UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
☐Preliminary Proxy Statement
☐Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒Definitive Proxy Statement
☐Definitive Additional Materials
☐Soliciting Materials under §240.14a-12
Black Hills Corporation | ||||||||||||||
(Name of Registrant as Specified In Its Charter) | ||||||||||||||
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | ||||||||||||||
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Fee paid previously with preliminary materials. |
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-16(i)(1) and 0-11. | |||||||||||||||
(1) | Amount Previously Paid: | |||||||||||||||
(2) | Form, Schedule or Registration Statement No.: | |||||||||||||||
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BLACK HILLS CORPORATION
Notice of 2024
Annual Meeting of Shareholders
and Proxy Statement
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BLACK HILLS CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WHEN: | WHERE: | |||
Horizon Point | ||||||||||||||
Tuesday, April | Company’s Corporate Headquarters | |||||||||||||
9:30 a.m., local time | 7001 Mount Rushmore Road | |||||||||||||
Rapid City, South Dakota 57702 |
We are pleased to invite you to attend the annual meeting of shareholders of Black Hills Corporation.
In the event it is not possible to attend our annual meeting in person, we encourage you to listen to the webcast ofmeeting by calling in: 605-782-9484, Conference ID: 604 530 619#. The presentation for this meeting can be located at www.ir.blackhillscorp.com by clicking on "Events and Presentations" in the meeting online at
Proposals:
Record Date:
The Board of Directors set March 7, 20224, 2024 as the record date for the meeting. This means that our shareholders as of the close of business on that date are entitled to receive this notice of the meeting and vote at the meeting and any adjournments or postponements of the meeting.
How to Vote:
Your vote is very important. You may vote your shares by telephone, by the Internet or by returning the enclosed proxy. If you own shares of common stock other than the shares shown on the enclosed proxy, you will receive a proxy in a separate envelope for each such holding. Please vote each proxy received. To make sure that your vote is counted if voting by mail, you should allow enough time for the postal service to deliver your proxy before the meeting.
Sincerely, | ||
/s/ AMY K. KOENIG | ||
Amy K. Koenig | ||
Vice President - Governance, Corporate Secretary and Deputy General Counsel |
PROXY SUMMARY
BLACK HILLS CORPORATION OVERVIEW
We are a customer-focused energy solution provider that invests in our communities’ safety, sustainability and growth with a mission of
Improving Life with Energy and a vision to be the Energy Partner of Choice. The Company’s core mission – and our primary focus – is to provide safe, reliable and cost-effective electric and natural gas service to more than 1.3 million utility customers in over 800 communities in eight states, including Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming.Items of Business to be Considered at the Annual Meeting
Proposal | Board Recommendation | Page | |||||||||
1 | Election of Directors | þ FOR each Director Nominee | 6 | ||||||||
2 | Ratification of Deloitte & Touche LLP to Serve as Independent Registered Public Accounting Firm for 2022 | þ FOR | 22 | ||||||||
3 | Advisory Non-Binding Resolution to Approve Executive Compensation | þ FOR | 25 | ||||||||
4 | Approval of the Black Hills Corporation Amended and Restated 2015 Omnibus Incentive Plan | þ FOR | 52 |
Proposal |
| Board Recommendation | Page |
1 | Election of Directors | þ FOR each Director Nominee | 6 |
2 | Ratification of Deloitte & Touche LLP to Serve as Independent Registered Public Accounting Firm for 2024 | þ FOR | 20 |
3 | Advisory Vote to Approve Executive Compensation | þ FOR | 23 |
BOARD OF DIRECTORS
Director Nominees
Our Board of Directors ("Board") is committed to oversight that promotes the long-term interests of our shareholders and other stakeholders. We believe this is best achieved with directors who bring a diverse and relevant set of skills, expertise, experiences and perspectives. Our Board is nominating threefour individuals for election at this annual meeting.
Name | Age | Director Since | Independent | Committee Membership | Other U.S. Public Boards |
Linden R. Evans | 61 | 2018 |
| NA | None |
Barry M. Granger | 64 | 2020 | X | Compensation |
None |
Tony A. Jensen | 61 | 2019 | X | Audit | None |
Steven R. Mills | 68 | 2011 | X | Board Chair; Governance | Amyris, Inc. |
Name | Age | Director Since | Independent | Committee Membership | Other Public Boards | ||||||||||||
Kathleen S. McAllister | 57 | 2019 | X | Audit | Hoegh LNG Partners LP TMC The Metals Company Inc. | ||||||||||||
Robert P. Otto | 62 | 2017 | X | Audit | None | ||||||||||||
Mark A. Schober | 66 | 2015 | X | Audit (Chair) | None |
Proxy Summary ‖ 1
Director Skills and Demographics
Evans | Granger | Jensen | McAllister | Mills | Otto | Prochazka | Roberts | Schober | Taylor | Vering | |||||||||||||||||||||||||
Skills and Experience | |||||||||||||||||||||||||||||||||||
Business Operations | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||
Customer Service | X | X | X | ||||||||||||||||||||||||||||||||
Cybersecurity/Technology | X | X | |||||||||||||||||||||||||||||||||
ESG/Sustainability | X | X | X | ||||||||||||||||||||||||||||||||
Financial Acumen | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||||
Government/Regulatory | X | X | X | X | X | ||||||||||||||||||||||||||||||
Health and Safety | X | X | X | X | X | X | X | X | |||||||||||||||||||||||||||
Human Capital Management/ Compensation | X | X | X | X | |||||||||||||||||||||||||||||||
Legal/Governance/Compliance | X | X | X | ||||||||||||||||||||||||||||||||
Mergers and Acquisitions | X | X | X | ||||||||||||||||||||||||||||||||
Risk Management | X | X | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||
Strategic Planning | X | X | X | X | X | X | X | X | X | X | X | ||||||||||||||||||||||||
Utility Industry | X | X | X | ||||||||||||||||||||||||||||||||
Board Tenure | |||||||||||||||||||||||||||||||||||
Years | 3 | 1 | 2 | 2 | 10 | 5 | 1 | 10 | 6 | 5 | 16 | ||||||||||||||||||||||||
Age | |||||||||||||||||||||||||||||||||||
Years Old | 59 | 62 | 59 | 57 | 66 | 62 | 56 | 69 | 66 | 58 | 72 | ||||||||||||||||||||||||
Gender | |||||||||||||||||||||||||||||||||||
Female | X | X | X | ||||||||||||||||||||||||||||||||
Male | X | X | X | X | X | X | X | X | |||||||||||||||||||||||||||
Race/Ethnicity | |||||||||||||||||||||||||||||||||||
African American/Black | X | ||||||||||||||||||||||||||||||||||
White/Caucasian | X | X | X | X | X | X | X | X | X | X |
Evans | Granger | Jensen | McAllister | Mills | Otto | Prochazka | Roberts | Schober | Taylor | |
Skills and Experience |
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Business Operations | X | X | X | X | X |
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Customer Service | X |
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Cybersecurity/Technology |
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ESG/Sustainability | X |
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Financial Acumen |
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Government/Regulatory | X | X |
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Health and Safety | X | X | X | X |
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Human Capital Management/Compensation |
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Legal/Governance/Compliance | X | X | X | X |
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Mergers and Acquisitions | X |
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Risk Management | X | X | X | X | X | X | X | X | X | X |
Strategic Planning | X | X | X | X | X | X | X | X | X | X |
Utility Industry | X |
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Board Tenure |
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Years | 5 | 3 | 4 | 4 | 12 | 7 | 3 | 12 | 8 | 7 |
Age |
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Years Old | 61 | 64 | 61 | 59 | 68 | 64 | 58 | 71 | 68 | 60 |
Gender |
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Female |
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Male | X | X | X |
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Race/Ethnicity |
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African American/Black |
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White/Caucasian | X |
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OUR COMMITMENT TO SUSTAINABILITY
Our mission of
Improving Life with Energy means we must be ready to make tomorrow even better than today. That is why we are committed to creating a cleaner energy future which builds upon our responsibility to provide the safe, reliable and cost-effective energy that improves our customers’ lives. By investing in the success of our employees, continually innovating, thoughtfully utilizing resources and keeping people at the core of our decision-making, we are dedicated to the sustainability of our Company, communities and planet.Environmental, Social and Governance (ESG) Strategy and Oversight
We are continuously strengthening our sustainability strategy.
Responsibly Reducing Greenhouse Gas Emissions
We have set challenging, yet realistic, goals to reduce greenhouse gas emissions intensity:
Proxy Summary ‖ 2
2040. In 2022, we increased our gas distribution utilities' emissions target to Net Zero by 2035. We expect to achieve our Net Zero target through ongoing infrastructure investment, damage prevention and integration of low carbon fuels.
Electric Utilities Goals(1)(2) | Natural Gas Utilities Goals(1)(3) | |||||
â | 40% by 2030 | â | Net Zero by 2035 | |||
â | 70% by 2040 |
We are proud of our sustainability efforts and continue to pursue initiatives to enable the transition to a cleaner energy future, including:
We will continue executing our strategy of investing in cost-effective renewables and new technologies to further reduce our environmental impact across all states in which we operate, while continuing to deliver safe, reliable and cost effective energy to customers.
For additional information on our commitment to sustainability, you can review the following 20202022 ESG reports on our website at
OUR COMMITMENT TO WILDFIRE SAFETY AND PREVENTION
We have a long history of delivering safe and reliable energy to our customers. For decades, we have employed a wide variety of wildfire mitigation measures and initiatives to support the integrity of our energy delivery systems, while safeguarding our facilities and the surrounding environment. These efforts are part of our comprehensive approach to mitigate not only wildfire risk, but also a variety of extreme weather events, including ice storms and high winds. We are utilizing a three-pronged approach to wildfire mitigation, which includes the following:
Proxy Summary ‖ 3
We are committed to the ongoing development and implementation of risk reduction strategies for the betterment of the environment and our customers, employees, and investors. For additional information on our commitment to wildfire safety and prevention, please visit our website at www.blackhillsenergy.com/wildfire-safety.
EXECUTIVE COMPENSATION
We have an Executive Compensation Philosophy that establishes the framework our Compensation Committee applies in structuring compensation for our executive officers ("Named Executive Officers" or "NEOs"). The components of our executive pay program consist of a base salary, a short-term incentive plan, and long-term incentives. Our executive pay program aligns the interest of our Named Executive Officers with our stakeholders by tying incentive pay to achievement of performance metrics.
Variable | 78 | % | Variable | 63 | % | |||||||||||||||
Linked to Share Value | 57 | % | Linked to Share Value | 40 | % |
Variable | 80 | % |
| Variable | 61 | % |
Linked to Share Value | 60 | % |
| Linked to Share Value | 39 | % |
*Percentages may differ from above due to rounding.
The performance measures for our incentive compensation plans are discussed in greater detail on page 2827 of the Proxy Statement. We also require our executive officers to hold a significant amount of our common stock (between 3 and 6 times the base salary) to further align their performanceinterests with the interest of our shareholders.
Our compensation practices and policies demonstrate the alignment between executive compensation and the interests of our stakeholders. Our shareholders share our confidence in our compensation philosophy as reflected by the support of shareholders owning 98 percent of the shares who voted to approve our 20202022 executive compensation at last year's annual meeting.
Proxy Summary ‖ 4
The following table summarizes performance metrics and results for incentive plans that ended in 2023.
Pay Element | Performance Measure | 2023 Results | ||
Short-term Incentive: Payout of 153.67% of Target | ||||
70 Percent | EPS from ongoing operations, as adjusted, target set at $3.75; threshold set at $3.49 | $3.93 per share for incentive plan purposes | ||
7.5 Percent | Timeliness of Incident Reporting, target set at 91%; threshold set at 90% | 93% | ||
Average Proactive Safety Activities/Employee; target set at 3; threshold set at 2 | 4 | |||
Total Case Incident Rate (TCIR); target set at 1.23; threshold set at 1.39 | TCIR: 1.51 | |||
Top Quartile PMVI Performance; target set at 1.44; threshold set at 1.56 | PMVI: 1.65 | |||
7.5 Percent | Hits Per Thousand (HPT), target set at 2.05; threshold set at 2.20 | HPT: 2.05 | ||
Top Quartile System Average Interruption Duration Index (SAIDI) Performance, target set at 65.7; threshold set at 72.8 | SAIDI: 61.56 | |||
5.0 Percent | Customer Interaction: Customer Effort; target set at 8.9; threshold set at 8.8 | 8.8 | ||
Customer Interaction: Net Promoter Score; target set at 67; threshold set at 64 | 65.4 | |||
2.5 Percent | Customer Brand/Perception: JD Power Gas vs Industry; target set at 50%; threshold set at 25% | 41% | ||
Customer Brand/Perception: JD Power Electric vs Industry; target set at +2 ranking; threshold set at +1 ranking | 0 | |||
7.5 Percent | Percent of Diverse Candidate Slates; target set at 85%; threshold set at 80% | 90% | ||
Percent of Diverse Interview Panels; target set at 92%; threshold set at 90% | 96% | |||
Long-term Incentive (2021-2023 Plan): Payout of 16.21% of Target | ||||
60 Percent | Total Shareholder Return (TSR) relative to our Performance Peer Group measured over a three-year period; target set at 50th Percentile; threshold set at 25th Percentile | TSR: 1.27% | ||
16th Percentile Ranking in Performance Peer Group | ||||
20 Percent | Average EPS as Adjusted; target set at $4.09; threshold set at $3.88 | Average EPS: $3.882 | ||
20 Percent | Average Cost to Serve; target set at 45.0%; threshold set at 47.2% | Average Cost to Serve: 46.3% |
Proxy Summary ‖ 5
2023 ACCOMPLISHMENTS AND PERFORMANCE | |||
Black Hills Corporation delivered on our financial commitments during an inflationary macroeconomic environment. Earnings per share for the year were $3.91, above our earnings guidance range of $3.65 to $3.85. We achieved our financial targets, advanced our key strategic initiatives, executed our capital plan and delivered excellent operations performance. Significant accomplishments for the year included: | |||
* | Provided the safe and reliable service our communities and customers depend on and achieved several notable operations performance metrics: | ||
* | Achieved a safety performance preventable motor vehicle incident rate of 1.65 compared to a 2022 American Gas Association report top quartile average of 1.72 | ||
* | Achieved 10 consecutive years of new peaks for Wyoming Electric, representing 127 MW, which is a 69% increase | ||
* | Completed financing activity to accomplish our long-term objective of investing to meet the needs of our customers, including: | ||
* | Completed a public debt offering of $450 million, 6.15% senior unsecured notes due 2034 | ||
* | Completed a public debt offering of $350 million, 5.95% senior unsecured notes due 2028 | ||
* | Issued a total of 2.0 million shares of new common stock for net proceeds of $118.7 million under our at-the-market equity offering program | ||
* | Improved our year-over-year net debt to capitalization ratio to 57.3% from 60.8% | ||
* | Grew our dividend for the 53rd consecutive year | ||
* | Invested in our utility infrastructure and systems: | ||
* | Deployed $590 million in capital projects | ||
* | Commenced construction on our 260-mile Ready Wyoming Electric Transmission Expansion Project | ||
* | Issued an RFP under our South Dakota Electric Integrated Resource Plan for 100 MW of build-transfer renewable generation by mid-2026 | ||
* | Executed a number of regulatory accomplishments: | ||
* | Successfully completed rate review requests for Rocky Mountain Natural Gas and Wyoming Electric | ||
* | Reached constructive settlements for our rate reviews for Colorado Gas and Wyoming Gas | ||
* | Received a Certificate of Public Convenience and Necessity for the Ready Wyoming Electric Transmission Expansion Project | ||
* | Continued our focus on sustainability, including: | ||
* | Issued an updated sustainability report and updated EEI, AGA, SASB, NGSI, and TCFD disclosures | ||
* | Issued an RFP under our Colorado Electric Clean Energy Plan for approximately 400 MW of renewable resources by 2030 | ||
Proxy Summary ‖ 6
BLACK HILLS CORPORATION
7001 Mount Rushmore Road
Rapid City, South Dakota 57702
PROXY STATEMENT | ||||||||||||||
ü | ||||||||||||||
A proxy in the accompanying form is solicited by the Board of Directors of Black Hills Corporation, a South Dakota corporation, to be voted at the annual meeting of our shareholders to be held Tuesday, April | ||||||||||||||
ü | The enclosed form of proxy, when executed and returned, will be voted as set forth in the proxy. Any shareholder signing a proxy has the power to revoke the proxy in writing, addressed to our secretary, or in person at the meeting at any time before the proxy is exercised. | |||||||||||||
ü | ||||||||||||||
This proxy statement and the accompanying form of proxy are to be first mailed on or about March |
VOTING RIGHTS AND PRINCIPAL HOLDERS | ||||||||||||||
ü | Only our shareholders of record at the close of business on March | |||||||||||||
ü | Each outstanding share of our common stock is entitled to one vote. Cumulative voting is permitted in the election of directors in the same class. | |||||||||||||
1
TABLE OF CONTENTS
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COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING PROCESS
Who is soliciting my proxy?
The Board of Directors of Black Hills Corporation is soliciting your proxy.
Where and when is the annual meeting?
The annual meeting is at 9:30 a.m., local time, April 26, 202223, 2024 at Horizon Point, the Company’s corporate headquarters, 7001 Mount Rushmore Road, Rapid City, South Dakota.
