SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
the Securities Exchange Act of 1934 (Amendment No. )
| | Dear Fellow Stockholder: | |
1720 North First StreetSan Jose, CA 95112-4598(408) 367-8200
April 13, 2016
Dear Fellow Stockholder:
You are cordially invited to attend ourGroup 2024 Annual Meeting of Stockholders at 9:30 a.m. Pacific Time on Wednesday, May 25, 2016,29, 2024. Once again, we will hold the Annual Meeting online to allow for greater participation by all of our stockholders, regardless of their geographic location. Please see the Notice of Annual Meeting on the next page for more information.
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Chairman, President & Chief Executive Officer
| | | | | California Water Service Group|2024 Proxy Statement | | | | |
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| | Dear Fellow Stockholder: | |
Enclosed are a notice of matters Charles and Jeffrey bring to our board extensive leadership experience and expertise.
Whetherto vote your shares whether or not you plan to attend, your vote is important. Please vote your shares, as soon as possible, in one of three ways: Internet, telephone, or mail. Instructions regarding Internet and telephone voting are included onjoin us for the proxy card or voting instruction card. If you choose to vote by mail, please follow the instructions on the proxy card or voting instruction card.
In a continuing effort to conserve natural resources and reduce costs, we produced a summary annual report again this year, opting not to duplicate the financial information that continues to be provided in our Form 10-K filed with the Securities and Exchange Commission. Your perspectives on the annual report are valuable to us. Please send your feedback to annualreport@calwater.com.
Thank you forAnnual Meeting. We appreciate your investment in our Company and thank you for the California Water Service Group.
opportunity to serve you and our Company as directors.
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/s/PETER C. NELSON
Peter C. NelsonChairman of the Board
Table of Contents
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Lead Independent Director
For directions to the Annual Meeting, please refer to page 60 of this Proxy Statement.
is important. Please submit a proxy as soon as possible so that your shares can be voted at the or about April 17, 2024. Date and Time Location Record Date ![[MISSING IMAGE: ic_date-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_date-pn.gif)
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Wednesday, May 29, 2024
9:30 a.m. Pacific Time
Annual Meeting visit
www.virtualshareholdermeeting.com/CWT2024 Only stockholders at the close of business
on April 2, 2024 are entitled to receive
notice of and vote at the Annual Meeting 20162024 Annual Meeting of Stockholders (Annual Meeting) of California Water Service Group (Group) will be held on Wednesday, May 25, 2016,29, 2024, at 9:30 a.m., at Pacific Time. You will be able to attend the executive offices of California Water Service Group, located at 1720 North First Street in San Jose, California.Annual Meeting, vote your shares electronically, and submit your questions during the live webcast by visiting www.virtualshareholdermeeting.com/CWT2024. At the meeting,Annual Meeting, stockholders will consider and vote on the following matters:1.Election of the ten 1. Election of the eleven directors named in the Proxy Statement; 2. An advisory vote to approve executive compensation; 3. Ratification of the selection of Deloitte & Touche LLP as the Group’s independent registered public accounting firm for 2024; 4. Approval of Group’s 2024 Equity Incentive Plan; 5. Such other business as may properly come before the Annual Meeting. proxy statement;2.An advisoryProxy Statement accompanying this notice. We believe your vote to approve executive compensation;3.Ratification of the selection of Deloitte & Touche LLP as the Group's independent registered public accounting firm for 2016; and4.Such other business as may properly come before the meeting.The Board of Directors has fixed the close of business on March 29, 2016 as the record date for the determination of holders of common stock entitled to notice of and to vote at the Annual Meeting.meetingAnnual Meeting in accordance with your instructions. You may submit your proxy: (a) by Internet,online, (b) by telephone, or (c) by U.S. Postal Service mail. You may revoke your proxy at any time prior to the vote at the Annual Meeting. Of course, in lieu of submitting a proxy, you may vote in person atonline during the Annual Meeting; provided, however, that if you hold your shares in street name, you must request a legal proxy from your stockbroker in order to do so.Meeting. For specific instructions, please refer to "Questions“Questions and Answers aboutAbout the Proxy Materials and the Annual Meeting"Meeting” in this Proxy Statement and the instructions on the proxy card. ![[MISSING IMAGE: ic_arrowline-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_arrowline-pn.jpg)
for the Stockholders Meeting to be Heldits stockholders commencing on May 25, 2016:Electronic copies of the Group's Form 10-K, including exhibits, and this Proxy Statement will be available atwww.proxyvote.com./s/MICHELLE![[MISSING IMAGE: sg_michellermortensen-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/sg_michellermortensen-pn.jpg)
MORTENSENMICHELLE R. MORTENSEN
Mortensen
Vice President, Corporate Secretary
This Proxy Statement, dated Staff13, 2016, relates to the solicitation of proxies by the Board of Directors of California Water Service Group (Group) for use at our 2016 Annual Meeting of Stockholders, which is scheduled to be held on May 25, 2016. We expect to begin mailing this Proxy Statement to stockholders on or about April 13, 2016. QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETINGWhat am I voting on?•Election of the ten directors named in the proxy statement to serve until the 2017 Annual Meeting;•An advisory vote to approve executive compensation; and•Ratification of the selection of Deloitte & Touche LLP as the Group's independent registered public accounting firm for 2016.Who may attend the Annual Meeting?Any stockholders of the Group may attend.Who is entitled to vote?Stockholders of record on the record date. The Board has fixed March 29, 2016 as the record date (Record Date) for stockholders entitled to notice of, and to vote at, the Annual Meeting.How many votes do I get?Each share of common stock is entitled to one vote.What constitutes a quorum?A majority of the outstanding shares – present at the Annual Meeting or represented by persons holding valid proxies – constitutes a quorum. If you submit a valid proxy card, your shares will be considered in determining whether a quorum is present.Without a quorum, no business may be transacted at the Annual Meeting. However, whether or not a quorum exists, a majority of the voting power of those present at the Annual Meeting may adjourn the Annual Meeting to another date, time, and place.At the Record Date, there were 2,243 stockholders of record. There were 47,973,801 shares of our common stock outstanding and entitled to vote at the Annual Meeting.
| | | | | California Water Service Group| | | | | |
How are the directors elected?
Our bylaws provide for a majority voting standard for the election of directors in uncontested elections. Under this majority voting standard, each director must be elected by the affirmative vote of a majority of the votes cast with respect to the director. A majority of the votes cast means that the number of votes cast "FOR" a candidate for director exceeds the number of votes cast "AGAINST" that candidate for director. As a result, abstentions will not be counted in determining which nominees receive a majority of votes cast since abstentions do not represent votes cast for or against a candidate. If you hold your shares through a stockbroker (or other nominee), the stockbroker does not have authority to vote your shares in the election of directors without instructions from you. Shares that your stockbroker does not vote ("broker non-votes") are not considered votes cast for or against a candidate, and they will not be counted in determining which nominees receive a majority of votes cast. In accordance with our director resignation policy, the Nominating/Corporate Governance Committee has established procedures that require an incumbent candidate for director who does not receive the required votes for re-election to tender his or her resignation offer to the Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee will recommend to the Board whether to accept or reject the offer, or whether other action should be taken. The Board will act on the Nominating/Corporate Governance Committee's recommendation within 90 days after certification of the election results. We will promptly publicly disclose the Board's decision regarding the resignation offer, including the rationale for rejecting the resignation offer, if applicable.
Who are the Board's nominees?
The nominees are Gregory E. Aliff, Terry P. Bayer, Edwin A. Guiles, Bonnie G. Hill, Martin A. Kropelnicki, Thomas M. Krummel, M.D., Richard P. Magnuson, Peter C. Nelson, Lester A. Snow, and George A. Vera. All of the nominees are current Board members. See "Proposal No. 1 – Election of Directors" for biographical information and qualifications. Linda R. Meier is retiring from the Board as of the Annual Meeting and will not stand for re-election in accordance with the Board's retirement policy.
What are the Board's voting recommendations?
"FOR" each of the nominees to the Board (Proposal No. 1);
"FOR" the proposal regarding an advisory vote to approve executive compensation (Proposal No. 2); and
"FOR" the ratification of the selection of Deloitte & Touche LLP as the Group's independent registered public accounting firm for 2016 (Proposal No. 3).
How do I vote?
If you are a stockholder of record (that is, you hold your shares in your own name), you may vote on the Internet, by telephone, by mail, or in person at the meeting. Different rules apply if your stockbroker or another nominee holds your shares for you (see below).
You may vote on the Internet.
You do this by following the "Vote by Internet" instructions on the proxy card. If you vote on the Internet, you do not have to mail in your proxy card.
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You may vote by telephone.
You do this by following the "Vote by Phone" instructions on the proxy card. If you vote by telephone, you do not have to mail in your proxy card. You must have a touch-tone phone to vote by telephone.
You may vote by mail.
You do this by signing the proxy card and mailing it in the enclosed, prepaid, and addressed envelope. If you mark your voting instructions on the proxy card, your shares will be voted as you instruct.
If you return a signed card but do not provide voting instructions, your shares will be voted:
•For the ten named director nominees;•For the advisory vote to approve executive compensation; and•For the ratification of the selection of Deloitte & Touche LLP as the Group's independent registered public accounting firm for 2016.
You may vote in person at the meeting.
We will hand out written ballots to anyone who wants to vote at the meeting. If you hold your shares in street name, you must request a legal proxy from your stockbroker in order to vote at the meeting.
What if I change my mind after I return my proxy?
You may revoke your proxy and/or change your vote at any time before the polls close at the Annual Meeting. You may do this by:
•Signing another proxy with a later date;•Voting on the Internet or by telephone (your latest Internet or telephone proxy is counted);•Voting again at the meeting; or•Notifying the Corporate Secretary, in writing, that you wish to revoke your previous proxy. We must receive your notice prior to the vote at the Annual Meeting.
Will my shares be voted if I do not return my proxy?
If you are a stockholder of record, and you do not return your proxy, your shares will not be voted unless you attend the meeting and vote in person.
What happens if my shares are held by my stockbroker (or other nominee)?
If your shares are held by a stockbroker (or other nominee), you will receive a voting instruction card so that you can instruct your stockbroker on how to vote your shares. If you do not return your voting instruction card, then your stockbroker, under certain circumstances, may vote your shares.
Specifically, stockbrokers have authority under exchange regulations to vote your uninstructed shares on certain "routine" matters. For "non-routine" matters, no votes will be cast on your behalf if you do not instruct your stockbroker on how to vote. If you wish to change the
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| | REPORT OF THE ORGANIZATION AND COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION | | | | | | | |
| | ORGANIZATION AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION | | | | | | |
| | | | | California Water Service Group| | | | | |
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voting instructions that you gave1995 (the PSLRA). The forward-looking statements are intended to your stockbroker, you must ask your stockbroker how to do so.
If you do not give your stockbroker voting instructions, your stockbroker may either:
•Proceed to vote your shares on routine matters and refrain from voting on non-routine matters; or•Leave your shares entirely unvoted.
Shares that your stockbroker does not vote (broker non-votes) will count towards the quorum only. We encourage you to provide your voting instructions to your stockbroker. This ensures that your shares will be voted at the meeting.
As to my stockbroker voting, which proposals are considered "routine" or "non-routine"?
The ratificationqualify under provisions of the selectionfederal securities laws for “safe harbor” treatment established by the PSLRA. Examples of Deloitte & Touche LLP as the Group's independent registered public accounting firm for 2016 (Proposal No. 3) is routine. A stockbroker may generally vote on routine matters if the stockbroker has not received voting instructions from youforward-looking statements in this document include our strategy, goals, progress or expectations with respect to such matters.
The electionour approach to environmental, social, and governance, workplace and employee safety, diversity, equality, and inclusion, human capital management, corporate responsibility and sustainability and public policy and political involvement (collectively, ESG Information), and new acquisitions, among other topics. Forward-looking statements in this proxy statement are based on currently available information, expectations, estimates, assumptions and projections, and our management’s beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of directors (Proposal No. 1)historical fact and are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks, including, among other things, the evolution of applicable laws and regulations, and the advisory voteability of our suppliers and partners to approve executive compensation (Proposal No. 2)meet our sustainability standards. Consequently, actual results may vary materially from what is contained in a forward-looking statement. For more information on these risks, uncertainties and other factors, refer to our Annual Report on Form 10-K for the year ended December 31, 2023, under the heading “Risk Factors” in Item 1A, as updated in Part II of our subsequent Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, investors are matters considered "non-routine" under applicable rules. A stockbroker cannot vote without your instructionscautioned not to place undue reliance on non-routine matters.
What is the voting requirement to approve eachforward-looking statements, which speak only as of the proposals?
| | | | | California Water Service Group|2024 Proxy Statement | | | | |
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| | Date and time: | | | | Wednesday, May 29, 2024 at 9:30 a.m. Pacific Time | |
| | Location: | | | | To attend and participate in the Annual Meeting visit www.virtualshareholdermeeting.com/CWT2024 | |
| | Record Date: | | | | April 2, 2024 | |
| | Voting matters: | | | | Stockholders will be asked to vote on the following matters at the Annual Meeting: | |
| | Proposal | | | | For More Information | | | | Board Recommendation | |
| | Proposal No. 1: Election of Eleven Directors | | | | Pages 19-31 | | | | FOR All Nominees | |
| | The Board of Directors and Nominating/Corporate Governance Committee believes that all of the following eleven nominees listed are highly qualified and have the skills and experience required for membership on our Board. A description of the specific experience, qualifications, attributes, and skills that led our Board to conclude that each of the nominees should serve as director follows the biographical information of each nominee. The directors reflect the diversity of the Company’s stockholders, employees, customers, and communities. | | ||||||||
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| | Name and Principal Occupation | | | | Age | | | | Director Since | | | | Independent | | | | Other Public Company Boards | | | | A | | | | C | | | | F | | | | NG | | | | S | |
| | Gregory E. Aliff Former Vice Chairman and Senior Partner of U.S. Energy & Resources, Deloitte LLP | | | | 70 | | | | 2015 | | | | Yes | | | | 1 | | | | ![[MISSING IMAGE: ic_chair-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_chair-pn.gif) | | | | | | | | ![[MISSING IMAGE: ic_member-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_member-pn.gif) | | | | | | | | | |
| | Shelly M. Esque Former Vice President and Global Director of Corporate Affairs of Intel Corporation | | | | 63 | | | | 2018 | | | | Yes | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | Jeffrey Kightlinger Principal and Owner of Acequia Consulting, LLC | | | | 64 | | | | 2023 | | | | Yes | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | Martin A. Kropelnicki Chairman, President & CEO of California Water Service Group | | | | 57 | | | | 2013 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | Thomas M. Krummel, M.D. Emile Holman and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine | | | | 72 | | | | 2010 | | | | Yes | | | | 1 | | | | | | | | | | | | | | | | | | | | | |
| | Yvonne A. Maldonado, M.D. Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University | | | | 68 | | | | 2021 | | | | Yes | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | Scott L. Morris Chairman of Avista Corporation | | | | 66 | | | | 2019 | | | | Yes | | | | 1 | | | | | | | | | | | | | | | | | | | | | |
| | Charles R. Patton Former Executive Vice President, External Affairs of American Electric Power Company, Inc. | | | | 64 | | | | 2023 | | | | Yes | | | | 2 | | | | | | | | | | | | | | | | | | | | | |
| | Carol M. Pottenger Principal and Owner of CMP Global, LLC Vice Admiral, U.S. Navy (Ret.) | | | | 69 | | | | 2017 | | | | Yes | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | Lester A. Snow Director and Former President of the Klamath River Renewal Corporation | | | | 72 | | | | 2011 | | | | Yes | | | | — | | | | | | | | | | | | | | | | | | | | | |
| | Patricia K. Wagner Former Group President of U.S. Utilities for Sempra Energy | | | | 61 | | | | 2019 | | | | Yes | | | | 2 | | | | | | | | | | | | | | | | | | | | | |
| | Number of meetings held during 2023 | | | | | | | | | | | | | | | | | | | | 4 | | | | 3 | | | | 3 | | | | 3 | | | | 3 | |
| | Number of executive sessions of the independent directors held in 2023 | | | | | | | | | | | | | | | | | | | | 4 | | | | 3 | | | | 2 | | | | 2 | | | | 3 | |
| | ![[MISSING IMAGE: ic_chair-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_chair-pn.jpg) Chair | | | | A: Audit | | | | C: Organization and | |
| ![[MISSING IMAGE: ic_member-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_member-pn.jpg) Member | | | | F: Finance and Capital Investment | | | | NG: Nominating/Corporate Governance | |
| | | | | | S: Enterprise Risk Management, Safety, and Security | | | | ||
| | | | | California Water Service Group|2024 Proxy Statement|2 | | | | |
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| | Proposal | | | | For More Information | | | | Board Recommendation | |
| | Proposal | | | Page 90 | | | | FOR | | |
| | We seek to closely align the | | ||||||||
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| | Proposal | | | | For More Information | | | | Board Recommendation | |
| | Proposal No. 3: Ratification of Independent Accountants | | | | Page 93 | | | | FOR | |
| | The Board believes the continued retention of Deloitte & Touche LLP is in the best interests of the Company and its stockholders. The Board is recommending stockholder ratification of Deloitte & Touche LLP as the | | ||||||||
| | | | | For More Information | | | | Board Recommendation | | |
| | Proposal No. 4: Approval of | | | | Page 94 | | | | FOR | |
| | The 2024 Equity Incentive Plan (2024 Plan) is intended to serve as the successor to the Amended and Restated California Water Service Equity Incentive Plan (Prior Plan), which Prior Plan terminated in | | ||||||||
How are broker non-votes and abstentions treated?
Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present. Only "FOR" and "AGAINST" votes are counted for purposes of determining the votes received in connection with the proposal relating to the election of directors (Proposal No. 1), and therefore broker non-votes and abstentions have no effect on that proposal. Stockbrokers may not vote your shares on Proposal No. 1 without instructions from you. The affirmative vote of the majority of the shares present in person or represented by proxy and entitled to vote at the Annual Meeting is required to approve Proposal No. 2 and Proposal No. 3. Abstentions have the effect of a vote "AGAINST" both of these proposals. Stockbrokers may vote your shares on Proposal No. 3 (but not on Proposal No. 2) without instructions from you. Shares resulting in broker non-votes, if any, are not entitled to vote and will have no effect on the outcome of these proposals.
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Whosustainable water and wastewater services.
| | State | | | | Customer Connections | | | | % of Customer Connections | | | | % of Total Consolidated Operating Revenue in 2023 | | |||||||||
| | California | | | | | | 497,700 | | | | | | | 89.5% | | | | | | | 90.6% | | |
| | Hawaii | | | | | | 6,500 | | | | | | | 1.2% | | | | | | | 5.2% | | |
| | Washington | | | | | | 38,000 | | | | | | | 6.8% | | | | | | | 3.0% | | |
| | New Mexico | | | | | | 11,400 | | | | | | | 2.0% | | | | | | | 0.9% | | |
| | Texas | | | | | | 2,800 | | | | | | | 0.5% | | | | | | | 0.3% | | |
RepresentativesCalifornia Public Utilities Commission issued a decision on Cal Water’s 2021 General Rate Case and Infrastructure Improvement Plan approving $1.2 billion in capital expenditures following extensive review of Broadridgethe utility’s water system improvement plans, costs, and rates. We continue to prepare our next General Rate Case and Infrastructure Improvement Plan, which we are scheduled to file in July 2024.
| | | | | California Water Service Group|2024 Proxy Statement|4 | | | | |
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| | | Ranked highest in overall customer satisfaction among large water utilities in the western United States, in the J.D. Power 2023 Water Utility Residential Customer Satisfaction StudySM | | | | Named one of “World’s Most Trustworthy Companies” by Newsweek magazine for 2023 in its inaugural list | | |
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| | | Earned the U.S. Environmental Protection Agency’s 2023 WaterSense Excellence in Promoting WaterSense Labeled Products Award | | | | Received recertification as a Great Place to Work® by the Great Place to Work® Institute for the eighth consecutive year | | |
| | | | | California Water Service Group|2024 Proxy Statement|5 | | | | |
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| | | Effective Board Leadership and Independent Oversight • Independent Lead Director designated by the independent directors with defined responsibilities • Regular scheduled executive sessions led by independent Lead Director at Board meetings • Regular scheduled executive sessions at committee meetings • Ongoing review of Board composition and succession planning • Focus on the experience, skills, diversity, and attributes that enhance our Board • Mandatory director retirement at age 75 • Demonstrated commitment to Board refreshment • All Board members are independent except our Chairman & CEO and all committees are composed of independent directors • Board and committee oversight of strategy and risk • Board and committee oversight of ESG matters | | | | Overview of Corporate Governance • Code of Conduct for Directors, Officers, and Employees • Annual committee assessments • Adopted clawback policy for incentive-based compensation aligned with NYSE requirements • Stock ownership guidelines for executive officers and directors • Prohibition on short sales, transactions in derivatives, and hedging and pledging of stock by directors and executive officers • Annual review of Board leadership structure • Annual review of committee assignments and committee chairs • Integrated active enterprise risk management • Annual Board member self-assessments • Demonstrated commitment to corporate responsibility and sustainability • Demonstrated commitment to stockholder engagement • Transparent public policy engagement • Board and committees may hire outside advisors independent of management • “Overboarding” limits for directors | | |
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| | | Stockholder Rights • No dual-class common stock structure • Annual election of all directors • Majority voting for directors in uncontested elections • No supermajority voting requirements in governing documents • Stockholder right at 10% threshold to call a special meeting • Annual advisory vote for say-on-pay | | | | | | |
| | | | | California Water Service Group|2024 Proxy Statement|6 | | | | |
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| | | | | California Water Service Group|2024 Proxy Statement|7 | | | | |
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| | | | | | Gregory E. Aliff | | | | Shelly M. Esque | | | | Jeffrey Kightlinger | | | | Martin A. Kropelnicki | | | | Thomas M. Krummel, M.D. | | | | Yvonne (Bonnie) A. Maldonado, M.D. | | | | Scott L. Morris | | | | Charles R. Patton | | | | Carol M. Pottenger | | | | Lester A. Snow | | | | Patricia K. Wagner | | ||||
| | | | | | Senior Leadership | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ![[MISSING IMAGE: ic_public-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_public-pn.gif) | | | | Public Company Board | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ![[MISSING IMAGE: ic_human-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_human-pn.gif) | | | | Human Capital Management | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ![[MISSING IMAGE: ic_sustainability-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_sustainability-pn.gif) | | | | Sustainability, Governmental, Public Policy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ![[MISSING IMAGE: ic_health-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_health-pn.gif) | | | | Health and Human Services | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ![[MISSING IMAGE: ic_cybersecurity-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_cybersecurity-pn.gif) | | | | Cybersecurity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ![[MISSING IMAGE: ic_financial-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_financial-pn.gif) | | | | Financial/Capital Allocation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | ![[MISSING IMAGE: ic_industry-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_industry-pn.gif) | | | | Industry | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Other Current Public Boards | | | | 1 | | | | | | | | | | | | | | | | 1 | | | | | | | | 1 | | | | 2 | | | | | | | | | | | | 2 | | ||||
| | Age | | | | 70 | | | | 63 | | | | 64 | | | | 57 | | | | 72 | | | | 68 | | | | 66 | | | | 64 | | | | 69 | | | | 72 | | | | 61 | | ||||
| | Tenure | | | | 9 | | | | 6 | | | | 1 | | | | 11 | | | | 14 | | | | 3 | | | | 5 | | | | 1 | | | | 7 | | | | 13 | | | | 5 | | ||||
| | | | | California Water Service Group|2024 Proxy Statement|8 | | | | |
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| | Scott L. Morris Independent Lead Director | | | | 10 of 11 Independent Director Nominees | |
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| | ALL Independent Board Committees | | | | 75 Mandatory Retirement Age | |
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| | | Governance and Executive Compensation Changes | | | ||||
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| | | Governance • Formed the Enterprise Risk Management, Safety, and Security Committee • Environmental, social, and governance (ESG) items are overseen by the Nominating/Corporate Governance Committee • Adopted four new policies: Environmental Sustainability; Diversity, Equality, and Inclusion; Political Engagement; and Human Rights • Intend to publish our 2023 ESG report in May 2024 with disclosure aligned with the Sustainability Accounting Standards Board (SASB) Water Utilities & Services Industry Standards and the recommendations of the Task Force on Climate-related Financial Disclosures as well as in reference to Global Reporting Initiative (GRI) standards • Included an ESG metric in the 2021, 2022, and 2023 long-term at-risk compensation program for the three-year performance periods 2021-2023, 2022- 2024, and 2023-2025 • Committed to setting absolute, science-aligned Scope 1 and Scope 2 emissions reduction targets by Q3 2024 | | | | Compensation • Continued emphasis on long-term equity performance-based equity awards • Modified the performance criteria used for long-term and short-term at-risk compensation programs • Revised the methodologies used to determine our Supplemental Executive Retirement Plan’s (SERP) actuarial assumptions and amended the plan, increasing the plan’s unreduced retirement age from 60 to 65 • Conducted an independent, third-party review of: • Our Chairman, President and CEO’s compensation plan • Our executive short-term and long-term at-risk compensation programs • Our proxy peer group • Updated our peer group to reflect industry changes • Adopted clawback policy for incentive-based compensation aligned with NYSE requirements | | |
| | | | | California Water Service Group|2024 Proxy Statement|10 | | | | |
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| | | | | | Environmental | | | | Customers and Communities | | | | Workforce | | | | Governance | |
| | Highest Priority | | | | • Climate Change, Strategic Planning, and Risk Management • Water Supply Resilience and Reliability • Water System Resilience, Reliability, and Efficiency • End-Use Conservation | | | | • Drinking Water Quality and Safety • Emergency Preparedness and Response • Water Affordability and Access • Stakeholder Engagement and Public Participation • Cybersecurity and Data Privacy | | | | | | | | • Public Policy and Political Involvement | |
| | Higher Priority | | | | • Energy and Emissions | | | | • Philanthropy and Volunteerism | | | | • Diversity, Equality, and Inclusion • Talent Attraction and Retention | | | | • Corporate Governance • Ethics | |
| | High Priority | | | | • Environmental Management, Compliance, and Stewardship | | | | • Customer Service | | | | • Workplace Health and Safety • Training and Development • Labor Relations and Management • Compensation, Benefits, and Employee Wellbeing | | | | • Responsible Sourcing | |
What does it mean if I getenterprise risks we monitor through our ERM program. In fact, there is an 85% overlap between our primary and secondary ERM risks and our material ESG topics. During our ERM review process each year, we analyze new and existing risks, and develop and revise the mitigation controls. We also review and update the mapping across ERM and ESG areas and strive to integrate new and emerging ESG-related risks into our risk assessments and mitigation controls as appropriate.
It means that you have multiple accounts at the transfer agent and/or with stockbrokers. Please signinformation on our formal ESG governance structure, please refer to “Board Oversight of Risks Related to Environmental, Social Responsibility, and return all proxy cards to ensure that all your shares are voted.
What percentage of stock do the directors and executive officers own?
Together, directors and officers own approximately 1.0% of our common stock. See "Stock Ownership of Management and Certain Beneficial Owners" for more details elsewhereGovernance Matters” in this Proxy Statement.
Who Additional information on this topic is available in our latest ESG report at
| | | | | California Water Service Group|2024 Proxy Statement|11 | | | | |
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AsSustainability Accounting Standards Board (SASB) Water Utilities and Services Industry Standard, leverage the guidance of the Task Force on Climate-related Financial Disclosures (TCFD), and reference the 2021 Global Reporting Initiative (GRI) Universal Standards. We expect to publish our 2023 ESG Report and 2023 ESG Analyst Download, which will cover our activities from January 1, 2023 to December 31, 2015,2023, in May 2024. Web links are provided throughout this Proxy Statement for convenience and are inactive textual references only. The content on the largest stockholders were:
•The Vanguard Group, Inc. beneficially owned 3,649,753 sharesreferenced websites does not constitute a part of,common stock, representing 7.62%and is not incorporated by reference into, this Proxy Statement.
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*- vehicle safety training, incorporating a specific focus on training employees on safe driving behavior, the causes of distracted driving, and our updated driving policies, with the aim to reward employees for safe driving and to promote consistency across departments and locations
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| | | Women in the Workforce 2023 | | |
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| | | • Overall Workforce — 27% • Field and Office Staff — 27% • Management Positions (First and Mid-Level Managers) — 23% • Senior Management (Directors and Officers) — 33% • Board of Directors — 36% | | |
| | | | | California Water Service Group|2024 Proxy Statement|14 | | | | |
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| | | Racial/Ethnic Diversity in the Workforce 2023 | | | ||||
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| | | Overall Workforce • Asian — 14% • Black — 4% • Hispanic — 32% • Native American — 1% • Native Hawaiian — 2% • Two or more — 3% • White — 44% | | | | Field and Office Staff • Asian — 13% • Black — 4% • Hispanic — 34% • Native American — 1% • Native Hawaiian — 3% • Two or more — 3% • White — 42% | | |
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| | | Management Positions (First and Mid-Level Managers) • Asian — 15% • Black — 5% • Hispanic — 25% • Native American — 1% • Native Hawaiian — 2% • Two or more — 3% • White — 50% | | | | Senior Management (Directors and Officers) • Asian — 23% • Black — 6% • Hispanic — 10% • Native American — 0% • Native Hawaiian — 0% • Two or more — 5% • White — 56% | | |
| | | | | California Water Service Group|2024 Proxy Statement|15 | | | | |
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| | | Talent Attraction and Retention • Our hiring managers are required to offer flexible interview formats and promote diverse perspectives • Our managers are trained on unconscious bias to help minimize potential preferential treatment and promote consistent hiring practices • We partner with local high schools, trade schools, and colleges to educate students about potential careers in the water industry • Each year, we employ two surveys to assess employee satisfaction and engagement and share results with our officer team to help identify opportunities to enhance our performance | | | | Training and Development • We promote internal advancement, where possible, and offer an interim promotion program • We work to promote consistency in our leadership training for employees • Our 18-month-long Future Leaders of Water (FLOW) program offers select high-potential leaders an opportunity to improve leadership skills • We incentivize employees to achieve certifications beyond the minimum requirements by collaborating with a third party to grant access to these courses that employees can access at any time | | |
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| | | Compensation, Benefits, and Employee Well-Being We believe we offer competitive benefits for employees including: • A defined benefit pension plan • A choice of healthcare plans • A commuter benefits program that encourages alternative modes of transportation • An Employee Assistance Program that provides mental health, childcare, and eldercare resources • Our Critical Incident Response Management (CIRM) program that offers peer-to-peer emotional support for employees who have experienced stress, loss, grief, change, or other traumatic events • Financial wellness education, including planning tools and investment advisory services | | | | Labor Relations and Management • Our policy is to respect the right to freedom of association and collective bargaining • We engage with our unions in meetings to review business matters and discuss potential issues • We partner with our unions and seek to foster opportunities for career development and provide applicable safety and functional training | | |
| | | | | California Water Service Group|2024 Proxy Statement|16 | | | | |
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| | | ![[MISSING IMAGE: ic_arrow-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_arrow-pn.jpg){kind=icon} | | | Reduce Group and Value Chain Contributions to Climate Change: We strive to minimize our GHG emissions footprint by reducing energy use in our operations, transitioning to renewable energy where possible, and increasing fleet efficiency and electrification. We also work to reduce water consumption by increasing efficiency in the water system and helping customers conserve water and reduce demand. Additionally, we continue to advance our value chain GHG emissions inventory and explore strategies to help mitigate our suppliers’ environmental impact and emissions. | | |
| | | | | | Plan for Potential Climate Change Impacts on Our Business: We are committed to delivering safe, high-quality water to our communities 24/7. Through adaptive planning pathways, we develop timeframes and triggers for implementing projects, while maintaining the flexibility to respond to changing climate, financial, and regulatory circumstances. Our current climate change adaptation efforts include managing changes in water availability and demand to secure a sustainable water supply for our customers far into the future; preserving water availability by saving water in our distribution system and engaging our communities to minimize downstream consumption; and investing strategically in operating and infrastructure resilience to prepare for and respond to climate change risks. | | |
| | | | | | Ramp Up Collaboration and Advocacy: We engage extensively with regulators, policymakers, customers and communities, and industry associations on climate priorities. Examples include: advocating for policies that advance climate change response, such as policies to decouple water utility profits from water sales to promote water conservation and to require water providers to develop Climate Risk Assessment Plans; increased media campaigns for conservation and climate change education among customers and community members; and partnership with the Public Policy Institute of California on projects that evaluate groundwater management, climate-related impacts on wastewater and recycled water, and drought resilience. | | |
| | | | | | Set Time-Bound Goals: We have publicly committed to science-aligned emissions reduction targets for our operational emissions, as well as several other objectives designed to support our efforts to reduce emissions and promote resilience in response to climate-related risks. | | |
| | | | | | Continue to Mature Disclosures: We strive to enhance our data collection process and to mature and enhance our climate change-related reporting to align with leading reporting standards and frameworks. Our climate change-related disclosures leverage the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). In 2023, we also completed an updated inventory of GHG emissions that aligns with the GHG Protocol, published a mid-year update on our climate change strategy, and prepared our inaugural 2023 CDP Climate Change questionnaire response. | | |
What isclimate-related impacts to our business and their interrelation to numerous other ESG focus areas at Group, the deadline for submitting stockholder proposals for the Group's proxy materials for next year's Annual Meeting?