Who can vote?
Holders of our common stock as of the close of business on the record date, March 7, 2022,4, 2024, can vote at our annual meeting. Each share of our common stock has one vote for Proposals 2, 3, and 4.3. Related to Proposal 1, Election of Directors, cumulative voting is permitted in the election of directors in the same class.
How do I vote?
There are three ways to vote by proxy:
You
may be able to vote by telephone or over the Internet if your shares are held in the name of a bank or broker. If this is the case, you will need to follow their instructions.What constitutes a quorum?
Shareholders representing at least 50 percent of our common stock issued and outstanding as of the record date must be present at the annual meeting, either in person or by proxy, for there to be a quorum. Abstentions and broker non-votes are counted as present for establishing a quorum. A broker non-vote occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power and has not received instructions from the beneficial owner.
3
What am I voting on and what is the required vote for the proposals to be adopted?
The required vote and method of counting votes for the various business matters to be considered at the annual meeting are described in the table below. If you sign and return your proxy card without indicating your vote, your shares will be voted in accordance with the Board recommendations as set forth below.
Item of Business | Board Recommendation | Voting Approval Standard | Effect of Abstention | Effect of Broker Non-Vote | ||||||||||
Proposal 1: | FOR election of each director nominee | The | No effect | No effect | ||||||||||
Election of Directors | ||||||||||||||
If a nominee receives more "WITHHOLD AUTHORITY" votes than "FOR" votes, the nominee must submit a resignation for consideration by the Governance Committee and final Board decision. | ||||||||||||||
Proposal 2: | FOR | The votes cast "FOR" must exceed the votes cast "AGAINST". | No effect | Not applicable; broker may vote shares without instruction | ||||||||||
Ratification of Appointment of Independent Registered Public Accounting Firm | ||||||||||||||
Proposal 3: | FOR | The votes cast "FOR" must exceed the votes cast "AGAINST". | No effect | No effect | ||||||||||
Advisory Vote to Approve Executive Compensation | ||||||||||||||
This advisory vote is not binding on the Board, but the Board will consider the vote results when making future executive compensation decisions. | ||||||||||||||
Is cumulative voting permitted for the election of directors?
In the election of directors, you may cumulate your vote. Cumulative voting allows you to allocate among the director nominees in the same class, as you see fit, the total number of votes equal to the number of director positions to be filled multiplied by the number of shares you hold. For example, if you own 100 shares of stock, and there are three directors to be elected in a class at the annual meeting, you could allocate 300 “For” votes (three times 100) among as few or as many of the three nominees to be voted on at the annual meeting as you choose.
If you choose to cumulate your votes, you will need to submit a proxy card or a ballot and make an explicit statement of your intent to cumulate your votes, either by indicating in writing on the proxy card or by indicating in writing on your ballot when voting at the annual meeting. If you hold shares beneficially in street name and wish to cumulate votes, you should contact your broker, trustee or nominee.
4
How will my shares be voted if they are held in a broker’s name?
If you hold your shares through an account with a bank or broker, the bank or broker may vote your shares on some matters even if you do not provide voting instructions. Brokerage firms have the authority under the New York Stock Exchange ("NYSE") rules to vote shares on certain matters (such as the ratification of auditors) when their customers do not provide voting instructions. However, on most other matters when the brokerage firm has not received voting instructions from its customers, the brokerage firm cannot vote the shares on that matter and a “broker non-vote” occurs.
This means that brokers may not vote your shares on the election of directors or the “say on pay” advisory voteWhat should I do now?
You should vote your shares by telephone, over the Internet or by returning your signed and dated proxy card in the enclosed envelope as soon as possible so that your shares will be represented at the annual meeting.
Who will count the vote?
Representatives of our transfer agent, Equiniti Trust Company, will count the votes and serve as judges of the election.
Who conducts the proxy solicitation and how much will it cost?
We are asking for your proxy for the annual meeting and will pay all the costs of asking for shareholder proxies. We have hired Georgeson LLC to help us send out the proxy materials and ask for proxies. Georgeson LLC’s fee for these services is anticipated to be $11,000$12,250 plus out-of-pocket expenses. We can ask for proxies through the mail, by telephone or in person. We can use our directors, officers and employees to ask for proxies. These people do not receive additional compensation for these services. We will reimburse brokers and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation material to the beneficial owners of our common stock.
Can I revoke my proxy?
Yes. You can change your vote in one of four ways at any time before your proxy is used. First, you can enter a new vote by telephone or Internet. Second, you can revoke your proxy by written notice. Third, you can send a later dated proxy changing your vote. Fourth, you can attend the meeting and vote in person.
Who should I call with questions?
If you have questions about the annual meeting, you should call Amy K. Koenig, Vice President - Governance, Corporate Secretary and Deputy General Counsel, at (605) 721-1700.
5
PROPOSAL 1 | ELECTION OF DIRECTORS |
Our Board is nominating threefour individuals for election as directors at this annual meeting. All of the nominees are currently serving as our directors. In accordance with our Bylaws and Article VI of our Articles of Incorporation, members of our Board of Directors are elected to three classes of staggered terms consisting of three years each, and until their successors are duly elected and qualified. At this annual meeting, threefour directors will be elected to Class IIII for a term of three years until our annual meeting in 2025.
Nominees for director at the annual meeting are Kathleen S. McAllister, Robert P. Otto,Linden R. Evans, Barry M. Granger, Tony A. Jensen, and Mark A. Schober.Steven R. Mills. Our Bylaws require a minimum of nine directors. TheCurrently, the Board has set the size of the Board at 10 directors effective at the annual meeting in connection with one director retirement occurring at that time.
If, at the time of the annual meeting, any nominees are unable to stand for election, the Board of Directors may designate a substitute or reduce the number of directors to no less than nine. In that case, shares represented by proxies may be voted for a substitute director nominated by the Board. We do not expect that any nominee will be unavailable or unable to serve.
The Board and the Governance Committee believe that the combination of the various qualifications, skills and experiences of the directors contribute to an effective and well-functioning Board, and that, individually and as a whole, the directors possess the necessary qualifications to provide effective oversight of the business and quality advice to the Company’s management. Included in each director’s biography below is an assessment of the specific qualifications, attributes, skills and experience that have led to the conclusion that each individual should serve as a director in light of our current business and structure.
The Board of Directors recommends a vote
Director Nominee | Class | Year Term Expiring | ||||||
Linden R. Evans | III | 2027 | ||||||
Barry M. Granger | III | 2027 | ||||||
Tony A. | III | 2027 | ||||||
Steven R. Mills | III | |||||||
2027 |
6
DIRECTOR SKILLS AND EXPERIENCE
| Linden R. Evans | Outside Directorships: | ||||||
President and Chief Executive Officer of the Company | None | |||||||
Director since: 2018 | ||||||||
Director Class: III, term expiring in | Other U.S. Public Company Directorships: | |||||||
Age: | None | |||||||
Summary: | ||||||||
Mr. Evans has been President and Chief Executive Officer of the Company since January 1, 2019. He previously served as President and Chief Operating Officer from 2016 to 2018, and President and Chief Operating Officer – Utilities from 2004 to 2015. He began his career with Black Hills Corporation in 2001 as Corporate Counsel. Prior to joining the Company, Mr. Evans was a mining engineer and an attorney specializing in environmental and corporate legal matters. | ||||||||
Skills | ||||||||
As CEO of Black Hills Corporation, Mr. Evans brings historic institutional knowledge of the Company and its operations |
| Barry M. Granger | Standing Board Committees: | ||||||
Managing Partner and Co-Founder of | Compensation Committee | |||||||
Director since: 2020 | ||||||||
Director Class: III, term expiring in | Other U.S. Public Company Directorships: | |||||||
Age: | None | |||||||
Summary: | ||||||||
Mr. Granger has over | ||||||||
Skills | ||||||||
Mr. Granger’s leadership roles in the areas of governmental affairs, business and operations |
7
| Tony A. Jensen | Standing Board Committees: | ||||||
Retired Director, President and Chief Executive Officer of Royal Gold, Inc. | Audit Committee | |||||||
Director since: 2019 | ||||||||
Director Class: III, term expiring in | Other U.S. Public Company Directorships: | |||||||
Age: | None | |||||||
Summary: | ||||||||
Mr. Jensen has over 35 years of experience in the international mining and mining finance industries. From 2003 until his retirement in 2019, Mr. Jensen served in several leadership roles at Royal Gold, Inc., a public precious metals company, including Director, President and Chief Executive Officer from 2006 to 2019, and Chief Operating Officer from 2003 to 2006. Prior to 2003, he held roles with progressively more | ||||||||
Skills | ||||||||
As the former CEO of a publicly traded precious metals stream and royalty company, Mr. Jensen brings business, |
| Kathleen S. McAllister | Standing Board Committees: | ||||||
Retired Director, President and Chief Executive Officer of Transocean Partners LLC | Audit Committee | |||||||
Director since: 2019 | ||||||||
Director | Other U.S. Public Company Directorships: | |||||||
Age: | Silverbow Resources, Inc. (since 2023) TMC The Metals Company Inc. | |||||||
Summary: | ||||||||
Ms. McAllister has over 30 years of experience in diverse leadership roles with global, capital intensive companies in the energy value chain. She served as Director, President and Chief Executive Officer | ||||||||
Skills | ||||||||
As a former CEO, CFO and Treasurer of publicly traded companies, Ms. McAllister's broad business |
8
| Steven R. Mills | Standing Board Committees: | ||||||
Chairman of the Board Retired Public Company Financial Executive | Governance Committee | |||||||
Director since: 2011 | ||||||||
Director Class: III, term expiring in | Other U.S. Public Company Directorships: | |||||||
Age: | Amyris, Inc. (since 2018) | |||||||
Summary: | ||||||||
Mr. Mills has more than 40 years of experience in the fields of accounting, corporate finance, strategic planning, risk management, and mergers and acquisitions. He | ||||||||
Skills | ||||||||
Mr. Mills brings to the Board executive leadership and financial |
| Robert P. Otto | Standing Board Committees: | ||||||
Owner of Bob Otto Consulting LLC | Audit Committee | |||||||
Director since: 2017 | ||||||||
Director | Other U.S. Public Company Directorships: | |||||||
Age: | None | |||||||
Summary: | ||||||||
Since 2017, Mr. Otto has provided strategic planning and advisory services in cybersecurity and | ||||||||
Skills | ||||||||
Mr. Otto’s experience in cybersecurity and intelligence through his lengthy career with the U.S. Air Force provides the Board information technology |
9
| Scott M. Prochazka | Standing Board Committees: | ||||||
Former Board Member, President and Chief Executive Officer of CenterPoint Energy | Compensation Committee | |||||||
Director since: 2020 | ||||||||
Director Nominee Class: II, term expiring in | Other U.S. Public Company Directorships: | |||||||
Age: | Li-Cycle Holdings Corp. (since | |||||||
Summary: | ||||||||
Mr. Prochazka served as Board Member, President and Chief Executive Officer of CenterPoint Energy, a public energy delivery company with electric transmission and distribution, power generation and natural gas distribution operations, from 2014 until his retirement in 2020. Prior to that he was Chief Operating Officer from 2012 to 2013, Senior Vice President of Electric Business from 2011 to 2012, and Vice President of Gas Business Unit from 2009 to 2011. He held other management positions including Vice President Customer Care and Support Services and Vice President Texas Gas Region. Before his time at CenterPoint Energy, Mr. Prochazka held roles of increasing responsibility at Dow Chemical. Mr. Prochazka was a Board Member of Enable Midstream Partners, LP from 2014 | ||||||||
Skills | ||||||||
Mr. Prochazka’s executive experience as a former CEO of a publicly traded electric and gas utility company, with a market cap more than four times that of Black Hills Corporation, and leadership experience as COO of both gas and electric utility divisions, provides a valuable perspective regarding utility business operations, |
| Rebecca B. Roberts | Standing Board Committees: | ||||||
Retired President of Chevron Pipe Line Company | Compensation Committee Governance Committee (Chair) | |||||||
Director since: 2011 | ||||||||
Director Nominee Class: II, term expiring in | Other U.S. Public Company Directorships: | |||||||
Age: | AbbVie, Inc. (since 2018) MSA Safety, Inc. (since 2013) | |||||||
Summary: | ||||||||
Ms. Roberts has over 35 years of experience in the energy industry, including managing pipelines in North America and global pipeline projects, and managing a portfolio of power plants in the United States, Asia, and the Middle East. From 2006 until her retirement in 2011, Ms. Roberts served as the President of Chevron Pipe Line Company, a pipeline company transporting crude oil, refined petroleum products, liquefied petroleum gas, natural gas, and chemicals within the United States. From 2003 until 2006, she was the President of Chevron Global Power Generation. She | ||||||||
Skills | ||||||||
Ms. Robert’s executive experience overseeing natural gas pipelines and power generation facilities positions her to assist the Board as it evaluates the Company’s operational, health and safety |
10
| Mark A. Schober | Standing Board Committees: | ||||||
Retired Senior Vice President and Chief Financial Officer of ALLETE, Inc. | Audit Committee (Chair) Governance Committee | |||||||
Director since: 2015 | ||||||||
Director | Other U.S. Public Company Directorships: | |||||||
Age: | None | |||||||
Summary: | ||||||||
Mr. Schober has more than 35 years of experience in the utility and energy industry. | ||||||||
Skills | ||||||||
Mr. Schober brings to the Board business and leadership experience as a former executive of a public company, regulated utility experience as a former executive of a publicly traded Midwest based energy company, and financial |
| Teresa A. Taylor | Standing Board Committees: | ||||||
Chief Executive Officer of Blue Valley Advisors, LLC | Compensation Committee (Chair) Governance Committee | |||||||
Director since: 2016 | ||||||||
Director Nominee Class: II, term expiring in | Other U.S. Public Company Directorships: | |||||||
Age: | T-Mobile USA, Inc. (since 2013) | |||||||
Summary: | ||||||||
Ms. Taylor has over 30 years of experience in the technology, media, and | ||||||||
Skills | ||||||||
Ms. Taylor’s broad range of experience over her three decades-long career, including in the fields of human resources, customer support, information technology systems, and business operations, |
11
CORPORATE GOVERNANCE
Corporate Governance Guidelines
Our Board of Directors has adopte
Board Leadership Structure
On May 1, 2020, retirement of our former Executive Board Chairman David R. Emery, Steven R. Mills, an independent director, was appointed Chairman of the Board. As Chairman, Mr. Mills leads our Board in the performance of its duties by working with the CEO to establish meeting agendas, facilitating board meetings and executive sessions, and collaborating with the Board to annually evaluate the performance of the CEO.
As provided in our Corporate Governance Guidelines, the Board does not have a policy on whether or not the roles of Chairman and CEO should be separate or combined. The Governance Committee annually reviews the appropriate leadership structure for the Company and recommends a Chairman for Board approval. While our Bylaws and Corporate Governance Guidelines do not require that our Chairman and CEO positions be held by separate individuals, the Board of Directors believes that having separate positions and having an independent director serve as Chairman is the appropriate leadership structure for the Company at this time.
Risk Oversight
Our Board oversees an enterprise risk management ("ERM") approach to risk management that supports our operational and strategic objectives. It fulfills its oversight responsibilities through receipt of quarterly reports from management regarding material risks involving strategic planning and execution, operations, physical and cybersecurity, environmental, social and governance ("ESG"), financial, legal, safety, regulatory, and human
Our management is responsible for day-to-day risk management and operates under our ERM program that addresses enterprise risks. The ERM program includes practices to identify risks, assess the impact and likelihood of occurrence, and develop action plans to prevent the occurrence or mitigate the impact of the risk. The ERM program includes regular reporting to our senior management team, quarterly reporting to our Board, of Directors, and monitoring and testing by the Risk Management, Compliance and Internal Audit groups.
Sustainability Oversight
We are committed to creating a cleaner energy future that builds upon our responsibility to provide the safe, reliable and economic energy that improves our customers' lives. The Board oversees management's execution of our sustainability objectives and receives quarterly updates from management regarding sustainability matters. Under the oversight of the Board, we published our 20202022 Corporate Sustainability Report in the third quarter of 2021.2023. In addition to highlighting numerous ESG initiatives underway, the Report showcased the Company'sannouncing progress on its greenhouse gas emissionstoward our goal to reduce electric utility emission intensity reduction goals of 40% by 2030 and 70% by 2040, forwe provided key strategic updates to our electric utilities and 50%plans to achieve net zero emissions by 2035 for our natural gas utilities (as compared to 2005).distribution system. Also in the third quarter of 2023, we issued updated Edison Electric Institute and American Gas Association ESG disclosures, Natural Gas Sustainability Initiative (NGSI) disclosures, and Sustainability Accounting Standards Board (SASB) disclosures, and Task Force on Climate Related Financial Disclosure Index disclosures.
Cyber and Physical Security Oversight
Our Board retains oversight of cyber and physical security. Our Chief Information Officer provides the Board quarterly reports that summarize material security risks and the measures that have been put in place to mitigate the associated risks. These reports address a variety of topics including updates on strategic initiatives, industry trends, threat vulnerability assessments, and efforts to prevent, detect and respond to internal and external critical threats.
12
Human Capital Management Oversight
Primary responsibility for oversight of human capital management rests with our Compensation Committee. As part of its oversight, the Committee reviews regular reports from management regarding diversity and inclusion, pay equity, strategic workforce planning, talent retention, employee benefits programs, employee engagement, human rights, and employee engagement.
Succession Planning Oversight
Our Board is actively engaged in succession planning for our key executive positions to ensure a strong bench of future leaders. To assist the Board, our CEO and our Senior Vice President - Chief Human Resources Officerteam perform talent reviews and discuss succession planning and leadership development. Semi-annually, their assessment of senior executive talent, including potential of such talent to succeed our CEO or other executive officers, readiness for succession and development opportunities are presented to our Board.
Director Nominees
The Governance Committee uses a variety of methods for identifying and evaluating nominees for director. The Governance Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event vacancies are anticipated, or otherwise arise, the Governance Committee considers various potential candidates for director. Board candidates are considered based upon various criteria, including diversity of gender, race and ethnicity; business, administrative and professional skills or experiences; an understanding of relevant industries, technologies and markets; financial literacy; independence status; the ability and willingness to contribute time and special competence to Board activities; personal integrity and independent judgment; and a commitment to enhancing shareholder value. The Governance Committee considers these and other factors as it deems appropriate, given the needs of the Board.
Shareholders who intend to nominate persons for election to the Board of Directors must provide timely written notice of the nomination in accordance with Article I, Section 9 of our Bylaws. Generally, our Corporate Secretary must receive the written notice at our executive offices at 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709, not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders. For the 20232025 shareholder meeting, those dates are January 26, 202323, 2025 and December 27, 2022.24, 2024. The notice must include at a minimum the information set forth in Article I, Section 9 of our Bylaws, including the shareholder’s identity, contingent ownership interests, description of any agreement made with others acting in concert with respect to the nomination, specific information about the nominee and certain representations by the nominee to us.
Board Independence
In accordance with NYSE rules, the Board of Directors through its Governance Committee, affirmatively determines the independence of each director and director nominee in accordance with guidelines it has adopted, which include all elements of independence set forth in the NYSE listing standards. These guidelines are contained in our Policy for Director Independence, which can be found in the "Governance""Corporate Governance" section of our website (www.blackhillscorp.com/investor-relations/corporate-governance)(https://ir.blackhillscorp.com/corporate-governance/governance-documents). Based on these standards, the Governance Committee determined that each of the following non-employee directors is independent and has no relationship with us, except as a director and shareholder: Barry M. Granger, Tony A. Jensen, Kathleen S. McAllister, Steven R. Mills, Robert P. Otto, Scott M. Prochazka, Rebecca B. Roberts, Mark A. Schober, and Teresa A. Taylor, and John B. Vering.Taylor. In addition, based upon these standards, the Governance Committee determined that Mr. Evans is not independent because he is an officer of the Company.
Director Resignation Policies
The Corporate Governance Guidelines require members of the Board to submit a letter of resignation for consideration by the Board in certain circumstances. The Corporate Governance Guidelines include a plurality plus voting policy. Pursuant to the policy, any nominee for election as a director in an uncontested election who receives a greater number of votes “Withheld” from his or her election than votes “For” his or her election will promptly tender his or her resignation as a director to the Chairman of the Board following certification of the election results. Broker non-votes will not be deemed to be votes “For” or “Withheld” from a director’s election for purposes of the policy. The Governance Committee (without the participation of the affected director) will consider each resignation tendered under the policy and recommend to the Board whether to accept or reject it. The Board will then take the appropriate action on each tendered resignation, taking into account the Governance Committee’s recommendation. The Governance Committee in making its recommendation, and the Board in making its decision, may consider any factors or other information that it considers appropriate, including the reasons why the Governance Committee believes shareholders “Withheld” votes for election from such director and any other circumstances
13
surrounding the “Withheld” votes, any alternatives for curing the underlying cause of the “Withheld” votes, the qualifications of the tendering director, his or her past and expected future contributions to us and the Board, and the overall composition of the Board, including whether accepting the resignation would cause us to fail to meet any applicable SEC or NYSE requirements. The Board will publicly disclose its decision and rationale by filing a Form 8-K with the SEC within 90 days after receipt of the tendered resignation.
The Corporate Governance Guidelines also require members of the Board to tender a letter of resignation in the event of a change in professional responsibilities that may directly or indirectly impact that Board member’s ability to fulfill directorship obligations. The Board is not obligated to accept that resignation. The Governance Committee
Codes of Business Conduct and Ethics
The Code of Business Conduct and the Code of Ethics that appliesapply to our Chief Executive Officer Chiefand Senior Financial Officer, Corporate Controller, and certain other persons performing similar functionsOfficers can be found in the “Corporate Governance” section of our website (
Certain Relationships and Related Party Transactions
We recognize related party transactions can present potential or actual conflicts of interest and create the appearance that decisions are based on considerations other than the best interests of us and our shareholders. Accordingly, as a general matter, it is our preference to avoid related party transactions. Nevertheless, we recognize that there are situations where related party transactions may be in, or may not be inconsistent with, the best interests of us and our shareholders, including but not limited to situations where we may obtain products or services of a nature, quantity or quality, or on other terms, that are not readily available from alternative sources or when we provide products or services to related parties on an arm’s length basis on terms comparable to those provided to unrelated third parties or on terms comparable to those provided to employees generally.
Therefore, our Board of Directors has adopted a policy for the review of related party transactions. This policy requires directors and officers to promptly report to our Vice President - Governance all proposed or existing transactions in which the Company and they, or persons related to them, are parties or participants. Our Vice President - Governance presents those transactions to our Governance Committee. Our Governance Committee reviews the material facts presented and either approves or disapproves entry into the transaction. In reviewing the transaction, the Governance Committee considers the following factors, among other factors it deems appropriate: (i) whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; (ii) the extent of the related party’s interest in the transaction; and (iii) the impact on a director’s independence in the event the related party is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer. There were no reportable related party transactions in 2021.
Delinquent Section 16(a) Reports
Based solely upon a review of our records and reports on Forms 3, 4 and 5 filed with the SEC, we believe that during and with respect to 2023, all persons subject to the reporting requirements of section 16(a) of the Securities and Exchange Act of 1934, as amended, filed the required reports on a timely basis, except for a Form 4 for Mr. Keller related to an August 2023 transaction that was reported in December of 2023.
Communications with the Board
We value the views and input of our shareholders and believe that fostering productive dialogue with our shareholders contributes to our long-term success. Shareholders and others interested in communicating directly with the Chairman, with the independent directors as a group, or the Board of Directors may do so in writing to the Chairman, Black Hills Corporation, 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709.
14
MEETINGS AND COMMITTEES OF THE BOARD
THE BOARD OF DIRECTORS
Our Board of Directors held fiveeleven meetings during 2021.2023. Each regularly scheduled meeting of the Board includes an executive session of only independent directors. We encourage our directors to attend the annual shareholders’ meeting. During 2021,2023, each current director attended at least 75 percent of the combined total of Board meetings and Committee meetings on which the director served. In addition,While not required under our policies, all directors attended the 20212023 annual meeting of shareholders either in person or virtually.
COMMITTEES OF THE BOARD
Our Board has three standing committees to facilitate and assist the Board in the execution of its responsibilities. Those standing committees are the Audit Committee, the Compensation Committee and the Governance Committee. Each committee operates under a charter, which is available on our website at
Audit Committee | Primary Responsibilities | ||||
9 Meetings in | © Assist the Board in fulfilling its oversight responsibility to our shareholders relating to the quality and integrity of our accounting, auditing and financial reporting processes; | ||||
Members: Mark A. Schober (Chair) Tony A. Jensen Kathleen S. McAllister Robert P. Otto | © Oversee the integrity of our financial statements, financial reporting systems, | ||||
© Review areas of potential significant financial risk to us; | |||||
© Review consolidated financial statements and disclosures; | |||||
©Appoint an independent registered public accounting firm for ratification by our shareholders; | |||||
© Monitor the independence and performance of our independent registered public accountants and internal auditing department; | |||||
© Pre-approve all audit and non-audit services provided by our independent registered public accountants; | |||||
© Review the scope and results of the annual audit, including reports and recommendations of our independent registered public accountants; | |||||
© Review the internal audit plan results of internal audit work and our process for monitoring compliance with our Code of Business Conduct and other policies and practices established to ensure compliance with legal and regulatory requirements; and | |||||
Independence: 100% | |||||
© Periodically meet, in private sessions, with our VP - Internal Audit, Chief Financial Officer, Chief Compliance Officer, other management, and our independent registered public accounting firm. | |||||
Committee Report: Page Proxy Statement | In accordance with the rules of the NYSE, all of the members of the Audit Committee are financially literate. In addition, the Board determined that Ms. McAllister and Messrs. |
15
Compensation Committee | Primary Responsibilities | ||||
6 Meetings in 2023 Members: Teresa A. Taylor (Chair) Barry M. Granger Scott M. Prochazka Rebecca B. Roberts Independence: 100% Committee Report: Page Proxy Statement | © Discharge the | ||||
© Perform functions required of directors in the administration of all federal and state laws and regulations pertaining to executive employment and compensation; | |||||
© Consider and recommend for approval by the Board all executive compensation programs including executive benefit programs and stock ownership plans; | |||||
© Promote an executive compensation program that supports the overall objective of enhancing shareholder value; and | |||||
© Provide oversight of Company culture, diversity and | |||||
The Compensation Committee has authority under its charter to retain compensation consultants and other advisors as the Committee may deem appropriate in its sole discretion. The Committee engaged Meridian Compensation Partners, LLC (Meridian), an independent consulting firm, to conduct an annual review of our | |||||
Compensation Committee Interlocks
. None of our executive officers serve as a member of a board of directors or compensation committee of any entity that has one or more executive officers who serve on our Board or on our Compensation Committee.Governance Committee | Primary Responsibilities | ||||
3 Meetings in 2023 Members: Rebecca B. Roberts (Chair) Steven R. Mills Mark A. Schober Teresa A. Taylor Independence: 100% | © Assess the size of the Board and qualifications for Board membership; | ||||
© Identify and recommend prospective directors to the Board to fill vacancies; | |||||
© Review and evaluate director nominations submitted by shareholders, including reviewing the qualifications and independence of shareholder nominees; | |||||
© Consider and recommend existing Board members to be renominated at our annual meeting of shareholders; | |||||
© Consider the resignation of an incumbent director who makes a principal occupation change (including retirement) or who receives a greater number of votes "Withheld" than votes "For" in an uncontested election of directors and recommend to the Board whether to accept or reject the resignation; | |||||
© Establish and review guidelines for corporate governance; | |||||
© Recommend to the Board for approval committee membership and chairs of the committees; | |||||
© Recommend to the Board for approval a Chairman or an independent director to serve as a Lead Director; | |||||
© Review the independence of each director and director nominee; | |||||
© Administer an annual evaluation of the performance of the Board and each Committee and a biennial evaluation of each individual director; | |||||
© Ensure that the Board oversees the evaluation and succession planning of management; | |||||
© Oversee the reporting framework the Company utilizes to track and monitor progress associated with ESG |
activities; and | ||
© Oversee company political engagement. |
16
DIRECTOR COMPENSATION
DIRECTOR FEES
Compensation to our non-employee directors consists of cash retainers for Board members, Committee members, the Board Chairman and Committee Chairs. In addition, through 2021, the Board members received their equity compensation in the form of common stock equivalents that are deferred until after they leave the Board. Effective January 1, 2022, the Board adopted a new Non-Employee Director Equity Compensation Plan that provides equity compensation to our Board members in the form of restricted stock units. For the period of January 1, 2022 through April 30, 2022, the Board members received a pro rata amount of equity compensation in the form of restricted stock units. Under the new Plan, beginning with the 2022 annual meeting, Board members will receive an annual equity award of restricted stock units that will vest at the next annual meeting. Dividend equivalents accrue on the common stock equivalents and the restricted stock units. We do not pay meeting fees.
In setting non-employee director compensation, the Compensation Committee recommends the form and amount of compensation to the Board, of Directors, which makes the final determination. In considering and recommending the compensation of non-employee directors, the Compensation Committee considers such factors as it deems appropriate, including historical compensation information, level of compensation necessary to attract and retain non-employee directors meeting our desired qualifications and market data. In the review ofWe do not pay meeting fees. The Committee did not recommend a change to director compensation for 2023. However, in 2022, Meridian completed a market compensation review ofJanuary 2024 the Committee recommended and our peer companies' director fees. Based on this review,Board approved increases to the cash retainer, equity compensation, Chairman retainer, and equity pay were increased effective May 1, 2022Governance Chair retainer to more closely align withmaintain our board compensation level near the median director compensation forof our peer utility companies.peers. The fee structure for director fees in 20212023 and 2022the fee structure that will take effect in May 2024, are as follows:
2021 Fees | Fees Effective January 1, 2022 | Fees Effective May 1, 2022 | |||||||||||||||||||||||||||
Cash | Common Stock Equivalents | Cash | Restricted Stock Units | Cash | Restricted Stock Units | ||||||||||||||||||||||||
Board Retainer | $85,000 | $105,000 | $85,000 | $105,000 | $95,000 | $120,000 | |||||||||||||||||||||||
Board Chairman | $100,000 | $100,000 | $100,000 | ||||||||||||||||||||||||||
Committee Chair Retainer | |||||||||||||||||||||||||||||
Audit Committee | $15,000 | $15,000 | $15,000 | ||||||||||||||||||||||||||
Compensation Committee | $12,500 | $12,500 | $12,500 | ||||||||||||||||||||||||||
Governance Committee | $10,000 | $10,000 | $10,000 | ||||||||||||||||||||||||||
Committee Member Retainer | |||||||||||||||||||||||||||||
Audit Committee | $10,000 | $10,000 | $10,000 | ||||||||||||||||||||||||||
Compensation Committee | $7,500 | $7,500 | $7,500 | ||||||||||||||||||||||||||
Governance Committee | $7,500 | $7,500 | $7,500 |
| Fees For Fiscal 2023 |
|
| Fees Effective |
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| |||||||||||
| Cash |
|
| Restricted Stock Units |
|
| Cash |
|
| Restricted Stock Units |
|
| |||||
Board Retainer |
| $ | 95,000 |
|
| $ | 120,000 |
|
| $ | 105,000 |
|
| $ | 135,000 |
|
|
Board Chairman |
| $ | 100,000 |
|
|
|
|
| $ | 120,000 |
|
|
|
|
| ||
Committee Chair Retainer |
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|
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|
|
|
|
|
|
|
|
|
| ||||
Audit Committee |
| $ | 15,000 |
|
|
|
|
| $ | 15,000 |
|
|
|
|
| ||
Compensation Committee |
| $ | 12,500 |
|
|
|
|
| $ | 12,500 |
|
|
|
|
| ||
Governance Committee |
| $ | 10,000 |
|
|
|
|
| $ | 12,500 |
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|
|
|
| ||
Committee Member Retainer |
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|
|
|
|
|
|
|
|
|
|
| ||||
Audit Committee |
| $ | 10,000 |
|
|
|
|
| $ | 10,000 |
|
|
|
|
| ||
Compensation Committee |
| $ | 7,500 |
|
|
|
|
| $ | 7,500 |
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|
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| ||
Governance Committee |
| $ | 7,500 |
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|
|
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| $ | 7,500 |
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DIRECTOR COMPENSATION FOR 20212023 AND COMMON STOCK EQUIVALENTS OUTSTANDING AS OF DECEMBER 31, 2021
Name(2) |
| Fees Earned or Paid in Cash | Stock Awards(3) | Total | Outstanding Equity Awards at December 31, 2023(4) |
| |
Barry M. Granger |
| $103,333 | $120,000 | $223,333 |
| 5,770 |
|
Tony A. Jensen |
| $104,167 | $120,000 | $224,167 |
| 5,755 |
|
Kathleen A. McAllister |
| $105,000 | $120,000 | $225,000 |
| 7,508 |
|
Steven R. Mills |
| $202,500 | $120,000 | $322,500 |
| 23,706 |
|
Robert P. Otto |
| $105,000 | $120,000 | $225,000 |
| 10,758 |
|
Scott M. Prochazka |
| $102,500 | $120,000 | $222,500 |
| 4,017 |
|
Rebecca B. Roberts |
| $120,000 | $120,000 | $240,000 |
| 23,166 |
|
Mark A. Schober |
| $127,500 | $120,000 | $247,500 |
| 15,014 |
|
Teresa A. Taylor |
| $122,500 | $120,000 | $242,500 |
| 11,321 |
|
Name(2) | Fees Earned or Paid in Cash | Stock Awards(3) | Total | Number of Common Stock Equivalents Outstanding at December 31, 2021(4) | ||||||||||||||||||||||
Barry M. Granger | $91,667 | $105,000 | $196,667 | 2,147 | ||||||||||||||||||||||
Tony A. Jensen | $92,500 | $105,000 | $197,500 | 10,057 | ||||||||||||||||||||||
Michael H. Madison(5) | $33,333 | $35,000 | $68,333 | — | ||||||||||||||||||||||
Kathleen A. McAllister | $95,000 | $105,000 | $200,000 | 8,440 | ||||||||||||||||||||||
Steven R. Mills | $195,833 | $105,000 | $300,833 | 36,702 | ||||||||||||||||||||||
Robert P. Otto | $95,000 | $105,000 | $200,000 | 11,146 | ||||||||||||||||||||||
Scott M. Prochazka | $90,000 | $105,000 | $195,000 | 2,147 | ||||||||||||||||||||||
Rebecca B. Roberts | $110,000 | $105,000 | $215,000 | 24,505 | ||||||||||||||||||||||
Mark A. Schober | $110,000 | $105,000 | $215,000 | 15,660 | ||||||||||||||||||||||
Teresa A. Taylor | $110,000 | $105,000 | $215,000 | 11,065 | ||||||||||||||||||||||
John B. Vering | $102,500 | $105,000 | $207,500 | 44,574 |
Dividend equivalents accrue on the Board. The common stock equivalents are payable inand restricted stock or cash or can be deferred further at the election of the director.units.