Any proposals that stockholders intend to submit for inclusion in next year's Group proxy materials must be receivedBoard considers climate-related issues while guiding business strategy, developing action plans, setting objectives, and evaluating company expenditures.
| | | | | California Water Service Group|2024 Proxy Statement|17 | | | | |
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| | | | | California Water Service Group|2024 Proxy Statement|18 | | | | |
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| | PROPOSAL NO. 1 — ELECTION OF DIRECTORS | |
| | Our Board of Directors unanimously recommends that you vote “FOR” the election of each of the following nominees. | |
| | Board Composition | | ||||
| | Diversity | | | | Our Board is comprised of members who demonstrate a diversity of thought, perspectives, skills, backgrounds, experiences, and independence and has a goal of identifying candidates that can contribute to that diversity in a variety of ways, including ethnically and gender diverse candidates. | |
| | Board Skills | | | | Our Board is composed of a collective set of skills to address corporate challenges, especially in the areas of business strategy, financial performance, utility regulation, risk management, cybersecurity, technology and enterprise innovation, and executive talent and leadership, and should evolve with the organization’s business strategy. | |
| | Industry Experience | | | | Our Board seeks and retains members with industry experience, including water, utility, and technology, that align with our long-term strategy; recognizes the utility industry is complex; and understands the importance of having directors who have experienced challenging business cycles and can share their knowledge. | |
| | Tenure | | | | Our Board retains members across the director tenure spectrum to promote effective oversight and embrace innovation, as well as a changing market and customer expectations. | |
| | Board Size | | | | Our Board considers the appropriate size of the board in relation to promoting active engagement, open discussion, effective risk management, and productive dialogue with management; continuously assesses the bench of successors for Board leadership positions in both expected and unexpected departure scenarios. | |
| | | | | California Water Service Group|2024 Proxy Statement|19 | | | | |
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95112-4508.
Stockholders who are entitled to vote at a stockholders' meeting may propose a nominee for the Board or other business for consideration at a meeting without seeking to have the matter included” in the proxy materials for the meeting pursuant to Rule 14a-8. The bylaws contain the requirements for doing so. The bylaws are posted on the Group's website at http://www.calwatergroup.com. Physical copies of these documents are also available upon request to the Corporate Secretary, California Water Service Group, 1720 North First Street, San Jose, CA 95112-4598. Briefly, a stockholder must give timely prior notice of the matter to the Group. The notice must be received by the Corporate Secretary at the Group's principal place of business by the 150th day before the first anniversary of the prior year's Annual Meeting. For the 2017 Annual Meeting, to be timely, notice must be received by the Corporate Secretary not later than the close of business on December 26, 2016. If we move the date of the meeting
| | | | | California Water Service Group| | | | | |
by more than thirty days before or more than sixty days after the date of the previous meeting, notice is due not later than the close of business on the later of the 150th day before the Annual Meeting or the 10th day after we publicly announce the holding of the meeting. If the Group's Corporate Secretary receives notice of a matter after the applicable deadline, the notice will be considered untimely. In that case, or where notice is timely but the stockholder fails to satisfy the requirements of Rule 14a-4 under the Securities Exchange of 1934, the persons named as proxies may exercise their discretion in voting with respect to the matter when and if it is raised at the meeting.
The bylaws specify what the notice must contain. Stockholders must comply with applicable law with respect to matters submitted in accordance with the bylaws. The bylaws do not affect any stockholder's right to request inclusion of proposals in the Group's Proxy Statement under Rule 14a-8.
How can a stockholder or other interested parties contact the independent directors, the director who chairs the Board's executive sessions or the full Board?
Stockholders or other interested parties may address inquiries to any of the Group's directors, to the lead director (who chairs the Board's executive sessions), or to the full Board, by email to stockholdercommunication@calwater.com or by writing to them in care of the Corporate Secretary, California Water Service Group, 1720 North First Street, San Jose, California 95112-4598. All such communications are sent directly to the intended recipient.
Can I make comments and/or ask questions during the Annual Meeting?
Yes. Stockholders wishing to address the meeting are welcome to do so by adhering to the following guidelines:
1.Stockholders may address the meeting when recognized by the Chairman or President & Chief Executive Officer (CEO);2.Each stockholder, when recognized, should stand and identify himself or herself; and3.Stockholder remarks must be limited to matters before the meeting and may not exceed two minutes in duration per speaker.
No cameras, video, or recording equipment will be permitted at the meeting. Many cellular phones have built-in digital cameras, and while these phones may be brought into the meeting, the camera function may not be used at any time.
Where and when will I be able to find the results of the voting?
Preliminary results will be announced at the Annual Meeting. We will publish the final results in a current report on Form 8-K to be filed with the SEC within four business days of the Annual Meeting.
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This section briefly describesskills, professional experience, and a diversity of backgrounds necessary to oversee our business. Also, the structureBoard believes every director should possess certain attributes as reflected in the Board’s membership criteria.
| | Director Criteria | | ||||
| | Personal Characteristics | | | | • High personal and professional ethics, integrity and honesty, good character, and sound judgment • Independence and absence of any actual or perceived conflicts of interest • The ability to be an independent thinker | |
| | Commitment to the Organization | | | | • A willingness to put in the time and energy to satisfy the requirements of Board and committee membership, including attendance and participation in Board and committee meetings of which they are a member and the annual meeting of stockholders, and be available to management to provide advice and counsel • Possess, or be willing to develop, a broad knowledge of critical issues facing the organization | |
| | Diversity | | | | • Diversity, including the candidate’s professional and personal experience, background, perspective, and viewpoint, as well as the candidate’s gender and ethnicity | |
| | Skills and Experience | | | | • Value derived from each nominee’s skills, qualifications, experience, and ability to impact long-term strategic objectives • Educational background • Substantial tenure and experience in leadership roles • Business and financial experience • Understanding the intricacies of a public utility • Experience in risk management • Additionally, Section 2.9 of our bylaws contains requirements that a person must meet to avoid conflicts of interest that would disqualify that person from serving as a director | |
| | Identification of Director Nominees | | | | • Through a variety of sources, the Nominating/Corporate Governance Committee identifies new director nominees and will consider director nominees recommended by stockholders in the same manner it considers other nominees. This process is described in “Director Qualifications and Diversity” and found elsewhere in this Proxy Statement. | |
| | Retirement Age of Directors | | | | • We have established a mandatory retirement age for all directors. All directors must retire no later than the Annual Meeting that follows the date of the director’s 75th birthday. Additionally, an employee director must retire as an employee no later than the Annual Meeting that follows the date of his or her 70th birthday, but may remain on the Board at the discretion of the Board of Directors. | |
| | Executive Sessions of the Board | | | | • Under our Corporate Governance Guidelines, the non-management directors meet at least four times each year in executive session without management present, and the independent directors meet in executive session at least once a year. The Lead Independent Director, Scott L. Morris, chairs these sessions. | |
| | | | | California Water Service Group|2024 Proxy Statement|21 | | | | |
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| | Name/Occupation | | | | Age | | | | California Water Service Group Position | | | | Current Term Expires | | | | Director Since | | | | Independent | | | | Other Board Experience | | | | Public Utilities or Public Health Experience | |
| | Gregory E. Aliff Former Vice Chairman and Senior Partner of U.S. Energy & Resources, Deloitte LLP | | | | 70 | | | | Director | | | | 2024 | | | | 2015 | | | | Yes | | | | Yes | | | | Yes | |
| | Shelly M. Esque Former Vice President and Global Director of Corporate Affairs of Intel Corporation | | | | 63 | | | | Director | | | | 2024 | | | | 2018 | | | | Yes | | | | Yes | | | | — | |
| | Jeffrey Kightlinger Principal and Owner of Acequia Consulting, LLC | | | | 64 | | | | Director | | | | 2024 | | | | 2023 | | | | Yes | | | | — | | | | Yes | |
| | Martin A. Kropelnicki Chairman, President & CEO of California Water Service Group | | | | 57 | | | | Chairman, President & CEO | | | | 2024 | | | | 2013 | | | | No | | | | Yes | | | | Yes | |
| | Thomas M. Krummel, M.D. Emile Holman and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine | | | | 72 | | | | Director | | | | 2024 | | | | 2010 | | | | Yes | | | | Yes | | | | Yes | |
| | Yvonne A. Maldonado, M.D. Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University | | | | 68 | | | | Director | | | | 2024 | | | | 2021 | | | | Yes | | | | Yes | | | | Yes | |
| | Scott L. Morris Chairman of Avista Corporation | | | | 66 | | | | Lead Independent Director | | | | 2024 | | | | 2019 | | | | Yes | | | | Yes | | | | Yes | |
| | Charles R. Patton Former Executive Vice President, External Affairs of American Electric Power Company, Inc. | | | | 64 | | | | Director | | | | 2024 | | | | 2023 | | | | Yes | | | | Yes | | | | Yes | |
| | Carol M. Pottenger Principal and Owner of CMP Global, LLC, Vice Admiral, U.S. Navy (Ret.) | | | | 69 | | | | Director | | | | 2024 | | | | 2017 | | | | Yes | | | | Yes | | | | — | |
| | Lester A. Snow Director and Former President of the Klamath River Renewal Corporation | | | | 72 | | | | Director | | | | 2024 | | | | 2011 | | | | Yes | | | | Yes | | | | Yes | |
| | Patricia K. Wagner Former Group President of U.S. Utilities for Sempra Energy | | | | 61 | | | | Director | | | | 2024 | | | | 2019 | | | | Yes | | | | Yes | | | | Yes | |
| | | | | California Water Service Group|2024 Proxy Statement|22 | | | | |
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| | ![[MISSING IMAGE: ph_gregoryealiff-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_gregoryealiff-4c.jpg) Gregory E. Aliff Independent Age: 70 Director Since 2015 | | | Committees: • Chair, Audit • Finance and Capital Investment • Enterprise Risk Management, Safety, and Security Public Board Directorships: Current: • New Jersey Resources Corp Previous: • SCANA Corporation | | | Retired Mr. Aliff is a retired Vice Chairman and Senior Partner, US Energy and Resources, at Deloitte LLP. From 2012 to his retirement in 2015, Mr. Aliff led Deloitte’s US Sustainability Services, which focused on industrial and commercial water and energy management. From 2002 to 2012, he led Deloitte’s US Energy and Resources practice, where he oversaw all professional services to the sector. Mr. Aliff earned his Bachelor of Science in accounting and his Master of Business Administration from Virginia Tech. He is a Certified Public Accountant and a designated Board Leadership Fellow of the National Association of Corporate Directors (NACD). He also holds a CERT Certificate in Cybersecurity Oversight from NACD. In addition to his public company directorships, Mr. Aliff has also served on the board of several non-profit organizations. Mr. Aliff brings extensive accounting, auditing, and financial reporting experience to the Board, with specific expertise in both the public utility and energy and resources industries. He has in-depth experience in strategy, enterprise risk management, and regulatory affairs from his many years providing professional services to numerous major utilities. Mr. Aliff’s deep understanding of public utility markets and the breadth of experience he has gained from working with public companies make him a valuable resource to the Board. | |
| | Skills Senior Leadership ![[MISSING IMAGE: ic_public-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_public-pn.jpg) Public Company Board ![[MISSING IMAGE: ic_human-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_human-pn.jpg) Human Capital Management ![[MISSING IMAGE: ic_cybersecurity-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_cybersecurity-pn.jpg) Cybersecurity ![[MISSING IMAGE: ic_financial-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_financial-pn.jpg) Financial/Capital Allocation ![[MISSING IMAGE: ic_industry-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_industry-pn.jpg) Industry | |
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| | ![[MISSING IMAGE: ph_shellymesque-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_shellymesque-4c.jpg) Shelly M. Esque Independent Age: 63 Director Since 2018 | | | Committees: • Nominating/Corporate Governance • Enterprise Risk Management, Safety, and Security | | | Retired Ms. Esque, prior to her retirement in 2016, served as Vice President and Global Director of Corporate Affairs at Intel Corporation, a leader in the semiconductor industry. Overseeing professionals in more than 35 countries, she was responsible for enhancing Intel’s reputation as the world’s leading technology brand and corporate citizen. She also served as both president and chair of the Intel Foundation. In her capacity as a leader of Intel’s corporate social responsibility, community, education, foundation, and government relations worldwide, Ms. Esque represented Intel at numerous events, including the World Economic Forum, World Bank, UNESCO, and forums promoting women in the workplace. Ms. Esque received the Greater Phoenix Chamber of Commerce 2011 ATHENA Businesswoman of the Year Award for excellence in business and leadership, exemplary community service, and support and mentorship of other women. She was also recognized by AZ Business Magazine as one of the 50 Most Influential Women in Arizona. Ms. Esque is active on two non-profit boards, Basis Charter Schools, and the Boyce Thompson Arboretum. Ms. Esque’s strong understanding of corporate social responsibility, education, media relations, and government and community affairs makes her a valuable resource to the Board. | |
| | Skills Senior Leadership Human Capital Management ![[MISSING IMAGE: ic_sustainability-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_sustainability-pn.jpg) Sustainability, Governmental, Public Policy Experience | |
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| | ![[MISSING IMAGE: ph_jeffkightlinger-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_jeffkightlinger-4c.jpg) Jeffrey Kightlinger Independent Age: 64 Director Since 2023 | | | Committees: • Audit • Enterprise Risk Management, Safety, and Security | | | Principal and Owner, Acequia Consulting Mr. Kightlinger is principal and owner of Acequia Consulting, LLC, which was founded in 2022 and provides strategic advice on Colorado River issues, natural resources, water and energy issues. Prior to founding Acequia Consulting, Mr. Kightlinger served as the Interim General Manager of the City of Pasadena’s Water and Power Department from 2021 to 2022, where he oversaw the recruitment of a new water manager and a new general manager, along with the implementation of a new customer billing program and development of a long-term power resource plan. Prior to his role at the City of Pasadena’s Water and Power Department, Mr. Kightlinger served as Chief Executive Officer of the Metropolitan Water District of Southern California, the largest municipal water supplier in the United States. During his tenure as CEO from 2006 to 2021, he took a leadership role in supporting a plan to build twin tunnels under the Sacramento-San Joaquin Delta to keep water flowing to Southern California while seeking to protect endangered species. Prior to becoming CEO, Mr. Kightlinger was Metropolitan’s deputy general counsel and assistant general counsel from 1995 to 2002 and served as general counsel from 2002 to 2006. Mr. Kightlinger earned his undergraduate degree from the University of California at Berkeley and a law degree from Santa Clara University. He currently serves on a number of boards including the Coro Foundation, the USC Price School of Public Policy, the UCLA Sustainability Advisory Board, the Climate Action Reserve, the California Foundation on the Environment and the Economy, the Los Angeles Economic Development Council, and the Los Angeles Area Chamber of Commerce. Mr. Kightlinger brings to the Board deep understanding and experience of water supply management, natural resource management, and sustainability. His experience as a leader in resolving complex water and environmental issues bring valuable perspective to the Board. | |
| | Skills Senior Leadership Human Capital Management Sustainability, Governmental, Public Policy Experience Cybersecurity Financial/Capital Allocation Industry | |
| | | | | California Water Service Group|2024 Proxy Statement|25 | | | | |
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| | ![[MISSING IMAGE: ph_martykropelnidki-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_martykropelnidki-4c.jpg) Martin A. Kropelnicki Age: 57 Director Since 2013 | | | Skills Senior Leadership Public Company Board Human Capital Management Sustainability, Governmental, Public Policy Experience Cybersecurity Financial/Capital Allocation Industry | | | Chairman, President & CEO, California Water Service Group Mr. Kropelnicki is Chairman, President & CEO of the Group. Mr. Kropelnicki joined the Group as Vice President, Chief Financial Officer (CFO) and Treasurer in 2006 and was named President and COO in 2012. He then was appointed President & CEO of the Group effective September 1, 2013. He has over 34 years of experience in finance and operations, including 15-plus years as CFO at publicly listed companies. He has held executive positions at PowerLight Corporation, Hall Kinion & Associates, Deloitte & Touche Consulting Group, and Pacific Gas & Electric Company. He serves as a director for the Bay Area Council and the California Foundation on the Environment & Economy and is a member of the Silicon Valley Leadership Group. Mr. Kropelnicki is the past President of the National Association of Water Companies (NAWC) and currently serves on the NAWC Board of Directors and Executive Committee. He holds a Bachelor of Arts and Master of Arts in business economics from San Jose State University. In 2016, Mr. Kropelnicki was awarded the United States Navy Memorial Fund’s Naval Heritage Award. He is the 12th recipient of this award since its inauguration. Mr. Kropelnicki is well positioned to lead the Group’s management team and give guidance and perspective to the Board. His experience as the former CFO of the Group provides expertise in both corporate leadership and financial management, and his management experience enables him to offer valuable perspectives to our strategic planning, rate making, and budgeting, along with operational and financial reporting. | |
| | | | | California Water Service Group|2024 Proxy Statement|26 | | | | |
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| | ![[MISSING IMAGE: ph_thomasmkrummel-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_thomasmkrummel-4c.jpg) Thomas M. Krummel, M.D. Independent Age: 72 Director Since 2010 | | | Board Committees: • Chair, Organization and Compensation • Nominating/Corporate Governance Public Board Directorships: Current: • Procept BioRobotics Corporation | | | Emile Holman and Chair Emeritus, Department of Surgery, Stanford University Dr. Krummel is the Emile Holman Professor and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine and former co-director of the Stanford Biodesign program. A leader in his field, he has been honored with the William E. Ladd Medal by the American Academy of Pediatrics, the Albion Walter Hewlett Award by the Stanford Department of Medicine, the Henry J. Kaiser Family Foundation Award for Excellence in Clinical Teaching; the John Austin Collins, M.D. Memorial Award for Outstanding Teaching and Dedication to Resident Training, and the Lucile Packard Children’s Hospital Recognition of Service Excellence. Dr. Krummel is currently chair of the board of directors at Fogarty Innovation, a not-for-profit medtech educational incubator, a venture partner at Santé Ventures, and a board member for Morgridge Institute for Research at the University of Wisconsin. Dr. Krummel brings to the Board experience in professional training and development as well as a familiarity with medical, public health, and science issues. He offers the Board unique insight on public health matters, including healthcare policy and legislation, drinking water quality, and employee health. | |
| | Skills Senior Leadership Public Company Board Sustainability, Governmental, Public Policy Experience Human Capital Management ![[MISSING IMAGE: ic_health-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_health-pn.jpg) Health and Human Services Financial/Capital Allocation | |
| | ![[MISSING IMAGE: ph_maldonado-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_maldonado-4c.jpg) Yvonne (Bonnie) A. Maldonado, M.D. Independent Age: 68 Director Since 2021 | | | Board Committees: • Nominating/Corporate Governance • Enterprise Risk Management, Safety, and Security | | | Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University Dr. Maldonado is currently a pediatric infectious diseases epidemiologist at Stanford University School of Medicine as well as the medical director of Infection Prevention and Control, and an attending physician at Packard Children’s Hospital at Stanford. She is also a professor in the Departments of Pediatrics and Health Research and Policy, chief of the Division of Infectious Diseases, director of Global Child Health, and senior associate dean for faculty development and diversity at Stanford’s School of Medicine. Dr. Maldonado is currently the chair of the American Academy of Pediatrics Committee on Infectious Diseases, serves on the board of the Lucile Packard Foundation for Children’s Health, and is a member of numerous medical associations and committees. Nationally and internationally renowned for her knowledge, research, and expertise in infectious and vaccine-preventable disease control and international health, Dr. Maldonado has led studies and investigations funded by the United States, CDC, WHO, NIH, and Gates Foundation worldwide on HIV, polio, and measles. Dr. Maldonado brings a unique perspective and valuable insight to the Board. | |
| | Skills Senior Leadership Human Capital Management Sustainability, Governmental, Public Policy Experience Health and Human Services | |
| | | | | California Water Service Group|2024 Proxy Statement|27 | | | | |
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| | ![[MISSING IMAGE: ph_scottlmorris-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_scottlmorris-4c.jpg) Scott L. Morris Independent Age: 66 Director Since 2019 | | | Lead Independent Director Committees: • Chair, Nominating/ Corporate Governance • Organization and Compensation Public Board Directorships: Current: • Avista Corporation | | | Chairman, Avista Corporation Mr. Morris has been Chairman of Avista Corporation, a publicly traded electrical and natural gas utility serving customers primarily in the Pacific Northwest, since January 2008. From January 2008 to October 1, 2019, he also served as Avista’s CEO, from January 2008 to January 2018 he served as its President, and from May 2006 to December 2007, he served as its President and Chief Operating Officer. Mr. Morris joined Avista in 1981 and his experience at the company includes management positions in construction and customer service and general manager of the company’s Oregon utility business. He is a graduate of Gonzaga University where he received his master’s degree from Gonzaga University in organizational leadership. He also attended the Stanford Business School Financial Management Program and the Kidder Peabody School of Financial Management. Mr. Morris serves on the board of McKinstry and on the Board of Trustees of Gonzaga University. He has served on a number of Spokane non-profit and economic development boards. Mr. Morris brings to the Board a deep knowledge and understanding of the utility industry, having spent his entire career in the industry. As a former senior executive, he also contributes senior leadership experience and valuable perspectives on strategy, operations, and business management. | |
| | Skills Senior Leadership Public Company Board Human Capital Management Sustainability, Governmental, Public Policy Experience Cybersecurity Financial/Capital Allocation Industry | |
| | | | | California Water Service Group|2024 Proxy Statement|28 | | | | |
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| | ![[MISSING IMAGE: ph_charlesrpatton-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_charlesrpatton-4c.jpg) Charles R. Patton Independent Age: 64 Director Since 2023 | | | Committees: • Audit • Finance and Capital Investment Public Board Directorships: Current: • Ameresco, Inc. • Sterling Infrastructure, Inc. Previous: • Southwestern Electric Power Company | | | Retired Prior to his retirement after a 27-year tenure with the company, Mr. Patton served as Executive Vice President, External Affairs, at American Electric Power Company, Inc. (AEP), an electric utility organization that serves customers across 11 states, from January 2017 to July 2022. In this capacity, he was responsible for customer service, regulatory affairs, communications, and federal public policy. He also led corporate sustainability initiatives and AEP’s compliance program to satisfy the requirements of the North American Electric Reliability Corporation, a not-for-profit international regulatory authority whose mission is to assure the effective and efficient reduction of the risks to the reliability and security of the electrical grid. Currently, Mr. Patton serves as an independent director of Ameresco, Inc. and Sterling Infrastructure, Inc. He has also served as a Board Member for Corpus Christi Regional Economic Development Corporation, Southwestern Electric Power Company and the Public Service Company of Oklahoma. Mr. Patton was a Company Liaison with the United States Energy Association and traveled internationally to discuss government affairs and public relations with Eastern European utilities. He served as Chairman of the Board of the Association of Electric Companies of Texas and Texas Taxpayers and Research Association, as well as the Federal Reserve Bank of Richmond. He holds a bachelor’s degree from Bowdoin College in Brunswick, Maine, and a Master’s Degree from the Lyndon B. Johnson School of Public Policy at the University of Texas at Austin. Mr. Patton’s extensive knowledge and senior leadership experience in the utility industry brings valuable resources to the Board. | |
| | Skills Senior Leadership Public Company Board Human Capital Management Sustainability, Governmental, Public Policy Experience Industry Financial/Capital Allocation | |
| | ![[MISSING IMAGE: ph_carolmpottenger-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_carolmpottenger-4c.jpg) Carol M. Pottenger Independent Age: 69 Director Since 2017 | | | Committees: • Enterprise Risk Management, Safety, and Security • Finance and Capital Investment • Nominating/Corporate Governance | | | Principal and Owner, CMP Global, LLC Ms. Pottenger is principal and owner of CMP Global LLC, which was founded in 2014 and provides consulting services in business development, process improvement, corporate governance, strategic planning, and cyber and information systems. The first female three-star Admiral in American history to lead in a combat branch, Ms. Pottenger commanded two ships, a logistics force of 30 ships, a Japan-based strike-group of eight ships, and the Expeditionary Force of 40,000 sailors during her 36 years in the U.S. Navy before retiring in 2013. She was also the senior U.S. Flag Officer responsible for military transformation and sensitive military topics such as counterterrorism and cybersecurity while on assignment with NATO. Ms. Pottenger brings unique experience to the Board, ranging from operations to technology to risk management. A graduate of Purdue University in Lafayette, Indiana, she also serves on various private, defense, and non-profit boards, including the U.S. Navy Memorial Foundation in Washington, D.C., PricewaterhouseCoopers LLP Board of Partners and Principals, and Serco North America. | |
| | Skills Senior Leadership Human Capital Management Sustainability, Governmental, Public Policy Experience Cybersecurity Financial/Capital Allocation Industry | |
| | | | | California Water Service Group|2024 Proxy Statement|29 | | | | |
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| | ![[MISSING IMAGE: ph_lesterasnow-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_lesterasnow-4c.jpg) Lester A. Snow Independent Age: 72 Director Since 2011 | | | Committees: • Chair, Enterprise Risk Management, Safety, and Security • Finance and Capital Investment • Organization and Compensation | | | Retired Mr. Snow has served as Secretary of the California Natural Resources Agency, Director of the California Department of Water Resources, Regional Director of the U.S. Bureau of Reclamation, Executive Director of the CALFED Bay Delta Program, and General Manager of the San Diego County Water Authority. He also served as Executive Director of the California Water Foundation, an initiative of the Resources Legacy Fund, and serves on the board of the Klamath River Renewal Corporation. He holds a Master of Science Degree in water resources administration from the University of Arizona and a Bachelor of Science in earth sciences from Pennsylvania State University. Mr. Snow brings more than 40 years of water and natural resource management experience to the Board. His distinguished public service career enables him to assist the Board in addressing water and environmental issues as well as regulatory and public policy matters. Mr. Snow’s executive experience in the public sector provides the Board with critical insight on a variety of operational and financial matters. | |
| | Skills Senior Leadership Human Capital Management Sustainability, Governmental, Public Policy Experience Industry | |
| | | | | California Water Service Group|2024 Proxy Statement|30 | | | | |
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| | ![[MISSING IMAGE: ph_patriciakwagner-4c.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ph_patriciakwagner-4c.jpg) Patricia K. Wagner Independent Age: 61 Director Since 2019 | | | Committees: • Chair, Finance and Capital Investment • Audit • Organization and Compensation Public Board Directorships: Current: • Apogee Enterprises • Primoris Services Corporation Previous: • SoCalGas | | | Retired Ms. Wagner, prior to her retirement in 2019, served as Group President, U.S. Utilities for Sempra Energy, an energy-services holding company whose subsidiaries include San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas), both California regulated utilities, as well as other companies operating in the electric and gas infrastructure business. Prior to her role as Group President, from 2017 to 2018 she served as Chairman and Chief Executive Officer of SoCalGas, one of the largest natural gas utilities in the country. She served as Executive Vice President of Sempra Energy in 2016, and as President and Chief Executive Officer of Sempra U.S. Gas & Power from 2014 to 2016. During her 24-year career in the utility sector, Ms. Wagner held a range of other leadership positions, including: Vice President of Audit Services for Sempra Energy; Vice President of Accounting and Finance for SoCalGas; Vice President of Information Technology for SoCalGas and SDG&E; and Vice President of Operational Excellence for SoCalGas and SDG&E. Ms. Wagner is currently a director of Apogee Enterprises, Inc., a public company that designs and develops commercial glass and metal products, and Primoris Services Corporation, a public company providing a wide range of specialty construction services, fabrication, maintenance, replacement, and engineering services. Ms. Wagner earned her Master of Business Administration from Pepperdine University and her bachelor’s degree in chemical engineering from California State Polytechnic University, Pomona. Ms. Wagner has immense working knowledge and familiarity with the California regulatory environment and has worked with the California Public Utilities Commission. Her deep understanding of regulatory affairs and experience working for an investor-owned utility make her a valuable asset to the Group. She also brings valuable accounting and finance, senior leadership, and operational experience to the Board. | |
| | Skills Senior Leadership Public Company Board Human Capital Management Sustainability, Governmental, Public Policy Experience Cybersecurity Financial/Capital Allocation Industry | |
| | | | | California Water Service Group|2024 Proxy Statement|31 | | | | |
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| | ISG Principle | | | | Our Practice | |
| | Principle 1 Boards are accountable to stockholders | | | | • Annual election of all directors • Majority voting for directors in uncontested elections • Directors are required to offer to resign if they fail to receive a majority of votes cast • No supermajority voting requirements in governing documents • Stockholder right at 10% threshold to call a special meeting | |
| | Principle 2 Stockholders should be entitled to voting rights in proportion to their economic interest | | | | • No dual class common stock structure • Each stockholder is entitled to one vote per share • No cumulative voting for directors | |
| | Principle 3 Boards should be responsive to stockholders and be proactive in order to understand their perspectives | | | | • Proactive, year-round investor outreach program • Directors receive regular updates on investor feedback and are available for stockholder engagement • In response to investor feedback, over the last several years, we have, for example: • Publish annually our Environmental, Social, and Governance report; • Formed the Enterprise Risk Management, Safety, and Security Committee; • Incorporated environmental leadership into our at-risk compensation program; • Modified the performance criteria used for long-term and short-term at-risk compensation program; • Increased the Supplemental Pension Plan’s (SERP) unreduced retirement age from 60 to 65; and • Committed to setting absolute, science-aligned Scope 1 and Scope 2 emissions reduction targets by Q3 2024 | |
| | | | | California Water Service Group|2024 Proxy Statement|32 | | | | |
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| | ISG Principle | | | | Our Practice | |
| | Principle 4 Boards should have a strong, independent leadership structure | | | | • Independent Lead Director with well-defined responsibilities • Substantial majority of the Board is independent (10 of 11 director nominees or 91% of the Board) and Board committees are completely independent • Non-management directors meet at least four times each year in executive session without management present, and the independent directors meet in executive session at least once a year (in 2023, the Board and committees met in executive session 22 times) | |
| | Principle 5 Boards should adopt structures and practices that enhance their effectiveness | | | | • Demonstrated focus on Board refreshment, with a balanced mix of director tenures and five new directors joining the Board since 2019 • Demonstrated focus on Board diversity, with four female director nominees (36% of the Board) and two ethnically diverse director nominees (18% of the Board) • Annual review of the Board, committees, Independent Lead Director, and individual directors • Limits on outside board service, with no director permitted to serve on more than four public company boards (including the Group) and directors who are public company executive officers not permitted to serve on more than two public company boards (including the Group) • Mandatory director retirement at age 75 | |
| | Principle 6 Boards should develop management incentive structures that are aligned with the long-term strategy of the company | | | | • Target total direct compensation is heavily weighted towards performance, comprising 72% of CEO pay and 43% of other NEO pay in 2023 on an annualized basis, and appropriately balances short-term drivers of the Group’s success and long-term creation of stockholder value • Organization & Compensation Committee annually re-evaluates the mix of fixed and variable compensation to best attract, retain and incentivize talented officers who contribute to the long-term success of the Group • We incorporate a number of risk mitigation features into our executive compensation program, including stock ownership requirements, clawback policy for incentive-based compensation aligned with NYSE requirements and anti-hedging and anti-pledging policies | |
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| | | | | California Water Service Group|2024 Proxy Statement|33 | | | | |
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and our strategy, control framework, regulatory environment, and industry begins when a director is elected to our Board and continues throughout his or her tenure on the Board. Upon joining our Board, new directors are provided with a comprehensive orientation about our company, which includes an overview of director duties and our corporate governance, one-on-one sessions with the Chairman, President & CEO, and presentations by senior management and other key management representatives on the organization’s strategy, regulatory framework, and control framework. As directors are appointed to new committees or assume a leadership role, such as committee chair, they receive additional orientation sessions specific to such responsibilities.