17
DIRECTOR STOCK OWNERSHIP GUIDELINES
Each member of our Board of Directors is required to hold shares of common stock, common stock equivalents, or restricted stock units equal to five times the annual cash Board retainer. Currently, all of our directors have met the stock ownership guideline except for Messrs. Granger and Prochazka, who have been on the Board for less than twofour years.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth the beneficial ownership of our common stock as of February 14, 202223, 2024 for each director, each executive officer named in the Summary Compensation Table, all of our current directors and executive officers as a group and each person known by us to beneficially own more than five percent of our outstanding shares of common stock. Beneficial ownership includes shares a director or executive officer has or shares the power to vote or transfer. There were no stock options outstanding for any of our directors or executive officers as of February 14, 2022.
Except as otherwise indicated by footnote below, we believe that each individual named has sole investment and voting power with respect to the shares of common stock indicated as beneficially owned by that individual.
Name of Beneficial Owner(1) | Shares of Common Stock Beneficially Owned(2) | Directors Common Stock Equivalents(3) | Total | Percentage | ||||||||||||||||||||||
Outside Directors | ||||||||||||||||||||||||||
Barry M. Granger | 681 | 1,962 | 2,643 | * | ||||||||||||||||||||||
Tony A. Jensen | 6,981 | 3,572 | 10,553 | * | ||||||||||||||||||||||
Kathleen S. McAllister | 5,365 | 3,572 | 8,937 | * | ||||||||||||||||||||||
Steven R. Mills | 18,623 | 18,575 | 37,198 | * | ||||||||||||||||||||||
Robert P. Otto | 3,437 | 8,206 | 11,643 | * | ||||||||||||||||||||||
Scott M. Prochazka | 681 | 1,962 | 2,643 | * | ||||||||||||||||||||||
Rebecca B. Roberts | 5,302 | 19,699 | 25,001 | * | ||||||||||||||||||||||
Mark A. Schober | 5,632 | 10,525 | 16,157 | * | ||||||||||||||||||||||
Teresa A. Taylor | 2,834 | 8,727 | 11,561 | * | ||||||||||||||||||||||
John B. Vering | 11,592 | 33,479 | 45,071 | * | ||||||||||||||||||||||
Named Executive Officers | ||||||||||||||||||||||||||
Linden R. Evans | 145,949 | — | 145,949 | * | ||||||||||||||||||||||
Brian G. Iverson | 37,559 | — | 37,559 | * | ||||||||||||||||||||||
Erik D. Keller | 7,200 | — | 7,200 | * | ||||||||||||||||||||||
Richard W. Kinzley | 54,014 | — | 54,014 | * | ||||||||||||||||||||||
Stuart A. Wevik | 24,387 | — | 24,387 | * | ||||||||||||||||||||||
All directors and executive officers as a group (16 persons) | 348,772 | 110,279 | 459,051 | * |
Name of Beneficial Owner (1) |
| Shares of |
|
| Outstanding Equity Awards (3) |
|
| Total |
|
| Percentage | |||
Outside Directors |
|
|
|
|
|
|
|
|
|
|
| |||
Barry M. Granger |
|
| 2,634 |
|
|
| 3,871 |
|
|
| 6,505 |
|
| * |
Tony A. Jensen |
|
| 10,730 |
|
|
| 3,857 |
|
|
| 14,587 |
|
| * |
Kathleen S. McAllister |
|
| 7,372 |
|
|
| 5,610 |
|
|
| 12,982 |
|
| * |
Steven R. Mills |
|
| 20,561 |
|
|
| 21,807 |
|
|
| 42,368 |
|
| * |
Robert P. Otto |
|
| 7,362 |
|
|
| 8,859 |
|
|
| 16,221 |
|
| * |
Scott M. Prochazka |
|
| 4,387 |
|
|
| 2,118 |
|
|
| 6,505 |
|
| * |
Rebecca B. Roberts |
|
| 8,599 |
|
|
| 21,267 |
|
|
| 29,866 |
|
| * |
Mark A. Schober |
|
| 7,979 |
|
|
| 13,116 |
|
|
| 21,095 |
|
| * |
Teresa A. Taylor |
|
| 6,525 |
|
|
| 9,422 |
|
|
| 15,947 |
|
| * |
|
|
|
|
|
|
|
|
|
|
|
| |||
Named Executive Officers |
|
|
|
|
|
|
|
|
|
|
| |||
Linden R. Evans |
|
| 159,840 |
|
|
|
|
|
| 159,840 |
|
| * | |
Kimberly F. Nooney |
|
| 22,174 |
|
|
|
|
|
| 22,174 |
|
| * | |
Brian G. Iverson |
|
| 42,771 |
|
|
|
|
|
| 42,771 |
|
| * | |
Marne M. Jones |
|
| 15,727 |
|
|
|
|
|
| 15,727 |
|
| * | |
Erik D. Keller |
|
| 8,702 |
|
|
|
|
|
| 8,702 |
|
| * | |
All current directors and executive officers as a group (15 persons) |
|
| 341,564 |
|
|
| 89,927 |
|
|
| 431,491 |
|
| * |
* Represents less than one percent of the common stock outstanding.
18
PRINCIPAL SHAREHOLDERS
Set forth in the table below is information about the number of shares held by persons we know to be the beneficial owners of more than 5% of the issued and outstanding Common Stock:
Name and Address |
| Shares of Common Stock Beneficially Owned |
| Percentage |
|
|
|
|
|
BlackRock, Inc.(1) |
|
|
|
|
50 Hudson Yards |
| 10,122,756 |
| 14.9% |
New York, NY 10001 |
|
|
|
|
|
|
|
|
|
The Vanguard Group Inc.(3) |
|
|
|
|
100 Vanguard Blvd. |
| 8,143,567 |
| 12.0% |
Malvern, PA 19355 |
|
|
|
|
|
|
|
|
|
State Street Corporation(2) |
|
|
|
|
State Street Financial Center |
| 3,665,284 |
| 5.4% |
1 Congress Street, Suite 1 |
|
|
|
|
Boston, MA 02114-2016 |
|
|
|
|
|
|
|
|
|
Name and Address | Shares of Common Stock Beneficially Owned | Percentage | ||||||
BlackRock, Inc.(1) | 9,242,515 | 14.5 | ||||||
55 East 52nd Street | ||||||||
New York, NY 10055 | ||||||||
The Vanguard Group Inc.(2) | 6,535,371 | 10.2 | ||||||
100 Vanguard Blvd. | ||||||||
Malvern, PA 19355 | ||||||||
State Street Corporation(3) | 5,220,662 | 8.2 | ||||||
State Street Financial Center | ||||||||
One Lincoln Street | ||||||||
Boston, MA 02111 |
19
PROPOSAL 2 | RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The firm of Deloitte & Touche LLP, independent registered public accountants, conducted the audit of Black Hills Corporation and its subsidiaries for 2021.2023. Representatives of Deloitte & Touche LLP will be present at our annual meeting and will have the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.
Our Audit Committee has appointed Deloitte & Touche LLP to perform an audit of our consolidated financial statements and those of our subsidiaries for 20222024 and to render their reports. In determining whether to recommend to the full Board the reappointment of Deloitte & Touche LLP as our independent auditor, the Audit Committee considered the following:
The Board of Directors recommends ratification of the Audit Committee’s appointment of Deloitte & Touche LLP. The appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 20222024 will be ratified if the votes cast “For” exceed the votes cast “Against.” Abstentions will have no effect on such vote. If shareholder approval for the appointment of Deloitte & Touche LLP is not obtained, the Audit Committee will reconsider the appointment.
The Board of Directors recommends a vote
to serve as our independent registered public accounting firm for 2022.
20
FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The following charts set forth the aggregate fees for services provided to us for the years ended December 31, 20212023 and 20202022 by our independent registered public accounting firm, Deloitte & Touche, LLP:
Audit Fees
Fees for professional services rendered for the audits of our financial statements, review of the interim financial statements included in quarterly reports, opinions on the effectiveness of our internal control over financial reporting, and services that generally only the independent auditor can reasonably provide, such as comfort letters, statutory audits, consents and assistance with and review of documents filed with the SEC.
Audit-Related Fees
Fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include employee benefit plan audits.
Tax Compliance Fees
Fees for services related to federal and state tax compliance planning and advice and preparation of tax returns.
Tax Planning and Advisory Fees
Fees for planning and advisory services primarily related to partnership restructuring and jurisdictional simplification and consolidation related to prior acquisitions.
The services performed by Deloitte & Touche LLPD&T were pre-approved in accordance with the Audit Committee’s pre-approval policy whereby the Audit Committee pre-approves all audit and permissible non-audit services provided by the independent registered public accountants. The Audit Committee will generally pre-approve a list of specific services and categories of services, including audit, audit-related, tax and other services, for the upcoming or current year, subject to a specified cost level. Any service that is not included in the approved list of services must be separately pre-approved by the Audit Committee.
21
AUDIT COMMITTEE REPORT
The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities to shareholders relating to the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements regarding financial reporting, the independent auditors’ qualifications and independence, and the performance of the Company’s internal and independent auditors.
Management has the primary responsibility for the completeness and accuracy of the Company’s financial statements and disclosures, the financial reporting process, and the effectiveness of the Company’s internal control over financial reporting.
Our independent auditors, Deloitte & Touche LLP, are responsible for auditing the Company’s consolidated financial statements and expressing an opinion as to whether they are presented fairly, in all material respects, in conformity with accounting principles generally accepted in the United States.
In fulfilling its oversight responsibilities for 2021,2023, the Audit Committee, among other things:
Based upon the reviews and discussions referred to above, the Audit Committee recommended to the Board that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20212023 filed with the SEC. The Audit Committee also recommended and the Board reappointed Deloitte & Touche LLP as our independent registered public accounting firm for 2022.2024. Shareholders are being asked to ratify that selection at the 20222024 Annual Meeting.
THE AUDIT COMMITTEE
Mark A. Schober, Chair
Tony A. Jensen
Kathleen S. McAllister
Robert P. Otto
22
PROPOSAL 3 | ADVISORY VOTE ON OUR EXECUTIVE COMPENSATION |
We are providing shareholders with an annual advisory, non-binding vote on the executive compensation of our Named Executive Officers (commonly referred to as “say on pay”). Accordingly, shareholders will vote on approval of the following resolution:
RESOLVED, that the shareholders approve, on an advisory basis, the compensation of our Named Executive Officers as disclosed in the Compensation Discussion and Analysis section, the accompanying compensation tables and the related narrative disclosure in this proxy statement.
This vote is non-binding. The Board of Directors and the Compensation Committee expect to consider the outcome of the vote when considering future executive compensation decisions to the extent they can determine the cause or causes of any significant negative voting results. At our 20212023 annual meeting, shareholders owning 98 percent of the shares that were voted in this matter approved our executive compensation.
As described at length in the Compensation Discussion and Analysis section of this proxy statement, we believe our executive compensation program is reasonable, competitive and strongly focused on pay for performance. The compensation of our Named Executive Officers varies depending upon the achievement of pre-established performance goals, both individual and corporate. Our short-term incentive is tied to earnings per share, safety performance targets, system safety and employee wellnessreliability targets, customer experience targets, and diversity targets that reward our executives when they deliver targeted financial and safety results. Our long-term incentives are delivered 50 percent in restricted stock and 50 percent in performance shares or performance share units. Theincentive performance shares or units vest based upon the level of achievement of certain pre-established performance goals over a three-year performance period. Entitlement toperiod as described in the performance shares or units is based on our total shareholder return over a three-year performance period compared to our Performance Peer Group.Compensation Discussion and Analysis. Through stock ownership guidelines, equity incentives and clawback provisions, we align the interests of our executives with those of our shareholders and our long-term interests. Our executive compensation policies have enabled us to attract and retain talented and experienced senior executives who can drive financial and strategic growth objectives that are intended to enhance shareholder value. We believe that the 20212023 compensation of our Named Executive Officers was appropriate and aligned with our 20212023 results and positions us for long-term growth.
Shareholders are encouraged to read the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosures to better understand the compensation of our Named Executive Officers.
The advisory resolution to approve executive compensation is non-binding. However, our Board of Directors will consider shareholders to have approved our executive compensation if the number of votes cast “For” the proposal exceeds the number of votes cast “Against” the proposal. Abstentions and broker non-votes will have no effect on such vote.
The Board of Directors recommends a vote
23
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
INTRODUCTION
This Compensation Discussion and Analysis describes our overall executive compensation policies and practices and specifically explains the compensation-related actions taken with respect to 20212023 compensation for our Named Executive Officers included in the Summary Compensation Table. We did not make any modifications to our executive pay program as a result of the COVID-19 pandemic. Our Named Executive Officers, based on 2021 positions and compensation levels, are:
Our Named Executive Officers, based on 2023 positions and compensation levels, are:
Named Executive Officers | Title | Reference | ||||||||||||
Linden R. Evans | President and Chief Executive Officer | Evans, CEO | ||||||||||||
Kimberly F. Nooney | Sr. Vice President and |
Nooney, CFO | ||||||||||||||
Brian G. Iverson | Sr. Vice President, General Counsel and Chief Compliance Officer | Iverson, GC | ||||||||||||
Erik D. Keller | Sr. Vice President - Chief Information Officer | Keller, CIO | ||||||||||||
Marne M. Jones | Sr. Vice President - Utilities | Jones, SVP | ||||||||||||
Richard W. Kinzley (1) | Former Sr. Vice President and | |||||||||||||
Chief Financial Officer | ||||||||||||||
Kinzley, Former CFO |
KEY EXECUTIVE COMPENSATION OBJECTIVES
Overall, our goal is to target total direct compensation (the sum of base salary, short-term incentive at target and long-term incentive at target) to be around the median of the appropriate market. Our executive compensation is designed to maintain an appropriate and competitive balance between fixed and variable compensation components including short-and long-term compensation, and cash and stock-based compensation. We believe that the performance basis for determining compensation should differ by each reward component – base salary, short-term incentive and long-term incentive. Incentive measures (short-term and long-term) should emphasize objective, quantitative operating measures. The performance measures for our incentive compensation plans are discussed below.
24
BEST PRACTICES IN EXECUTIVE COMPENSATION
Our executive compensation program reflects the following best practices, which ensure effective compensation governance and align the interests of our shareholders and executives.
What we do: | What we do not do: | ||
ü | A significant portion of executive pay is at risk by granting incentive awards that are based on continuing annual and long-term metrics tied to performance. | X | No employment agreements with executives. |
ü | Short-Term incentive plan awards are capped at 200% of target. | X | No change in control cash severance payments that exceed three times base salary and target bonus. |
ü | Long-Term incentive plan awards are capped at 200% of target number of shares granted. | X | No excise tax gross-ups for executives. |
ü | Beginning with 2023 grants, non-vested equity awards are not accelerated after a change in control unless the executive is: (1) terminated without cause or good reason; or (2) the award is not assumed or substituted by the successor company | X | No hedging or pledging of Company stock. |
ü | Executives and directors are subject to stock ownership guidelines and retention requirements. | X | No excessive perquisites for executives. |
2023 COMPENSATION PRACTICE CHANGES
The Compensation Committee engaged Meridian Compensation Partners, LLC (Meridian) to review our executive compensation plans and practices. Based on this review and recommendations from Meridian and the Company's business strategy, the Compensation Committee made the following changes to our executive compensation practices for 2023:
Prior Executive Compensation Practice | Revised Executive Compensation Practice | Rationale for Change | ||||
Short-Term Incentive | Five performance measures and the corresponding weighting: 70% EPS from ongoing operations, as adjusted 7.5% System Average Interruption Duration Index (SAIDI) 7.5% Hits Per Thousand (HPT) 7.5% Total Case Incident Rate (TCIR) 7.5% Diversity Training | Five goal categories and the corresponding weighting: 70% EPS from ongoing operations, as adjusted 7.5% Safety Index metrics 7.5% System Safety and Reliability Index metrics 7.5% Customer Experience Index metrics 7.5% Diversity Index metrics | Safety metrics reinforce a culture of safety by encouraging employee attention to key proactive safety actions and outcome-based safety results. System Safety and Reliability metrics reinforce our commitment to safe and reliable operations and environmental stewardship. Customer Experience metrics measure the quality of our customer service through multiple points of interaction. Diversity metrics reinforce our commitment to advancing diversity in our workforce. | |||
Long-Term Incentive | 60% Performance Share Units and 40% Restricted Stock Awards | 70% Performance Share Units and 30% Restricted Stock Awards | A higher performance based percentage drives long-term focus/behaviors/actions on the performance measures and aligns with peer group practices. |
25
SETTING EXECUTIVE COMPENSATION
Based upon our compensation philosophy, the Committee structures executive compensation to motivate our executives to achieve specified business goals and to reward them for achieving such goals. The key steps the Committee follows in setting executive compensation are to:
« | Analyze executive compensation market data to ensure market competitiveness | ||||
« | Review the components of executive compensation, including base salary, short-term incentive, long-term incentive, retirement, and other benefits | ||||
« | Review total compensation and structure | ||||
« | Review executive officer performance, responsibilities, experience, and other factors cited above to determine individual compensation levels |
EXECUTIVE COMPENSATION PROGRAM DESIGN OBJECTIVES | ||||
Attract, retain, motivate, and encourage the development of highly qualified executives | Provide competitive compensation | Promote the relationship between pay and performance | Promote corporate performance that is linked to our shareholders’ interests | Recognize and reward individual performance |
Market Compensation Analysis
The market for our executive talent is national in scope and is not focused on any one geographic location, area or region of the country. As such, our executive compensation should be competitive with the national market for executives. It should also reflect the executive’s responsibilities and duties and align with the compensation of executives at companies or business units of comparable size and complexity. The Committee gathers market information for our executives from the electric and gas utility industry and general industry.
The Committee selects and retains the services of an independent consulting firm to periodically:
« | Provide information regarding practices and trends in compensation programs | ||||
« | Review and evaluate our compensation program as compared to compensation practices of other companies with similar characteristics, including size, complexity, and type of business | ||||
« | Review and assist with the establishment of a peer group of companies | ||||
« | Provide a compensation analysis of the executive positions |
The Committee used the services of Meridian Compensation Partners, LLC to evaluate 20212023 compensation. ItMeridian gathered data from nationally recognized survey providers, as well as specific peer companies through public filings, which included:
26
The 20 peer companies ranged in annual revenue size from approximately $529$656 million to $6.7$8.1 billion, with the median at $2.0$2.4 billion. The Company’s 20212023 revenue was $1.9$2.3 billion. The survey data was adjusted for our relative revenue size using regression analysis. Our compensation peer companies included in the analysis for 20212023 compensation decisions were:
ALLETE Inc. | IDACORP Inc. | ONE Gas, Inc. | ||||||||||||
Alliant Energy Corporation | MGE Energy Inc. | Pinnacle West Capital Corp. | ||||||||||||
Ameren Corporation | New Jersey Resources Corp. | PNM Resources, Inc. | ||||||||||||
Atmos Energy Corp. | NiSource, Inc. | Portland General Electric Co. | ||||||||||||
Avista Corp. | Northwest Natural Holding Co. | South Jersey Industries, Inc.(1) | ||||||||||||
CMS Energy Corp. | NorthWestern Corp. | Spire, Inc. | ||||||||||||
Hawaiian Electric Ind., Inc. | OGE Energy Corp. |
(1) South Jersey Industries, Inc. is no longer an SEC registrant following completion of a merger in February 2023, and was therefore removed from the peer group.
Meridian validated that the above Compensation Peer Group remains credible, includes size-appropriate peers, and reflects the Company's industry, complexity and market for executive talent. Approximately 70 percent of the above companies are a subset of the Edison Electric Institute (EEI) Index, our Performance Peer Group, and were chosen because they were within our revenue range of 0.3x - 4.0x our size and market capitalization range of 0.40x - 2.5x our size. The EEI Index is comprised of electric utilities and combination gas and electric utilities. The remaining approximately 30 percent of the peer companies above were included in the Compensation Peer Group to provide a mix of gas utilities.
The salary surveys are one of several factors the Committee uses in setting appropriate compensation levels. Other factors include Company performance, individual performance and experience, the level and nature of the executive’s responsibilities, internal equity considerations and discussions with the CEO related to the other senior executive officers.
Components of Executive Compensation
The primary components of our executive compensation program consist of a base salary, a short-term incentive plan, and long-term incentives. In addition, we provide retirement and other benefits.
The majority of the executives’ total compensation is granted as incentive compensation. Incentive compensation is intended to motivate and encourage our executives to drive performance and achieve superior results for our shareholders and align realized pay with stock performance. The Committee periodically reviews information provided by its compensation consultant to inform its determination of the appropriate level and mix of total compensation. The Committee believes that a significant portion of total target compensation should be comprised of variable compensation. In order to reward long-term growth while still encouraging focus on short-term results, the Committee establishes incentive targets that emphasize long-term compensation at a greater level than short-term compensation.
Base Salary.
Base salaries for all executives are reviewed annually. The base salary of our executives is also adjusted at the time of a promotion or material change in job responsibility, as appropriate. Evaluation ofBase Salary | ||||||||||||||
2020 | 2021 | |||||||||||||
Evans, CEO | $790,000 | $825,000 | ||||||||||||
Kinzley, CFO | $454,000 | $454,000 | ||||||||||||
Iverson, GC | $386,000 | $400,000 | ||||||||||||
Wevik, UOO | $407,000 | $425,000 | ||||||||||||
Keller, CIO | $330,000 | $340,000 |
Base Salary |
| |||||
2022 |
| 2023 |
| |||
Evans, CEO | $ | 860,000 |
| $ | 900,000 |
|
Nooney, CFO (1) | $ | 375,000 |
| $ | 440,000 |
|
Iverson, GC | $ | 416,000 |
| $ | 433,000 |
|
Jones, SVP (2) | $ | 340,000 |
| $ | 398,000 |
|
Keller, CIO | $ | 354,000 |
| $ | 368,000 |
|
Kinzley, Former CFO | $ | 472,000 |
| $ | 472,000 |
|
________
(1) Ms. Nooney was appointed CFO effective April 1, 2023.
(2) Ms. Jones was appointed Senior Vice President - Utilities effective June 12, 2023
Short-Term Incentive.
Our Short-Term Incentive Plan is designed to recognize and reward the contributions of individual executives as well as the contributions that group performance makes to overall corporate success. The27
2023 Short-Term Incentive Metrics | |||||
Metric | Weighting | Definition | |||
EPS from ongoing operations, as adjusted | 70.00% | Diluted earnings per share calculated in accordance with GAAP, adjusted for material, non-recurring events (such as impairment charges, one-time tax events, external acquisition costs, changes to accounting rules, etc.) | |||
Timeliness of Incident Reporting | 1.875% | Reporting of injuries within 24 hours | |||
Average Proactive Safety Activities/Employee | 1.875% | Includes reporting of near misses, safety suggestions, unsafe conditions, stop work authority, and pipeline near misses | |||
Total Case Incident Rate (TCIR) | 1.875% | Injuries per 200,000 hours worked | |||
Preventable Motor Vehicle Incident Rate (PMVI) | 1.875% | Preventable motor vehicle incident rate | |||
Gas Distribution Damage Prevention (HPT) | 3.75% | Hits per thousand | |||
Electric Reliability (SAIDI) | 3.75% | System average interruption duration index | |||
Customer Interaction: Customer Effort | 2.50% | Third party survey of 25,000 customers regarding "How easy is BHE to do business with?" | |||
Customer Interaction: Net Promoter Score | 2.50% | Third party survey of 25,000 customers regarding "How likely are you to recommend BHE?" | |||
Customer Brand/Perception: JD Power Gas vs Industry | 1.25% | Third party scoring of brand perception relative to other gas utilities | |||
Customer Brand/Perception: JD Power Electric vs Industry | 1.25% | Third party scoring of brand perception relative to other electric utilities | |||
Percent of Diverse Candidate Slates | 3.75% | A slate that includes at least 1 woman and/or racially/ethnically diverse candidate | |||
Percent of Diverse Interview Panels | 3.75% | A panel that includes at least 1 woman and/or racially/ethnically diverse individual in the final interview |
2023 Short-Term Incentive Goals | ||||||
|
| Goals | ||||
Incentive |
| Threshold |
| Target |
| Maximum |
EPS from ongoing operations, as adjusted |
| $3.488 |
| $3.750 |
| $4.013 |
Timeliness of Incident Reporting |
| 90% |
| 91% |
| 92% |
Average Proactive Safety Activities/Employee |
| 2 |
| 3 |
| 4 |
Total Case Incident Rate (TCIR) |
| 1.39 |
| 1.23 |
| 1.11 |
Preventable Motor Vehicle Incident Rate (PMVI) |
| 1.56 |
| 1.44 |
| 1.33 |
Gas Distribution Damage (HPT) |
| 2.20 |
| 2.05 |
| 1.80 |
Electric Reliability (SAIDI) |
| 72.80 |
| 65.70 |
| 51.80 |
Customer Interaction: Customer Effort |
| 8.80 |
| 8.90 |
| 9.00 |
Customer interaction: Net Promotor Score |
| 64.00 |
| 67.00 |
| 70.00 |
Customer Brand/Perception: JD Power Gas vs Industry |
| 25% |
| 50% |
| 75% |
Customer Brand/Perception: JD Power Electric vs Industry |
| +1 ranking |
| +2 ranking |
| +3 ranking |
Percent of Diverse Candidate Slates |
| 80% |
| 85% |
| 90% |
Percent of Diverse Interview Panels |
| 90% |
| 92% |
| 94% |
Payout percentage of target for each metric |
| 50% |
| 100% |
| 200% |
The Committee believes that these performance measures closely align interests with shareholders and foster teamwork and cooperation within the executive team.
« | Align the interests of the plan participants and the shareholders | ||||
« | Motivate employees to strive to achieve superior operating results | ||||
« | Provide an incentive reflective of core operating performance | ||||
« | Ensure “buy-in” from participants with easily understood metrics | ||||
« | Meet the performance objectives of the plan to achieve over time an average payout equal to market competitive levels |
The short-term incentive, after applicable tax withholding, is distributed to the officer in the form of cash. Target award levels are established as a percentage of each participant’s base salary. A target award is typically set around the benchmark 50
th percentile short-term incentive target award for comparable positions. The actual payout, if any, will vary, based on attainment of pre-established performance goals, between28
The Committee approves the target level for each officer in January, which applies to performance in the upcoming plan year. Target levels are derived in part from market data provided by the compensation consultant and in part by the Committee’s judgment regarding internal equity, retention and an individual executive’s expected contribution to the achievement of our strategic objectives. The target levels for our Named Executive Officers are shown below:
Short-Term Incentive Target | ||||||||||||||||||||
2020 | 2021 | |||||||||||||||||||
% Amount | $ Amount | % Amount | $ Amount | |||||||||||||||||
Evans, CEO | 100% | $790,000 | 100% | $825,000 | ||||||||||||||||
Kinzley, CFO | 65% | $295,100 | 70% | $317,800 | ||||||||||||||||
Iverson, GC | 60% | $231,600 | 60% | $240,000 | ||||||||||||||||
Wevik, UOO | 70% | $284,900 | 70% | $297,500 | ||||||||||||||||
Keller, CIO | 50% | $165,000 | 50% | $170,000 |
Short-Term Incentive Target |
| |||||||||||
| 2022 |
|
| 2023 |
| |||||||
| % of Base Salary |
| $ Amount |
|
| % of Base Salary |
| $ Amount |
| |||
Evans, CEO |
| 100% |
| $ | 860,000 |
|
| 100% |
| $ | 900,000 |
|
Nooney, CFO |
| 45% |
| $ | 168,750 |
|
| 60% |
| $ | 264,000 |
|
Iverson, GC |
| 60% |
| $ | 249,600 |
|
| 70% |
| $ | 303,100 |
|
Jones, SVP |
| 45% |
| $ | 153,000 |
|
| 55% |
| $ | 218,900 |
|
Keller, CIO |
| 50% |
| $ | 177,000 |
|
| 50% |
| $ | 184,000 |
|
Kinzley, Former CFO |
| 70% |
| $ | 330,400 |
|
| 70% |
| $ | 330,400 |
|
The threshold, target and maximum payout levels for our Named Executive Officers under the 20212023 Short-Term Incentive Plan are shown in the Grants of Plan-Based Awards in 20212023 table on page 42,38, under the heading “Estimated Future Payouts Under Non-Equity Incentive Plan Awards.”
2021 Short-Term Incentive Metrics | ||||||||||||||||||||
Performance Goals | ||||||||||||||||||||
Incentive | Value | Threshold | Target | Maximum | ||||||||||||||||
EPS from ongoing operations, as adjusted | 70% | $3.64 | $3.91 | $4.18 | ||||||||||||||||
Total Case Incident Rate (TCIR) | 10% | 1.25 | 1.00 | 0.85 | ||||||||||||||||
Preventable Motor Vehicle Incidents (PMVI) | 10% | 2.60 | 2.26 | 1.92 | ||||||||||||||||
Employee Safety & Wellness Engagement | 10% | 10,000 points | 12,500 points | 15,000 points | ||||||||||||||||
Payout percentage of target for each metric | 50% | 100% | 200% |
Early in the first quarter, the Committee evaluates actual performance in relation to the prior year’s targets and approves the actual payment of awards related to the prior plan year. The Committee reserves the discretion to adjust any award, and will review and take into account individual performance, level of contribution, and the accomplishment of specific project goals that were initiated throughout the plan year. The Committee also reserves discretion with respect to any payout related to safety goals if we experience an employee or contractor fatality during the plan period. Discretion was not exercised to adjust awards for 2021.
On January 25, 2024, the Committee approved a payout of 153.67% percent of target under the 2023 Short-Term Incentive Plan. The incentive plan payout was based on attainment of the following:
Incentive | 2023 Results | Goal Payout | % of Award | Payout |
EPS from ongoing operations, as adjusted | $3.932 | 169.200% | 70.000% | 118.440% |
Timeliness of Incident Reporting | 93% | 200.00% | 1.875% | 3.750% |
Average Proactive Safety Activities/Employee | 4 | 200.00% | 1.875% | 3.750% |
Total Case Incident Rate (TCIR) | 1.51 | 0.00% | 1.875% | 0.000% |
Preventable Motor Vehicle Incident Rate (PMVI) | 1.65 | 0.00% | 1.875% | 0.000% |
Gas Distribution Damage (HPT) | 2.05 | 100.00% | 3.750% | 3.750% |
Electric Reliability (SAIDI) | 61.56 | 129.78% | 3.750% | 4.867% |
Customer Interaction: Customer Effort | 8.80 | 50.00% | 2.500% | 1.250% |
Customer interaction: Net Promotor Score | 65.40 | 73.33% | 2.500% | 1.833% |
Customer Brand/Perception: JD Power Gas vs Industry | 41% | 82.00% | 1.250% | 1.025% |
Customer Brand/Perception: JD Power Electric vs Industry | 0.00 | 0.00% | 1.250% | 0.000% |
Percent of Diverse Candidate Slates | 90% | 200.00% | 3.750% | 7.500% |
Percent of Diverse Interview Panels | 96% | 200.00% | 3.750% | 7.500% |
Total Payout |
|
| 100% | 153.67% |
29
Payouts under the Short-Term Incentive Plan have varied over the last 10 years as shown in the graph below.
Actual awards made to each of our Named Executive Officers under the Short-Term Incentive Plan for 20212023 are included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 40.
For the 2024 Short-Term Incentive Plan, we are maintaining our commitment to financial performance with EPS from ongoing operations as adjusted, changing our outcome-based safety metric to replace TCIR and PMVI with the Days Away, Restricted or Transferred Rate (DART), modifying our customer experience metrics to update our methodology for measuring customer satisfaction and customer effort to leverage internal customer feedback tools instead of NPS and JD Power and continuing our commitment to diversity by replacing diverse candidate slates and interview panels with a new metric intended to increase diversity in leadership positions. Our metrics for customer experience, diversity, and system safety and reliability demonstrate our continued efforts to improve our social and environmental ESG performance.
Long-Term Incentive.
« | Promote achievement of corporate goals by linking the interests of participants to those of our shareholders | ||||
« | Provide participants with an incentive for excellence in individual performance | ||||
« | Promote teamwork among participants | ||||
« | Motivate, retain, and attract the services of participants who make significant contributions to our success by allowing participants to share in such success | ||||
« | Meet the performance objectives of the plan to achieve an average payout equal to market competitive levels over time |
30
The Committee overseesapproved the administrationmetrics for the Performance plan portion of the 2015 Omnibus Incentive Plan with full powerour Long-term incentive plans as follows:
Performance Plan Metrics | |||
Plan | Metrics | Definition | Rationale |
2021-2023 Plan and 2022-2024 Plan | 60% TSR | Total shareholder return | Executive pay under a long-term, capital accumulation program should mirror performance in shareholder return and directly aligns with shareholders and reflects our performance relative to peers |
20% EPS | Diluted earnings per share calculated in accordance with GAAP, adjusted for material, non-recurring events (such as impairment charges, one-time tax events, external acquisition costs, changes to accounting rules, etc.) | Aligns with long-term performance growth | |
20% Average Cost to Serve | Non-fuel operations and maintenance (O&M) expense divided by Utility margin (a non-GAAP measure (1) which represents revenue less cost of sales), adjusted for material, non-recurring events (such as impairment charges, external acquisition costs, changes to accounting rules, etc.) | Drives growth goals while balancing capital deployment with increasing customer rates | |
2023-2025 Plan | 70% TSR | Total shareholder return | Executive pay under a long-term, capital accumulation program should mirror performance in shareholder return and directly aligns with shareholders and reflects our performance relative to peers |
10% EPS | Diluted earnings per share calculated in accordance with GAAP, adjusted for material, non-recurring events (such as impairment charges, one-time tax events, external acquisition costs, changes to accounting rules, etc.) | Aligns with long-term performance growth | |
10% Average Cost to Serve | Non-fuel operations and maintenance (O&M) expense divided by Utility margin (a non-GAAP measure (1) which represents revenue less cost of sales), adjusted for material, non-recurring events (such as impairment charges, external acquisition costs, changes to accounting rules, etc.) | Drives growth goals while balancing capital deployment with increasing customer rates | |
10% Emissions Reduction | Natural gas emissions reduction by 2035 | Aligns with sustainability goals |
(1) For further information regarding Utility margin, a non-GAAP measure, please see Item 7 - Management’s Discussion and authority to determine whenAnalysis of Financial Condition and to whom awards will be granted, alongResults of Operations in our 2023 Annual Report on Form 10-K as filed with the type, amountU.S. Securities and other terms and conditions of each award. Exchange Commission on February 14, 2024.