| | | | | California Water Service Group|2024 Proxy Statement|34 | | | | |
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| | | ANNUAL BOARD SELF-EVALUATIONS As part of the evaluation, each Board member completes an anonymous, comprehensive questionnaire soliciting input on topics such as corporate governance issues, Board and committee culture, structure and meeting process, director interactions with each other and with management, management responsiveness, quality and quantity of information provided to the Board of Directors, strategic planning, and more. | | | ||||||||||||
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| | | SUMMARY OF WRITTEN EVALUATIONS Each Director’s anonymous responses to the questionnaire are sent to outside counsel retained by the Company at the Nominating/Corporate Governance Committee’s request. Outside counsel compiles the results of the evaluations into a report for the Nominating/Corporate Governance Committee and Lead Independent Director. | | | ||||||||||||
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| | | CONVERSATIONS Additionally, the Lead Independent Director has individual conversations throughout the year with each member of the Board, providing further opportunity for dialogue, feedback, and improvement. | | | ||||||||||||
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| | | BOARD REVIEW The responses to the questionnaires, in addition to other feedback provided by Board members through interviews and other communications, are then reviewed and compiled by our Lead Independent Director to determine strengths and areas for improvement. Those results are then discussed with the Nominating/Corporate Governance Committee and the Board of Directors, and such results are used to improve Board and committee performance. Matters that require further assessment or additional follow-up are addressed at future Board or committee meetings, as applicable. | | | ||||||||||||
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| | | ACTIONS Our evaluation process typically generates robust comments and discussion with the Board, including with respect to Board composition and processes. These evaluation results have led to changes designed to increase Board effectiveness and efficiency. Examples include enhancements to meeting materials, the structure of the Board, responsibilities of committees, committee and executive session discussions, committee reports to the Board, Director onboarding, continuing education, and hands-on experiences with our business, senior leaders, and emerging talent throughout the Company. | | | ||||||||||||
| | As discussed in our Corporate Governance Guidelines, a substantial majority of the Board is comprised of independent directors. Based on the recommendation of the Nominating/Corporate Governance Committee, the Board determined that, other than Martin A. Kropelnicki, each of our director nominees (Gregory E. Aliff, Shelly M. Esque, Jeffrey Kightlinger, Thomas M. Krummel, M.D., Yvonne A. Maldonado, M.D., Scott L. Morris, Charles R. Patton, Carol M. Pottenger, Lester A. Snow, and Patricia K. Wagner) is independent. In addition, Terry P. Bayer was independent during the period she served on the Board. | | | | ![[MISSING IMAGE: pc_director-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/pc_director-pn.jpg) | |
| | | | | California Water Service Group|2024 Proxy Statement|35 | | | | |
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| | | | | | The director is, or has been within the last three years, an employee of any company that comprises the Group or an immediate family member is, or has been within the last three years, an executive officer of any company that comprises the Group, | |
| | | | | | The director has received, or has an immediate family member who has received, during any 12-month period during the last three years, more than $120,000 in direct compensation from companies that comprise the Group, other than director or committee fees and pension or other forms of deferred compensation for prior service, | |
| | | | | | The director, or an immediate family member, is a current partner of the Group’s internal or external auditor; the director is a current employee of such a firm; the director’s immediate family member is a current employee of such a firm who personally works on the Group’s audit, or the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Group’s audit within that time, | |
| | | | | | The director, or an immediate family member, is, or has been within the last three years, employed as an executive officer of another company where any of the Group’s present executive officers serves or served at the same time on that company’s compensation committee, | |
| | | | | | The director is a current employee, or has an immediate family member who is a current executive officer, of a customer or vendor or other party that has made payments to or received payments from companies that comprise the Group for property or services in an amount that, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of the party’s consolidated gross revenues, | |
| | | | | | The director, or the director’s spouse, is an executive officer of a non-profit organization to which the Group makes, or in the past three years has made, payments that, in any single fiscal year, exceeded the greater of $1 million or 2% of the non-profit organization’s consolidated gross revenues | |
| | | | | | Being a residential customer of any service territory | |
| | | | | | Being a current executive officer or employee of, or being otherwise affiliated with, a commercial customer from which the Group has received payments that, in any of the last three fiscal years, did not exceed the greater of (i) 1% of the Group’s consolidated gross revenues for the year; or (ii) $500,000 | |
| | | | | | Being a current executive officer or employee of, or having a 5% or greater ownership or similar financial interest in, a supplier or vendor that has received payments from the Group that, in any of the last three fiscal years, did not exceed the lesser of (i) 1% of the Group’s consolidated gross revenues for the year; or (ii) $500,000 | |
| | | | | | Being a director of any of the Group’s subsidiaries | |
| | | | | California Water Service Group|2024 Proxy Statement|36 | | | | |
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Leadership Structure
Peter C. Nelson has served as Chairmanserve.
The Board also has established the position of lead director because the Board supports having an independent director in a Board leadership position at all times. The lead director is an independent director who is elected by the independentcollectively 16 committee meetings. All incumbent directors to serve for a period ofattended at least one year. Mr. Richard P. Magnuson currently serves as lead director. As set forth in the Corporate Governance Guidelines, the lead director's responsibilities75%, and authority include:
•Presiding over executive sessionson average attended 99%, ofthe non-management and independent directors and having the authority to call executive sessions;•Presiding at meetings of the Board in the absence of the Chairman of the Board;•Approving Board meeting agendas and schedules;•Approving information sent to the Board;•Serving as liaison between the Chairman of theall Board and applicable committee meetings in 2023 (held during theindependent directors; and•Being available for consultation and communication with major stockholders upon request.
Risk Oversight
Under the Corporate Governance Guidelines, the full Board oversees the Group's processes for assessing and managing risk. The Board does not view risk in isolation, but considers risk as part of its regular consideration of business decisions and business strategy. The Board exercises its risk oversight function through the Board as a whole and through its committees. Each of the Board committees considers the risks within its areas of responsibility and identified in its charter. The Finance and Risk Management Committee reviews the Group's major risk
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exposures and the steps management has taken and proposes to take to monitor and control such exposures. The Audit Committee reviews with management risks related to financial reporting and internal controls. At least annually, the Finance and Risk Management Committee discusses the Group's risk assessment and risk management with the Audit Committee. The Organization and Compensation Committee reviews enterprise risks to see that our compensation plans and programs do not encourage management to take unreasonable risks relating to our business. The Nominating/Corporate Governance Committee oversees risks related to matters of corporate governance, including director independence and Board performance.
The Group has a Management Committee (MC) that reports directly to the Finance and Risk Management Committee and meets at least semi-monthly. The MC is chaired by the Group's President & CEO and membership is comprised of the Group's officers. Among other functions, the MC identifies and prioritizes key risks and recommends the implementation of appropriate mitigation measures, as needed. The MC reports to the Audit Committee no less frequently than annually. Further review or reporting on risks is conducted as needed or as requested by the Board or committee.
| | Name | | | | Audit | | | | Organization and Compensation | | | | Finance and Capital Investment | | | | Nominating/ Corporate Governance | | | | Enterprise Risk Management, Safety, and Security | |
| | Gregory E. Aliff | | | | | | | | | | | | | | | | | | | | | |
| | Shelly M. Esque | | | | | | | | | | | | | | | | | | | | | |
| | Jeffrey Kightlinger | | | | | | | | | | | | | | | | | | | | | |
| | Martin A. Kropelnicki | | | | | | | | | | | | | | | | | | | | | |
| | Thomas M. Krummel, M.D. | | | | | | | | | | | | | | | | | | | | | |
| | Yvonne A. Maldonado, M.D. | | | | | | | | | | | | | | | | | | | | | |
| | Scott L. Morris | | | | | | | | | | | | | | | | | | | | | |
| | Charles R. Patton | | | | | | | | | | | | | | | | | | | | | |
| | Carol M. Pottenger | | | | | | | | | | | | | | | | | | | | | |
| | Lester A. Snow | | | | | | | | | | | | | | | | | | | | | |
| | Patricia K. Wagner | | | | | | | | | | | | | | | | | | | | | |
| | Number of meetings held during 2023 | | | | 4 | | | | 3 | | | | 3 | | | | 3 | | | | 3 | |
| | Chair | | | | Member | | | | | |
| Name | Audit | Organization and Compensation | Finance and Risk Management | Nominating/ Corporate Governance | ||||
|---|---|---|---|---|---|---|---|---|
| | | | | | | | | |
Gregory E. Aliff | ü | | | | ||||
Terry P. Bayer | ü | ü | ||||||
Edwin A. Guiles | ü | ü | Chair | | ||||
Bonnie G. Hill | ü | ü | ||||||
Martin A. Kropelnicki | | | | | ||||
Thomas M. Krummel, M.D. | Chair | ü | ||||||
Richard P. Magnuson | ü | | ü | Chair | ||||
Linda R. Meier | ü | ü | ü | |||||
Peter C. Nelson | | | | | ||||
Lester A. Snow | ü | ü | ||||||
George A. Vera | Chair | | ü | ü | ||||
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Number of meetings held during 2015 | 5 | 3 | 2 | 2 | ||||
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| | | | | California Water Service Group|2024 Proxy Statement|38 | | | | |
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AUDIT: Reviews the Group's auditing, accounting, financial reporting, and internal audit functions. Also,
| | Current Members: Gregory E. Aliff, Chair Jeffrey Kightlinger Charles R. Patton Patricia K. Wagner Committee Meetings Held in 2023: 4 | | | Primary Responsibilities: • Represents and assists the Board in oversight of the quality and integrity of the Company’s financial statements; the Company’s compliance with legal, environmental, regulatory, and reporting requirements; the qualifications, performance, and independence of the Company’s Independent Registered Public Accounting Firm; the Company’s internal audit function; cybersecurity risk; and third-party supplier risk • Responsible for the appointment, retention, compensation, and oversight of the Independent Registered Public Accounting Firm • Reviews with management each Form 10-K and 10-Q report required to be submitted to the SEC • Reviews annually the quality of reporting processes and internal controls, Independent Registered Public Accounting Firm reports and opinions, and any recommendations the internal auditor or Independent Registered Public Accounting Firm may have for improving or changing the Company’s internal controls • Oversees and reviews with management risks related to the Company’s financial reporting and internal controls • Oversees the Company’s compliance program with respect to legal and regulatory requirements, including the Company’s code of business conduct for executive officers and employees, and oversees the Company’s policies and procedures for monitoring compliance • Oversees the Company’s cybersecurity program, including management’s response to emerging risks and compliance with all federal and state cybersecurity standards and privacy laws • Oversees the Company’s program to identify, manage, and mitigate third party supplier risk and reviews with management prior year results and updates to the Supplier Diversity Program, compliance with the Supplier Code of Conduct, and performance of the Supplier Diversity Program | |
The Board has determined that George A. Vera, chair of the Audit Committee, Gregory E. Aliff, and Edwin A. Guiles are audit committee financial experts and are independent under the
standards applicable to Audit Committee members. Designation as an audit committee financial expert means that the Board believes Mr. Vera, Mr. Aliff, and Mr. Guiles have:
(i)An understanding of generally accepted accounting principles and financial statements;(ii)The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;(iii)Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Group's financial statements, or experience actively supervising one or more persons engaged in such activities;(iv)An understanding of internal controls over financial reporting; and(v)An understanding of audit committee functions.
Designation of a person as an audit committee financial expert does not result in the person being deemed an expert for any purpose, including under Section 11 of the Securities Act of 1933. The designation does not impose on the person any duties, obligations, or liability greater than those imposed on any other Audit Committee member or any other director and does not affect the duties, obligations, or liability of any other member of the Audit Committee or Board of Directors.
ORGANIZATION AND COMPENSATION: Reviews the Group's executive compensation programs, including their establishment, modification, and administration. All members are independent as defined in the listing standards of the New York Stock Exchange and meet additional independence requirements for Compensation Committeeaudit committee members applicable under SEC rules and the New York Stock Exchange listing standards.
As a result of this evaluation, the Committee does not believe that the Group's compensation practices and programs create risks that are reasonably likely to have a material adverse effectserve on the Group, nor does it believe thatAudit Committee. Gregory E. Aliff, Jeffrey Kightlinger, and Patricia K. Wagner meet the Group's executive compensation practicesNew York Stock Exchange listing standards of financial sophistication and programs are designed to promote risk taking.
“audit committee financial experts” under SEC rules.
| | | | | California Water Service Group|2024 Proxy Statement|39 | | | | |
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| | Current Members: Thomas M. Krummel, M.D., Chair Scott L. Morris Lester A. Snow Patricia K. Wagner Committee Meetings Held in 2023: 3 | | | Primary Responsibilities • Oversees the Company’s officer compensation structure, policies and programs; assesses whether the Company’s compensation structure establishes appropriate incentives for officers; and assesses the results of the Company’s most recent advisory vote on executive compensation • Oversees the evaluation and recommendations of the compensation of the CEO to the independent directors and of the executive officers to the Board of Directors • Reviews the organizational structure for the Company’s senior management • Oversees the strategies and policies related to human capital management, including matters such as diversity and inclusion, workplace environment, culture, talent development and retention, and succession planning • Oversees a periodic assessment of the risk related to the Company’s compensation policies and practices applicable to officers and employees • Reviews and discusses with our management the Compensation Discussion and Analysis disclosure required to be included in the proxy statement for the Annual Meeting of Stockholders to be filed with the SEC, and based on such review and discussion, determines whether to recommend to the Board that the Compensation Discussion and Analysis disclosure be included in such filing • Oversees preparation of the Organization and Compensation Committee report required by SEC rules to be included in the proxy statement for the Annual Meeting of Stockholders • Oversees the administration of the Company’s clawback policy • Monitors compliance by executive officers with the Company’s stock ownership guidelines All members are independent as defined in the listing standards of the New York Stock Exchange and meet additional independence requirements for compensation committee members applicable under SEC rules and the New York Stock Exchange listing standards. | |
Veritas
members of the Organization and Compensation Committee; (v) any ofCommittee
| | | | | California Water Service Group|2024 Proxy Statement|40 | | | | |
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| | Current Members: Patricia K. Wagner, Chair Gregory E. Aliff Charles R. Patton Carol M. Pottenger Lester A. Snow Committee Meetings Held in 2023: 3 | | | Primary Responsibilities: • Assists the Board of Directors in fulfilling its oversight responsibilities with respect to the monitoring and oversight of our financial resources, including its capital investment management and rate recovery, and financial resources planning and processes • Assists the Board in reviewing our financial policies, strategies, and capital structure • Reviews and makes recommendations to the Board for approval, where authority to do so has been delegated by the Board, regarding: ◦ long-term financial objectives and policies ◦ financing requirements and financing plans ◦ the annual dividend plan ◦ oversight of the annual operating budgets ◦ oversight of the annual capital investment plans, including periodic updates on the progress of the annual construction and capital investment programs ◦ reports received from the Employee Benefit Finance Committee ◦ other finance matters as appropriate In addition, the Committee discusses with management the policies and procedures concerning the major risk exposures, including exposures to infrastructure failure risk and credit risk, and the steps management has taken and/or proposes to take to monitor, mitigate, and control such exposures within the capital investment process. All members are independent as defined in the listing standards of the New York Stock Exchange. | |
| | | | | California Water Service Group|2024 Proxy Statement|41 | | | | |
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| | Current Members: Scott L. Morris, Chair Shelly M. Esque Thomas M. Krummel, M.D. Yvonne A. Maldonado, M.D. Carol M. Pottenger Committee Meetings Held in 2023: 3 | | | Primary Responsibilities: • Engages in director succession planning and actively seeks diverse individuals qualified to become Board members • Evaluates the composition of the Board annually to assess whether the skills, experience, characteristics, and other criteria established by the Board are currently represented on the Board as a whole and in individual directors, and to assess the criteria that may be needed in the future • Oversees the evaluation of the Board and its committees • Oversees risks related to matters of corporate governance, including director independence and Board performance • Recommends to the Board the size, structure, composition, and functioning of the Board and its committees • Reviews the compensation of directors for service on the Board and its committees, and recommends changes to the Board as appropriate • Reviews the Corporate Governance Guidelines annually and recommends changes to the Board • Oversees the Company’s Code of Business Conduct and Ethics Policy of the Board of Directors and compliance with the Code • Provides oversight of and reviews the Company’s strategy, policies, practices, risks, and disclosures with respect to ESG matters, and makes recommendations to management as appropriate • Oversees internal and external communications with employees, investors, and other stakeholders regarding the Company’s position on or approach to ESG matters All members are independent as defined in the listing standards of the New York Stock Exchange. | |
| | | | | California Water Service Group|2024 Proxy Statement|42 | | | | |
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| | Current Members: Lester A. Snow, Chair Gregory E. Aliff Shelly M. Esque Jeffrey Kightlinger Yvonne A. Maldonado, M.D. Carol M. Pottenger Committee Meetings Held in 2023: 3 | | | Primary Responsibilities • Assists the Board in the oversight of our enterprise risk management, safety, and security programs, including those related to physical safety and security • Discusses with management our principal risks and the effectiveness of the processes used by management to both identify and analyze major risks, as well as the effectiveness of the programs to manage and mitigate risks • Reviews with management our risk assessments, the steps management has taken, or would consider taking, to mitigate such risks or exposures and safeguard assets, and our underlying policies with respect to risk assessment, risk management, and asset protection • Discusses with management current and emerging applicable matters that may affect the business, operations, performance, or public image of the organization, or are otherwise pertinent to us and our stakeholders • Reviews our Emergency Preparedness program, including emergency response and coordination with authorities • Reviews our physical safety and security programs to confirm preventative, detective, and remedial controls and processes are in place • Oversees our other compliance programs for enterprise risk management, safety, and security, as well as our policies and procedures for monitoring compliance • Makes recommendations to the Board and to our senior management with respect to any of the above matters as the Committee deems necessary or appropriate All members are independent as defined in the listing standards of the New York Stock Exchange. | |
| | | | | California Water Service Group|2024 Proxy Statement|43 | | | | |
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| | | BOARD OF DIRECTORS The Company believes that its Board leadership structure supports the risk oversight function of the Board. As effective risk oversight is an important priority of the Board, the Board has allocated responsibilities for risk oversight among the full Board and its committees. | | | ||||||||||||
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| | | AUDIT Oversees risks related to financial reporting and internal controls, cybersecurity, and third-party suppliers. | | | | ORGANIZATION AND COMPENSATION Oversees risks related to human capital management and oversees periodic assessments of risks relating to our compensation plans and programs to see that these plans and programs do not encourage management to take unreasonable risks relating to our business. | | | | FINANCE AND CAPITAL INVESTMENT Oversees risks within the capital investment programs including infrastructure failures and credit risk. | | | ||||
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| | | NOMINATING/CORPORATE GOVERNANCE Oversees risks related to matters of corporate governance, including director independence and Board performance, as well as risks related to environmental, social responsibility, and sustainability matters. | | | | ENTERPRISE RISK MANAGEMENT, SAFETY, AND SECURITY Oversees management’s development and execution of the Group’s enterprise risk management, safety, and security programs, including those related to physical safety and security and advises on the committee oversight function for key risks. | | | ||||||||
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| | | EXECUTIVE MANAGEMENT | | | ||||||||||||
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| | | STRATEGY & OPERATING COMMITTEE The Company’s Strategic Operating Committee (SOC), chaired by the Chairman, President & CEO, is comprised of senior officers and NEOs, and meets twice per month. Among other functions, the SOC assesses evolving market conditions and develops a long-term strategy to mitigate emerging risks and maximize future opportunities.Priorities for the SOC include, but are not limited to, strategy, workforce transformation (including succession planning, employee development, and recruitment), business development, political and regulatory climate, operating model, affordability, resiliency, climate change, and sustainability, with an emphasis on water resource planning. | | | | MANAGEMENT COMMITTEE The Company’s Management Committee (MC), chaired by the Chairman, President & CEO, is comprised of Group and subsidiary executives, and meets monthly. Among other functions, the MC identifies and prioritizes key risks and recommends the implementation of appropriate mitigation measures as needed. Management reports to the Board and Board Committees multiple times throughout the year. Further review or reporting of risks is conducted as needed or as requested by the Board or a committee. | | | ||||||||
| | | | | California Water Service Group|2024 Proxy Statement|44 | | | | |
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NOMINATING/CORPORATE GOVERNANCE: Reviewskey risks facing the Group's director compensationcompany and assistseffective risk management:
| | Board Oversight | | | | Tier 1 Risk(1) | | | | Lead Officer | |
| | Full Board | | | | Affordability and Access Risk | | | | VP, Rates and Regulatory Affairs | |
| | Political Risk | | | | VP, Government and Community Affairs | | ||||
| | Regulatory Risk | | | | VP, Rates and Regulatory Affairs | | ||||
| | Water Supply Risk | | | | Chief Water Resource Sustainability Officer | | ||||
| | Climate Change Risk | | | | Chief Water Resource Sustainability Officer | | ||||
| | Governance Risk | | | | Chairman, President & CEO; SVP, General Counsel & Business Development; VP, Corporate Secretary & Chief of Staff | | ||||
| | Enterprise Risk Management, Safety, and Security Committee(2) | | | | Environmental Contamination Risk | | | | VP, Water Quality & Environmental Affairs | |
| | Physical Safety and Security Risk | | | | VP, Emergency Preparedness, Safety & Security | | ||||
| | Natural or Human-Caused Disaster Risk | | | | VP, Emergency Preparedness, Safety & Security; SVP, Operations | | ||||
| | Emergency Preparedness & Business Continuity Risk | | | | VP, Emergency Preparedness, Safety & Security | | ||||
| | Water Quality Risk | | | | VP, Water Quality & Environmental Affairs | | ||||
| | Finance Committee | | | | Infrastructure and Asset Failure Risk | | | | SVP, Corporate Services & Chief Risk Officer; Chief Engineering Officer | |
| | Organization/Compensation Committee | | | | Talent Risk, including Diversity, Equality, and Inclusion | | | | VP, Chief Human Resource Officer | |
| | Audit Committee | | | | Cybersecurity Risk | | | | SVP, Corporate Services & Chief Risk Officer | |
| | Third-Party Supplier Dependency Risk | | | | SVP, General Counsel & Business Development; VP, Facilities, Fleet, and Procurement | |
During 2015, there were nine regular meetings of the Board, five meetings of the Audit Committee, three meetings oftake on additional leadership roles and developmental opportunities needed to prepare senior leaders for greater responsibilities. In addition, the Organization and Compensation Committee two meetings ofregularly discusses recommendations and evaluations from the Finance and Risk Management Committee, and two meetings ofChairman, President & CEO as to potential successors to fill senior positions, including potential successors to the Nominating/Corporate Governance Committee. The incumbent directors attended at least 75% of all Board and applicable committee meetings in 2015 (held during the period each director served). Directors are also expectedCEO role. These discussions include developmental plans for senior leaders to attend the Annual Meeting of Stockholders. All of the Directors were present at the 2015 Annual Meeting.
Independence of Directors
As discussedhelp prepare them for future succession as well as contingency plans in the Group's Corporate Governance Guidelines, a substantial majority ofevent the BoardCEO is comprised of independent directors. Currently, the Group's independent directors are Gregory E. Aliff, Terry P. Bayer, Edwin A. Guiles, Bonnie G. Hill, Thomas M. Krummel, M.D., Richard P. Magnuson, Linda R. Meier (who will retire from the Board as of the Annual Meeting), Lester A. Snow, and George A. Vera. Under the listing standards of the New York Stock Exchange, a director is independent if heunable to serve for any reason (including death or she has no material relationship, whether commercial, industrial, banking, consulting, accounting, legal, charitable, or familial, with the Group, either directly or indirectly as a partner, stockholder, or officer of an entity that has a material relationship with the Group. The Board makes an affirmative determination regarding the independence of each director annually, based on the recommendation of the Nominating/Corporate Governance Committee. The Board has adopted standards to assist it in assessing the independence of directors, which are set forth in the Corporate Governance Guidelines, which are posted on the Group's website at http://www.calwatergroup.com. Under these standards, the Board has determined that a director is not independent if:
•The director is, or has been within the last three years, an employee of any company that comprises the Group or an immediate family member is, or has been within the last three years, an executive officer of any company that comprises the Group;•The director or any immediate family member has received personally during any twelve-month period within the past three years more than $120,000 in direct compensation from companies that comprise the Group, other than director or committee fees and pension or other forms of deferred compensation for prior service (compensation received by an immediate family member for service as an employee, other than an executive officer, of the Group is not considered for purposes of this standard);
•The director, or an immediate family member, is a current partner of the Group's internal or external auditor; the director is a current employee of such a firm; the director's immediate family member is a current employee of such a firm who works personally on the Group's audit, or the director or an immediate family member was in the last three years a partner or employee of such a firm and personally worked on the Group's audit within that time;•The director, or an immediate family member, has been employed within the last three years as an executive officer of a company whose organization and compensation committee includes or included at the same time an executive officer of the Group;•The director is an employee, or has an immediate family member, who is an executive officer of a customer or vendor or other party that has made payments to or received payments from companies that comprise the Group for property or services in an amount that exceeded the greater of $1 million or 2% of the party's consolidated gross revenues in any of the past three years; or•The director, or the director's spouse, is an executive officer of a non-profit organization to which the Group makes, or in the past three years has made, payments that, in any single fiscal year, exceeded the greater of $1 million or 2% of the non-profit organization's consolidated gross revenues.
The Board has determined that none of the following relationships, in itself, is a material relationship that would impair a director's independence:
•Being a residential customer of any subsidiary of the Group;•Being an executive officer or employee, or being otherwise affiliated with, a commercial customer from which the Group's consolidated gross revenues in any of the last three years are or were not more than the greater of (i) 1% of the Group's consolidated gross revenues for the year or (ii) $500,000;•Being an executive officer or employee of a supplier or vendor that has or had consolidated gross revenues from the Group in any of the last three years of not more than the lesser of (i) 1% of the Group's consolidated gross revenues for the year or (ii) $500,000;•Having a 5% or greater ownership interest or similar financial interest in a supplier or vendor that has or had consolidated gross revenues from the Group in any of the last three years of not more than the lesser of (i) 1% of the Group's consolidated gross revenues for such year or (ii) $500,000; and•Being a director of any of the Group's subsidiaries.
Directors inform the Board as to their relationships with the Group and provide other pertinent information pursuant to questionnaires that they complete, sign, and certify on an annual basis. The Board reviews such relationships to identify possible impairments to director independence and in connection with disclosure obligations. In assessing Mr. Aliff's independence, the Board considered that he is a retired former partner of Deloitte LLP, which is the parent entity of Deloitte & Touche LLP, the Group's independent registered public accounting firm. While at Deloitte, Mr. Aliff did not work on the Group's audit or otherwise have any involvement in providing services to the Group. For those directors who reside in a service territory of California Water Service Company and are customers, the Board has determined that it is not a material relationship that would impair their independence under the above standards.
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The Nominating/Corporate Governance Committee is responsible for developing and recommending Board membership criteriaour ability to the Board for approval. The Board andobtain financing, which supports ESG efforts.
The Group seeks directors having the following specific qualifications:
•Evidence of leadership in his or her particular field;•Broad experience and sound business judgment;•Expertise in an area of importance to the Group and its subsidiaries;•The ability to work in a collegial Board environment;•High personal and professional ethics and integrity;•The ability to devote the required time to carry out director responsibilities;•The ability and willingness to contribute special competencies to Board activities, including appointment to Board committees;•Freedom from conflicts of interest that would interfere with serving and acting in the best intereststrack progress of theGroupstrategies, policies, andits stockholders;practices relating to our material sustainability issues. We also have various ESG Working Groups that include officer sponsors, subject matter experts, and•Evidencegoal owners across the Company and are dedicated to specific cross- cutting ESG focus areas. These teams support the execution ofbeing a high caliber individual who has achieved a levelour ESG strategies and objectives as well as facilitate cross- departmental collaboration for their areas ofprominence in his or her career; for example, a CEO or highest level financial officer of a sizeable organization, a director of a major corporation, or a prominent civic or academic leader.
Additionally, Section 2.9 of the Group's bylaws contains requirements that a person must meet to avoid conflicts of interest that would disqualify that person from serving as a director.
Board membership should reflect diversity in its broadest sense. The Group seeks directors who represent a diversity of backgrounds and experiences that will enhance the quality of the Board's deliberations and decisions. The Board, as a whole, should possess a combination of skills, professional experience, and backgrounds necessary to oversee the Group's business. The Board assesses the diversity of skills, experience, and backgrounds represented on the Board as part of the annual Board self-evaluation process.
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Identification of Director Nominees
The Group identifies new director candidates through a variety of sources. The Nominating/Corporate Governance Committee will consider director candidates recommended by stockholders in the same manner it considers other candidates, as described in "Board Structure – Director Qualifications and Diversity" elsewhere in this Proxy Statement. Stockholders seeking to recommend candidates for consideration by the Nominating/Corporate Governance Committee should submit a recommendation in writing describing the candidate's qualifications and other relevant biographical information and provide confirmation of the candidate's consent to serve as director. Please submit this information to the Corporate Secretary, California Water Service Group, 1720 North First Street, San Jose, California 95112-4598.
Stockholders may also propose director nominees by adhering to the advance notice procedure described under "Questions and Answers About the Proxy Materials and the Annual Meeting – How can a stockholder propose a nominee for the Board or other business for consideration at a stockholders' meeting?" elsewhere in this Proxy Statement.
Executive Sessions of the Board
Under the Group's Corporate Governance Guidelines, the non-management directors meet at least four times each year in executive session without management present, and the independent directors meet in executive session at least once a year. The lead director, Mr. Richard P. Magnuson, chairs these sessions.
Retirement Age of Directors
The Group has established a mandatory retirement age for directors. A director must retire no later than the Annual Meeting that follows the date of the director's 75th birthday. An employee director must retire as an employee no later than the Annual Meeting that follows the date of his or her 70th birthday, but may remain on the Board at the discretion of the Board of Directors.
Annual Meeting Attendance
All directors are expected to attend each Annual Meeting of the Group's stockholders, unless attendance is prevented by an emergency. All of the Group's directors who were directors as of the date of the Group's 2015 Annual Meeting attended the Group's 2015 Annual Meeting.
The Group has
No Hedging and Pledging Policies
In accordance with our Insider Trading Policy, our directors and officers are prohibited from (i) hedging their ownership of Group stock, including trading in options, puts, calls, or other derivative instruments related to Group stock or debt; and (ii) pledging their ownership of Group stock.
Executive Compensation Recovery ("Clawback") Policy
The Board has adopted an executive compensation recovery, or "clawback," policy requiring the reimbursement of excess incentive-based compensation provided to the Group's officers in the
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event of certain restatements of the company's financial statements. A more detailed description of the Executive Compensation Recovery Policy appears in the "Compensation Discussion and Analysis" section of this Proxy Statement.
Stock Ownership Requirements
Our Board has adopted stock ownership requirements for directors and officers. These stock ownership requirements were adopted to promote a long-term perspective in managing the Group and to help align the interests of our stockholders, directors, and officers. As of March 29, 2016, 12 of our non-employee directors and officers already met or exceeded their ownership requirements. New directors and new officers have five years to meet the requirements. A complete description of the stock ownership requirements for directors and officers appears in the "Compensation Discussion and Analysis" section of this Proxy Statement.
Our directors as of March 29, 2016, are as follows:
| Name | Age | Position | Current Term Expires | Director Since | Independent | Occupation | Other Board Experience | Public Utilities or Public Health Experience | ||||||||||||||
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| Gregory E. Aliff | | 62 | Director | | 2016 | | 2015 | Yes | Former Vice Chairman and Senior Partner of U.S. Energy & Resources, Deloitte LLP | | Yes | | Yes | |||||||||
| Terry P. Bayer | 65 | Director | 2016 | 2014 | Yes | COO of Molina Healthcare, Inc. | Yes | Yes | ||||||||||||||
| Edwin A. Guiles | | 66 | Director | | 2016 | | 2008 | Yes | Former Executive Vice President of Corporate Development, Sempra Energy | | Yes | | Yes | |||||||||
| Bonnie G. Hill | 74 | Director | 2016 | 2003 | Yes | President of B. Hill Enterprises, LLC | Yes | Yes | ||||||||||||||
| Martin A. Kropelnicki | | 49 | President & CEO and Director | | 2016 | | 2013 | No | President & CEO of California Water Service Group | | Yes | | Yes | |||||||||
| Thomas M. Krummel, M.D. | 64 | Director | 2016 | 2010 | Yes | Emile Holman Professor in the Department of Surgery at Stanford University School of Medicine and Susan B. Ford Surgeon-in-Chief at Lucile Packard Children's Hospital | Yes | Yes | ||||||||||||||
| Richard P. Magnuson | | 60 | Lead Director & Chair of the Board's Executive Sessions | | 2016 | | 1996 | Yes | Venture Capitalist | | Yes | | | |||||||||
| Linda R. Meier | 75 | Director | 2016 | 1994 | Yes | Board Member, Stanford University Hospital | Yes | Yes | ||||||||||||||
| Peter C. Nelson | | 68 | Chairman of the Board | | 2016 | | 1996 | No | Chairman of the Board of California Water Service Group | | Yes | | Yes | |||||||||
| Lester A. Snow | 64 | Director | 2016 | 2011 | Yes | Executive Director of the California Water Foundation | Yes | Yes | ||||||||||||||
| George A. Vera | | 72 | Director | | 2016 | | 1998 | Yes | Principal Executive Officer of the Carroll Investment Company | | Yes | | | |||||||||
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PROPOSAL NO. 1 – ELECTION OF DIRECTORS
Upon the recommendation of the Nominating/Corporate Governance Committee, the Board has nominated for election at the 2016 Annual Meeting of Stockholders a slate of ten nominees. All of the nominees other than Gregory E. Aliff have served as directors since the last Annual Meeting. Mr. Aliff has served as a director since September, 2015. All directors are elected annually to serve until the next Annual Meeting or until their respective successors are elected. Linda R. Meier is retiring from the Board as of the 2016 Annual Meeting and will not stand for re-election, in accordance with the Board's retirement policy. Accordingly, the Board has reduced the number of directors to ten, effective as of the Annual Meeting.
Nominee Qualifications
When an incumbent director is up for re-election, the Nominating/Corporate Governance Committee reviews the performance, skills, and characteristics of such incumbent director before making a determination to recommend that the Board nominate him or her for re-election.
The Nominating/Corporate Governance Committee believes that all of the following ten director nominees listed are highly qualified and have the skills and experience required for membership on our Board. A description of the specific experience, qualifications, attributes and skills that led our Board to conclude that each of the nominees should serve as a director follows the biographical information of each nominee.
Vote Required
Each director must be elected by the affirmative vote of a majority of the votes cast. A majority of the votes cast means that the number of votes cast "FOR" a candidate for director exceeds the number of votes cast "AGAINST" that candidate for director.
Recommendation of the Board
Our Board of Directors unanimously recommends that you vote "FOR" the election of each of the following nominees:
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| | | Policies Prohibiting Hedging and Pledging In accordance with our Insider Trading Policy, our directors and executives are prohibited from: • Hedging their ownership of Group stock, including trading in options, puts, calls, or other derivative instruments related to Group stock or debt; and • Pledging their ownership of Group stock. | | | | Executive Compensation Recovery (“Clawback”) Policy Our Board has adopted an executive compensation recovery, or “clawback,” policy aligned with NYSE requirements and Rule 10D-1 under the Securities and Exchange Act of 1934 requiring the reimbursement of excess incentive-based compensation provided to the executives in the event of certain restatements of our financial statements. A more detailed description of the Executive Compensation Recovery Policy appears in the “Compensation Discussion and Analysis” section of this Proxy Statement. | | |
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Mr. Aliff is the former Vice Chairman and Senior Partner of U.S. Energy & Resources at Deloitte LLP, a global provider of professional services, where he began his distinguished career nearly four decades ago. From 2012 to 2014, Mr. Aliff led Deloitte's Sustainability Services practice, which focused on water and energy management. Prior to that, he led the firm's U.S. Energy & Resources practice for ten years. Mr. Aliff also previously served as a member of the Board of Directors of the United States Energy Association. He currently serves as a director on the board of SCANA Corporation and as a director for Grid Alternatives, a non-profit organization. Mr. Aliff earned his Bachelor of Science in Accounting and his Masters of Business Administration from Virginia Tech. He is a Certified Public Accountant.
Mr. Aliff brings extensive accounting, auditing, and financial reporting experience to the Board, with specific expertise in both the public utility and energy and resources industries. He also has in-depth experience in strategy, enterprise risk management, and regulatory affairs from his many years providing professional services to numerous major utilities. His deep understanding of public utility markets and the breadth of experience he has gained from working with public companies make him a valuable resource to the Group. Mr. Aliff was identified as a nominee by the President & CEO of the Group, who introduced him to the chair of the Nominating/Corporate Governance Committee and the Chairman of the Board for consideration as a director candidate.
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| | | Codes of Business Conduct Board members are expected to adhere to the Code of Business Conduct and Ethics for Members of the Board of Directors, which outlines expectations for behavior and promotes a culture of honesty. Our Business Code of Conduct applies to all officers and employees of Group, highlights areas of ethical risk, provides guidance in recognizing and handling ethical issues, and describes established mechanisms for reporting unethical conduct. We require employees to receive annual ethics training. Our Business Code of Conduct is available on our website at http:/www.calwatergroup.com. | | | |
Ms. Bayer is the Chief Operating Officer (COO) for Molina Healthcare, Inc., a managed care company that provides Medicaid and Medicare related solutions to meet the healthcare needs of low-income individuals and families. She has held that position since 2005. She was previously Executive Vice President of Health Plan Operations and also held management positions at Family Health Plan and AccentCare, Inc. Ms. Bayer previously served on the Board of Directors of Apria Healthcare Group, Inc. from 2006-2008 where she served as the chair of the compliance committee and served as a member of the compensation committee. She holds a Juris Doctor Degree from Stanford University, a Master's Degree in Public Health from the University of California, Berkeley, and a Bachelor's Degree in Communications from Northwestern University.
Ms. Bayer brings senior leadership, financial, operational, and public health expertise to the Board from her service as the COO of Molina Healthcare, Inc., a public company. She has many years of experience as an operating executive with a strong focus on government program compliance, public health and administration, as well as customer service. Her significant background and experience in healthcare supports the Board's efforts in overseeing and advising on employee health matters. Her previous experience as a director of Apria Healthcare Group. Inc. and a committee member also allows her to contribute to the Group.
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Common Common Common Role of the Organization and Compensation Committee Target Authorized Regulated ROE GAAP Calculated ROE Regulatory Calculation of ROE (GAAP + CWIP) Regulatory Calculated ROE + Drought Expenses vesting criteria. The annual performance targets related to ESG, shareholder value, and earnings per share. Martin A. Kropelnicki Thomas F. Smegal Paul G. Townsley Francis S. Ferraro Robert J. Kuta 2023. Maximum Target Threshold Target Authorized Regulated ROE GAAP Calculated ROE Regulatory Calculation of ROE (GAAP + CWIP) Regulatory Calculated ROE + Drought Expenses RSUs to our officers for the three-year performance period ending on December 31, 2023. The component weighting is 40% for each of the two financial measures and 20% for the environmental leadership metric. The payouts are summarized below: Martin A. Kropelnicki Thomas F. Smegal Paul G. Townsley Francis S. Ferraro Robert J. Kuta Basic and Supplemental Pension Plan Benefits (SERP) 65. employee’s eligible earnings. and Other NEO Benefits a company-owned Stock Ownership Requirements annually. All non-employee directors and officers are in compliance with this requirement. Martin A. Kropelnicki President & CEO Thomas F. Smegal III Vice President, Chief Financial Officer and Treasurer Paul G. Townsley Vice President, Rates and Regulatory Matters Francis S. Ferraro Vice President, Corporate Development Robert J. Kuta Vice President, Engineering compensation, years of service, and vesting. 2023 Martin A. Kropelnicki Thomas F. Smegal III Paul G. Townsley Francis S. Ferraro Robert J. Kuta Martin A. Kropelnicki Thomas F. Smegal III Paul G. Townsley Francis S. Ferraro Robert J. Kuta Pension Benefits 2023 Martin A. Kropelnicki President & CEO Thomas F. Smegal III California Water Service Pension Plan Vice President, Chief Financial Officer and Treasurer Paul G. Townsley California Water Service Pension Plan Vice President, Regulatory Matters and Corporate Relations Francis S. Ferraro California Water Service Pension Plan Vice President, Corporate Development Robert J. Kuta California Water Service Pension Plan Vice President, Engineering service and at age This provision for a tax gross-up has been a part of the Executive Severance Plan since its inception in 1998 and has not been modified since then. lump sum at termination. Martin A. Kropelnicki Thomas F. Smegal III Paul G. Townsley Francis S. Ferraro Robert J. Kuta Board Retainers: Annual Base Retainer – All Directors Chairman of the Board Retainer Lead Director Retainer Committee Chair Retainers: Audit Committee Chair Retainer Organization and Compensation Committee Chair Retainer Nominating and Corporate Governance Committee Chair Retainer Finance and Risk Management Committee Chair Retainer Board/Committee Meeting Attendance Fees: Chairman of the Board – Board Attendance Fee All other Directors – Board Attendance Fee Chairman of the Board – Committee Attendance Fee All other Directors – Committee Attendance Fees Equity: Annual RSA Equity Grants(1) Peter C. Nelson(1) Chairman Richard P. Magnuson Lead Director Gregory E. Aliff Terry P. Bayer Edwin A. Guiles Bonnie G. Hill Thomas M. Krummel, M.D. Linda R. Meier Lester A. Snow George A. Vera The Organization and Compensation Committee of the Securities and Exchange Commission. the related narrative discussion in this proxy statement when deciding how to vote on this proposal. ” 2023. matters. TABLE OF CONTENTS Audit Fees(1) Audit-Related Fees(2) Tax Fees All Other Fees Total supply chain strategy services. TABLE OF CONTENTS In addition, under the listing standards of the New York Stock Exchange, approval of Proposal No. 4 requires the affirmative vote of a majority of the votes cast. copy of the documents was delivered. A stockholder who wishes to receive a separate copy of the proxy statement and annual report, now or in the future, may obtain one, without charge, by addressing a request to the Corporate Secretary, California Water Service Group, 1720 North First Street, San Jose, California 95112-4508. www.calwatergroup.com Mr. Guiles has been a director Enterprise Risk Management, Safety, and Security Committee Chair Retainer $ 15,000 Equity: $ 110,000 Cubic Corporation since 2008. He was formerly Executive Vice President of Corporate Developmentrestricted stock valued at Sempra Energy. From 2000 to 2006, he was Chairman$110,000. The restricted stock grants were made on March 7, 2023, respectively, and CEO of San Diego Gas & Electric (SDG&E) and Southern California Gas Company (SoCal Gas), Sempra Energy's California regulated utilities. He held a variety of management positions at SDG&E since joining that company in 1972. Mr. Guiles is also past chairmanwere fully vested on the first anniversary of the California Chambergrant date. Name
(a)(1) Fees Earned or
Paid in Cash
($)
(b)
($)
(c) Total
($)
(h) Peter C. Nelson, Former Chairman(2) 86,667 43,259 129,926 Gregory E. Aliff 143,000 103,710 246,710 Shelly M. Esque 118,000 103,710 221,710 Jeffrey Kightlinger 19,667 18,894 38,561 Thomas M. Krummel, M.D. 138,000 103,710 241,710 Yvonne A. Maldonado, M.D. 118,000 103,710 221,710 173,000 103,710 276,710 Charles R. Patton 59,000 55,537 114,537 Carol M. Pottenger 118,000 103,710 221,710 Lester A. Snow 133,000 103,710 236,710 Patricia K. Wagner 133,000 103,710 236,710 Commerce. He has a Mechanical Engineering Degreethe Board retainer, and 2023 stock award for his role as Chairman of the Board, prorated for his retirement from the UniversityBoard on May 31, 2023.Arizona.Mr. Guiles is a former chairman & CEOeach RSA granted in 2023 to the non-employee directors, calculated in accordance with a strong public utility background. He has corporate governance experience through his serviceFASB ASC Topic 718, disregarding estimates for forfeitures. On March 7, 2023, non-employee directors received annual grants of restricted stock valued at $110,000 as the Board retainer. Assumptions used in the calculation of these amounts are included in footnote 12 of Group’s annual report on Form 10-K, filed with the Securities and Exchange Commission on February 29, 2024.boards of SDG&E, SoCal Gas, and Cubic Corporation, a public company. He brings to the Board valuable senior management and operational expertise from his 37 years at Sempra Energy, SDG&E, and SoCal Gas. Additionally, Mr. Guiles' in depth knowledge of public utility regulation provides the Board with crucial insight.was as follows: Gregory E. Aliff, 16,200; Shelly M. Esque, 9,533; Jeffrey Kightlinger, 381; Thomas M. Krummel, M.D., 24,300; Dr. Yvonne A. Maldonado, 4,541; Scott L. Morris, 7,118; Charles R. Patton, 1,067; Carol M. Pottenger, 11,089; Lester A. Snow, 19,825; Patricia K. Wagner, 7,115. Bonnie G. HillAge 74Director since 2003 Ms. Hill ispresidentlong-term interests of B. Hill Enterprises, LLC, a consulting firm specializing in corporate governance and board organization. She isour stockholders. We also co-founder of Icon Blue, a brand marketing company. From 1997 to 2001, she wasdiscuss how our Chairman, President & CEOChief Executive Officer, Chief Financial Officer, and other Named Executive Officers (collectively, our NEOs) were compensated in 2023 and describe how their compensation fits within our executive compensation philosophy. For fiscal 2023, our NEOs were: Name Title Martin A. Kropelnicki Chairman, President & Chief Executive Officer David B. Healey Former Vice President, Chief Financial Officer & Treasurer Thomas F. Smegal, III Former Vice President, Chief Financial Officer & Treasurer Paul G. Townsley President, TWSC, Inc. & Former Vice President, Business Development Michael B. Luu Senior Vice President, Corporate Services & Chief Risk Officer Ronald D. Webb Vice President, Chief Human Resource Officer Shawn C. Bunting Senior Vice President, General Counsel & Business Development Table of Contents Page This Compensation Discussion and Analysis is organized as follows: 2023 Compensation Overview 49 NEO Compensation Components and Pay Mix 50 Executive Compensation Governance and Process 53 2023 Performance Goals and Performance 57 Other Compensation Programs 69 Executive Compensation Policies and Practices 70 Times Mirror Foundationgenerating strong operating results and Senior Vice President, Communicationscreating long-term alignment with our stockholders and Public Affairs, of The Los Angeles Times. She is a director of Yum Brands, Inc. She was formerly a director of AK Steel Holdings Corp., Home Depot, Inc., Hershey Foods Corporation,customers. We reward for excellent job performance, overall leadership, long-term results, and is a former member of the Investors Advisory Group of the Public Company Accounting Oversight Board. She is a trustee of the RAND Corporation, a member of the Shareholder Director Exchange (SDX),provide for fair, reasonable, and was a founding member of the Lead Director Network (LDN).Through her experience as a former chair of the SEC's Consumer Affairs Advisory Committee, and as a former director of the National Association of Securities Dealers Regulation Board, Ms. Hill brings to the Board significant public policy, regulatory, and governance expertise. Her business experience as well as her service on the boards of a variety of public companies over the past 24 years demonstrates her extensive knowledge of the complex financial and operational issues that public companies face. CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 17 Martin A. KropelnickiAge Director since 2013 Mr. Kropelnicki is President & CEO ofGroup. Mr. Kropelnicki joined the Group as Vice President, Chief Financial Officer (CFO) and Treasurer in 2006 and was named the President and COO in 2012. He then was appointed President & CEO of the Group effective September 1, 2013. He has over 27 years of experience in finance and operations, including 15-plus years as CFO at public listed companies and has held executive positions at PowerLight Corporation, Hall Kinion & Associates, Deloitte & Touche Consulting Group, and Pacific Gas & Electric Company. He is currently on the board of the Bay Area Council and is president-elect and serves on the executive committee of the National Association of Water Companies (NAWC). He holds a Bachelor of Arts Degree and Master of Arts Degree in Business Economics from San Jose State University.Mr. Kropelnicki is well positioned to lead the Group's management team and give guidance and perspective to the Board. His experience as the former CFO of the Group provides expertise in both corporate leadership and financial management. His 15-plus years as a CFO of publicly listed companies and operations management experience enables him to offer valuable perspectives on the Group's corporate planning, rate making, and budgeting along with operational and financial reporting. Thomas M. Krummel, M.D. Age 64 Director since 2010Align management interests with the long-term interests of our customers, communities, and stockholders 2023
Base Salary
$ Achieved
Short-Term At-Risk
Compensation
$ Achieved
Long-Term At-Risk
Compensation
$
Total Direct
Compensation(1)
$ Martin A. Kropelnicki 1,050,005 1,449,000 1,225,666 3,724,671 David B. Healey 289,564 113,505 — 403,069 Thomas F. Smegal III 426,344 90,494 179,136 695,974 Paul G. Townsley 367,266 151,871 179,136 698,273 Michael B. Luu 415,021 172,204 204,053 791,278 Ronald D. Webb 334,198 138,483 179,136 651,817 Shawn C. Bunting 329,235 138,000 149,354 616,589 Dr. Krummel is the Emile Holman Professor in the Department of Surgery at Stanford University School of Medicine and the Susan B. Ford Surgeon-in-Chief at the Lucile Packard Children's Hospital. A leader in his field, he has been honoredHenry J. Kaiser Family Foundation Award for Excellence in Clinical Teaching;long-term interests of our customers and stockholders. When designing our compensation programs, the John Austin Collins, M.D. Memorial Award for Outstanding TeachingOrganization and Dedication to Resident Training;Compensation Committee (Committee) prioritizes transparency and the Lucile Packard Children's Hospital Recognition of Service Excellence. He is currently Chairsimplicity of the Board of Directors at The Fogarty Institute for Innovation and serves as a Director of The Morgridge Institute for Research – University of Wisconsin.Dr. Krummel brings to the Board experience with professional training and developmentprograms as well as maintaining unified goals and objectives of the annual short- and long-term incentive programs for the entire executive team to drive aligned operational decisions and Company performance.familiaritybalance of fixed and variable compensation components, with medical, public health,short-term and science issues. He offerslong-term compensation elements, maintains a strong link between the Board unique insightNEOs’ compensation and the overall Group’s performance while promoting the interests of both customers and stockholders. The Committee annually re-evaluates the mix of fixed and variable compensation, including the proportions of at-risk compensation awarded as short-term cash-based and long-term equity- based awards and stockholder feedback. Additionally, the Committee continues to monitor our program on public health matters, including healthcare policyan annual basis to ensure the structure will not incentivize excessive risk-taking.legislation, drinking water quality,operating performance of our Companyemployee health.inflation 18 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement Richard P. MagnusonAge 60Director since 1996 Name 2022
Base Salary
$ 2023
Base Salary
$ Change in Base
Salary
% Martin A. Kropelnicki 1,050,000 1,050,000 — 285,600 470,000 64.6 504,400 524,600 4.0 450,000 470,300 4.5 378,400 429,200 13.4 Ronald D. Webb 318,500 334,500 5.0 — 400,000 — Magnuson is a private venture capitalistHealey retired December 31, 2022 as Vice President, Corporate Controller. Mr. Healey returned to the Company on May 31, 2023 and is lead director.was appointed Interim Vice President, Chief Financial Officer and Treasurer until January 3, 2024.Magnuson holds an undergraduate degreeSmegal’s 2023 annual base salary amount reflects Mr. Smegal’s base salary in economics, a law degreeeffect at the time he stepped down from his role of Vice President, Chief Financial Officer and a master's degree in business administration from Stanford University. From 1984 to 1996, he was a general partner of Menlo Ventures, a venture capital firm. He has servedTreasurer on May 31, 2023. For more discussion on the boardsterms of Mr. Smegal’s transition agreement, please see the section titled “Transition Agreements and Severance Arrangements” in this Proxy Statement.following public companies: Rogue Wave Software (acquiredGroup. The performance- based short-term compensation is fully at risk with payout, dependent upon achievement of certain performance objectives over a one-year performance period.Quovadx), IKOS Systems, Inc. (acquiredthe Committee to establish the 2023 short-term at-risk performance metrics, see “Performance-Based Short-Term At-Risk Compensation” in this Proxy Statement.Mentor Graphics),our officers, and OrCAD, Inc. (acquired by Cadence Design Systems). He has also served on the boardsto promote stock ownership. We grant our officers long-term equity compensation consisting of several other privately held companiesperformance-based restricted stock units (RSUs) and time-based restricted stock awards (RSAs).past.With his legalform of RSUs subject to at-risk performance-based vesting criteria, vesting 0% to 200% based on performance of each metric. RSUs reward officers only if preset performance targets are met and venture capital backgrounds, Mr. Magnuson brings valuable financial and business strategy expertisevest subject to the Board. His past experience onlevel of achievement under a three-year performance period. Time-based RSAs vest over three years, vesting one-third at the boardsend of other public companies,the first year and his insight on financialthe remaining shares vesting quarterly over the next 24 months.operational matters, adds valuethe factors used by the Committee to establish the Board. His past2023 long-term at-risk performance metrics, see “2023 Long-Term Performance and current Board service also provides insight on corporate governance practices. Peter C. NelsonAge 68Director since 1996 
Mr. Nelson is Chairman of the Board of the Group and its subsidiaries. He is a director of the California Chamber of Commerce and a past president of the National Association of Water Companies (NAWC).Mr. Nelson has a strong record of operational and strategic leadership in the public utility business, including his 17-plus years of experience as the former President & CEO of the Group. An engineer by training with a graduate degree in business administration, he gained extensive senior executive experience at Pacific Gas & Electric Company. He has a vast understanding of the water industry from his role as the former President & CEO of the Group and from his leadership roles representing the water profession nationally at NAWC as well as in California at the State Chamber of Commerce.CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 19 Lester A. SnowAge 64Director since 2011 
Mr. Snow has served as Secretary of the California Natural Resources Agency, Director of the California Department of Water Resources, Regional Director of the U.S. Bureau of Reclamation, Executive Director of the CALFED Bay Delta Program, and General Manager of the San Diego County Water Authority. He is Executive Director of the California Water Foundation, an initiative of the Resources Legacy Fund, and currently serves on the board of the Water Education Foundation. He holds a Master of Science Degree in Water Resources Administration from the University of Arizona and a Bachelor of Science Degree in Earth Sciences from Pennsylvania State University.Mr. Snow brings more than 30 years of water and natural resource management experience to the Board. His distinguished public service career enables him to assist the Board in addressing water and environmental issues as well as regulatory and public policy matters. Additionally, his executive experience in the public sector provides the Board with critical insight on a variety of operational and financial matters. George A. VeraAge 72Director since 1998 
Mr. Vera retired in May, 2011 as Vice President and CFO of the David and Lucile Packard Foundation. Until 1997, he was an audit partner at Arthur Andersen, LLP. He is now employed as the principal executive officer with the Carroll Investment Company, a private investment management firm.Mr. Vera is an experienced financial leader with the skills necessary to chair our Audit Committee. He brings many years of accounting experience as a former audit partner that is critical to the Board. His former position with the David and Lucile Packard Foundation provides him with extensive knowledge in dealing with financial and accounting matters. His current position with Carroll Investment Company continues to build his experience in dealing with investment and financial matters.20 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERSOwnership of Directors and Executive OfficersThe Group's Corporate Governance Guidelines, available on the Group's website at http://www.calwatergroup.com, include the stock ownership requirements for non-employee directors and officers. The requirements were adopted to promote a long-term perspective in managing the Group and to help align the interests of our stockholders, directors, and officers. A more complete description of the stock ownership requirements appears in the "Compensation Discussion and Analysis" section of this Proxy Statement.Individuals are required to achieve the relevant ownership threshold within five years following adoption of the requirements or five years after commencing service, whichever is later.CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 21The following table shows the common stock ownership of our directors and officers as of March 29, 2016. All directors and officers have sole voting and investment power over their shares (or share such powers with their spouses).NameCommon StockBeneficiallyOwned(*) Gregory E. AliffDirector3,593Terry P. BayerDirector7,171 Shannon C. DeanExecutive Officer5,663Edwin A. GuilesDirector26,357 David B. HealeyExecutive Officer14,440Bonnie G. HillDirector26,508 Martin A. KropelnickiDirector and Executive Officer60,823Thomas M. Krummel, M.D.Director18,648 Robert J. KutaExecutive Officer4,667Michael B. LuuExecutive Officer8,923 Richard P. MagnusonDirector65,646Lynne P. McGheeExecutive Officer19,329 Linda R. MeierDirector30,465Michelle R. MortensenExecutive Officer3,069 Peter C. NelsonDirector and Retired Executive Officer38,708Elissa Y. OuyangExecutive Officer1,513 Michael J. RossiExecutive Officer31,411Gerald A. SimonExecutive Officer1,513 Thomas F. Smegal IIIExecutive Officer31,134Lester A. SnowDirector14,683 Paul G. TownsleyExecutive Officer11,966Timothy D. TreloarExecutive Officer9,168 George A. VeraDirector36,731Ronald D. WebbExecutive Officer7,629 All directors and executive officers as a group479,758 *To the knowledge of the Group, as of March 29, 2016, all directors and executive officers together beneficially owned an aggregate of approximately 1.0% of the Group's outstanding common shares. No one director or officer beneficially owns more than 1.0% of the Group's outstanding common shares.22 CALIFORNIA WATER SERVICE GROUP |2016 Proxy StatementOwnership of Largest StockholdersAs of December 31, 2015, the Group's records and other information available from outside sources indicated that the following stockholders were the beneficial owner of more than five percent of the outstanding shares of our common stock.The information below is as reported in filings made by third parties with the SEC. Based solely on the review of our stockholder records and public filings made by the third parties with the SEC, the Group is not aware of any other beneficial owners of more than five percent of the common stock.Class Beneficial Owner Number of
Shares of
Common Stock Percent of
Class The Vanguard Group, Inc.(1)