The long-term incentive compensation component is composed of performance sharesshare units and restricted stock.stock that vests ratably over three years. The Committee chose these components because linking executive compensation to stock price appreciation, and total shareholder return, and other key financial and environmental metrics is an effective way to align the interests of management with those of our shareholders. For the 2019-2021The split between performance share units and 2020-2022 Plans, the Committee selected total shareholder return as the goalrestricted stock for the performance shares because it believes executive pay under a long-term, capital accumulation program should mirror our performance in shareholder return as compared to our Performance Peer Group of companies.
31
The value of long-term incentives awarded is based primarily on competitive market-based data presented by the compensation consultant to the Committee, the impact each position has on our shareholder return, executive performance, and internal pay relationships. The actual amount realized willmay vary from the target award amounts. The Committee approved the target long-term incentive compensation level for each officer in January 2021.2023. The 20212023 long-term incentive was adjusted from 20202022 levels for the majority of the Named Executive OfficersMr. Evans to increase competitiveness within the market.
NEO Long-Term Incentive Target Compensation | ||||||||||||||||||||
As % of Base Salary | ||||||||||||||||||||
2020 | 2021 | 2021 | ||||||||||||||||||
Evans, CEO | $ | 1,775,000 | $ | 2,150,000 | 261% | |||||||||||||||
Kinzley, CFO | $ | 525,000 | $ | 625,000 | 138% | |||||||||||||||
Iverson, GC | $ | 415,000 | $ | 490,000 | 123% | |||||||||||||||
Wevik, UOO | $ | 400,000 | $ | 475,000 | 112% | |||||||||||||||
Keller, CIO | $ | 240,000 | $ | 250,000 | 74% |
NEO Long-Term Incentive Target Compensation |
| |||||
|
|
|
|
| ||
2022 |
| 2023 |
| |||
Evans, CEO | $ | 2,300,000 |
| $ | 2,700,000 |
|
Nooney, CFO | $ | 250,000 |
| $ | 600,000 |
|
Iverson, GC | $ | 600,000 |
| $ | 600,000 |
|
Jones, SVP | $ | 250,000 |
| $ | 250,000 |
|
Keller, CIO | $ | 300,000 |
| $ | 300,000 |
|
Kinzley, Former CFO | $ | 625,000 |
| $ | — |
|
Performance Share Units.
Participants are awarded a target number of performanceVesting of performance share units associated with TSR is based on our total shareholder return over designated performance periods as measured against our Performance Peer Group. The final value of the performance shares is based upon the number of shares of common stock that are ultimately earned, based upon our performance in relation to the performance criteria.
A summary of the TSR performance criteria for each three-year plan periodthe 2023-2025 performance share units is summarized in the table below:
Performance Share Plans | |||||||||||
Percentile Ranking for Threshold Payout of 25% of Target Shares | Percentile Ranking for Target Payout of 100% of Target Shares | Percentile Ranking for Maximum Payout Level | Possible Payout Range of Target | ||||||||
25th percentile | 50th percentile | 90th percentile | 0-200% |
The 2023-2025 Performance plan, for the portion of the award that vests based on relative TSR, provides: (i) a threshold payout if relative TSR performance is below threshold but our TSR is at least 35 percent for the performance period; and (ii) the performance share plan payout is capped at 100 percent of target if TSR is negative. The additional provisions are intended to reduce the impact of one peer company’s performance on the relative TSR, plan, and also increase accountability and expectations related to the Company’s performance.
Vesting of performance share units associated with Earnings Per Share, Average Cost to Serve, and Emissions Reduction performance is determined based upon the Company's performance against established performance goals. The final value of the performance shares is based upon the number of shares of common stock that are ultimately earned, based upon our performance in relation to the performance criteria.
Threshold performance results in a payout of 25 percent of the target share award. Target performance results in a payout of the target share award. Maximum performance results in a payout of 200 percent of the target share award.
The performance awardsshare units and dividend equivalents, if earned, are paid 50 percent in cash and 50 percent in common stock. All payroll deductions and applicable tax withholding related toPerformance share units are pro-rated for the award are withheld from the cash portion.
Restricted Stock.
Restricted stock awarded as long-term incentives vests one-third each year over a three-year period, and automatically vests in its entirety upon death, disability or under certain termination circumstances following a change in control. Dividends are paid on the restricted stock. Unvested restricted stock is forfeited if an officer’s employment is terminated for any reason other thanPayouts under the Performance Share Plan have varied significantly over the last 10 years, as shown in the eventgraph below. Each performance period extends for three years. For the recently completed performance period, January 1, 2021 to December 31, 2023, the payout was based on attainment of a change in control.
32
Metric | 2021-2023 Results | Goal Payout as a % of Target | % of Award | Payout |
Total Shareholder Return (TSR) | 1.27% | 0.00% | 60% | 0.00% |
TSR relative to Performance Peer Group | 16th Percentile |
|
|
|
Average EPS as Adjusted | $3.882 | 25.37% | 20% | 5.07% |
Average Cost to Serve | 46.3% | 55.68% | 20% | 11.14% |
Total Payout |
|
| 100% | 16.21% |
The number of shares of restricted stock awarded in 2021 for each2024-2026 Performance plan portion of our Named Executive Officers is shown below and is includedLong-Term Incentive plan retains our current four metrics. The Compensation Committee, with the guidance of its independent compensation consultant, adopted the Compensation Peer Group as the Company's Performance Peer Group beginning with the 2024-2026 Performance plan. This change was made to better align with our fuel mix as the companies in the Grants of Plan-Based Awards in 2021 table under the heading “All Other Stock Awards: Number of Shares of Stock or Units” and “Grant Date Fair Value of Stock Awards” on page 42.
Board and Management Roles in Compensation Decisions
Role of Executive Officers in Compensation Decisions.
InThe CEO annually reviews the performance of each of our senior executive officers. Based upon these performance reviews and market analysis conducted by compensation consultants, and discussions with our Senior Vice President - Chief Human Resources Officer, the CEO recommends the compensation for this group of officers to the Committee.
Role of the Committee and Board in Setting Executive Compensation.
The Committee reviews the CEO’s recommended compensation for our senior executive officers. The Committee may approve the CEO’s compensation recommendations for this group of officers or exercise its discretion inby modifying any of the recommended compensation and award levels in its review and approval process. The Committee is required to approve all decisions regarding equity awards to our officers.
33
Summary
In total, the Committee believes that the 20212023 compensation actions, decisions and outcomes strongly reflect and reinforce our compensation philosophy and, in particular, emphasize the alignment between compensation and both performance and shareholder interests. At our 20212023 annual meeting, shareholders owning 98 percent of the shares that were voted on this matter approved our executive compensation for 2020,2022, which we consider highly supportive of our current compensation philosophy. In connection with establishing the 20212023 executive compensation program, the Board reviewed the results of the say on pay vote, as well as market data and performance indicators.
Governance Best Practices
We have several governance programs in place to align our executive compensation with shareholder interests and to mitigate risks in our plans. These programs include stock ownership guidelines, mandatory and supplemental clawback provisions in our short-term and long-term incentive award agreements,policies, and the prohibition of hedging or pledging of Company stock.
STOCK OWNERSHIP GUIDELINES
The Committee has implemented stock ownership guidelines that apply to all officers based upon their level of responsibility. We believe it is important for our officers to hold a significant amount of our common stock to further align their interests with the interests of our shareholders. A “retention ratio” approach to stock ownership is incorporated into the guidelines. Officers are required to retain 100 percent of all shares owned, including shares awarded through our incentive plans (net of share withholding for taxes and, in the case of cashless stock option exercises, net of the exercise price and withholding for taxes) until specific ownership goals are achieved.
The guidelines are shown below.
Stock Ownership Value as | ||||||||
Position | Multiple of Base Salary | |||||||
CEO | 6X | |||||||
CFO | 3X | |||||||
Other Senior Officers | 3X |
At least annually, the Compensation Committee reviews common stock ownership to confirm the officers have met or are progressing toward their stock ownership guidelines. Generally, an officer may not sell common stock unless he or she owns common stock in excess of 110 percent of the applicable stock ownership guideline. With the exception of Mr. Keller and Messes. Jones and Nooney, who hashave all been in his roletheir current roles less than twofour years, all of our Named Executive Officers who are current officers have exceeded their stock ownership guidelines.
CLAWBACK POLICY
We have adopted a Mandatory Compensation Recovery Policy that applies to all current and former Section 16 Officers. This policy that ifis consistent with the final rules adopted by the SEC and the NYSE. In the event of an accounting restatement occurs afterto correct an error that is (a) material to the previously issued financial statements or (b) would result in a material misstatement if the error were corrected in the current period, the Company will seek to recover erroneously awarded incentive paymentscompensation received by any current or former executive officer during the immediately preceding three years. This policy does not require a finding of fault to trigger a recoupment, rather recovery may be triggered absent fraud or willful misconduct by the executive. Erroneous compensation is the amount of compensation that is granted, earned or vested based upon attainment of a financial reporting measure included in an accounting restatement, as described above, that would not have been made, duereceived had the financial statements in question been accurate. The Mandatory Compensation Recovery Policy is filed as an exhibit to the results of misconduct associated with financial reporting, the Committee will2023 Form 10-K.
The Company has also adopted a Supplemental Compensation Recovery Policy that also applies to our NEOs. Under this Policy, our Board may seek repayment of theto recover incentive compensation from our CEO and CFO, andreceived by the Committee hasexecutive in the discretion to request repayment of incentive compensation from our other officers, taking into consideration the individual roles and responsibilities prompting the restatement.
UNLAWFUL INSIDER TRADING AND ANTI-HEDGING POLICY
Black Hills Corporation has adopted policies and procedures designed to prohibit unlawful insider trading, hedging transactions and related practices. Specifically, Black Hills Corporation’s employees, officers and directors are prohibited from trading in the Company’s securities while in possession of material, nonpublic information, from pledging its securities as collateral, holding its securities in a margin account and entering into transactions that are designed to hedge or reputationoffset decreases in the market value of the Company; (4) ifsecurities. Additionally, certain employees and officers are subject to routine and
34
non-routine blackout periods during which times trading in our securities is not permitted, as well as pre-clearance procedures to ensure compliance with applicable internal policies.
Notwithstanding the employee violates in any material respect any policy or any code of ethics; or (5) ifprohibition against insider trading, the participant engages in any fraudulent, illegal or other misconduct.
2023 BENEFITS
Retirement Benefits.
We maintain a variety of employee benefit plans and programs in which our executive officers may participate. We believe it is important to provide post-employment benefits to our executive officers and the benefits we provide approximate retirement benefits paid by other employers to executives in similar positions. The Committee periodically reviews the benefits provided, with assistance from its compensation consultant, to maintain a market-based benefits package.Several years ago, we adopted a defined contribution plan design as our primary retirement plan and amended our Defined Benefit Pension Plan (“Pension Plan”) for all eligible employees to incorporate a partial freeze in which the accrual of benefits ceased for certain participants while other participants were allowed an election to continue to accrue benefits. Mr. Wevik isNone of our only Named Executive Officer whoOfficers met the age and service requirements allowing himto allow them to continue to accrue benefits under the Pension Plan. Employees who no longer accrue benefits under the Pension Plan now receive Company Retirement Contributions (“Retirement Contributions”) in the Retirement Savings Plan. The Retirement Contributions are an age and service points-based calculation.
The 401(k) Retirement Savings Plan is offered to all our eligible employees and we provide matching contributions for certain eligible participants. All of our Named Executive Officers are participants in the 401(k) Retirement Savings Plan and received matching contributions in 2021.2023. The matching contributions and the Retirement Contributions are included as “All Other Compensation” in the Summary Compensation Table on page 40.
We also provide nonqualified plans to certain executives as approved by the Compensation Committee. The level of retirement benefits provided by the Pension Plan and Nonqualified Plans for each of our Named Executive Officers is reflected in the Pension Benefits for 20212023 table on page 44.41. Our contributions to the Nonqualified Deferred Compensation Plan are included in the All Other Compensation column of the Summary Compensation Table on page 4037 and the aggregate Nonqualified Deferred Compensation balance at December 31, 20212023 is reported in the Nonqualified Deferred Compensation for 20212023 table on page 46.43. These retirement benefits are explained in more detail in the accompanying narrative to the tables.
Other Personal Benefits.
We provide the personal use of a Company vehicle, executive health services, and limited reimbursement of financial planning services as benefits to our executive officers. The specific amount attributable to these benefits inCHANGE IN CONTROL PAYMENTS
Our Named Executive Officers may also receive severance benefits in the event of a qualifying termination in connection with a change in control. We have no employment agreements with our Named Executive Officers. However, change in control agreementsprotections are common among our Compensation Peer Group and the Committee and our Board of Directors believebelieves providing these agreements to our corporate and select subsidiary officers protects our shareholder interests in the event of a change in control by helping assure management focus and continuity.
In 2022, our Compensation Committee approved revised form of incentive award agreements that require a "double trigger" before accelerated equity compensation will be paid to our Named Executive Officers. The double trigger provides benefits in association with:
(1) | a change in control, and | |
(2) | (i) | a termination of employment other than by death, disability or by us for cause, or |
(ii) | a termination by the employee for good reason. |
35
Our change in control agreements have expiration dates and our Board of Directors conducts a thorough review of the change in control agreements at each renewal period. Our current change in control agreements expire November 15, 2022.2025. In general, our change in control agreements provide a severance payment of up to 2.99 times average compensation for Mr. Evans, and up to two times average compensation for the other Named Executive Officers. The change in control agreements do not provide for excise tax gross-ups and contain a “double trigger,” providing benefits in association with:
See the Potential Payments upon Termination or Change in Control table on page 4744 and the accompanying narrative for more information regarding our change in control agreements and estimated payments associated with a change in control.