100 Vanguard Blvd.
Malvern, PA 19355
3,649,753 7.62% BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055 3,579,076 7.50% Pictet Asset Management SA(3)
60 Route des Acacias
1211 Geneva 73
Switzerland
2,765,877 5.77% (1)The Vanguard Group, Inc. has sole voting power over 64,182 shares; sole investment power over 3,587,471 shares; shared voting power over 5,000 shares; and shared investment power over 62,282 shares as of December 31, 2015, as filed on SEC Schedule 13G/A.(2)BlackRock, Inc. has sole voting power over 3,381,373 shares and sole investment power over 3,579,076 shares as of December 31, 2015, as filed on SEC Schedule 13G/A.(3)Pictet Asset Management SA has shared voting power over 2,765,877 shares and shared investment power over 2,765,877 shares as of December 31, 2015, as filed on SEC Schedule 13G.Section 16(a) Beneficial Ownership Reporting ComplianceSection 16(a) of the Securities Exchange Act of 1934, requires our directors, executive officers, and holders of more than 10% of our common stock to file with the SEC reports regarding their ownership, and changes in ownership of our securities. Based solely on its review of the copies of forms furnished to the Group, or written representations that no annual forms (SEC Form 5) were required, the Group believes that for fiscal year ended December 31, 2015, our directors and executive officers filed all reports on a timely basis.CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 23 COMPENSATION DISCUSSION AND ANALYSISThis Compensation Discussion and Analysis (CD&A) describes the material elements of the Group's executive compensation program for 2015. This section focuses on the compensation of the Group's principal executive officer, principal financial officer, and the three other most highly compensated executive officers for 2015 referred to herein as "named executive officers" (NEOs) or "executives."The Organization and Compensation Committee (Committee), which is comprisedthe Group'sour compensation programs for executivesofficers and executiveofficer succession. After a reviewThis includes reviewing and approving goals and objectives relevant to the compensation of our CEO, evaluating our CEO’s performance in light of those goals and objectives, and based on this evaluation, recommending our CEO’s compensation levels,level to the independent directors for approval.incentiveat-risk performance objectives for executivesofficers for the 12-month period beginning January 1st1 of each year. These objectives align with stockholder and customer interests and support theour long-term growth and health of the Group. Company. To assist the Committee, our Chairman, President & CEO provides an assessment of each officer’s performance and contribution towards the key corporate goals. Our Chairman, President & CEO’s recommendations regarding direct compensation adjustments are provided to the Committee for each of our officers other than himself based on the competitive data and the other factors described below under “Total Compensation Factors.”typicallygenerally concludes its process in November. After year-end results are final, the Committee reviews the achieved results for the prior year, certifies the achievement of each goal, approves payment of incentiveat-risk compensation as certified, and approves the incentiveat-risk compensation targets for the current year. 24 CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement|53 is a summary ofoutlines the key features of our executiveofficer compensation program: WHAT WE DON'T DO✓![[MISSING IMAGE: ic_whatwedo-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_whatwedo-pn.jpg)
performance-based incentivesat-risk performance- based compensation, as well as awarding 50%award more than half of long-term equity incentive compensation in the form of at-risk restricted stock units (RSUs) subject to performance-based vesting criteria over a three-yearthree- year period.✓✓have implementedadopted an executive compensation recovery, ("clawback")or “clawback,” policy aligned with NYSE requirements and Rule 10D-1 under the Securities and Exchange Act of 1934 requiring the reimbursement of excess incentive-based compensation provided to the Group's officersexecutives in the event of certain restatements of the Company'sour financial statements.✓We have retained an independent compensation consultant who reports to ![[MISSING IMAGE: ic_whatwedont-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_whatwedont-pn.jpg)
Organization and Compensation Committee.✗We do not provideGroup provides officers with only limited perquisites consisting of a company vehicle with related excess liability insurance.agreements. Otheragreements; other than participation in the Executive Severance Plan, none of the executivesour current officers are party to individual employment or severance agreements.✗We do not providechange in control benefits. The Group'schange-in-control benefits; the Group’s Executive Severance Plan provides for change in controlchange-in-control severance benefits upon a qualifying termination of employment following a change in control. In addition,change-in- control; the Group'sGroup’s equity incentivecompensation plan does not require single-trigger vesting acceleration upon a change in control.✗We do not provide tax gross-ups on perquisites or other personal benefits.✗We limit perquisites. As detailed below, the Group provides executives with only limited perquisites consisting of a company car with related excess liability insurance and an employee relocation program.✗We do not allowchange-in-control.with respect toof Group stock. Ourstock; the Group’s directors and officers are prohibited from hedging their ownership of Group stock, including trading in options, puts, calls, or other derivative instruments related to Group stock or debt, in accordance with anthe anti-hedging prohibition in our insider trading policy. Ourpolicy; directors and officers are also prohibited from pledging their ownership of Group stock in accordance with an anti-pledging provision in our insider trading policy. PayPerformanceIn a significant deviation from historical practice, beginning in 2012 we implemented substantial changesour officers after determining that the compensation for these individuals is competitive relative to ourcompanies of comparable size, complexity, location, and business nature (see below for additional discussion of this comparison).program to incorporate both long-term and short-term performance-based compensation. These changes focused on better linking executive compensationconsultant.Group's performance (as measuredCommittee; the Committee has sole authority to retain, terminate, and approve the fees paid to Meridian; and Meridian may not be engaged to provide any other services to the Company without the approval of the Committee. Other than its engagement by key operationalthe Committee, Meridian does not perform any other services for the Group. The Committee believes having an independent evaluation of compensation is a beneficial tool for the Committee, the Group, and financial objectives).stockholders. The enhancementsCommittee retained Meridian for several purposes, including:executive compensation program of the past several years, which are discussed in more detail elsewhere in this CD&A, include:
proxy peer group•Implementing a short-term performance-based compensation program in the form of an annual short-term performance-based incentive that supports the long-term growth of the Group;•Awarding 50% of long-term equity incentive compensation in the form of restricted stock units (RSUs) subject to performance-based vesting criteria, with the remaining 50% awarded in the form of time-based restricted stock awards (RSAs); CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 25|54 Contents•Implementingvarious factors, including performance and those factors required by SEC rules and NYSE Listed Company Rules regarding compensation consultant independence. The Committee has affirmatively concluded that Meridian is independent from California Water Service Group and has no conflicts of interest relating to its engagement by the Committee.three-year performance periodnumber of compensation recommendations, including those pertaining to the officers that were based on the competitive assessments provided by and through consultation with Meridian. The Committee’s recommendations to the Board were made, however, entirely by the Committee in its sole discretion. Regulated Utilities Companies that are generally highly regulated public gas, water, or multi-utility-based organizations Similar Business Models Companies that operate in similar arenas, requiring similar skills and experiences from their executive talent, and being subject to similar market forces Size (Revenue Within 1/2x-2x Range) Companies of a broadly relevant size as an indicator of complexity and scope for executive roles; companies that are of a reasonable size for making market comparisons Other Factors Companies that are subject to unique California statutes that are applicable to the Group (we aim for a portion of the peer group to meet this requirement) Allete, Inc. MGE Energy American States Water Company Northwest Natural Gas Company Avista Corporation NorthWestern Corp. Black Hills Corp. Otter Tail Corporation Chesapeake Utilities Corp. PNM Resources Essential Utilities, Inc. San Jose Water Group IDACORP, Inc. Unitil Corporation performance-based RSUs with vesting only upon meeting2023 fiscal year for the officers, the Committee’s general objective was to set total compensation within a “competitive range” for each officer’s position based on the competitive data. The Committee considers the “competitive range” to mean that compensation levels are within plus or exceeding performance targets related to eachminus 20% of the following: water quality, customer service, utility plant investment, returnmedian compensation levels, as determined by reference to data derived from peer group companies or general industry survey data, as applicable. Given reliable proxy data is only available for the CEO and CFO, general industry survey data is referenced using the same approach for the officers in non-CEO and non-CFO roles.equity,these other factors, the Compensation Committee may determine it is appropriate to set an officer’s total compensation outside the competitive range. safety;•Adopting stock ownership requirements for officers;•Adopting no-hedging and no-pledging policies for members of theSay-on-Payfor officers;management value the views of our stockholders and•Adopting a compensation recovery ("clawback") policy.2015 Say-on-Pay VoteWe believe that maintaining an active dialogue with them is important to our commitment to long-term stockholder value. For fiscal year 2023, we received approximately 92%96% of the votes cast on the Say-on-Pay advisory vote in favor of our executive compensation program (Say-on-Pay Vote) for fiscal year 2014, taken at the 20152023 Annual Meeting of Stockholders. The Committee believesIn light of the high level ofstrong support was the result of changes to the compensation program implemented by the Committee in late 2012 and 2013. We have continued to apply the same effective principles in making compensation decisions for 2015 and 2016, as described more fully below, although the Committeereceived at our last Say-on-Pay vote, we did not make any changes to the executive compensation program in response to the 20152023 Say-on-Pay Vote.Following the 2012 Say-on-Pay Vote, we increased our efforts to solicit feedback from stockholders to better understand their views. As a result of these discussions with stockholders, effective January 1, 2014, we implemented a short-term performance-based incentive compensation program for officers, which further strengthened the link between pay and the Group's performance. We continued to solicit feedback from stockholders in 2015. The Committee believes that a mix of short-term and long-term incentive compensation will reward and motivate near-term performance, while at the same time providing significant incentives to keep executives focused on longer-term corporate goals that support both stockholders and customers.We believe that the changes made to our executive compensation program since 2012 are responsive to the views expressed by our stockholders and that our executive compensation program continues to be aligned with the interests of our stockholders and customers. vote. Say-on-Pay Vote will continuewe believe in soliciting feedback from stockholders to monitor developments in this area. The Committee plansbetter understand their perspectives, to continue regular solicitationreceive their input on our business strategy and execution, and to gather feedback regarding other matters of investor interest. Over the course of 2023, management engaged regularly with investors at conferences, one-on-one meetings, and other forums, and discussed several topics, including corporate strategy, financial results, executive compensation, and environmental, social, and governance issues.onwe have observed the following:compensation program.Recapleadership team2015 Group PerformanceFor 2015, the Group achieved the majority of its operational goals while keeping non-drought related, controllable costs within budget.In April of 2015, the Governor for the State of California issued the first ever statewide drought emergency declaration in response to the fourth year of historic drought conditions. The emergency declaration required a mandatory urban water reduction of 25% statewide. Accordingly, the Group's largest subsidiary, California Water Service Company (Cal Water), reallocated its resources to implement an aggressive drought response plan during 2015 to ensure mandatory reduction targets were metnamed executive officers, and the California utility wasalignment between pay and performance.full compliance withpension which can change significantly based on uncontrollable factors (such as the Executive Order.As expected,discount rate) represent a large non-cash portion of the drought impactedreported total compensation for our CEO and did not see previously reported amounts as a risk factor that influenced their Say-on-Pay vote. Instead, stockholders tend to focus on changes in our CEO’s pay, excluding the Group's financial performance foractuarial change in pension value.year. The Group's net income was $45.0 millionBoard’s and diluted earnings per share was $0.94, which is inclusive of $4.4 million in incremental drought expenses for Cal Water relatedCompensation Committee’s responsiveness to its drought response and26 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statementthe state declared drought emergency. It is anticipated that the majority or all of these expenses will be recovered in future customer rates via a drought memorandum account established by the California Public Utilities Commission (CPUC) and subject to regulatory review and approval. Additionally, on July 3, 2015 we timely filed a general rate case (GRC) application seeking rate increases in all regulated operating districts in California for the Group's largest subsidiary, beginning January 1, 2017. The 2015 GRC application requested increased revenues of $94.8 million for 2017, $23.0 million for 2018, and $22.6 million for 2019. Additionally, the application also requested approval to invest $693.0 million in new capital throughout Californiastockholder feedback over the three-year period from January 1, 2016 through December 31, 2018 in order to continue to provide a safe and reliable water supply to our customers.Despite the diversion of significant resources used in response to the declared drought emergency for the implementation of water budgets for individual California customers along with related billing, regulatory filings, and increased conservation education and outreach, our officer team made considerable progress on our strategic corporate goals and critical business objectives. The officer team met or exceeded the performance objective with respect to three of the five performance targets established at the end of the year, as described in more detail in the following pages.Financial highlights for 2015 include:•Achieved an average system-wide water reduction of 28.6% in California versus the state mandated 25% target as of December 31, 2015;•Invested $177.3 million of capital in rate base, inclusive of developer contributions, an increase of 34% over 2014;•Increased the dividend for the 49th consecutive year;•Completed successful debt offering in the fourth quarter and a replacement of its syndicated line of credit in the first quarter;•Maintained the Company's strong credit rating of A+ stable and AA- for first mortgage bonds; and•Completed and implemented new rates via general rate cases in Hawaii and Washington.Our earnings per share in 2015 represented a return on equity (determined in accordance with GAAP) of 7.10%. However, common equity in part supports construction work in progress (CWIP), which is subject to interest during construction in lieu of a return on equity in most regulatory jurisdictions. Excluding the Cal Water funded CWIP from common equity, the Group earned 8.45% on average common equity (the regulatory calculation of return on equity). Excluding CWIP and the $4.4 million in 2015 drought expenses, which are tracked in a drought memorandum account for future recovery but expensed as incurred, the Group would have earned 8.98% on average common equity.2015 Return on Equity (ROE) ROE % Achieved 9.46% 7.10% 75% 8.45% 89% 8.98% 95% CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 27|56 Table of ContentsCEO Pay OverviewMr. Kropelnicki, the Group's CEO since September 1, 2013, made significant contributions to the Group's performance in 2015. Based on the 2015 performance objectives, the Committee granted Mr. Kropelnicki an equity incentive award with a total value of $550,000 for 2015. With a 2015 base salary of $770,000 and his $385,000 short-term incentive compensation bonus (representing a maximum payout of 100% of target for 2015 and reflecting superior performance during the year as described in more detail below), his total direct compensation for 2015 was $1,705,000 (comprised of salary, bonus, and equity award). The main difference between Mr. Kropelnicki's total direct compensation and the amount reported in the Summary Compensation Table is the change in value of his pension from 2014 to 2015, a $1.1 million increase in the actuarial estimate of his future potential pension benefits due to changes in interest rates. Changes in actuarial assumptions for the pension and Supplemental Executive Retirement Plan (SERP) costs are included in customer rates through a rate recovery mechanism. The actual value of the pension benefit ultimately received by Mr. Kropelnicki will depend on a number of factors including when he retires, when he elects to begin receiving benefits, and how long he actually receives benefits. No pension benefit is paid to Mr. Kropelnicki until after his retirement from the Group.Compensation Philosophy for ExecutivesThe Group's overall philosophy is to provide compensation that attracts, retains, and motivates talented executives, rewards excellent job performance, overall leadership, and provides for fair, reasonable, and competitive total compensation that aligns executives' interests with the long-term interests of our stockholders and customers.The Committee believes that a balance of fixed and variable compensation, with short-term and long-term compensation elements, maintains a strong link between the NEOs' compensation and the Group's performance, as well as promotes the interests of both customers and stockholders. The Committee will annually re-evaluate the mix of fixed and variable compensation, including the proportions of incentive compensation awarded as short-term cash-based and long-term equity-based awards. Additionally, the Committee continues to monitor our program on an annual basis to ensure that the structure will not incentivize excessive risk-taking.Overall, we believe ourachievingdesigned to link officer compensation to our overall short-term and long-term performance (as measured by key operational and financial objectives incorporated in both short-term (ARP) and long-term (ARP-LT) performance- based compensation programs as outlined below.intended results. Group.believegrant to our officers long-term equity compensation of which more than half is competitive in the industry and has resulted in the attraction and retentionform of officers who contributerestricted stock units (RSUs) subject to the long-term success of the Group. In addition, the program creates a strong linkage between pay and performance through our long-term equity and annualat-risk performance-based short-term incentive compensation without encouraging imprudent risk taking by the Group's officers.Elements of Compensationmaterial elements of the Group's executive compensation program for 2015 included:•Base Salary;•Annual Performance-Based Short-Term Incentive Compensation;•Performance and Time-Based Long-Term Equity Compensation;•Basic and Supplemental Pension Plan Benefits;•Deferred Compensation Plan Benefits; and•Limited Perquisites.28 CALIFORNIA WATER SERVICE GROUP |2016 Proxy StatementIn determining compensation, the CommitteeGroup’s Chairman, President & CEO is mindful that as a holding company for a California regulated utility, the Group's financial performance is substantially dependent upon CPUC regulation plus other factors, which to a large extent are beyond the control of executives. Therefore, the Committee's decisions regarding overall compensation are determined largely by evaluation of factors that are within the executives' control and its comparisons with peer groups. As discussed below, the metrics used to determine the executives' annual short-term performance-based incentive compensation and the vestingawarded 64% of long-term performance-based equity compensation awards are appropriate metrics that will align executive performance in a manner beneficial to both stockholders and customers and not encourage imprudent risk-taking. Base SalaryThe Group provides the largest portion of executive total compensation in the form of base salaries that compensateRSUs, subject to performance-based vesting criteria, with the remaining 36% awarded in the form of time-based restricted stock awards (RSAs). The Group’s senior vice presidents are awarded 65% of long-term equity compensation in the form of RSUs, subject to performance-based vesting criteria, with the remaining 35% awarded in the form of RSAs. The Group’s vice presidents are awarded 61% of long-term equity compensation in the form of RSUs, subject to performance-based vesting criteria, with the remaining 39% awarded in the form of RSAs. All other executives forare awarded 61% of long-term equity compensation in the form RSUs, subject to performance-based vesting criteria, with the remaining 39% awarded in the form of RSAs.of primary roles and responsibilities. The Committee reviews base salaries for executives annually and determines whether or not to recommend adjustments to salaries. To assist the Committee in this review, the Group's President & CEO provides an assessment of each executive's performance and contribution towards the key corporate goals and makes recommendations regarding base salary adjustments to the Committee for each of the executives other than himself based on the competitive data and the other factors described below under "Determining Executive Compensation."The Committee has and continues to target base salaries for each executive that are appropriateperiod for the performance, skills, capabilities, and individual contributions in his/her position. The base salary levels are established by reference to the competitive data described below.As was consistentlong-term performance-based RSUs with last year's practice, when determining 2015 base salaries and total target cash compensation, the Group compared both the base salaries for its executives to the base salaries for similar positions within the competitive data as well as the target total cash compensation for its executives (taking into account annual short-term incentive compensation targets) to the competitive market target total cash compensation. Each of the executive's base salaries for 2015 were within the competitive range (defined as plus or minus 20% from the median compensation level,vesting based upon available survey data)achievement of target total cash compensation. of the Group, including the NEOs, establish a number of corporate goals and objectives for the Group that seek to promote the long-term growth of the Group and alignsalign the interests of stockholders, customers, and employees. The objectives chosen are communicated internally within the Group and monitored quarterly. Changes in base salary levels for our Chairman, President & CEO and other NEOs are generally based on progress against certain of these key corporate goals, by the Groupofficer performance goals, and individual executiveofficer performance. For 2015, the following corporate goals of the Group were used to evaluate 2015 compensation for our current President & CEO and NEOs:1. Group Operations Goal – Achieve planned operating results as defined in the 2015 Corporate Goals and Objectives. Our overall goal was to manage the controllable elements of administrative and general, other operations, and maintenance expenses within budget.Achieved Results for Group Operations – For 2015, the Group achieved the majority of its operational goals while keeping non-drought related, controllable costs within budget. In April of 2015, the Governor for the State of California issued the first ever statewide drought emergency declaration in response to historic drought conditions. The emergency declarationCALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 29required a mandatory urban water reduction of 25%. Accordingly, Cal Water reallocated its resources to implement an aggressive drought response plan during 2015 to ensure mandatory reduction targets were met and the California utility was in compliance with the Executive Order. Plan elements included:•Reprogramming its customer billing system in response to the California drought emergency to implement individual customer water budgets and budget tracking at the meter level;•Establishing a dedicated full-time drought response team for statewide drought response efforts comprised of more than 30 full-time employees including call center representatives, conservation experts, a government affairs specialist, and a communications specialist;•Opening a dedicated drought call center operating 12 hours per day to assist customers throughout the state with drought-related issues, including reviewing customer appeals of water budget allocations;•Responding to leak emergencies 24 hours per day, 7 days a week, rather than scheduling repairs during normal business hours;•Maintaining customer service levels and call center response times despite the significant increase in phone calls due to the implementation of mandatory drought requirements;•Implementing an aggressive media and customer outreach program for each district; and•Taking a customer-first approach that focuses on helping customers achieve their water budgets.As of December 31, 2015, Cal Water achieved an average system wide savings of 28.6% versus the 25% target. The achieved savings is equal to more than 22 billion gallons of water saved for the period of June 1 through December 31, 2015 as compared to the same period of 2013, the baseline year for savings calculations. The majority of the California districts met or exceeded the mandatory reduction targets that ranged from 6 to 36% at the local level.While Cal Water has an authorized memorandum account to track drought-related costs from the CPUC and can apply for expense recovery at a later date, drought costs are expensed in the period incurred. During 2015, the Group incurred $4.4 million in incremental costs associated with the drought, which reduced earnings by an estimated $0.06 per share for 2015. In addition to significant efforts related to the drought response, the Group achieved the majority of its corporate goals and managed non-drought-related controllable costs within budget, as discussed below.2. Stockholder Value Goal – Achieve budgeted earnings per share of $1.12, return on equity on invested capital of 9.46%, and Company funded capital expenditures of $136 million.Achieved Results for Stockholder Value – For 2015, the Group achieved the following result for the major objective in this category:•Earnings per share of $0.94 or 84% of target, which represents a return on equity (as determined in accordance with GAAP) of 7.10%. Common equity in part supports CWIP, which is subject to interest during construction in lieu of a return on equity in most regulatory jurisdictions. Excluding the Cal Water funded CWIP from common equity, the Group earned 8.45% on average common equity (the regulatory calculation of return on equity). Excluding CWIP and the $4.4 million in 2015 drought expenses, which are tracked in a drought memorandum account for future recovery but expensed as incurred, the Group would have earned 8.98% on average common equity.30 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement•Company funded capital expenditures were $171 million, exceeding the 2015 Capital Budget by $35 million or 26%. In evaluating this result, the Committee gave consideration to factors that affected the Group's operating results that are described in the Group's annual report on Form 10-K.3. Regulatory Goal – File the 2015 GRC for Cal Water, the Hawaii Water Service Company (Ka'anapali) GRC, and the Washington Water Service Company GRC.Achieved Results for Regulatory – On July 3, 2015, Cal Water filed a GRC application as described above. In December, 2015, Hawaii Water Service Company filed a GRC for Ka'anapali water and wastewater requesting $1.7 million in additional annual revenues. On January 15, 2015, the Washington Utilities and Transportation commission approved the 2014 Washington Water Service Company GRC authorizing annual revenue increase of $1.7 million effective February 1, 2015.4. Customer Service and Water Quality Goal – Complete key strategic projects in the areas of customer service and water quality.Achieved Results for Customer Service and Water Quality – To address the water use reduction targets, Cal Water established individual water budgets for every customer, set up a centralized drought call center to answer questions and process water-budget appeals, and trained numerous drought coordinators to provide personal, individual assistance to every customer who needed it. Additionally, Cal Water hosted 25 public meetings throughout the state to discuss its drought plan personally with thousands of customers. During 2015, the California districts achieved an average system-wide reduction of 28.6% compared to a state target reduction of 25%.An automated customer survey program was also implemented in 2015 to issue surveys to customers after receiving service from Cal Water. The surveys, delivered via either email or phone, provide real-time feedback allowing trends to be identified and any issues to be resolved quickly.In 2015, the Group maintained high water quality standards with no primary water quality violations in California, Hawaii, and New Mexico. During the year, Cal Water achieved full compliance with the new California regulation for chromium-6 and became one of the first water providers in the United States to utilize full-scale strong base anion-exchange technology for treatment, the most cost-effective methodology to treat chromium-6. Nine treatment installations were completed in 2015 using this methodology, maintaining affordability for our customers.5. Employee Retention and Development Goal – Implement key strategic projects in the area of employee retention and development.Achieved Results for Employee Retention and Development – During 2015, the Group completed key strategic objectives in the area of employee retention and development, including:•Implemented online learning management system making available developmental and safety courses to employees;•Implemented changes focused on safety and reducing long-term worker's compensation costs;•Cal Water named a "Top 100 Workplace" in the San Francisco Bay Area for the fourth consecutive year; and•Ratified and implemented a six-year contract with our unions.CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 31above,below for 2023, the Committee then reviews and discusses the overall performance of each executiveofficer and the competitive data provided by the independent consultant retained by the Committee. Once reviewed and agreed upon, the Committee recommends to the Board the base salaries for the executivesour officers (including the Chairman, President & CEO). The following table shows the base salaries for each executive for 2014, 2015, and 2016:Name 2014
Base Salary 2015
Base Salary 2016
Base Salary $ 700,000 $ 770,000 $ 825,000 381,600 390,000 405,600 325,000 335,000 345,050 423,315 432,000 440,640 300,000 306,000 The increases to salaries for 2015 and 2016 are intended to compensate the individuals for job performance and overall leadership while being within the "competitive range" of the market data for target total cash compensation for similar positions ("competitive range" is described in more detail above and below). Group Operations: Financial: Regulatory: Employee Retention and Development: IncentiveAt-Risk CompensationEffective January 1, 2014,introducedmaintain an annual performance-based short-term incentiveat-risk compensation program for officers that alignsdesigned to align annual performance and achievement with the long-term strategic goals of the Group. The performance- based short-term compensation is fully at risk with payoutspayout dependent upon achievement of certain performance objectives over a one-yearone- year performance period.For 2015, the performance criteria for the annual short-term incentive awards were tied to the same performance metrics used for the long-term performance-based RSUs that were eligible to be earned for 2015 performance, which are listed in the table that follows under "Performance and Time-Based Equity Compensation." The same metrics were utilized for two reasons. First, the Committee believes aligning incentives between short-term and long-term incentive compensation discourages short-term risk taking at the expense of the long-term health of the Group's regulated utilities, customers, and operations. Second, the metrics previously underwent regulatory review in the last general rate case, and compensation payable based upon these metrics is currently included in customer rates through a rate recovery mechanism.For 2015, the Committee granted the opportunity for executives (other than our President & CEO) to receive short-term performance incentive awards of 10% of base salary at target, vesting 0% to 200% based on performance. The annual short-term incentive award target will increase to 15% of base salary in 2016. For our President & CEO, the Committee granted the opportunity to receive a short-term performance based incentive award of up to 50% of base salary (at target) in 2015, which will increase to up to 75% of base salary (at target) in 2016. As short-term incentive compensation increases, the Committee intends to slow the growth of base salaries and allocate a greater portion of total direct compensation to variable incentives that better align with the interest of stockholders, customers, and employees.Achievement of the performance criteria for the annual short-term incentive awards is reviewed and certified by the Committee in the February meeting following the review of year-end results and related audit opinion. Once certified, the annual short-term incentive award is paid shortly thereafter, subject to the executive's continued employment through the end of the applicable performance period and only to the extent the performance criteria are 32 CALIFORNIA WATER SERVICE GROUP |2016 Proxy StatementThe Committee considered a number of factors when establishing the 2023 short-term at-risk performance metrics, including: For 2023, the Committee granted the opportunity for our officers to receive short-term at-risk (ARP) performance awards as follows:
100% of base salary
0% to 200% of target, based on
performance
30% of base salary
0% to 200% of target, based on
performance incentiveat-risk compensation program for 2015.
Weight: 20%
Performance Level* Primary
Drinking Water
Standards
Violations
(all states) Secondary
Drinking Water
Standards
Violations (California only) Procedural
Drinking Water
Violations
(California only) Percent of
Target Earned Maximum 0 0 0 200% Target 0 2 or fewer Up to 4 100% Threshold 1 or fewer 4 or fewer Up to 8 50% * An additional tier applies between the target and maximum level
and Support
Weight: 20%
Performance Level* Criteria Percent of
Target Earned Maximum 99.1% of maximum annual metric, plus PromisePay implementation and a 20% reduction in California customer accounts receivable 90 days and over from all customer outreach 200% Target 92.1.% of maximum annual metric 100% Threshold 90.0% of maximum annual metric 50%
Improvement and
Utility Plant
Investment
Weight: 20% Historically, the annual Board-approved capital expenditures budget is the target for this metric. Investment in utility plant, property, and equipment is a driver of stockholder return and a key component of providing reliable, high-quality water service to customers. This metric is updated each year to reflect the annual approved capital program and budget for the Group and its subsidiaries and is tied to regulatory approvals. As the outcome of the California general rate case was still pending as of fiscal year end and there was not yet regulatory approvals for 2023, the 2023 target performance level was set at $290 million.
Performance Level* 2023
(In Millions) Percent of
Target Earned Maximum $330 200% Target $290 100% Threshold $245 25%
Performance (EPS)
Weight: 20% This metric measures the annual budget-to-actual performance of the Company. Specifically, this measure compares the actual diluted earnings per share to the forecasted diluted earnings per share for the calendar year. The forecasted diluted earnings per share is adopted during the budget process by the Board of Directors each year at its January meeting. By adhering to budgets, management can demonstrate to the Board, stockholders and customers that the Company is effective at managing controllable costs and has the ability to efficiently execute its business plan.
Performance Level* EPS Variance
From Budget Percent of
Target Earned Maximum Over 10% 200% Target −2.5% to 2.5% 100% Threshold −7.6% to −10% 25%
Preparedness and
Safety
Weight: 20% Performance Level* Performance Target Percent of
Target Earned Maximum Conduct 17 community EOC trainings 200% Target Conduct 12 community EOC trainings 100% Threshold Conduct 10 community EOC trainings 50% Performance Level* Performance Target Percent of
Target Earned Maximum 100% of applicable employees 200% Target 85% of applicable employees 100% Threshold 70% of applicable employees 25% TCIR Performance Level* Performance Target Numeric
Equivalent Percent of
Target Earned Maximum 25% improvement over target results 2.55 200% Target Maintain 2022 achieved TCIR, excluding OSHA reportable COVID-19 incidents 3.40 100% Threshold 85% of target results 3.91 25% Performance Level* Performance Target Numeric
Equivalent Percent of
Target Earned Maximum 20% improvement over 3-year average (2020-2022) achieved results 33 200% Target Maintain 3-year average (2020-2022) achieved results 41 100% Threshold 85% of 3-year average (2020-2022) achieved results 47 25% Performance Level* Performance Target Percent of
Target Earned Maximum 505 Audits 200% Target 365 Audits 100% Threshold 260 Audits 25% Performance Metric Minimum Threshold
Performance Target Performance Maximum
Performance Achieved Results
Public Health
Weight: 20% Up to one primary (all states), up to four secondary (California only), up to eight procedural violations (California only) No primary (all states), up to two secondary (California only), up to four procedural violations (California only) No primary (all states), no secondary (California only), no procedural violations (California only) 200% — No primary, no secondary, no procedural violation
Support
Weight: 20% 90.9% of the maximum annual metric 93.9% of the maximum annual metric 99.1% of the maximum annual metric, plus implementation of Promise Pay and a 20% reduction in California customer accounts receivable 90 days and over from all customer outreach and assistance efforts 175% — Achieved 100% of the maximum annual metric, implementation of PromisePay achieved, 20% reduction in California customer accounts receivable 90 days and over was not achieved
Weight: 20% $245 million in company-funded capital expenditures $290 million in company-funded capital expenditures $330 million in company-funded capital expenditures 200% — $366 million in company-funded expenditures
Weight: 20% Negative 10% EPS variance from budget +/- 2.5% EPS variance from budget Positive 10% EPS variance from budget 0% — (53%) variance from budget
Weight: 20% Performance Metric Weight Achievement Achieved Results Water Quality and Public Health 20% 200% 40% Customer Service and Support 20% 175% 35% 20% 200% 40% 20% 0% 0% Emergency Preparedness and Safety 20% 114% 23% Final 2023 Achievement Name
At-Risk Compensation Earned
($)(1) Martin A. Kropelnicki $ 1,449,00 David B. Healey 113,505 Thomas F. Smegal 90,494 Paul G. Townsley 151,871 Michael B. Luu 172,204 Ronald D. Webb 138,483 Shawn C. Bunting 138,000 the Group'sour long-term equity incentive compensation is to better align executive compensation with the long-term interests of both stockholders and customers, to create incentives for executiveofficer recruiting and retention, to encourage long-term performance by the Group's executives,our officers, and to promote stock ownership. Risk is taken into account in determining the aggregate amount of incentiveat-risk compensation and performance criteria, including assessment of risk management and risk mitigation.incentiveat-risk compensation, the Committee reviewed the competitive range of long-term equity compensation and total direct compensation for similar positions within the competitive market in making decisions regarding long-term equity compensation awards for 2015. However, the2023. The Committee also believes that, in the interest of fostering the Group's "One-Team" approach for the officer team, which strengthensstrengthening and rewardsrewarding teamwork and collaboration within the officer team, the annual equity incentive awards granted to each of the Group's executives (other than the President & CEO)our officers should be based on the same objectives and methodology. The Committee recommended awarding the President & CEO a greater value of equity awards in 2015 than the other officers because of his substantially greater level of responsibility and ability to influence the Group's operational results. The President & CEO's grant value for 2015 was greater than his grant value for 2014 as a result of the Committee's review of the competitive data and its desire to bring long-term equity incentive compensation values within the competitive range of the proxy peer group. for 2015, the Committee set the total target value for the long-term at-risk (ARP-LT) equity compensation awards at $550,000 for our President & CEO, $120,000 for vice presidents,2023 and $72,000 for all other executives, assuming a target level of performance. All equity awards for executives were granted 50% in2022 as follows: form of time-based RSAs vesting over three years and 50% inperformance metrics applicable to the form of performance-based RSUs with a three-year performance period and the opportunity to earn up to 200% of the target2023 performance-based RSU award, based onthe Committee will certify the level of achievement with respect to Board approved objectives.The performance-based RSUs awarded to our President & CEO and other executives provide for aat the end of the three-year performance period with vesting based solely upon the achievement of objective performance criteria.period. The number of shares awarded at the end of the three-year performance period will beis based on the extent the performance criteria is met over such time and will be subject to the executive'sofficer’s continued employment through such date. Each year following the performance period, the Committee establishes performance metrics with respect to each of the performance criteria described below. As noted above, for 2015, the performance criteria for our annual short-term incentive programthe same metrics applicablesubject to the performance-based RSUs for 2015.The following section provides a more detailed look at each performance metric, along with the maximum, target,measures, goals, and thresholdrelated payout levels for each:
three-year period ending on December 31, 2025.•Water Quality: This metric is based only upon performance of the Group's largest subsidiary, Cal Water. The CPUC has authority to set drinking water standards. It has adopted the California State Water Resources Control Board, Division of Drinking Water (DDW) standards, which also incorporate U.S. Environmental Protection Agency (EPA) drinking water standards.•A primary drinking water standard violation is related to public health, either acute or long-term.
(Performance Period 2023 — 2025)
Weight: 40% This metric measures return on equity (ROE) as shown in the public financial statements of California Water Service Group. It is defined as net income divided by average common stockholders’ equity for the three- year performance period. The final three-year achievement will be certified at the end of the three-year performance period. Stockholders expect the Company to earn its authorized return on equity for its regulated business. For this reason, the metric uses the authorized ROE as the target for 100% performance achievement. The rationale for tiers above and below the authorized ROE is to account for regulatory mechanisms and lag.
Performance Level* Annual Return on Common Stockholders’ Equity Percent of
Target Earned Maximum Target plus 50 basis points 200% Target California authorized ROE 100% Threshold Target minus 200 basis points 20% CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 33•A secondary drinking water standard violation is related to taste or aesthetics, such as excessive iron and manganese, and can generate customer complaints.•A procedural violation is a missed sample or other non-compliance item that is not a violation of a primary or secondary standard.Performance is evaluated based on number of procedural violations and violations of primary and secondary drinking water standards. Cal Water makes it a priority to meet all water quality standards, every day, in every service area. For this reason, the target performance level was set for no primary water standard violations, two or fewer secondary water standard violations, and no more than four procedural violations.Performance Level* Primary Water
Standards
Violations Secondary Water
Standards
Violations Procedural
Violations Goal Achieved 0 0 0 200% 0 2 or fewer Up to 4 100% 1 or fewer 4 or fewer Up to 8 50% *An additional tier applies between the target and maximum level.•Customer Service: A combination of nine CPUC standards and one internal company performance indicator which encompass key measurements for telephone responsiveness, service responsiveness, billing accuracy, and general levels of customer complaints comprises this metric. The nine CPUC customer service standards are found in the CPUC's General Order 103-A. This metric is evaluated each quarter for 10 measurements in 20 California service areas for a maximum annual metric measurement of 800.Performance Level*CriteriaGoalAchieved Maximum99% of maximum annual metric200%Target95% of maximum annual metric100%Threshold92% of maximum annual metric25% *Multiple tiers apply between the threshold and target level and between the target and maximum level.•Utility Plant Investment: The annual Board-approved capital expenditures budget is the target for this metric. Investment in utility plant, property, and equipment is a driver of stockholder return and a key component of providing reliable, high-quality water service to customers. This metric is updated each year to reflect the annual approved capital program and budget for the Group and its subsidiaries. For 2015, the annual Board-approved capital expenditure budget and target performance level was set at $136 million, an increase of $5 million over 2014's Board-approved capital expenditure budget.Performance Level* 2015
(In Millions) Goal
Achieved Maximum $156 200% Target $136 100% Threshold $121 25% *Multiple tiers apply between the threshold and target level and between the target and maximum level•Return on Equity (ROE): The return on equity of 9.46% on invested capital is the target for this metric. Return on equity is defined using net income divided by average common stockholders' equity. This metric measures the effectiveness of the Group's financial34 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement management and regulatory strategy. It provides for a substantial increase in the award for performance above the authorized ROE (20% increase for a 5 basis points [bps] increase in ROE) and a more graduated downside measure (20% decrease in award for a 50 bps decrease in ROE) due to the regulatory mechanisms in place which limit the possibility of achieving high returns on equity. For 2015, the ROE authorized by the CPUC was 9.43%.Performance Level* Each Annual Period Goal
Achieved Maximum 9.96% 200% Target 9.46% 100% Threshold 7.46% 20%
Stockholders’
Equity
Weight: 40% This metric measures growth in stockholders’ equity by the accumulation of two factors over the performance period growth in total stockholders’ equity and actual dividends paid in the calendar year. These growth values can be objectively validated using the Company’s audited annual financial statements. The metric, in a stock-price neutral way, measures the growth in stockholders’ equity created by the Company over the performance period. Investors in water utilities are interested in value creation along with dividend growth.
Performance Level* Accumulation of Stockholder Value
Over the Performance Period Percent of
Target Earned Maximum $750 million 200% Target $650 million 100% Threshold $575 million 25%
Social,
and Governance -
Environmental
Leadership
Weight: 20%
Performance Level Performance Target Percent of
Target Earned Maximum Achieve three goals 200% Target Achieve two goals 100% Threshold Achieve one or fewer goals 0% *Multiple tiers apply between the threshold and target level and between the target and maximum level.•SAFETY: This metric is measured annually for Cal Water and is the sum of two broadly used indices of a company's workplace safety. Those indices are the federal Occupational Safety and Health Administration Reportable Incident Rate (ORIR) and lost productivity measured in employee days away, restricted, or transferred (DART). The Group's officer team has been focused on improving its management of the safety program and has set this metric to improve performance from the 2012/2013 average rate. The two measures are aggregated, so performance at the 50% level for each metric would be the equivalent of a 100% performance on this metric as a whole.Performance Level* ORIR Measure Performance Target Numeric
Equivalent Goal
Achieved Maximum 57% improvement over 2012/2013 average 4.0 100% Target 20% improvement over 2012/2013 average 8.1 50% Threshold 10% improvement over 2012/2013 average 9.1 25% *An additional tier applies between the target and maximum level.Performance Level* DART Measure Performance Target Numeric
Equivalent Goal
Achieved Maximum 40% improvement over 2012/2013 average 2.4 100% Target 20% improvement over 2012/2013 average 3.1 50% Threshold 10% improvement over 2012/2013 average 3.5 25% *An additional tier applies between the target and maximum level. CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 35|67 Summary of Performance Goal Achievements for 2015The following table sets forth the performance goals used for short-term and long-term compensation for 2015, along with the target for each goal, the weight of each component in the overall award, and the achievement of each goal as certified by the Committee for 2015, both in terms of actual achievement and percentage received based on such achievement:Performance Goal* Target for 100%
Achievement RSU/Cash
Award
Component
Weighting Achievement 2015
Goal
Achieved 2015
Weighted
Achieved
Results Water Quality No primary violations, 2 or fewer secondary violations, and up to 4 procedural violations 20% No primary or secondary violations. No procedural violations. 200% 40% Customer Service Meet 760-767 out of 800 annual aggregate metrics for CPUC standards and internal targets 20% 786 annual aggregate metrics met 125% 25% Utility Plant Investment $136 million in company-funded capital expenditures 20% $177 million in company-funded capital expenditures 200% 40% Return on Equity 9.43% 20% 8.45% 40% * 8% Safety 4.0 ORIR and 2.4 DART 20% 7.0 ORIR and 3.7 DART 75% 15% 128% Total 2015 RSU achievement for all executives = 128% Total 2015 short-term incentive award achievement for all other executives = 128% (award cannot exceed 200%) Total 2015 short-term incentive award achievement for Mr. Kropelnicki = 100% (award cannot exceed 100%) * The Group achieved a return on average common equity in 2015 of 7.10%. However, common equity in part supports construction work in progress (CWIP), which is subject to interest during construction in lieu of a return on equity in most regulatory jurisdictions. Excluding the company funded CWIP from common equity; the Group earned 8.45% on average common equity. Excluding CWIP and the 2015 drought expenses of $4.4 million, the Group earned 8.98% on average common equity, net. In light of these circumstances, the Committee approved payment/vesting at 40% for this metric.2015 Return on Equity (ROE) ROE % Achieved 9.46% 7.10% 75% 8.45% 89% 8.98% 95% 36 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement
(Performance Period 2021 — 2023)Contents Performance Metric Annual Threshold
Performance Annual Target
Performance Annual Maximum
Performance Achieved Results
Weight: 40% 7.20% in 2021 and 2022, 8.27% in 2023 CPUC authorized ROE: 9.20% in 2021 and 2022, 10.27% in 2023 9.70% in 2021 and 2022, 10.77% in 2023 80% — GAAP ROE — 9.71% in 2021, 7.70% in 2022, 3.73% in 2023
Equity
Weight: 40% $345 million $420 million $520 million 200% — $677 million
Weight: 20% Implementation of rate design which increases the total percent of company-wide annual revenue requirement collected through a customer’s fixed monthly service charge Implementation of rate design which increases the total percent of company-wide annual revenue requirement collected through a customer’s fixed monthly service charge, and reduces the typical Customer Assistance Program (“CAP”) customer bill in 5 service areas as compared to the rate design approved in the 2018 rate case Implementation of rate design which increases the total percent of company-wide annual revenue requirement collected through a customer’s fixed monthly service charge, and reduces the typical Customer Assistance Program (“CAP”) customer bill in 15 service areas as compared to the rate design approved in the 2018 rate case. 200% — Implemented rate design which increases the total percent of company-wide annual revenue requirement collected through a customer’s fixed monthly service charge, and reduces the typical Customer Assistance Program (“CAP”) customer bill in 15 service areas as compared to the rate design approved in the 2018 rate case. Performance Metric Weight Achievement Achieved Results Return on Equity 40% 80% 32% Growth in Stockholders’ Equity 40% 200% 80% Affordability and Rate Design 20% 200% 40% Final Achievement incentiveequity compensation paid or earned by our President & CEO, CFO, and the three most highly compensated executive officers of the Group for the fiscal yearthree-year performance period ended December 31, 2015.Name 2015
Performance Stock Earned
($)(1) 2015
Short-Term Incentive Award
($)(2) $575,841 $385,000 137,613 49,920 137,613 42,800 137,613 55,296 63,049 38,400 Name
Stock Earned
($)(1) Martin A. Kropelnicki 667,288 David B. Healey 88,556 Thomas F. Smegal 102,807 Paul G. Townsley 102,807 Michael B. Luu 102,807 Ronald D. Webb 102,807 Shawn C. Bunting(2) — The performance stock earned represents the 2015 tranche for the 2013, 2014, and 2015 performance stock awards. 20132021 performance stock will be granted following the end of the three-year performance period,award, which is comprised of the years 2013, 2014,2021, 2022, and 2015. The shares for the 2014 performance stock will be granted2023, were earned and vested following the end of the three-yearthree- year performance period which is comprised of the years 2014, 2015,on March 2, 2024.2016. The shares for the 2015therefore did not participate in this performance stock will be granted following the end of the three-year performance period, which is comprised of the years 2015, 2016, and 2017.(2)The short-term incentive compensation is paid out annually following certification of the prior year's results by the Committee. 2016 CompensationIncentive Awards for 2016For executives (other than our President & CEO), the Committee set short-term incentive award opportunity at a target of 15% of base salary, vesting between 0% to 200%, dependent on 2016 performance. The Committee set our President & CEO short-term incentive awards at up to 75% of base salary, dependent on 2016 performance. As short-term incentive compensation increases, the Committee intends to slow the growth of base salaries to better align with the total direct compensation of our proxy peer group.In November of 2015, the Committee, after reviewing competitive data for each executive, approved the total value of the equity compensation awards, in the form of RSAs & RSUs, and short-term incentive awards to be granted to our President & CEO and other executives for 2016. The equity award values (assuming a target level of performance) were:•President & CEO – $575,000;•Vice presidents – $150,000; and•Other executives – $90,000.The equity awards vest over three years respectively, with 50% subject to the achievement of performance metrics and 50% subject to time-based vesting and continued employment.On March 1, 2016, the following awards were granted:•President & CEO – 11,593 shares of RSAs and 11,593 RSUs;•Vice presidents – 3,025 shares of RSAs and 3,025 RSUs; and•Other executives – 1,815 shares of RSAs and 1,815 RSUs.The RSUs are subject to performance-based vesting.cycle. CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 37The following charts illustrate variable incentive pay as a percentage of compensation for 2015 and 2016:Chief Executive Officer2015-2016 Pay Mix Other NEOs2015-2016 Pay Mix
the Group provides supplemental retirement benefits are provided to our officers under the SERP. The SERP plan is designed primarily to compensate for limitations imposed by the Internal Revenue Code (Code) on allocations and benefits that may be paid to executivesofficers under the Group'sGroup’s tax-qualified plan. Because the Code restricts benefits under the tax-qualified plan, executivesour officers otherwise would not be eligible to receive the retirement benefits that are proportional to the benefits received by our employees that generallyemployees. The benefits under the SERP are based on compensation.obtained by applying similar benefit provisions of the Pension Plan to all compensation included under the Pension Plan, without regard to these limits, reduced by benefits actually accrued under the Pension Plan. The SERP is structured as such that benefits are paid to executivesour officers on a "pay“pay as you go"go” basis. The SERP is an unfunded, unsecured obligation of the Group and is designed to assist in attracting and retaining key executivesofficers while providing a competitive, total compensation program. Currently, bothWe believe that pension benefits are an important recruitment and retention tool for our employees and are consistent with practice among most of our peers.qualified pension and SERP expenses are fully recoverable in customer rates, includingyear-over-year, non-cash, changes in the actuarial present value of the accrued pension liability and do not represent actual cash compensation paid. During 2020, the SERP valuation duewas amended, increasing the plan’s unreduced retirement age from 60 to market interest rate changes and mortality table changes.qualified managers.eligible employees. The plan is intended to promote retention by providing eligible employees, including the officers, with a long-term savings opportunity on an income tax-deferred basis. This plan is voluntary and funded by the individuals who elect to participate in the program. There are no company-matchingcompany or company- matching contributions.officers,our NEOs, are entitled to contribute up to the statutory limit set by the Internal Revenue Service (IRS) and the Group matches 75% for each dollar contributed up to 8% for a maximum company-matching contribution of 6% of employee's base salary.Group'sGroup’s automobile policy, the Group's officers have the use of a company-owned automobile,vehicle, including excess liability insurance. The Committee believes that the use of38 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statementautomobilevehicle allows theour officers to work more efficiently because many of the geographic the executiveour officers is taxed as additional compensation in accordance with IRS regulations and paid for by the executive.officers. The Group alsooffers its officers a supplemental medical plan providing proactive health protection services, including executive physicals and emergency travel assistance. Additionally, the Group has a relocation program assisting employees required to move on behalf of the companyGroup to remain as productive as possible during the relocation transition. Employees who receive relocation assistance are required to sign a repayment agreement. Other than these benefits, the automobile and relocation benefit, the Committee'sCommittee’s general philosophy is not to provide perquisites and other personal benefits of substantial value to the officers.Severance ArrangementsNoneofficerstarget performance-based RSU award based on achievement with respect to Committee approved objectives.partyparticipant in the tax-qualified defined benefit plan that covers all permanent employees as well as the non-qualified supplemental retirement benefit plan provided to an individual employment agreement with the Group that provides for severance benefits. In addition, we do not provide officers with single-triggered change in control benefits.Consistent with the Group's compensation philosophy, the Committee believes that the interests of stockholders are best served if the interests of senior management are aligned with those of the Group's stockholders. To this end, the Group provides change in control severance benefits toour officers under the Group's Executive Severance Plan to reduce any reluctance ofSERP. The amounts reported in the officers to pursue or support potential2023 Summary Compensation Table later in this Proxy Statement is the change in control transactions that would be beneficial to stockholders.the actuarial estimate of his future potential pension benefits. The Group adopted the plan in 1998, and its purpose is to promote the continued employment and dedication of executives without distraction in the face of a potential change in control transaction. The Executive Severance Plan provides severance pay equalpension value represents the present value of future retirement benefits and does not represent any cash payment to three times base salary to each of the officers if their employment is terminated without good cause or they resign for good reason during the two-year period followingfrom Mr. Kropelnicki or a change in control. Each executive officerthe formula which determines his retirement benefit.also be eligiblepaid to receive a gross-up payment ifMr. Kropelnicki until after his retirement from the executive is required to pay an excise tax under Section 4999Group. The net present value of the Internal Revenue Code. This provision forpension benefit ultimately received by Mr. Kropelnicki will change based on a tax gross-up has been a partnumber of the executive Severance Plan since its inceptionfactors, including changes in 1998 and has not been modified since then.In the event of a termination notinterest rates, changes in connection with a change in control, each executive officer is covered by the Group's general severance policy stating that each non-union employee of Group whose employment is terminated without cause is entitled to severance pay of either one week's pay after completing twomortality tables, Mr. Kropelnicki’s current age, years of service, or two weeks' pay after completing five or more years of service, provided in each case thatand age at least two weeks' notice is given. Under the Group's policies, all officers are entitled to a pay-out of six weeks of vacation time upon termination of employment.Determining Executive CompensationEach year the Committee reviews, assesses, and recommends to the Board all compensation for executives after determining that the compensation for these individuals is competitive relative to companies of comparable size, complexity, location and business nature (see below for additional discussion of this comparison). In addition, the Committee approves the retention, fees, and termination of any compensation consultant or compensation consulting firm used to assist in the evaluation of executive compensation. With respect to 2015 compensation decisions, the Committee retained the services of an independent compensation consultant, Veritas Executive Compensation Consultants (Veritas), for investigation into and advice on compensation for executives. The Committee believes that having an independent evaluation of compensation is a valuable tool for the Committee, the Group, and stockholders. Veritas isCALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 39not engaged to perform any additional work for the Group. The Committee retained Veritas for several purposes, including:•Constructing and reviewing compensation comparisons from readily available published survey and public filings data; and•Performing a competitive assessment of the Group's compensation programs, practices, and levels for its directors, executives, and other officers.The Committee made a number of compensation recommendations, including those pertaining to the executives that were based on the competitive assessments provided by and through consultation with Veritas. The Committee's recommendations were made, however, entirely by the Committee, in its sole discretion.Total compensation level for executives is based on one or more of the following factors:•The individual's duties and responsibilities within the Group;•The individual's experience and expertise;•The compensation levels for the individual's peers within the Group;•Compensation levels for similar positions based on a review of published compensation surveys; and•The levels of compensation necessary to recruit, retain, and motivate executives.In order to determine competitive compensation practices for 2015, the Committee relied, in part, on published survey compensation data as well as proxy data for individual companies. The individual companies are referred to in this proxy statement as the "Peer Group." The Peer Group includes companies that are generally gas, water, or multi-utility-based organizations with one-half to two times the annual revenue size of the Company. For 2015, the Committee made a change to the peer group. The Committee added The Empire District Electric Company, MGE Energy, and Ormat Technologies, all of which are similar to the Company in size and industry scope.On November 18, 2015, the Committee approved the following companies for inclusion in the Peer Group for 2015 for determining competitive compensation levels:Allete, Inc.Northwest Natural Gas Co.American States Water Co.Northwestern Corp.Aqua America, Inc.Ormat TechnologiesAvista CorporationPMN ResourcesBlack Hills Corp.Portland General ElectricChesapeake Utilities Corp.SJW Corp.El Paso ElectricSouth Jersey Industries, Inc.Veritas utilized the data from these sources (competitive data) to compile the competitive pay information comparing each executive's compensation to market levels for his/her officer position.After consideration of the competitive data, the Committee makes decisions regarding each individual executive's target total compensation opportunities based on the Group and individual performance and the need to attract, motivate, and retain an experienced and effective management team. The Committee examined the relationship of each executive's40 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statementbase salary, long-term equity incentives, short-term incentive awards, and total compensation to the competitive data from several perspectives by reviewing the following:•The competitive data without any adjustments;•Annual incentive or bonus valued at 50% of median of the market competitive data;•The lower range of 20% below the median of the market competitive data;•Target total direct compensation reduced by 20% from the median of the market competitive data; and•Actual short-term incentive compensation reduced by 20% from the median of the market competitive data.In making compensation recommendations for the 2015 fiscal year for the executives, the Committee's general objective was to set total compensation within a "competitive range" for each executive's position based on the competitive data. The Committee considers the "competitive range" to mean that compensation levels are within plus or minus 20% of the median compensation levels as determined by reference to the competitive data. Actual compensation decisions for the executive officers were, however, influenced by a variety of additional factors, including considerations of each individual's experience, expertise, performance and leadership, the Group's performance, and internal equity among the executive officers. With respect to 2016 compensation planning, the Committee retained the services of Veritas as the independent compensation consultant.Other Compensation PoliciesThe Board adopted requirements for our officersourGroup’s stock to further align their interests with those of our stockholders. The requirements were adopted to promote a long-term perspective in managing the Group and to help align the interests of our stockholders, directors, and officers. Each non-employee director and officer must directly own Group stock having a market or intrinsic value (i.e., paper gain for vested, unexercised stock options); whichever is higher, equal to:•For our CEO, five times annual base salary;•For vice presidents, one and one-half times annual base salary;•For all other officers, one time annual base salary; and•For non-employee Title Equity Chairman, President & CEO 3X annual base salary Group Senior Vice Presidents and Vice Presidents 1.5X annual base salary Other Officers 1X annual base salary Non-Employee Directors 5X annual base retainer five times annual cash retainer.Individuals subject to these requirements are required to achieve the relevant ownership threshold within five years following adoption of the requirements will reviewreviews compliance with these requirements on an annual basis.annually. The Nominating/Corporate Governance Committee will reviewreviews compliance with these requirements for non-employee directors on an annual basis. ![[MISSING IMAGE: ic_whatwedont-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_whatwedont-bw.jpg)