TAX AND ACCOUNTING IMPLICATIONS
Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, places a limit of $1 million in compensation per year on the amount public companies may deduct with respect to certain executive officers. The Committee continues to believe that shareholder interests are best served if its discretion and flexibility in structuring and awarding compensation is not restricted, even though some past and/or future compensation awards result in non-deductible compensation expenses to the Company. The Committee's ability to continue to provide a competitive compensation package to attract, motivate and retain the Company's most senior executives is considered critical to the Company's success and to advancing the interests of its shareholders.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
THE COMPENSATION COMMITTEE |
Teresa A. Taylor, Chair |
Barry M. Granger |
Scott M. Prochazka |
Rebecca B. Roberts |
36
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation paid or earned by each of our Named Executive Officers for the years ended December 31, 2021, 20202023, 2022 and 2019.2021. We have no employment agreements with our Named Executive Officers:
Name and | Year | Salary |
| Stock Awards(1) |
| Non-Equity Incentive Plan Compensation(2) |
| Changes in Pension Value and Nonqualified Deferred Compensation Earnings (3) |
| All |
| Total |
| ||||||
Linden R. Evans | 2023 | $ | 893,333 |
| $ | 2,729,666 |
| $ | 1,372,785 |
| $ | 35,493 |
| $ | 607,725 |
| $ | 5,639,002 |
|
President and Chief | 2022 | $ | 854,167 |
| $ | 2,394,776 |
| $ | 610,559 |
| $ | — |
| $ | 627,046 |
| $ | 4,486,548 |
|
Executive Officer | 2021 | $ | 819,167 |
| $ | 2,238,529 |
| $ | 708,252 |
| $ | — |
| $ | 674,960 |
| $ | 4,440,908 |
|
Kimberly F. Nooney (5) | 2023 | $ | 429,167 |
| $ | 606,568 |
| $ | 395,700 |
| $ | 13,765 |
| $ | 144,083 |
| $ | 1,589,283 |
|
Sr. Vice President and |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Brian G. Iverson | 2023 | $ | 430,167 |
| $ | 606,568 |
| $ | 462,726 |
| $ | 10,405 |
| $ | 163,506 |
| $ | 1,673,372 |
|
Sr. Vice President, General Counsel and | 2022 | $ | 413,333 |
| $ | 624,682 |
| $ | 177,270 |
| $ | — |
| $ | 164,183 |
| $ | 1,379,468 |
|
Chief Compliance Officer | 2021 | $ | 397,667 |
| $ | 510,213 |
| $ | 206,294 |
| $ | — |
| $ | 170,934 |
| $ | 1,285,108 |
|
Marne M. Jones (5) | 2023 | $ | 388,333 |
| $ | 252,767 |
| $ | 328,214 |
| $ | 4,968 |
| $ | 123,906 |
| $ | 1,098,188 |
|
Sr. Vice President - Utilities |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Erik D. Keller | 2023 | $ | 365,667 |
| $ | 303,274 |
| $ | 280,960 |
| $ | — |
| $ | 117,496 |
| $ | 1,067,397 |
|
Sr. Vice President - Chief Information Officer | 2022 | $ | 351,667 |
| $ | 312,337 |
| $ | 125,686 |
| $ | — |
| $ | 109,753 |
| $ | 899,443 |
|
| 2021 | $ | 338,333 |
| $ | 260,251 |
| $ | 146,261 |
| $ | — |
| $ | 146,667 |
| $ | 891,512 |
|
Richard W. Kinzley (6) | 2023 | $ | 236,000 |
| $ | — |
| $ | — |
| $ | — |
| $ | 277,783 |
| $ | 513,783 |
|
Former Sr. Vice President and | 2022 | $ | 469,000 |
| $ | 650,723 |
| $ | 234,669 |
| $ | — |
| $ | 268,377 |
| $ | 1,622,769 |
|
Chief Financial Officer | 2021 | $ | 454,000 |
| $ | 650,687 |
| $ | 274,770 |
| $ | — |
| $ | 282,323 |
| $ | 1,661,780 |
|
Name and Principal Position | Year | Salary | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | Changes in Pension Value and Nonqualified Deferred Compensation Earnings (3) | All Other Compensation(4) | Total | ||||||||||||||||
Linden R. Evans President and Chief Executive Officer | 2021 | $ | 819,167 | $ | 2,238,529 | $ | 708,252 | $ | — | $ | 674,960 | $ | 4,440,908 | ||||||||||
2020 | $ | 783,333 | $ | 1,820,599 | $ | 936,632 | $ | 79,100 | $ | 601,450 | $ | 4,221,114 | |||||||||||
2019 | $ | 713,333 | $ | 1,541,811 | $ | 800,400 | $ | 110,158 | $ | 473,600 | $ | 3,639,302 | |||||||||||
Richard W. Kinzley Sr. Vice President and Chief Financial Officer | 2021 | $ | 454,000 | $ | 650,687 | $ | 274,770 | $ | — | $ | 282,323 | $ | 1,661,780 | ||||||||||
2020 | $ | 448,333 | $ | 538,547 | $ | 348,447 | $ | 51,945 | $ | 263,528 | $ | 1,650,800 | |||||||||||
2019 | $ | 413,500 | $ | 524,220 | $ | 291,346 | $ | 68,631 | $ | 254,366 | $ | 1,552,063 | |||||||||||
Brian G. Iverson Sr. Vice President, General Counsel and Chief Compliance Officer | 2021 | $ | 397,667 | $ | 510,213 | $ | 206,294 | $ | — | $ | 170,934 | $ | 1,285,108 | ||||||||||
2020 | $ | 384,167 | $ | 425,583 | $ | 275,609 | $ | 23,339 | $ | 157,216 | $ | 1,265,914 | |||||||||||
2019 | $ | 370,833 | $ | 400,825 | $ | 240,120 | $ | 31,927 | $ | 156,990 | $ | 1,200,695 | |||||||||||
Stuart A. Wevik Sr. Vice President - Utility Operations (5) | 2021 | $ | 422,000 | $ | 494,536 | $ | 255,403 | $ | 149,812 | $ | 114,904 | $ | 1,436,655 | ||||||||||
2020 | $ | 398,601 | $ | 410,333 | $ | 333,625 | $ | 371,933 | $ | 121,870 | $ | 1,636,362 | |||||||||||
Erik D. Keller Sr. Vice President - Chief Information Officer (5) | 2021 | $ | 338,333 | $ | 260,251 | $ | 146,261 | $ | — | $ | 146,667 | $ | 891,512 |
The Pension Plan and PRB were frozen effective January 1, 2010 for participants who did not satisfy the age 45 and 10 years of service eligibility. Messrs. Evans, Kinzley and Iverson and Messes. Jones and Nooney did not meet the eligibility choice criteria and their Defined Pension and PRB benefits were frozen.
Our Named Executive Officers receive employer contributions into a Nonqualified Deferred Compensation Plan (“NQDC”). The NQDC employer contributions are reported in the All Other Compensation column. No Named Executive Officer received preferential or above-market earnings on nonqualified deferred compensation. The change in value attributed to each Named Executive Officer from each plan is shown in the table below:
Year | Defined |
|
| PRB |
|
| Total Change in |
| ||||
2023 | $ | 19,510 |
|
| $ | 15,983 |
|
| $ | 35,493 |
| |
Linden R. Evans | 2022 | $ | (76,130 | ) |
| $ | (63,285 | ) |
| $ | (139,415 | ) |
2021 | $ | (7,574 | ) |
| $ | (7,745 | ) |
| $ | (15,319 | ) | |
Kimberly F. Nooney | 2023 | $ | 13,765 |
|
| $ | - |
|
| $ | 13,765 |
|
2023 | $ | 10,405 |
|
| $ | - |
|
| $ | 10,405 |
| |
Brian G. Iverson | 2022 | $ | (40,857 | ) |
| $ | - |
|
| $ | (40,857 | ) |
2021 | $ | (4,089 | ) |
| $ | - |
|
| $ | (4,089 | ) | |
Marne M. Jones | 2023 | $ | 4,968 |
|
| $ | - |
|
| $ | 4,968 |
|
| 2023 | $ | - |
|
| $ | - |
|
| $ | - |
|
Erik D. Keller | 2022 | $ | - |
|
| $ | - |
|
| $ | - |
|
| 2021 | $ | - |
|
| $ | - |
|
| $ | - |
|
2023 | $ | (32,085 | ) |
| $ | 1,711 |
|
| $ | (30,374 | ) | |
Richard W. Kinzley | 2022 | $ | (91,619 | ) |
| $ | (5,842 | ) |
| $ | (97,461 | ) |
2021 | $ | (11,125 | ) |
| $ | (833 | ) |
| $ | (11,958 | ) |
Year | Defined Benefit Plan | PRB | Total Change in Pension Value | ||||||||||||||
Linden R. Evans | 2021 | $ | (7,574) | $ | (7,745) | $ | (15,319) | ||||||||||
2020 | $ | 43,576 | $ | 35,524 | $ | 79,100 | |||||||||||
2019 | $ | 59,664 | $ | 50,494 | $ | 110,158 | |||||||||||
Richard W. Kinzley | 2021 | $ | (11,125) | $ | (833) | $ | (11,958) | ||||||||||
2020 | $ | 48,872 | $ | 3,073 | $ | 51,945 | |||||||||||
2019 | $ | 64,428 | $ | 4,203 | $ | 68,631 | |||||||||||
Brian G. Iverson | 2021 | $ | (4,089) | $ | — | $ | (4,089) | ||||||||||
2020 | $ | 23,339 | $ | — | $ | 23,339 | |||||||||||
2019 | $ | 31,927 | $ | — | $ | 31,927 | |||||||||||
Stuart A. Wevik | 2021 | $ | 149,812 | $ | — | $ | 149,812 | ||||||||||
2020 | $ | 371,933 | $ | — | $ | 371,933 | |||||||||||
Erik D. Keller | 2021 | $ | — | $ | — | $ | — |
37
| Year |
| 401(k) |
|
| Defined |
|
| NQDC |
|
| Dividends on |
|
| Other Personal |
|
| Total Other |
| |||||||
Linden R. Evans |
| 2023 |
| $ | 13,800 |
|
| $ | 29,700 |
|
| $ | 476,817 |
|
| $ | 66,365 |
|
| $ | 21,043 |
|
| $ | 607,725 |
|
Kimberly F. Nooney |
| 2023 |
| $ | 17,100 |
|
| $ | 26,400 |
|
| $ | 76,231 |
|
| $ | 10,388 |
|
| $ | 13,964 |
|
| $ | 144,083 |
|
Brian G. Iverson |
| 2023 |
| $ | 17,044 |
|
| $ | 26,456 |
|
| $ | 90,220 |
|
| $ | 15,720 |
|
| $ | 14,066 |
|
| $ | 163,506 |
|
Marne M. Jones |
| 2023 |
| $ | 17,100 |
|
| $ | 26,400 |
|
| $ | 63,682 |
|
| $ | 6,350 |
|
| $ | 10,374 |
|
| $ | 123,906 |
|
Erik D. Keller |
| 2023 |
| $ | 19,800 |
|
| $ | 19,800 |
|
| $ | 47,705 |
|
| $ | 12,308 |
|
| $ | 17,883 |
|
| $ | 117,496 |
|
Richard W. Kinzley |
| 2023 |
| $ | 19,512 |
|
| $ | 24,086 |
|
| $ | 112,685 |
|
| $ | 5,288 |
|
| $ | 116,212 |
|
| $ | 277,783 |
|
Year | 401(k) Match | Defined Contributions | NQDC Contributions | Dividends on Restricted Stock | Other Personal Benefits | Total Other Compensation | |||||||||||||||||
Linden R. Evans | 2021 | $ | 15,300 | $ | 23,200 | $ | 555,649 | $ | 65,057 | $ | 15,754 | $ | 674,960 | ||||||||||
Richard W. Kinzley | 2021 | $ | 17,400 | $ | 21,100 | $ | 211,957 | $ | 19,394 | $ | 12,472 | $ | 282,323 | ||||||||||
Brian G. Iverson | 2021 | $ | 17,400 | $ | 21,100 | $ | 107,397 | $ | 15,185 | $ | 9,852 | $ | 170,934 | ||||||||||
Stuart A. Wevik | 2021 | $ | 8,250 | $ | — | $ | 65,044 | $ | 15,277 | $ | 26,333 | $ | 114,904 | ||||||||||
Erik D. Keller | 2021 | $ | 17,400 | $ | 11,600 | $ | 39,427 | $ | 12,835 | $ | 65,405 | $ | 146,667 |
GRANTS OF PLAN BASED AWARDS IN 2021
|
|
|
|
| Estimated Future Payouts |
|
| Estimated Future Payouts |
|
| Maximum |
|
| Threshold |
| |||||||||||||||||||||
Name |
| Grant |
| Date of Compensation Committee Action |
| Threshold |
|
| Target |
|
| Maximum |
|
| Threshold |
|
| Target |
|
| Maximum |
|
| All Other Stock Awards: Number of Shares of Stock or Units(4) |
|
| Grant Date |
| ||||||||
|
|
|
|
| $ | 446,667 |
|
| $ | 893,333 |
|
| $ | 1,786,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Linden R. Evans |
| 1/24/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
| 6,609 |
|
|
| 26,434 |
|
|
| 52,868 |
|
|
|
|
| $ | 2,009,388 |
| ||||
|
| 2/9/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,395 |
|
| $ | 720,278 |
| ||||||
|
|
|
|
| $ | 128,750 |
|
| $ | 257,500 |
|
| $ | 515,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Kimberly F. Nooney |
| 1/24/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
| 1,469 |
|
|
| 5,874 |
|
|
| 11,748 |
|
|
|
|
| $ | 446,520 |
| ||||
|
| 2/9/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,532 |
|
| $ | 160,048 |
| ||||||
|
|
|
|
| $ | 150,558 |
|
| $ | 301,117 |
|
| $ | 602,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Brian G. Iverson |
| 1/24/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
| 1,469 |
|
|
| 5,874 |
|
|
| 11,748 |
|
|
|
|
| $ | 446,520 |
| ||||
|
| 2/9/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2,532 |
|
| $ | 160,048 |
| ||||||
|
|
|
|
| $ | 98,797 |
|
| $ | 197,403 |
|
| $ | 394,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Marne M. Jones |
| 1/24/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
| 612 |
|
|
| 2,448 |
|
|
| 4,896 |
|
|
|
|
| $ | 186,081 |
| ||||
|
| 2/9/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,055 |
|
| $ | 66,687 |
| ||||||
|
|
|
|
| $ | 91,417 |
|
| $ | 182,833 |
|
| $ | 365,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Erik D. Keller |
| 1/24/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
| 734 |
|
|
| 2,937 |
|
|
| 5,874 |
|
|
|
|
| $ | 223,250 |
| ||||
|
| 2/9/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,266 |
|
| $ | 80,024 |
| ||||||
|
|
|
|
| $ | 82,600 |
|
| $ | 165,200 |
|
| $ | 330,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Richard W. Kinzley (6) |
| 1/24/23 |
| 1/24/23 |
|
|
|
|
|
|
| �� |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
| $ | — |
| ||||
|
| 2/9/23 |
| 1/24/23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
| $ | — |
|
Name | Grant Date | Date of Compensation Committee Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | All Other Stock Awards: Number of Shares of Stock or Units(4) (#) | Grant Date Fair Value of Stock Awards(5) ($) | ||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||
Linden R. Evans | $ | 412,500 | $ | 825,000 | $ | 1,650,000 | ||||||||||||||||||||||||||
1/26/21 | 1/26/21 | 4,462 | 17,848 | 35,696 | $ | 1,134,452 | ||||||||||||||||||||||||||
2/11/21 | 1/26/21 | 17,848 | $ | 1,104,077 | ||||||||||||||||||||||||||||
Richard W. Kinzley | $ | 158,900 | $ | 317,800 | $ | 635,600 | ||||||||||||||||||||||||||
1/26/21 | 1/26/21 | 1,297 | 5,188 | 10,376 | $ | 329,757 | ||||||||||||||||||||||||||
2/11/21 | 1/26/21 | 5,188 | $ | 320,930 | ||||||||||||||||||||||||||||
Brian G. Iverson | $ | 120,000 | $ | 240,000 | $ | 480,000 | ||||||||||||||||||||||||||
1/26/21 | 1/26/21 | 1,017 | 4,068 | 8,136 | $ | 258,567 | ||||||||||||||||||||||||||
2/11/21 | 1/26/21 | 4,068 | $ | 251,646 | ||||||||||||||||||||||||||||
Stuart A. Wevik | $ | 148,750 | $ | 297,500 | $ | 595,000 | ||||||||||||||||||||||||||
1/26/21 | 1/26/21 | 986 | 3,943 | 7,886 | $ | 250,622 | ||||||||||||||||||||||||||
2/11/21 | 1/26/21 | 3,943 | $ | 243,914 | ||||||||||||||||||||||||||||
Erik D. Keller | $ | 85,000 | $ | 170,000 | $ | 340,000 | ||||||||||||||||||||||||||
1/26/21 | 1/26/21 | 519 | 2,075 | 4,150 | $ | 131,891 | ||||||||||||||||||||||||||
2/11/21 | 1/26/21 | 2,075 | $ | 128,360 |
38
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2021
Stock Awards |
| |||||||||||||||
Name |
| Number of Shares |
|
| Market Value |
|
| Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights |
|
| Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights |
| ||||
Linden R. Evans |
|
| 26,546 |
|
|
| 1,432,157 |
|
|
| 39,573 |
|
|
| 2,134,963 |
|
Kimberly F. Nooney |
|
| 4,155 |
|
|
| 224,162 |
|
|
| 7,417 |
|
|
| 400,147 |
|
Brian G. Iverson |
|
| 6,288 |
|
|
| 339,238 |
|
|
| 9,144 |
|
|
| 493,319 |
|
Marne M. Jones |
|
| 2,540 |
|
|
| 137,033 |
|
|
| 3,761 |
|
|
| 202,906 |
|
Erik D. Keller |
|
| 3,158 |
|
|
| 170,374 |
|
|
| 4,577 |
|
|
| 246,929 |
|
Richard W. Kinzley |
|
| — |
|
|
| — |
|
|
| 3,307 |
|
|
| 178,413 |
|
Stock Awards | ||||||||||||||
Name | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||
Linden R. Evans | 28,409 | 2,004,823 | 25,782 | 1,808,859 | ||||||||||
Richard W. Kinzley | 8,469 | 597,657 | 7,759 | 543,949 | ||||||||||
Brian G. Iverson | 6,631 | 467,950 | 6,056 | 424,593 | ||||||||||
Stuart A. Wevik | 6,561 | 463,010 | 5,434 | 381,695 | ||||||||||
Erik D. Keller | 5,605 | 395,545 | 2,075 | 146,433 |
Name | Unvested Restricted Stock | Unvested and Unearned Performance Shares | |||||||||||||||
# of Shares | Vesting Date | # of Shares | Vesting Date | ||||||||||||||
Linden R. Evans | 3,502 | 02/10/22 | 5,069 | 12/31/21 | |||||||||||||
3,556 | 02/11/22 | 2,865 | 12/31/22 | ||||||||||||||
5,949 | 02/11/22 | 17,848 | 12/31/23 | ||||||||||||||
3,503 | 02/10/23 | ||||||||||||||||
5,949 | 02/11/23 | ||||||||||||||||