In 2012, thethatin 2012, which prohibits our directors and officers from participatingengaging in puthedging transactions (such as swaps, puts and calls, collars, and similar financial instruments) that would eliminate or calllimit the risks and rewards of share ownership. In addition, our directors and officers may not at any time engage in any short selling, buy or sell options, transactions, hedgingputs or calls, whether exchange-traded or otherwise, or engage in any other transaction in derivative securities that reflects speculation about the price of our stock or that may place their financial interests ahead of the financial interests of the Group.pledging transactions,all current officers of the Company and its subsidiaries have agreed in writing to the policy. Under such policy, in the event the Company is required to prepare an accounting restatement of the Company’s financial statements due to the Company’s material non-compliance with any financial reporting requirement under the federal securities laws (including any such correction that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period), the Company will recover the amount of any incentive-based compensation received by an officer that exceeds the amount that otherwise would have been Received had it been determined based on the restated financial statementsinherently speculative transactionsfactors in making decisions and we retain the flexibility to award compensation that we determine to be consistent with respect to Group stock. We adopted this policy as a matterthe goals of good corporate governance, and becauseour officer compensation program even if the awards are not deductible by prohibiting such transactionsus for tax purposes. CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 41|71 executives, the compensatory value of equity awards on both the upside and the downside remains strong. Executive Compensation Recovery ("Clawback") PolicyIn 2012, the Board also adopted an executive compensation recovery, or "clawback," policy requiring the reimbursement of excess incentive-based compensation provided to the Group's officers in the event of certain restatements of the company's financial statements. The policy allows the Group to clawback incentive-based compensation from executive officers who were actually involved in the fraud or misconduct that triggered the accounting restatement to the extent that the compensation was in excess of what would have been paid under the accounting restatement. This policy is applicable to all incentive-based compensation paid after implementation of the policy, and it covers the three-year period preceding the date on which the company is required to prepare the accounting restatement. Tax and Section 162(m) ImplicationsWhen designing compensation policies and setting compensation levels, the Group considers the potential tax treatment of the compensation, but the primary factor influencing program design is the support of business objectives. The Committee has reviewed the Group's compensation structure in light of Section 162(m) of the Code (Section 162(m)), which limits the amount of compensation that the Group may deduct for federal income tax purposes in any given year to $1,000,000 for our CEO and each of our next four highest compensated executives. There are certain exceptions to this limit, one of which is for "performance-based compensation," as defined under Section 162(m). RSAs granted by the Group do not qualify as "performance-based compensation," and thus count against the $1,000,000 deductibility limit.In designing our executive compensation decisions for 2016, we carefully consider the effect of Section 162(m) together with our factors relevant to our business needs. As we implement the performance-based awards into our compensation program, we will generally intend our performance-based awards to be eligible to qualify as tax-deductible to the Group, but we have the flexibility to pay the non-deductible compensation when necessary to achieve our executive compensation objectives. 42 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement executive officers of the Group for the fiscal years ended December 31, 2015, 2014,2023, 2022, and 2013.(a) (b) (c) (e) (h) (i) (j) Name and
Principal Position Year Salary
($) Stock
Awards
($)(1) Non-equity
Incentive Plan
Compensation
($)(2) Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(3)(4) All Other
Compensation
($)(5) Total
($) 2015 $ 768,712 $ 509,458 $ 385,000 $ 1,064,617 $ 32,009 $ 2,755,296 2014 698,388 404,179 175,000 1,507,183 27,907 2,812,657 2013 601,305 241,291 93,831 31,956 968,383 2015 390,592 120,512 49,920 60,668 23,430 645,122 2014 381,035 103,167 19,080 1,104,718 24,623 1,632,623 2013 359,591 82,508 — 24,993 467,092 2015 335,547 120,512 42,800 276,342 18,482 793,683 2014 324,596 103,167 16,250 320,906 20,494 785,413 2015 432,599 120,512 55,296 — 28,377 636,784 2014 422,936 103,167 21,166 622,465 30,504 1,200,238 2013 408,826 82,508 — 34,966 526,300 2015 228,548 58,924 38,400 125,609 142,230 593,711 Name and
Principal Position
(a) Year
(b) Salary
($)
(c)
Awards
($)(1)(2)
(e)
Incentive Plan
Compensation
($)(3)
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings ($)(4)
(h)
Compensation
($)(5)
(i) Total
($)
(j)
Excluding
Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings(6)
Chairman, President &
Chief Executive Officer 2023 1,050,005 1,225,666 1,449,000 1,062,525 69,556 4,856,752 3,794,227 2022 1,047,120 980,523 1,281,000 0 42,886 3,351,529 3,351,529 2021 901,872 988,682 1,206,000 $ 575,989 45,544 3,718,087 3,142,098
Former Vice President,
Chief Financial Officer 2023 289,564 0 113,505 382,362 28,451 813,882 431,520
Former Vice President,
Chief Financial Officer 2023 426,344 179,136 90,494 76,684 41,935 814,594 737,910 2022 502,937 163,449 184,611 0 45,347 896,343 896,343 2021 429,032 198,497 172,136 348,593 42,276 1,190,534 841,941
President, TWSC, Inc. 2023 367,266 179,136 151,871 707,116 145,348 1,550,737 843,621 2022 448,616 163,449 164,700 0 135,503 912,267 912,267 2021 378,245 192,777 151,795 745,224 40,350 1,508,391 763,167
Senior Vice President,
Corporate Services &
Chief Risk Officer 2023 415,021 204,053 172,204 210,501 49,680 1,051,459 840,958 2022 377,234 163,449 138,495 0 48,026 727,203 727,203
Vice President, Chief Human Resource Officer 2023 334,198 179,136 138,483 290,021 34,539 976,376 686,356
Senior Vice President,
General Counsel &
Business Development 2023 329,235 149,354 138,000 102,395 97,260 816,244 713,848 1213 of Group'sGroup’s annual report on Form 10-K, filed with the SEC on February 25, 2016.29, 2024. Mr. Kropelnicki, RSAs of $272,378 and RSUs granted in 2015, 2014, and 2013 of $90,793, $85,964, and $60,323 with a maximum value of $181,586, $171,928, and $120,646; Mr. Smegal, RSAs of $59,437 and RSUs granted in 2015, 2014, and 2013 of $19,813, $20,635 and $20,627 with a maximum value of $39,625, $41,270 and $41,254; Mr. Ferraro, RSAs of $59,437 and RSUs granted in 2015, 2014, and 2013 of $19,813, $20,635 and $20,627 with a maximum value of $39,625, $41,270 and $41,254; Mr. Townsley, RSAs of $59,437 and RSUs granted in 2015, 2014, and 2013 of $19,813, $20,635 and $20,627 with a maximum value of $39,625, $41,270 and $41,254; and Mr. Kuta, RSAs of $44,193 and RSUs granted in 2015 of $14,731 with a maximum value of $29,462. The RSUs reported reflect the grant date fair value of the 2015 portion of the award as performance goals are set for each year of the performance period.(2) Name RSA Grant Date
Fair Value
$ RSU Grant Date
Fair Value at
Target
Achievement
$ RSU Grant Date
Fair Value at
Maximum
Achievement
$ Mr. Kropelnicki 441,240 784,427 1,568,853 Mr. Healey — — — Mr. Smegal 70,712 108,424 216,849 Mr. Townsley 70,712 108,424 216,849 Mr. Luu 70,712 133,341 266,683 Mr. Webb 70,712 108,424 216,849 Mr. Bunting 58,954 90,400 180,800 executive officer pursuant to the performance-based short-term incentiveat-risk compensation program. The executive officers were not entitled to receive payments which would be characterized as "bonus" or "non-equity incentive plan compensation" paymentsprogram for the fiscal year ended December 31, 2013. For further information, see the "Performance-Based Short-term Incentive Compensation" section of this Proxy Statement.(3)actuarial increases or decreasesthe year-over-year, non-cash, changes in the actuarial present value of the accrued pension liability and do not represent actual cash compensation paid to any of the Named Executive Officers. Pension values are included in customer rates through a rate recovery mechanism. Fluctuation in the present value of the accrued pension benefit occur year-to-year due tomechanism and may fluctuate significantly from year-to- year depending on a number of valuation assumptionsfactors including changes in the discount rate and other assumptions, changes in mortality rates, changes inCALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 43For 2014,Other than assuming retirement at the mortality assumption was updated to the RP-2014 Mortality Table, as prescribed by the Society of Actuaries in October 2014, and replaced the RP-2000 Healthy Mortality Table consistent with Section 430 of the Internal Revenue Code. The interest rate and mortality rateunreduced retirement age, all assumptions are consistent with those used in the Group'sGroup’s financial statements and include amounts which the executive officers may not be entitled to receive due to vesting requirements consistent with the plans. For further information, see the "Basic“CEO Pay Overview,” “Basic and Supplemental Pension Plan Benefits" sectionBenefits,” and “Pension Benefits for Fiscal Year Ended 2023” sections of this Proxy Statement. Earnings on the nonqualifiednon-qualified deferred compensation plan are noted on the NonqualifiedNon-qualified Deferred Compensation tableTable for those officers participating in the plan. Earnings have been excluded from this table since earnings were not at above market or at preferential rates.(4)Amounts for 2015 consist of the negative change in present value during 2015 due to an increase in the discount rate of the plans for Mr. Francis S. Ferraro, $242,297. Amounts for 2013 consist of the negative change in present value during 2013 due to an increase in the discount rate of the plans for Mr. Thomas F. Smegal III, $250,753; Mr. Francis S. Ferraro, $579,681.executive officer, the personal use of company-provided vehicles and associated insurance, supplemental medical reimbursement plan, and relocation benefits,benefits. The value of the 401(k) matching contributions made by the Group on behalf of the named executives was $19,800 of the listed executives except, Mr. Luu was $16,875 and any miscellaneous reimbursed expenses that may be taxable.Mr. Bunting was $19,754. The reported value attributable to personal use of company-provided cars is includedare as compensation onfollows: Mr. Kropelnicki, $29,956; Mr. Healey, $8,651; Mr. Smegal, $2,335; Mr. Townsley, $2,308; Mr. Luu, $13,005; Mr. Webb, $2,667; and Mr. Bunting, $5,356. The recorded cost for the W-2supplemental medical plan was $18,600 of each executive officer who receives such benefits. Each such officer is responsible for paying income tax on such amount.the listed executives except, Mr. Townsley, $11,472; Mr. Webb, $11,472, and Mr. Bunting $15,500. Additionally, the amount for Mr. KutaBunting includes a housing allowancemoving expense totaling $22,500 and $110,000 for expenses incurred in connection with his$55,634, Mr. Townsley includes relocation to San Jose, California astotaling $30,000 approved by the Organization and Compensation Committee. Mr. Townsley also had wages incurred with his retirement totaling $81,400 which is comprised of $54,267 for vacation payout, $9,044 for payout of unused floating holidays, and $18,089 in termination wages paid in accordance to the Company’s general termination policy as described in “Executive Severance Plan” of this Proxy Statement. 20152015,2023, to each of our executive officers. All
Other
Stock
Awards:
Number
of
Shares
of
Stock or
Units (#)
(i) Grant
Date
Fair Value
of
Stock and
Options
Awards
($)
(l) Estimated Payouts Under Non-
Equity Incentive Plan Awards
($)(1) Estimated Payouts Under
Equity Incentive Plan Awards(2) Name
(a) Grant Date
(b) Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) Martin A. Kropelnicki(3) 3/3/2015 $ 0 $ 385,000 $ 385,000 0 11,209 22,418 11,209 $ 544,757 Thomas F. Smegal III(3) 3/3/2015 0 39,000 78,000 0 2,446 4,892 2,446 118,876 Paul G. Townsley(3) 3/3/2015 0 33,500 67,000 0 2,446 4,892 2,446 118,876 Francis S. Ferraro(3) 3/3/2015 0 43,200 86,400 0 2,446 4,892 2,446 118,876 Robert J. Kuta 5/5/2015 0 21,250 42,500 0 1,846 3,692 1,846 88,386
Non-Equity Incentive Plan
Awards ($)(1)
Equity Incentive Plan
Awards(2) All
Other Stock
Awards:
Number
of
Shares of
Stock or
Units (#)
(i) Grant
Date
Fair Value
of
Stock and
Options
Awards
($)
(l) Name
(a) Grant Date
(b) Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) 3/7/2023 378,000 1,050,000 2,100,000 3/7/2023 7,956 441,240 3/7/2023 5,375 14,144 28,288 784,426 3/7/2023 3/7/2023 3/7/2023 3/7/2023 23,607 65,575 131,150 3/7/2023 1,275 70,712 3/7/2023 743 1,955 3,910 108,424 3/7/2023 39,618 110,050 220,100 3/7/2023 1,275 70,712 3/7/2023 743 1,955 3,910 108,424 3/7/2023 44,923 124,785 249,570 3/7/2023 1,275 70,712 3/7/2023 743 1,955 3,910 108,424 6/1/2023 169 444 888 24,917 3/7/2023 36,126 100,350 200,700 3/7/2023 1,275 70,712 3/7/2023 743 1,955 3,910 108,424 3/7/2023 36,000 100,000 200,000 3/7/2023 1,275 70,712 3/7/2023 619 1,630 3,260 90,400 incentiveat-risk compensation program.award.executive officers on March 3, 2015, pursuant to the Incentive Plan7, 2023, vest over three years, with one-third of the RSAs vesting on the first anniversary of the grant date and the remaining RSAs vesting in equal monthlyquarterly installments thereafter. The performance-based RSUs reported reflect the grant date fair value of the 2015 portionaward.awardaward.performance goals are set for eachan executive officer in fiscal year of the performance period.ended 2023. 44 CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement|74 2015 Year-EndYear Ended 2023 Option Awards Stock Awards Equity Incentive Plan Awards Name
(a) Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b) Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(c) Option
Exercise
Price ($)
(e) Option
Expiration
Date
(f) Number of
Shares
or Units
of Stock
That Have
Not
Vested (#)
(g) Market
Value of
Shares or
Units of
Stock
That Have
Not
Vested ($)(1)
(h) Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested (#) Market Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested ($)(1) 7,500 — $ 18.80 3/4/2018 — $ — — $ — 11,000 — 19.19 3/3/2019 — — — — — — — — 303 (2) 7,051 — — — — — — 647 (3) 15,056 7,753 (3) 180,412 — — — — 91 (4) 2,118 1,081 (4) 25,155 — — — — 4,552 (5) 105,925 10,923 (5) 254,178 — — — — 11,209 (6) 260,833 11,209 (6) 260,833
7,500
—
18.80
3/4/2018
—
—
—
— 11,000 — 19.19 3/3/2019 — — — — — — — — 303 (2) 7,051 — — — — — — 251 (3) 5,841 3,001 (3) 69,833 — — — — 1,093 (5) 25,434 2,622 (5) 61,014 — — — — 2,446 (6) 56,918 2,446 (6) 56,918
—
—
—
—
251
(3)
5,841
3,001
(3)
69,833 — — — — 1,093 (5) 25,434 2,622 (5) 61,014 — — — — 2,446 (6) 56,918 2,446 (6) 56,918
5,000
—
19.26
1/4/2016
—
—
—
— 4,000 — 19.06 3/6/2017 — — — — 7,500 — 18.80 3/4/2018 — — — — 11,000 — 19.19 3/3/2019 — — — — — — — — 303 (2) 7,051 — — — — — — 251 (3) 5,841 3,001 (3) 69,833 — — — — 1,093 (5) 25,434 2,622 (5) 61,014 — — — — 2,446 (6) 56,918 2,446 (6) 56,918
—
—
—
—
1,846
(7)
42,956
1,846
(7)
42,956 Stock Awards Equity Incentive Plan Awards Name
(a) Number of
Shares or Units
of Stock That
Have Not Vested
(#)
(g)
Shares or Units
of Stock That
Have Not Vested
($)(1)
(h) Number of
Unearned
Shares, Units
or Other Rights That
Have Not Vested
(#)
Unearned Shares,
Units, or Other
Rights That Have
Not Vested
($)(1) Martin A. Kropelnicki 536(2) 27,802 9,642(2) 500,131 2,614(3) 135,588 11,109(3) 576,224 7,956(4) 412,678 14,144(4) 733,649 David B. Healey 110(2) 5,706 1,249(2)(6) 64,786 532(3) 27,595 540(3)(6) 28,010 Thomas F. Smegal III 110(2) 5,706 1,485(2) 77,027 532(3) 27,595 1,619(3) 83,978 1,275(4) 66,134 1,955(4) 101,406 Paul G. Townsley 110(2) 5,706 1,485(2) 77,027 532(3) 27,595 1,619(3) 83,978 1,275(4) 66,134 1,955(4) 101,406 Michael B. Luu 110(2) 5,706 1,485(2) 77,027 532(3) 27,595 1,619(3) 83,978 1,275(4) 66,134 1,955(4) 101,406 444(5) 23,030 Ronald D. Webb 110(2) 5,706 1,485(2) 77,027 532(3) 27,595 1,619(3) 83,978 1,275(4) 66,134 1,955(4) 101,406 Shawn C. Bunting 1,063(4) 55,138 1,630(4) 85,548 Group'sGroup’s common stock on the New York Stock Exchange as of December 31, 2015,29, 2023, which was $23.27,$51.87, and the number of shares underlying each such award.Awards6, 2012, with 25% vesting on the first anniversary of the grant date and the remaining 75% vesting ratably over 36 months.(3)Awards were granted on March 5, 2013,2, 2021, with 33.3% vesting on the first anniversary of the grant dateMarch 2, 2022, and the remaining 66.7% vesting ratably over 24 months. The performance-based RSUs are for performance periods 2013, 2014,2021, 2022, and 20152023 and vest on March 5, 2016.(4)Award2, 2024.September 4, 2013,March 1, 2022, with 33.3% vesting on March 5, 20141, 2023, and the remaining 66.7% vesting ratably over 24 months. The performance-based RSUs are for performance periods 2013, 2014,2022, 2023, and 20152024 and vest on March 5, 2016.(5)Awards1, 2025.4, 2014,7, 2023, with 33.3% vesting on the first anniversary of the grant dateMarch 7, 2024, and the remaining 66.7% vesting ratably over 24 months. The performance-based RSUs are for performance periods 2014, 2015,2023, 2024, and 20162025 and vest on March 4, 2017.(6)Awards7, 2026.March 3, 2015,June 1, 2023, with 33.3% vesting on the first anniversary of the grant dateMarch 7, 2024, and the remaining 66.7% vesting ratably over 24 months. The performance-based RSUs are for performance periods 2015, 2016,2023, 2024, and 20172025 and vest on March 3, 2018.(7)granted on May 5, 2015, with 33.3% vesting on March 3, 2016reflected at full grant value. Mr. Healey initially retired effective January 1, 2023 and the remaining 66.7% vesting ratably over 24 months. RSUs are for performance periods 2015, 2016, and 2017 and vest on March 3, 2018.grant value will be pro-rated at vesting. CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 45|75 For for Fiscal Year Ended 2015 Name
(a) Number of
Shares
Acquired on
Exercise
(#)
(b) Value
Realized on
Exercise
($)
(c) Number of
Shares
Acquired on
Vesting
(#)
(d) Value
Realized on
Vesting
($)
(e) Martin A. Kropelnicki — — 22,406 1,259,147 David B. Healey — — 3770 211,343 Thomas F. Smegal III — — 3770 211,343 Paul G. Townsley — — 3770 211,343 Michael B. Luu — — 3770 211,343 Ronald D. Webb — — 3770 211,343 Shawn C. Bunting — — — — Option Awards Stock Awards Name
(a) Number of
Shares
Acquired on
Exercise
(#)
(b) Value
Realized on
Exercise
($)
(c) Number of
Shares
Acquired on
Vesting
(#)
(d) Value
Realized on
Vesting
($)
(e) 1,658 $ 41,200 10,807 $ 255,125 — — 4,021 94,619 — — 2,529 59,681 — — 4,021 94,619 — — — — For for Fiscal Year Ended 2015of the executives,NEO, including the number of years of service credited to each executive officer under the California Water Service Pension Plan (“Pension Plan”) and the Supplemental Executive Retirement Plan,SERP, each of which is described elsewhere in this Proxy Statement. Name
(a) Plan Name
(b)
Years
Credited
Service
(#)(1)
(c)
Value of
Accumulated
Benefit
($)(2)
(d) Payments
During Last
Fiscal
Year
($)
(e) California Water Service Pension Plan 17.80 1,356,454 — Supplemental Executive Retirement Plan 15.00 16,103,884 — David B. Healey California Water Service Pension Plan 14.50 845,138 58,699 Supplemental Executive Retirement Plan 14.50 2,520,532 161,262 California Water Service Pension Plan 26.67 1,788,914 — Supplemental Executive Retirement Plan 15.00 2,856,311 — Paul G. Townsley California Water Service Pension Plan 10.83 776,559 24,686 Supplemental Executive Retirement Plan 10.83 3,154,754 123,769 California Water Service Pension Plan 23.60 837,476 — Supplemental Executive Retirement Plan 15.00 1,191,823 — Ronald D. Webb California Water Service Pension Plan 9.39 659,284 — Supplemental Executive Retirement Plan 9.39 1,851,616 — Shawn C. Bunting California Water Service Pension Plan .84 55,892 — Supplemental Executive Retirement Plan .84 46,503 — Name
(a) Plan
Name (b) Number of
Years
Credited
Service
(#)(1)
(c) Present
Value of
Accumulated
Benefit
($)(2)
(d) California Water Service Pension Plan 9.80 $ 599.840 Supplemental Executive Retirement Plan 9.80 3,889,654
18.67
916,955 Supplemental Executive Retirement Plan 15.00 2,366,445
2.83
260,754 Supplemental Executive Retirement Plan 2.83 508,568
26.42
1,650,326 Supplemental Executive Retirement Plan 15.00 2,963,842
0.70
45,259 Supplemental Executive Retirement Plan 0.70 80,350 (1)1112 of Group'sGroup’s annual report on Form 10-K, filed with the SEC on February 25, 2016. named executive officerNEOs may not currently be entitled to receive because such amounts are not vested. Pension values may fluctuate significantly from year-to-year depending on a number of factors including changes in the discount rate, changes in mortality rates, changes in compensation, years of service, and vesting.thesimilar benefit provisions of the California Water Service Pension Plan, (Pension Plan), a tax-qualified plan, to all compensation included under the Pension Plan, without regard to these limits, reduced by benefits actually accrued under the Pension Plan. Under the SERP, all eligible officers are fully vested after five years of service as an officer and are eligible for the full benefit after 15 years of46 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement60.65. SERP participants are eligible for early retirement starting at age 55 and would receive a reduced benefit ranging from 74% to 95% of their monthly SERP benefit upon early retirement between the ages of 55 and 60.65, and further adjusted if service credited is less than 15 years. Under the Pension Plan, all eligible employees, including officers, are fully vested after 35 years of service. The SERP is structured such that benefits are paid to executivesofficers on a "pay“pay as you go"go” basis. None of the executives received any payments under the Pension Plan or SERP during 2015.retirement.Nonqualifiedretirement, or three highest consecutive years, whichever is higher, excluding any equity compensation. For additional description of the SERP and Pension Plan, see “Basic and Supplemental Pension Plan Benefits (SERP)” in this Proxy Statement.For for Fiscal Year Ended 2015 Name
(a)
Contributions in
Last FY
($)(1)
(b)
Earnings in
Last FY
($)(1)
(d) Aggregate
Withdrawals/
Distributions
($)
(e)
Balance at
Last FY
($)(2)
(f) Martin A. Kropelnicki 193,720 $ 0 $ — 3,632,995 David B. Healey — — — — Thomas F. Smegal III — — — — Paul G. Townsley 19,038 0 (33,172) 518,195 Michael B. Luu 35,976 — (32,120) 436,775 Ronald D. Webb 68,391 0 — 575,949 Shawn C. Bunting — 0 — 0 Name
(a) Executive
Contributions in
Last FY
($)(1)
(b) Aggregate
Earnings in
Last FY
($)(1)
(d) Aggregate
Withdrawals/
Distributions
($)
(e) Aggregate
Balance at
Last FY
($)(2)
(f) Martin A. Kropelnicki $ 127,750 $ (1,213 ) $ — $ 328,525 Thomas F. Smegal III — — — — Paul G. Townsley 48,277 (488 ) — 89,080 Francis S. Ferraro — 35,063 — 1,838,385 Robert J. Kuta — — — — "Executive“Executive Contributions in Last FY"FY” are included in the Summary Compensation Tables shown below. None of the amounts reported under “Aggregate Earnings in Last FY” are included in the Summary Compensation Table for 2015. None of the amounts reported under "Aggregate Earnings in Last FY" are included in the Summary Compensation Table for 2015. Name Salary Non-Equity
Incentive Plan Total Mr. Kropelnicki 2023 $ 40,000 $ 40,000 2022 $ 153,720 $ 153,720 Mr. Townsley 2023 19,038 19,038 2022 Mr. Luu 2023 29,052 29,052 2022 6,925 6,925 Mr. Webb 2023 33,420 33,420 2022 34,971 "Aggregate“Aggregate Balance at Last FY"FY” that are included in the Summary Compensation Table in years prior to 20152023 are as follows: Mr. Kropelnicki, $121,400; Mr. Ferraro, $702,000;$1,956,772; Mr. Townsley, $40,152.$399,189, Mr. Luu, $279,679 and Mr. Webb, $416,118. Group's executivesGroup’s officers and eligible managersemployees to defer up to 50% of their base salary. In addition, officers can defer up to 100% of their short-term at-risk compensation. The Group does not make any contributions to the Deferred Compensation Plan. The Deferred Compensation Plan'sPlan’s investment options are similar, but not identical, to the Group'sGroup’s tax-qualified 401(k) plan and are funded by a Rabbi trust created for the funding of such benefits. Benefits under the Deferred Compensation Plan are payable by the Group upon separation from service with the Group, either in lump sum at separation, in monthly installments over five years following separation, or in lump sum or installments commencing five years following separation.Potential Payments upon TerminationChange in ControlThe information below describes certain compensationsupport potential change-in-control transactions that would have become payable under existing plans and contractual arrangements assuming a termination of employment, or a change in control and termination of employment, had occurred on December 31, 2015, given the executive's compensation and service levels as of such date. In additionbe beneficial to the benefits described below, upon any termination of employment, each of the executives would also be entitled to the benefits as described in the table of Pension Benefits for Fiscal Year 2015 and the amount shown in the column labeled "Aggregate Balance at Last FY" of the table of Nonqualified Deferred Compensation for Fiscal Year 2015 above.CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 47On December 16, 1998, theour stockholders. The Group adopted the Executive Severance Plan.Plan in 1998, and its purpose is to promote the continued employment and dedication of our officers without distraction in the face of a potential change- in-control transaction. The Group’s Executive Severance Plan is described in further detail below.change in controlchange-in-control of the Group, the officer'sofficer’s employment is terminated by the Group for any reason other than good cause or by the officer for good reason (each, a qualifying reason), the Group will make a cash payment to the officer in an amount equal to three times such officer'sthe officer’s base salary on the date of the change in controlchange-in-control or on the date that the officer'sofficer’s employment terminates, whichever is greater. The payments would be paid in three equal annual installments, commencing on the first of the month following the month in which the officer'sofficer’s employment terminated, and payable thereafter on the anniversary of the initial payment date. Each officer will also receive a gross-up payment if the officer is required to pay an excise tax under section 4999 of the Internal Revenue Code.officer'sofficer’s entitlement to the severance payment is conditioned upon execution of a release agreement. Additionally, the officer forfeits the right to receive the severance payment if he or she violates the non-solicitation and confidentiality provisions of the Executive Severance Plan."change in control"“change-in-control” means the occurrence of (i) any merger or consolidation of the Group in which the Group is not the surviving organization, a majority of the capital stock of which is not owned by the stockholders of the Group immediately prior to such merger or consolidation; (ii) a transfer of all or substantially all of the assets of the Group; (iii) any other corporate reorganization in which there is a change in ownership of the outstanding shares of the Group, wherein thirty percent (30%) or more of the outstanding shares of the Group are transferred to any person; (iv) the acquisition by or transfer to a person (including all affiliates or associates of such person) of beneficial ownership of capital stock of the Group, if after such acquisition or transfer such person (and their affiliates or associates) is entitled to exercise thirty percent (30%) or more of the outstanding voting power of all capital stock of the Group entitled to vote in elections of directors; or (v) the election to the Board of Directors of the Group of candidates who were not recommended for election by the Board of Directors of the Group in office immediately prior to the election, if such candidates constitute a majority of those elected in that particular election."good cause" will be deemed to exist“good cause” exists if (i) the applicable officer engages in acts or omissions that result in substantial harm to the business or property of the Group, and that constitute dishonesty, intentional breach of fiduciary obligation, or intentional wrongdoing; or (ii) the applicable officer is convicted of a criminal violation involving fraud or dishonesty. "good reason" will be deemed to exist“good reason” exists if, without the applicable officer'sofficer’s consent, (i) there is a significant change in the nature or the scope of the applicable officer'sofficer’s authority, or in his or her overall working environment; (ii) the applicable officer is assigned duties materially inconsistent with his or her present duties, responsibilities, and status; (iii) there is a reduction in the applicable officer'sofficer’s rate of base salary or bonus; or (iv) the Group changes by 100 miles or more the principal location in which the applicable officer is required to perform services. Had a change in controlchange-in-control occurred during fiscal 2015year 2023 and had their employment been terminated on December 31, 2015,2023, either without good cause or by the executiveofficer for good reason, the executivesNEOs would have been eligible to receive the payments set forth in the table below.Group'sGroup’s general severancetermination policy. Under the severancetermination policy, each non-union employee of the Group whose employment is terminated without cause is entitled to severancetermination pay of either one week'sweek’s pay after completing two years of service or two weeks'weeks’ pay after completing five or more years of service, provided at least two weeks'weeks’ notice is given. In addition, all officers are entitled to a payout of six weeks of vacation time upon any termination of employment, to be paid in a48 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement Incontrol,control. Rather, RSUs and RSAs continue to vest over time and RSUs are subject to the same performance metrics that apply as if there had theirbeen no termination.been terminated on December 31, 2015, without cause,each of the executivesofficers would have been eligiblealso be entitled to receive the payments set forth below.Potential Payments upon Termination or Changebenefits as described in ControlName Change in
Control and
Termination of
Employment
Severance
Amount
($) Termination of
Employment
without a
Change in
Control
Severance
Amount
($) $ 2,310,000 $ 88,846 1,170,000 45,000 1,005,000 38,654 1,296,000 49,846 900,000 34,615 Please refer to the table of Outstanding Equity Awards at Fiscal Year-Ended 2015 abovePension Benefits for more information regarding these awards.Director CompensationFor Fiscal Year Ended 2015The Group's non-employee directors receive retainers comprised of both a cash award2023 and an equity award along with meeting fees for their service. The Nominating/Corporate Governance Committee is responsible for non-employee director compensation and makes recommendations to the Board. For 2015, the Nominating/Corporate Governance retained the services of Veritas for determining non-employee director compensation.Our 2015 director compensation program is summarizedamount shown in the column labeled “Aggregate Balance at Last FY” of the table below: Martin A. Kropelnicki Compensation and Benefits Termination of
Employment
without a
Change-in-Control
Severance
Amount
($) Retirement
Severance
($) Change-in-
Control
and Termination
of Employment
Severance
Amount
($) Cash Compensation 161,538 161,538 3,311,538 ARP(2) 1,050,000 1,050,000 1,050,000 Long-Term Equity Compensation — 837,747 1,810,004 RSAs(4) — — 576,068 Benefits Accrued Vacation — — — Total 1,211,538 2,049,285 6,747,610 2015 Director Compensation Program $ 47,000 $ 40,000 $ 15,000 $ 12,500 $ 10,000 $ 7,500 $ 5,000 $ 4,600 $ 2,300 $ 1,800 $ 1,800 $ 60,000 (1)In 2015, non-employee directors received grants of restricted stockThis amount represents severance and termination wage benefits as described above in the section “Executive Severance Plan” in the Proxy Statement.$60,000 asmarket value, the Board retainer. The restrictedclosing price for the Group’s common stock grants were made on March 3, 2015 and were fully vested on the first anniversaryNew York Stock Exchange as of December 29, 2023, which was $51.87.grant date.closing price for the Group’s common stock on the New York Stock Exchange as of December 29, 2023, which was $51.87. CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 49|79 David B. Healey Compensation and Benefits Termination of
Employment
without a
Change-in-Control
Severance
Amount
($) Retirement
Severance
($) Change-in-
Control
and Termination
of Employment
Severance
Amount
($) Cash Compensation — — 1,410,000 ARP(2) 82,250 82,250 82,250 Long-Term Incentives — 94,352 94,352 RSAs(4) — — 33,301 Benefits Accrued Vacation — — — Total 82,250 176,602 1,619,902 Contentshis retirement on December 31, 2022. Thomas F. Smegal III Compensation and Benefits Termination of
Employment
without a
Change-in-Control
Severance
Amount
($) Retirement
Severance
($) Change-in-
Control
and Termination
of Employment
Severance
Amount
($) Cash Compensation — — — ARP(2) 65,575 65,575 65,575 Long-Term Incentives — 125,618 262,410 RSAs(4) — — 99,435 Benefits Accrued Vacation 16,222 16,222 16,222 Total 81,797 207,415 443,642 Paul G. Townsley Compensation and Benefits Termination of
Employment
without a
Change-in-Control
Severance
Amount
($) Retirement
Severance
($) Change-in-
Control
and Termination
of Employment
Severance
Amount
($) Cash Compensation — — — ST-ARP(2) 110,051 110,051 110,051 Long-Term Incentives — 125,618 262,410 RSAs(4) — — 99,435 Benefits Accrued Vacation — — — Total 110,051 235,669 471,896 Michael B. Luu Compensation and Benefits Termination of
Employment
without a
Change-in-Control
Severance
Amount
($) Retirement
Severance
($) Change-in-
Control
and Termination
of Employment
Severance
Amount
($) Cash Compensation 66,031 66,031 1,353,631 ST-ARP(2) 124,785 124,785 124,785 Long-Term Incentives — 128,176 285,441 RSAs(4) — — 99,435 Benefits Accrued Vacation 87,491 87,491 87,491 Total 278,307 406,483 1,950,783 Ronald D. Webb Compensation and Benefits Termination of
Employment
without a
Change-in-Control
Severance
Amount
($) Retirement
Severance
($) Change-in-
Control
and Termination
of Employment
Severance
Amount
($) Cash Compensation 51,462 51,462 1,054,962 ST-ARP(2) 100,350 100,350 100,350 Long-Term Incentives — 125,618 262,410 RSAs(4) — — 99,435 Benefits Accrued Vacation — — — Total 151,812 277,430 1,517,157 Shawn C. Bunting Compensation and Benefits Termination of
Employment
without a
Change-in-Control
Severance
Amount
($) Retirement
Severance
($) Change-in-
Control
and Termination
of Employment
Severance
Amount
($) Cash Compensation 46,154 46,154 1,246,154 ST-ARP(2) 100,000 100,000 100,000 Long-Term Incentives — 9,394 55,138 RSAs(4) — — 84,548 Benefits Accrued Vacation — — — Total 146,154 155,548 1,485,840 Septemberaccordance with SEC rules, we are providing the ratio of 2015, after performing itsthe annual total compensation review, the Nominating/Corporate Governance Committee approved increasesof our CEO to the foregoingannual total compensation of our median associate. In calculating this ratio, SEC rules allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions reflecting their unique employee populations. Our reported pay ratio may not be comparable to that reported by other companies due to differences in industries, scope of operations, business models and scale, as well as the different estimates, assumptions, and methodologies applied by other companies in calculating their respective pay ratios. Measurement Under SEC
Rules Excluding Change in
Present Value of
Pension Benefits CEO Compensation $ 4,856,752 $ 3,794,227 Median Employee Compensation $ 182,866 $ 117,841 Ratio 1:27 1:32 Summary
Comp.
Table for
CEO
Actually
Paid to
CEO(2) Average
Summary
Comp.
Table Total
for Non-CEO
NEOs
Comp.
Actually
Paid to
Non-CEO
NEOs(2) Value of Initial
Fixed $100 Investment
Based On: Net
Income
($M)
Actual
Performance
(EPS)(4) TSR
Group TSR(3) 2023 $ 4,856,752 $ 3,689,961 $ 1,003,883 $ 704,548 $ 107.84 $ 105.53 $ 51.9 (52.1)% 2022 $ 3,351,529 $ 3,111,318 $ 820,950 $ 829,540 $ 123.71 $ 123.42 $ 96.0 (1.7)% 2021 $ 3,718,087 $ 4,495,501 $ 1,204,755 $ 1,050,610 $ 144.06 $ 144.46 $ 101.1 6.5% 2020 $ 3,776,856 $ 4,268,399 $ 901,550 $ 983,279 $ 106.68 $ 115.75 $ 96.8 21% January 1, 2016,at managing controllable costs and has the ability to efficiently execute its business plan. 2023 Summary Compensation Table Reported Compensation $ 4,856,752 Deduction for pension values reported in SCT for the covered year $ (1,062,525) Increase for pension value attributable to current year’s service and any change in pension value attributable to plan
amendments made in the covered year $ 63,639 Deduction for grant date fair value of equity awards reported in “Stock Awards” column of the SCT for the covered year $ (1,225,666) Increase for the fair value as of the end of the covered year of all equity awards granted during the covered year that are outstanding and unvested as of the end of such covered year $ 1,244,147 Increase/(Deduction) for the change in fair value as of the end of the covered year of any equity awards granted in any prior year that are outstanding and unvested as of the end of such covered year $ (99,624) Increase/(Deduction) for the change in fair value as of the vesting date of any equity awards granted in any prior year for which all applicable vesting conditions were satisfied during the covered year $ (99,553) Increase for the dollar value of any dividends or other earnings paid on stock or option awards in the covered year prior to the vesting date that are not otherwise reflected in the fair value of such award $ 12,790 Total Compensation Actually Paid $ 3,689,961 2023 Summary Compensation Table Reported Compensation $ 1,003,883 Deduction for pension values reported in SCT for the covered year $ (294,847) Increase for pension value attributable to current year’s service and any change in pension value attributable to plan
amendments made in the covered year $ 37,375 Deduction for grant date fair value of equity awards reported in “Stock Awards” column of the SCT for the covered year $ (148,469) Increase for the fair value as of the end of the covered year of all equity awards granted during the covered year that
are outstanding and unvested as of the end of such covered year $ 131,063 Increase/(Deduction) for the change in fair value as of the end of the covered year of any equity awards granted in any prior year that are outstanding and unvested as of the end of such covered year $ (11,899) Increase/(Deduction) for the change in fair value as of the vesting date of any equity awards granted in any prior year
for which all applicable vesting conditions were satisfied during the covered year $ (14,331) Increase for the dollar value of any dividends or other earnings paid on stock or option awards in the covered year prior to the vesting date that are not otherwise reflected in the fair value of such award $ 1,773 Total Compensation Actually Paid $ 704,548 follows: non-employee directors will receive a grantdetermined by the Group, that link compensation actually paid to our NEOs to the Company’s performance for the most recently completed fiscal year. Budget to Actual Performance (EPS) Return on Equity for Stockholder Return Growth in Stockholder’s Equity Customer Service and Support Emergency Preparedness and Safety Infrastructure Improvement and Utility Plant Investment Water Quality and Public Health ![[MISSING IMAGE: bc_compaptsr-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/bc_compaptsr-pn.jpg)
restricted stock valued at $67,500. The Finance and Risk Management Committee chair will receive a retainer of $6,000, the Organization and Compensation Committee chair will receive an $11,000 retainer,of the Nominating/Corporate Governance Committee chair will receive an $8,500 retainer, and the Audit Committee chair will receive a $13,500 retainer. Board and committee meeting fees for the chairman and other non-employee directors will remain unchanged for 2016. The chairman will receive a Board retainer of $47,000 and a chairman retainer of $40,000 for 2016. The lead director will receive a $15,000 retainer due to continued increased responsibilities, including stockholder engagement.The Board of Directors requires non-employee directors to maintain a certain amount of stock ownership consistent with our stock ownership requirements. Pursuant to the Group's Corporate Governance Guidelines, available on the Group's website at http://www.calwatergroup.com, beneficial ownership of an aggregate amount of shares having a value of five times the amount of the annual director retainer is required. Non-employee directors are required to achieve the relevant ownership threshold within five years following adoption of the requirements or five years after commencing service, whichever is later. The Nominating/Corporate Governance Committee will review compliance with these requirements for non-employee directors on an annual basis.Directors may elect to defer cash compensation payable to them under the Group's deferred compensation plan in the same manner as applicable to the Group's officers as described above. In addition, the Group maintains a Director Retirement Plan for the benefit of its non-employee directors. In December 2005, this plan was closed to new participants; however, each of the non-employee directors listed in the table below (except for Mr. Aliff, Ms. Bayer, Mr. Guiles, Dr. Krummel, and Mr. Snow) were, at that time, participants in the plan and thus continues to accrue benefits thereunder. Under the Director Retirement Plan, a director who participates in the plan and retires after serving on the Board for a total of five or more years will receive a retirement benefit equivalent to $22,000 per year. This benefit will be paid for the number of years the director served on the Board, up to 10 years. Except for former directors Douglas M. Brown and Robert W. Foy, no amounts were paid to directors under this program in 2015.50 CALIFORNIA WATER SERVICE GROUP |2016 Proxy StatementNon-Employee DirectorExecutive CompensationName
(a) Fees
Earned or
Paid in
Cash
($)
(b) Stock
Awards
($)(2)(3)
(c) Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings
($)(4)
(f) Total
($)
(h) $ 150,000 $ 59,438 $ — $ 209,438 110,000 59,438 — 169,438 24,365 19,558 — 43,923 74,900 59,438 — 134,338 94,300 59,438 — 153,738 76,700 59,438 3,515 139,653 92,100 59,438 — 151,538 85,700 59,438 3,988 149,126 76,700 59,438 — 136,138 105,400 59,438 3,605 168,443 (1)Mr. Nelson's retainer consists of $40,000 for his role as Chairman of the Board.(2)Amounts reflect the full grant date fair value of each restricted stock award granted in 2015 to the non-employee directors, calculated in accordance with FASB ASC Topic 718, disregarding estimates for forfeitures. Assumptions used in the calculation of these amounts are included in footnote 12 of Group's annual report on Form 10-K filed with the Securities and Exchange Commission on February 25, 2016.(3)At the end of 2015, the aggregate number of RSAs held by each current non-employee director was as follows: Mr. Peter C. Nelson, 10,406; Mr. Gregory E. Aliff, 865; Terry P. Bayer, 4,449; Mr. Edwin A. Guiles, 20,780; Ms. Bonnie G. Hill, 18,330; Dr. Thomas M. Krummel, 14,870; Mr. Richard P. Magnuson, 23,330; Ms. Linda R. Meier, 23,330; Lester A. Snow, 13,000; and Mr. George A. Vera, 23,330.(4)Amounts in this column represent the actuarial increase in the present value of the director benefits under the Group's Director Retirement Plan. In December 2005, this plan was closed to new participants; however, any director active in 2005 will continue to accrue benefits. Amounts for 2015 consist of the negative change in present value during 2015 due to an increase in the discount rate of the plan for Mr. Richard P. Magnuson, $887.CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 51REPORT OF THE ORGANIZATION AND COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATIONGroup'sGroup’s Board of Directors has submitted the following report for inclusion in this Proxy Statement:Group'sGroup’s annual report on Form 10-K for the fiscal year ended December 31, 2015,2023, for filing with the SEC. Terry P. Bayer Edwin A. Guiles Bonnie G. Hill Linda R. Meier
Scott L. Morris
Lester A. Snow
Patricia K. Wagner 20152023 fiscal year: Thomas M. Krummel, M.D., Committee Chair, Terry P. Bayer, Edwin A. Guiles, Bonnie G. Hill, Linda R. Meier,Scott L. Morris, and Lester A. Snow. No member of the Organization and Compensation Committee was an officer or employee of the Group or any of its subsidiaries during 2015,2023, nor was any such member previously an officer of the Group or any of its subsidiaries. No member of the Organization and Compensation Committee had any material interest in a transaction of the Group or a business relationship with, or any indebtedness to the Group, in each case that would require disclosure under "Procedures“Procedures for Approval of Related Person Transactions"Transactions”, included elsewhere in this Proxy Statement.boardBoard of directorsDirectors or on the compensation committeeOrganization and Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or on the Organization and Compensation Committee of the Group. Board'sBoard’s Nominating/Corporate Governance Committee is responsible for review, approval, or ratification of "related“related person transactions"transactions” involving the Group or its subsidiaries and related persons.persons, as defined in SEC rules. Under SEC rules, of the Securities and Exchange Commission, a related person is a director, executive officer, nominee for director, or a greater than 5% stockholder of the Group at any time since the beginning of the previous fiscal year.2015,2023, there were no related person transactions under the relevant standards. 52 CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement|89 PROPOSAL NO. 2 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION voteapprove, on ana non-binding, advisory resolution to approve the Group's executive compensation programs as reported in this Proxy Statement in accordance withbasis, under Section 14(A)14A of the Securities Exchange Act, of 1934. The Board has adopted a policy providing for an annual advisory vote to approve executive compensation. Stockholders previously indicated their preference that the advisory vote on named executive officer compensation occur once every year.At last year's Annual Meeting, 92% of the votes cast were "for" the 2014 compensation of our named executive officersNEOs as compared with 95% fordisclosed in this proxy statement. We have held a similar stockholder vote every year since 2014.2013 compensation and 93% for the 2012 compensation. We believe thatCD&A, our executive compensation program is now strongly aligneddesigned with an emphasis on performance and is intended to closely align the long-terminterests of our NEOs with the interests of our stockholders as well asand customers. As discussed in the Compensation Discussion and Analysis section of this Proxy Statement, the Board and the Organization and Compensation Committee considered the results of these "Say-on-Pay" votes and modifiedWe regularly review our executive compensation program for 2013with the goal that compensation is closely tied to aspects of our company’s performance that our NEOs can impact and continuedthat are likely to apply the same effective principles when makinghave an impact on stockholder value.decisions for 2015.The Group's goal for its executive compensation programsprogram is also designed to attract, motivate, and retain talented executives who will provide leadership for the Group. The Group seeks to accomplish this goal in a way that rewardsbalance long-term performance with shorter-term performance and isto mitigate any risk that an officer would be incentivized to pursue good results with respect to a single performance measure, company segment, or area of responsibility to the detriment of our company as a whole.the long-term interests of customers and stockholders.our company’s performance during fiscal 2023. The Group believes that its executive compensation programs achieve this goal.The "Compensation Discussion and Analysis" section of this Proxy StatementCD&A also describes the Group's executive compensation programs and the decisions made by the Organization and Compensation Committee for 2015 in more detail. Highlights of the programs include the following:•Performance-based Equity Compensation;•Short-term Performance-based Incentive Compensation;•No Employment Agreements;•No Single Trigger Change in Control Benefits;•No Tax Gross-Ups on Perquisites;•Limited Perquisites;•Director and Officer Stock Ownership Requirements;•Clawback Policy; and•Anti-hedging and Anti-pledging Policies.For 2015, 50% of long-term equity awards granted to our executives are in the form of RSUs subject to performance-based vesting criteria and 50% are in the form of time-based RSAs. The performance-based RSUs provide for a three-year performance period and provide for vesting based solely upon the achievement of objective performance criteria. The performance criteria are tied to the following performance metrics: water quality, customer service, plant additions, return on assets, and safety.Further, in 2014,feedback we introduced annual performance-based short-term incentive compensation for officers as part of the Group's executive compensation program. The Committee believes thatreceived regarding our executive compensation program provides a good mix of short-termduring our stockholder outreach efforts, and long-termis intended to provide additional clarity and transparency regarding the rationale for, and philosophy behind, our executive compensation that supportsprogram and practices. We urge you to carefully read the business strategiesCD&A, the compensation tables, and creates long-term stockholder value.CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement 53that the policies and procedures articulated in the "Compensation“Compensation Discussion and Analysis"Analysis” are effective in achieving the Group'sGroup’s goals and that the compensation of the Group'sGroup’s named executive officers reported in this Proxy Statement has supported and contributed to the Group'sGroup’s success. Accordingly, the Group asks stockholders to vote "FOR"“FOR” the following resolution at the 2023 Annual Meeting:"Group'sGroup’s named executive officers, as disclosed in this Proxy Statement pursuant to the SEC'sSEC’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion.""Say-on-Pay"“Say-on-Pay” resolution, is not binding upon the Group, the Organization and Compensation Committee, or the Board. However, the Board and the Organization and Compensation Committee, which is responsible for designing and administering the Group'sGroup’s executive compensation programs, value the opinions expressed by stockholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for named executive officers. After consideration of the vote of stockholders at the 20112023 Annual Meeting of Stockholders and other factors, the Board decided to hold advisory votes on the approval of executive compensation annually until the next advisory vote on frequency occurs. Unless the Board modifies its policy on the frequency of future advisory votes, the next such advisory vote to approve the 2016 executive compensation will be held at the 20172025 Annual Meeting.Vote RequiredApproval of Proposal No. 2 requires the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote at the Annual Meeting."FOR"“FOR” this proposal. 54 CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement|90 Group'sGroup’s financial reporting process on behalf of the Board of Directors. The Audit Committee'sCommittee’s purpose and responsibilities are set forth in the Audit Committee Charter.charter. The current charter is available on the Group'sGroup’s website at http://www.calwatergroup.com.www.calwatergroup.com. The Audit Committee consists of fivefour members, each of whom meet the New York Stock Exchange standards for independence and the Sarbanes-Oxley Act independence standards for Audit Committee membership, and threeall of the Audit Committee's fiveCommittee’s members meet the requirements of an Audit Committee financial expert. During 2015,2023, the Audit Committee met fivefour times.Group'sGroup’s management has primary responsibility for preparing the Group'sGroup’s financial statements and the overall reporting process, including the Group'sGroup’s system of internal controls. Deloitte & Touche LLP, the Group'sGroup’s independent registered public accounting firm, audited the financial statements prepared by the Group and expressed their opinion that the financial statements fairly present the Group'sGroup’s financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. Deloitte & Touche LLP also determined that the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015.20152023 financial statements, the Audit Committee:Board;firm'sfirm’s communications with the Audit Committee concerning independence, and also discussed with Deloitte & Touche LLP the firm'sfirm’s independence, and considered whether the firm'sfirm’s provision of non- auditnon-audit services and the fees and costs billed for those services are compatible with Deloitte & Touche LLP'sLLP’s independence; andGroup'sGroup’s internal auditor, each of whom has unrestricted access to the Audit Committee, without management present, and discussed their evaluations of the Group'sGroup’s internal controls and overall quality of the Group'sGroup’s financial reporting and accounting principles used in preparation of the financial statements. The Committee also met privately with the Group'sGroup’s Chairman, President & CEO, the CFO and the Controller, and the General Counsel to discuss the same issues. George A. Vera, Committee Chair Edwin A. Guiles Richard P. Magnuson Linda Committee Chair
Jeffrey Kightlinger
Charles R. MeierPatton
Patricia K. Wagner CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 55|91 RELATIONSHIP WITH THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMGroup'sGroup’s independent registered public accounting firm. The Audit Committee evaluates the selection of the independent registered accounting firm each year. In addition, the Audit Committee considers the independence of the independent registered public accounting firm each year and periodically considers whether there should be a regular rotation of the independent registered public auditing firm. The Audit Committee also is involved in considering the selection of Deloitte & Touche LLP'sLLP’s lead engagement partner when rotation is required.Group'sGroup’s independent auditor since fiscal year 2008. After careful consideration of a number of factors, including the length of time the firm has served in this role, the firm'sfirm’s past performance, and an assessment of the firm'sfirm’s qualifications and resources, the Audit Committee has selected Deloitte & Touche LLP to serve as the Group'sGroup’s independent registered public accounting firm for the year ending December 31, 2016.2024. The Committee'sCommittee’s selection of Deloitte & Touche LLP as the Group'sGroup’s independent registered public accounting firm is being submitted for ratification by vote of the stockholders at this Annual Meeting.relatebilled and expected to services providedbe billed by Deloitte & Touche LLP, the Group'sGroup’s independent registered public accounting firm, for the indicated fiscal years 2014 and 2015.the fees billed by Deloitte & Touche LLP for all other services rendered during the indicated fiscal years. Category of Services 2022 2023 $ 2,322,469 $ 2,162,750 269,877 163,803 Tax Fees 0 0 0 189,000 Total $ 2,592,346 $ 2,515,553 Category of Services 2014 2015 $1,342,300 $1,403,300 525,000 0 0 0 0 0 1,867,300 1,403,300 (1)The audit services includedAudit fees relate to audits of the Group'sGroup’s annual financial statements, for the years ended December 31, 2014 and 2015, and quarterly reviews of the Group'sGroup’s interim financial statements. Included also are fees related tostatements and the audit of the effectiveness of internal control over financial reporting.Services include assurance and related services by the independent registered public accounting firm that are reasonablyperformance of the audit or review of the Group's financial statements and are not reportedfees disclosed under "Audit Fees."Fees reported in the above table are those billed or expected“All Other Fees” relate to be billed for audit services related to that fiscal year and for other services rendered during that fiscal year. 56 CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement|92 PROPOSAL NO. 3 – RATIFICATION OF SELECTION OF DELOITTE & TOUCHE LLPAS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016 PROPOSAL NO. 3 — RATIFICATION OF SELECTION OF
DELOITTE & TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2024 Group'sGroup’s books, records, and accounts for the year ending December 31, 2016.2024. The members of the Audit Committee and the Board believe that the continued retention of Deloitte & Touche LLP to serve as the Group'sGroup’s independent registered public accounting firm is in the best interests of the Group and its stockholders. Following the recommendation of the Audit Committee, the Board recommends a vote FOR“FOR” the adoption of this proposal. Representatives of Deloitte & Touche LLP willare expected to be present at the meeting to answer appropriate questions from stockholders and will have an opportunity to make a statement if they desire to do so. If the stockholders do not ratify this appointment, the Audit Committee will reconsider the selection of the independent registered public accounting firm.Vote RequiredRatificationselectionBoard PROPOSAL NO. 4 — APPROVE GROUP’S 2024 EQUITY INCENTIVE COMPENSATION PLAN independent registered public accounting firm for 2016 requiresBoard approved the Company’s 2024 Equity Incentive Plan (the “2024 Plan”) subject to stockholder approval. The approval by an affirmative vote of a majority of the votes cast on this proposal (either in person or by proxy) is required for adoption. The complete text of the 2024 Plan approved by the Board is attached as Appendix A to this proxy statement. Award Number
Outstanding Weighted Average
Exercise Price Weighted Average
Remaining Term Stock Options & SARs 0 Not applicable Not applicable 203,380 Not applicable Not applicable Total Overhang 0.87% — — Shares Available for Grant 349,208 — — Year SAR
Options
Granted
Shares
Granted(1) Total Granted Weighted
Average Number
of Common
Shares
Outstanding Burn Rates 2023 0 87,848 87,848 56,951,846 0.15% 2022 0 77,968 77,968 54,320,445 0.14% 2021 0 82,730 82,730 51,633,168 0.16% Three-year average 0 82,849 82,849 54,301,820 0.15% in person or represented by proxy and entitled to vote at the Annual Meeting."FOR"“FOR” this proposal. CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 57|100 Contentsour executive officers as a group, as of April 2, 2024. All directors and executives have sole voting and investment power over their shares (or share such powers with their spouses). Name
Beneficially
Owned(*) 17,647 860 10,065 3,473 381 120,765 26,093 19,790 4,564 7,139 1,067 11,116 47,756 22,067 32,661 24,393 7,142 All current directors and executives as a group 424,225 Beneficial Owner Number of Shares of
Common Stock Percent of Class BlackRock, Inc.(1)
50 Hudson Yards
New York, NY 10001 10,687,783 18.5% The Vanguard Group, Inc.(2)
100 Vanguard Blvd.
Malvern, PA 19355 6,966,637 12.07% State Street Corporation(3)
1 Congress Street, Suite 1
Boston, MA 02111 3,434,902 5.95% T. Rowe Price Investment Management, Inc.(4)
101 E. Pratt Street
Baltimore, MD 21201 2,908,537 5.0% place thereofthe means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the Annual Meeting at which the adjournment is taken.taken, displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxyholders to participate in the meeting by means of remote communication or set forth in the notice of meeting given in accordance with our bylaws. However, if the adjournment is for more than 30 days, or if a new record date is fixed for the adjourned Annual Meeting, a notice of the adjourned Annual Meeting will be given to each stockholder entitled to vote at the Annual Meeting. At adjourned annual meetings, any business may be transacted that might have been transacted at the original Annual Meeting.whichthat may be furnished by the Board to stockholders. The solicitation of proxies will be made by the use of the U.S. Postal Service and also may be made by telephone, or personally, by directors, officers, and regular employees of the Group, who will receive no extra compensation for such services. Morrow & Company,Sodali, LLC, 470 West Avenue, Stamford, CT 06902 was hired to assist in the distribution of proxy materials and solicitation of votes for a $9,000$10,000 fee, plus distribution expenses. The Group will reimburse brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to stockholders. meetingAnnual Meeting or any adjournment or postponement thereof, upon which a vote properly may be taken, the proxy holders will vote in their discretion unless otherwise provided in the proxies. discretion.Code of EthicsThe Group has adopted written codes of ethics for all directors, officers, and employees. The codes are posted on the Group's website at http://www.calwatergroup.com. The codes are also available in written form upon request to the Corporate Secretary, California Water Service Group, 1720 North First Street, San Jose, California 95112-4598."householding,"“householding,” can result in significant cost savings for the Group. In order to take advantage of this opportunity, banks and brokerage firms that hold shares for stockholders who are the beneficial owners, but not the record holders, of the Group'sGroup’s shares, have delivered only one proxy statement and annual report to multiple stockholders who share an address, unless one or more of the stockholders has provided contrary instructions. For stockholders who are the record holders of the Group'sGroup’s shares, the Group may follow a similar process absent contrary instructions. The Group will deliver promptly, upon written or oral request, a separate copy of the proxy statement and annual report to a stockholder at a shared address to which a single58 CALIFORNIA WATER SERVICE GROUP |2016 Proxy Statement95112-459895112-4508 or calling (408) 367-8200. Stockholders of record sharing an address who are receiving multiple copies of proxy materials and annual reports and wish to receive a single copy of such materials in the future should submit their request by contacting the Group in the same manner. If you are the beneficial owner, but not the record holder, of the Group'sGroup’s shares and wish to receive only one copy of the proxy statement and annual report in the future, you will need to contact your broker, bank, or other nominee to request that only a single copy of each document be mailed to all stockholders at the shared address in the future.2015.2023. Copies of exhibits to Form 10-K also will be furnished upon request for a payment of a fee of $0.50 per page. All requests should be directed to the Corporate Secretary, California Water Service Group, 1720 North First Street, San Jose, California 95112-4598.Group'sGroup’s Form 10-K, including exhibits and this Proxy Statement, will be available on the Group'sGroup’s website at http://www.calwatergroup.com.Group'sGroup’s website, including the Environmental, Social, and Governance Report, is not to be deemed included or incorporated by reference into this Proxy Statement. CALIFORNIA WATER SERVICE GROUP 20162024 Proxy Statement 59|103 Contentsthe eleven directors named in the Proxy Statement to serve until the 2025 Annual Meeting; You may vote online. You may vote by telephone. You may vote by mail. ![[MISSING IMAGE: ic_votebyinternet-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_votebyinternet-pn.gif)
by Internet” instructions on the
proxy card. If you vote online, you
do not have to mail in your proxy
card.
Annual Meeting online, we
recommend that you vote your
shares prior to the meeting so that
your vote will be counted if you later
decide not to attend. ![[MISSING IMAGE: ic_votebyphone7416-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_votebyphone7416-pn.gif)
by Phone” instructions on the proxy
card. If you vote by telephone, you
do not have to mail in your proxy
card. You must have a touch-tone
phone to vote by telephone. ![[MISSING IMAGE: ic_votebymail-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/ic_votebymail-pn.gif)
and mailing it in the enclosed,
prepaid, and addressed envelope. If
you mark your voting instructions on
the proxy card, your shares will be
voted as you instruct.
not provide voting instructions, your
shares will be voted in accordance
with the Board’s recommendations
set forth in this proxy statement. Proposal Vote Required Proposal No. 1 — Election of 11 directors Majority of Votes Cast Proposal No. 2 — Advisory vote to approve executive compensation Majority of Shares Present in Person or Represented by Proxy and Entitled to Vote on the Matter Proposal No. 3 — Ratify the selection of Deloitte & Touche LLP as the Group’s independent registered public accounting firm for 2024 Majority of Shares Present in Person or Represented by Proxy and Entitled to Vote on the Matter Proposal No. 4 — Approval of the Group’s 2024 Equity Incentive Plan Majority of Shares Present in Person or Represented by Proxy and Entitled to Vote on the Matter California Water Service Company,Hawaii Water Service Company,New Mexico Water Service Company,Washington Water Service Company,CWS Utility Services, andHWS Utility Services
1720 North First Street,
San Jose, California 95112-4508. The submission of a stockholder proposal does not guarantee that it will be included in the proxy statement.95112-4598(408) 367-8200
95112-4508. Briefly, a stockholder must give timely prior notice of the matter to the Group. The notice must be received by the Corporate Secretary at the Group’s principal place of business no less than 90 days before and no more than 120 days before the first anniversary of the prior year’s Annual Meeting. For the 2025 Annual Meeting, to be timely, notice must be received by the Corporate Secretary not later than the close of business (5:00 p.m. Pacific Time) between January 29, 2025 and February 28, 2025. If we change the date of the Annual Meeting by more than 30 days before or more than 60 days after the date of the previous meeting, notice is due not less than 90 days nor more than 120 days before the Annual Meeting or the 10th day after we publicly announce the holding of the Annual Meeting. If the Group’s Corporate Secretary receives notice of a matter after the applicable deadline, the notice will be considered untimely. In that case, or where notice is timely but the stockholder fails to satisfy the requirements of Rule 14a-4 under the Securities Exchange of 1934, the persons named as proxies may exercise their discretion in voting with respect to the matter when and if it is raised at the Annual Meeting. VOTE ![[MISSING IMAGE: px_24californiapxy1pg01-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-048344/px_24californiapxy1pg01-bw.jpg)
INTERNETINTERNETBefore The Meeting - Go to www.proxyvote.com Useor scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic delivery of information up untilinformation. Vote by 11:59 P.M.p.m. Eastern Time the day before the cut-off date or meeting date.May 28, 2024 for shares held directly and by 11:59 p.m. Eastern Time May 26, 2024 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. CALIFORNIA WATER SERVICE GROUP ATTN:MICHELLE MORTENSEN 1720 NORTH FIRST STREET SAN JOSE, CA 95112-4598 ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would likeform.During The Meeting - Go to reducewww.virtualshareholdermeeting.com/CWT2024You may attend the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronicallymeeting via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and when prompted, indicatevote during the meeting. Have the information that you agree to receive or access proxy materials electronicallyis printed in future years. VOTEthe box marked by the arrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903 Use1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up untilinstructions. Vote by 11:59 P.M.p.m. Eastern Time the day before the cut-off date or meeting date.May 28, 2024 for shares held directly and by 11:59 p.m. Eastern Time May 26, 2024 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTEinstructions.VOTE BY MAIL Mark,MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THISV40627-P07601THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. TheDATED.CALIFORNIA WATER SERVICE GROUPThe Board of Directors recommends you vote FOR each of the nominees listed in proposal 1. 1. ELECTIONKEEP THIS PORTION FOR YOUR RECORDSDETACH AND RETURN THIS PORTION ONLY 1.ELECTION OF DIRECTORS NomineesNominees: 1a. Gregory E. Aliff 1b. Shelly M. Esque 1c. Jeffrey Kightlinger 1d. Martin A. Kropelnicki 1e. Thomas M. Krummel, M.D. 1f. Yvonne A. Maldonado, M.D. 1g. Scott L. Morris 1h. Charles R. Patton 1i. Carol M. Pottenger 1j. Lester A. Snow 1k. Patricia K. Wagner For 0 0 0 0 0 0 0 0 0 0 Against 0 0 0 0 0 0 0 0 0 0 Abstain 0 0 0 0 0 0 0 0 0 0 1aAbstain! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! ! The Board of Directors recommends you vote FOR proposals 2, 3, and 3. For 0 0 Against 0 0 Abstain 0 0 1b Terry P. Bayer 2 ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION. RATIFICATION OF SELECTION OF DELOITTE4.2.Advisory vote to approve executive compensation. 3.Ratification of the selection of Deloitte & TOUCHETouche LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016. 1c Edwin A. Guiles 3 1d Bonnie G. Hill 1e Martin A. Kropelnickias the Group's independent registered public accounting firm for 2024. 4.Approval of the 2024 Equity Incentive Plan. NOTE: I authorize the proxies to vote according to their discretion on any other matters that properly come before the Annual Meeting of Stockholders or any adjournment or postponement thereof. 1f Thomas M. Krummel, M.D. 1g Richard P. Magnuson 1h Peter C. Nelson 1i Lester A. Snow 1j George A. VeraFor Against Abstain! ! !! ! !! ! ! Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signatureofficer.Signature [PLEASE SIGN WITHIN BOX] Date SignatureDateSignature (Joint Owners) Date 0000282758_1 R1.0.1.25
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Meeting to be Held on May 25, 2016: Meeting:The Proxy Statement and the Annual Report Form 10-K and Proxy Statement are available at www.proxyvote.com. CALIFORNIAwww.proxyvote.com.V40628-P07601CALIFORNIA WATER SERVICE GROUP THISGROUPTHIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS MARTINDIRECTORSMARTIN A. KROPELNICKI and MICHELLE R. MORTENSEN, and each of them with full power of substitution, are hereby authorized to vote, as designated on the reverse side, all the shares of California Water Service Group common stock of the undersigned at the Annual Meeting of Stockholders of California Water Service Group to be held at the executive office, 1720 North First Street, San Jose, California on May 25, 2016 at 9:30 a.m.,29, 2024, or at any adjournment or postponement thereof.thereof (including, if applicable, for the election of any substitute nominee named by the Board of Directors if any nominee named in proposal 1 becomes unavailable to serve). By my signature on the reverse side of this proxy, I acknowledge that I have received a copy of the noticeNotice of meetingMeeting and proxy statementProxy Statement relating to this meeting and of the Group's most recent Annual Report to Stockholders. THISStockholders.THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S), AND IN THE DISCRETION OF THE PROXY HOLDERS UPON ANY OTHER MATTER THAT MAY PROPERTLYPROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF. IF NO DIRECTION IS MADE, THIS PROXYTHISPROXY WILL BE VOTED FOR THE ELECTION OF EACH NOMINEE FOR DIRECTOROF THE NOMINEES LISTED IN PROPOSAL 1, FOR PROPOSAL 2, and FOR PROPOSAL 3. Please3, AND FOR PROPOSAL 4.Please date, sign and mail in the enclosed envelope, or vote by Internet or telephone, as soon as possible. Continued and to be signed on reverse side 0000282758_2 R1.0.1.25
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