5,950 | 02/11/24 | ||||||||||||||||
Richard W. Kinzley | 1,036 | 02/10/22 | 1,723 | 12/31/21 | |||||||||||||
1,209 | 02/11/22 | 848 | 12/31/22 | ||||||||||||||
1,729 | 02/11/22 | 5,188 | 12/31/23 | ||||||||||||||
1,036 | 02/10/23 | ||||||||||||||||
1,729 | 02/11/23 | ||||||||||||||||
1,730 | 02/11/24 | ||||||||||||||||
Brian G. Iverson | 819 | 02/10/22 | 1,318 | 12/31/21 | |||||||||||||
925 | 02/11/22 | 670 | 12/31/22 | ||||||||||||||
1,356 | 02/11/22 | 4,068 | 12/31/23 | ||||||||||||||
819 | 02/10/23 | ||||||||||||||||
1,356 | 02/11/23 | ||||||||||||||||
1,356 | 02/11/24 | ||||||||||||||||
Stuart A. Wevik | 789 | 02/10/22 | 845 | 12/31/21 | |||||||||||||
593 | 02/11/22 | 646 | 12/31/22 | ||||||||||||||
1,314 | 02/11/22 | 3,943 | 12/31/23 | ||||||||||||||
446 | 05/06/22 | ||||||||||||||||
790 | 02/10/23 | ||||||||||||||||
1,314 | 02/11/23 | ||||||||||||||||
1,315 | 02/11/24 | ||||||||||||||||
Erik D. Keller | 691 | 02/11/22 | 2,075 | 12/31/23 | |||||||||||||
692 | 02/11/23 | ||||||||||||||||
3,530 | 08/05/23 | ||||||||||||||||
692 | 02/11/24 |
39
| Unvested Restricted Stock |
| Unvested and Unearned Performance Shares | |||||||||
|
| # of Shares |
|
| Vesting Date |
| # of Shares |
|
| Vesting Date | ||
Linden R. Evans |
|
| 5,950 |
|
| 02/11/24 |
|
| 3,233 |
|
| 01/25/24 |
|
|
| 4,600 |
|
| 02/11/24 |
|
| 8,730 |
|
| 01/23/25 |
|
|
| 4,601 |
|
| 02/11/25 |
|
| 27,610 |
|
| 01/23/26 |
|
|
| 3,798 |
|
| 02/09/24 |
|
|
|
|
| |
|
|
| 3,798 |
|
| 02/09/25 |
|
|
|
|
| |
|
|
| 3,799 |
|
| 02/09/26 |
|
|
|
|
| |
Kimberly F. Nooney |
|
| 623 |
|
| 02/11/24 |
|
| 336 |
|
| 01/25/24 |
|
|
| 500 |
|
| 02/11/24 |
|
| 947 |
|
| 01/23/25 |
|
|
| 500 |
|
| 02/11/25 |
|
| 6,134 |
|
| 01/23/26 |
|
|
| 844 |
|
| 02/09/24 |
|
|
|
|
| |
|
|
| 844 |
|
| 02/09/25 |
|
|
|
|
| |
|
|
| 844 |
|
| 02/09/26 |
|
|
|
|
| |
Brian G. Iverson |
|
| 1,356 |
|
| 02/11/24 |
|
| 735 |
|
| 01/25/24 |
|
|
| 1,200 |
|
| 02/11/24 |
|
| 2,275 |
|
| 01/23/25 |
|
|
| 1,200 |
|
| 02/11/25 |
|
| 6,134 |
|
| 01/23/26 |
|
|
| 844 |
|
| 02/09/24 |
|
|
|
|
| |
|
|
| 844 |
|
| 02/09/25 |
|
|
|
|
| |
|
|
| 844 |
|
| 02/09/26 |
|
|
|
|
| |
Marne M. Jones |
|
| 485 |
|
| 02/11/24 |
|
| 261 |
|
| 01/25/24 |
|
|
| 500 |
|
| 02/11/24 |
|
| 947 |
|
| 01/23/25 |
|
|
| 500 |
|
| 02/11/25 |
|
| 2,553 |
|
| 01/23/26 |
|
|
| 351 |
|
| 02/09/24 |
|
|
|
|
| |
|
|
| 352 |
|
| 02/09/25 |
|
|
|
|
| |
|
|
| 352 |
|
| 02/09/26 |
|
|
|
|
| |
Erik D. Keller |
|
| 692 |
|
| 02/11/24 |
|
| 374 |
|
| 01/25/24 |
|
|
| 600 |
|
| 02/11/24 |
|
| 1,137 |
|
| 01/23/25 |
|
|
| 600 |
|
| 02/11/25 |
|
| 3,066 |
|
| 01/23/26 |
|
|
| 422 |
|
| 02/09/24 |
|
|
|
|
| |
|
|
| 422 |
|
| 02/09/25 |
|
|
|
|
| |
|
|
| 422 |
|
| 02/09/26 |
|
|
|
|
| |
Richard W. Kinzley |
|
|
|
|
|
|
| 937 |
|
| 01/25/24 | |
|
|
|
|
|
|
|
| 2,370 |
|
| 01/23/25 |
OPTION EXERCISES AND STOCK VESTED DURING 2021
Stock Awards(2) |
| |||||||
Name |
| Number of Shares Acquired on Vesting |
|
| Value Realized |
| ||
Linden R. Evans |
|
| 17,448 |
|
| $ | 1,138,987 |
|
Kimberly F. Nooney |
|
| 1,706 |
|
| $ | 111,094 |
|
Brian G. Iverson |
|
| 4,169 |
|
| $ | 272,039 |
|
Marne M. Jones |
|
| 1,567 |
|
| $ | 102,177 |
|
Erik D. Keller |
|
| 4,822 |
|
| $ | 283,704 |
|
Richard W. Kinzley |
|
| 5,019 |
|
| $ | 327,833 |
|
_______________
Stock Awards(2) | ||||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||
Linden R. Evans | 18,535 | $ | 1,129,576 | |||||
Richard W. Kinzley | 8,803 | $ | 534,740 | |||||
Brian G. Iverson | 6,866 | $ | 417,058 | |||||
Stuart A. Wevik | 4,903 | $ | 301,638 | |||||
Erik D. Keller | — | $ | — |
40
PENSION BENEFITS FOR 2021
Several years ago, we adopted a defined contribution plan design as our primary retirement plan and amended our Pension Plan and Nonqualified Pension Plans for all eligible employees to incorporate a partial freeze in which the accrual of benefits ceased for certain participants while other participants were allowed an election to continue to accrue benefits. Employees eligible to elect continued participation were those employees who were at least 45 years old and had at least 10 years of eligible service with us as of January 1, 2010. Mr. Wevik isNone of our only Named Executive Officer whoOfficers met the age and service requirement and continuesnecessary to continue to accrue benefits under the Pension Plan. BenefitsRather, benefits under the Pension Plan and Pension Restoration Plan were frozen for Messrs. Evans, Kinzley and Iverson.Iverson and Messes. Jones and Nooney. Mr. Keller joined the Company after the plans were frozen and therefore does not participate in the plans. None of our Named Executive OfficersMr. Kinzley received anya pension benefit paymentspayment during the fiscal year ended December 31, 2021.
The present value accumulated by each Named Executive Officer from each plan is shown in the table below:
Name |
| Plan Name |
| Number of Years of |
|
| Present Value of |
|
| Payments During Last Fiscal Year |
| |||
Linden R. Evans |
| Pension Plan |
|
| 8.58 |
|
| $ | 295,006 |
|
| $ | - |
|
|
| Pension Restoration Benefit |
|
| 8.58 |
|
| $ | 235,796 |
|
| $ | - |
|
Kimberly F. Nooney |
| Pension Plan |
|
| 13.50 |
|
| $ | 171,160 |
|
| $ | - |
|
|
| Pension Restoration Benefit |
| N/A |
|
| $ | - |
|
| $ | - |
| |
Brian G. Iverson |
| Pension Plan |
|
| 5.83 |
|
| $ | 157,035 |
|
| $ | - |
|
|
| Pension Restoration Plan |
| N/A |
|
| $ | - |
|
| $ | - |
| |
Marne M. Jones |
| Pension Plan |
|
| 8.00 |
|
| $ | 59,139 |
|
| $ | - |
|
|
| Pension Restoration Plan |
| N/A |
|
| $ | - |
|
| $ | - |
| |
Erik D. Keller |
| Pension Plan |
| N/A |
|
| $ | - |
|
| $ | - |
| |
|
| Pension Restoration Plan |
| N/A |
|
| $ | - |
|
| $ | - |
| |
Richard W. Kinzley |
| Pension Plan |
|
| 10.50 |
|
| $ | - |
|
| $ | 203,926 |
|
|
| Pension Restoration Benefit |
|
| 10.50 |
|
| $ | 16,172 |
|
| $ | - |
|
Name | Plan Name | Number of Years of Credited Service(1) (#) | Present Value of Accumulated Benefit(2) ($) | ||||||||
Linden R. Evans | Pension Plan | 8.58 | 351,626 | ||||||||
Pension Restoration Benefit | 8.58 | 283,098 | |||||||||
Richard W. Kinzley | Pension Plan | 10.50 | 327,630 | ||||||||
Pension Restoration Benefit | 10.50 | 20,303 | |||||||||
Brian G. Iverson | Pension Plan | 5.83 | 187,487 | ||||||||
Stuart A. Wevik | Pension Plan | 35.59 | 2,019,167 | ||||||||
Erik D. Keller | Pension Plan | NA | — | ||||||||
Pension Restoration Plan | NA | — |
41
DEFINED BENEFIT PENSION PLAN
Our Pension Plan is a qualified pension plan. As discussed above, several years ago we amended our Pension Plan to incorporate a partial freeze in which the accrual of benefits ceased for certain participants while other participants were allowed an election to continue to accrue benefits.
The Pension Plan provides benefits at retirement based on length of employment service and average compensation levels during the highest five consecutive years of the last ten years of service. For purposes of the benefit calculation, earnings include wages and other cash compensation received from us, including any bonus, commission, unused paid time off or incentive compensation. It also includes any elective before-tax contributions made by the employee to a Company-sponsored cafeteria plan or 401(k) plan. However, it does not include any expense reimbursements, taxable fringe benefits, moving expenses or moving/relocation allowances, nonqualified deferred compensation, non-cash incentives, stock options and any payments of long-term incentive compensation such as restricted stock or payments under performance share plans. The Internal Revenue Code places maximum limitations on the amount of compensation that may be recognized when determining benefits of qualified pension plans. In 2021,2023, the maximum amount of compensation that could be recognized when determining compensation was $290,000$330,000 (called “covered compensation”). Our employees do not contribute to the plan. The amount of the annual contribution by us to the plan is based on an actuarial determination.
The benefit formula for the Named Executive Officers in the plan is the sum of (a) and (b) below:
0.9% of average earnings (up to covered compensation), multiplied by credited service after January 31, 2000 minus the number of years of credited service before January 31, 2000 | Plus | 1.3% of average earnings in excess of covered compensation, multiplied by credited service after January 31, 2000 minus the number of years of credited service before January 31, 2000 |
Plus
1.2% of average earnings (up to covered compensation), multiplied by credited service before January 31, 2000 | Plus | 1.6% of average earnings in excess of covered compensation, multiplied by credited service before January 31, 2000 |
Pension benefits are not reduced for social security benefits. The Internal Revenue Code places maximum limitations on annual benefit amounts that can be paid under qualified pension plans. In 2021,2023, the maximum benefit payable under qualified pension plans was $230,000.$265,000. Accrued benefits become 100 percent vested after an employee completes five years of service.
Normal retirement is defined as age 65 under the plan. However, a participant may retire and begin taking unreduced benefits at age 62 with five years of service. Participants who have completed at least five years of credited service can retire and receive defined benefit pension benefits as early as age 55. However, the retirement benefit will be reduced by five percent for each year of retirement before age 62. All our Named Executive Officers who are eligible for pension benefits, with the exception of Messes. Jones and Nooney, are currently age 55 or older and are entitled to early retirement benefits under this provision.
PENSION RESTORATION BENEFIT
We also have a Pension Restoration Benefit. This is a nonqualified supplemental plan, in which benefits are not tax deductible until paid. The plan is designed to provide the higher paid executive employee a retirement benefit which, when added to social security benefits and the pension to be received under the Pension Plan, will approximate retirement benefits being paid by other employers to their employees in similar executive positions. The employee’s pension from the qualified Pension Plan is limited by the Internal Revenue Code. The 20212023 pension limit was set at $230,000$265,000 annually and the compensation taken into account in determining contributions and benefits could not exceed $290,000$330,000 and could not include nonqualified deferred compensation. The amount of deferred compensation paid under nonqualified plans is not subject to these limits.
As a result of the change in the Pension Plan discussed above, the benefits for certain officers (including Messrs. Evans and Kinzley) under the Nonqualified Pension Plans were significantly reduced because the nonqualified benefit calculations were linked to the benefits earned in the Pension Plan. The Compensation Committee amended the Nonqualified Deferred Compensation Plan to provide non-elective nonqualified restoration benefits to those affected officers who were not eligible to continue accruing benefits under the Pension Plan and Nonqualified Pension Plans.
42
Pension Restoration Benefit.
In the event that at the time of a participant’s retirement, the participant’s salary level exceeds the qualified Pension Plan annual compensation limitation ($NONQUALIFIED DEFERRED COMPENSATION FOR 2021
We have a Nonqualified Deferred Compensation Plan for a select group of management or highly compensated employees. Eligibility to participate in the plan is determined by the Compensation Committee and primarily consists of corporate officers.
A summary of the activity in the plan and the aggregate balance as of December 31, 20212023 for our Named Executive Officers is shown in the following table. Our Named Executive Officers received no withdrawals or distributions from the plan in 2021.
Name |
| Executive Contributions |
|
| Company |
|
| Aggregate Earnings in Last Fiscal |
|
| Aggregate Balance |
| ||||
Linden R. Evans |
| $ | — |
|
| $ | 476,817 |
|
| $ | 926,737 |
|
| $ | 6,436,107 |
|
Kimberly F. Nooney |
| $ | — |
|
| $ | 76,231 |
|
| $ | 91,506 |
|
| $ | 559,709 |
|
Brian G. Iverson |
| $ | — |
|
| $ | 90,220 |
|
| $ | 103,392 |
|
| $ | 1,183,756 |
|
Marne M. Jones |
| $ | — |
|
| $ | 63,682 |
|
| $ | 41,561 |
|
| $ | 305,035 |
|
Erik D. Keller |
| $ | 54,877 |
|
| $ | 47,705 |
|
| $ | 35,121 |
|
| $ | 333,465 |
|
Richard W. Kinzley |
| $ | — |
|
| $ | 112,685 |
|
| $ | 233,229 |
|
| $ | 2,817,496 |
|
_______________
Name | Executive Contributions | Company Contributions in Last Fiscal Year(1) | Aggregate Earnings in Last Fiscal Year(2) | Aggregate Balance at Last Fiscal Year End(3) | ||||||||||
Linden R. Evans | $ | — | $ | 555,649 | $ | 516,169 | $ | 5,605,245 | ||||||
Richard W. Kinzley | $ | — | $ | 211,957 | $ | 287,485 | $ | 2,619,212 | ||||||
Brian G. Iverson | $ | — | $ | 107,397 | $ | 179,826 | $ | 1,154,034 | ||||||
Stuart A. Wevik | $ | — | $ | 65,044 | $ | 69,346 | $ | 957,302 | ||||||
Erik D. Keller | $ | 33,808 | $ | 39,427 | $ | 2,040 | $ | 80,011 |
Name |
| Supplemental Matching Contribution |
|
| Supplemental Retirement Contribution |
|
| Supplemental Target Contribution |
|
| Total |
| ||||
Linden R. Evans |
| $ | 70,426 |
|
| $ | 105,639 |
|
| $ | 300,752 |
|
| $ | 476,817 |
|
Kimberly F. Nooney |
| $ | 13,590 |
|
| $ | 18,121 |
|
| $ | 44,520 |
|
| $ | 76,231 |
|
Brian G. Iverson |
| $ | 16,649 |
|
| $ | 24,973 |
|
| $ | 48,598 |
|
| $ | 90,220 |
|
Marne M. Jones |
| $ | 10,168 |
|
| $ | 13,557 |
|
| $ | 39,957 |
|
| $ | 63,682 |
|
Erik D. Keller |
| $ | 6,392 |
|
| $ | 6,392 |
|
| $ | 34,921 |
|
| $ | 47,705 |
|
Richard W. Kinzley |
| $ | 10,142 |
|
| $ | 15,213 |
|
| $ | 87,330 |
|
| $ | 112,685 |
|
Name | Supplemental Matching Contribution | Supplemental Retirement Contribution | Supplemental Target Contribution | Total Company Contributions | ||||||||||
Linden R. Evans | $ | 87,821 | $ | 117,093 | $ | 350,735 | $ | 555,649 | ||||||
Richard W. Kinzley | $ | 30,706 | $ | 40,941 | $ | 140,310 | $ | 211,957 | ||||||
Brian G. Iverson | $ | 22,963 | $ | 30,617 | $ | 53,817 | $ | 107,397 | ||||||
Stuart A. Wevik | $ | 17,933 | $ | — | $ | 47,111 | $ | 65,044 | ||||||
Erik D. Keller | $ | 5,409 | $ | 3,606 | $ | 30,412 | $ | 39,427 |
Eligible employees may elect to defer up to 50 percent of their base salary and up to 100 percent of their Short-Term Incentive Plan award, and up to 100 percent of the cash portion of their Performance Share Plan award. In addition, the Nonqualified Deferred Compensation Plan was amended to provide certain officers whose Pension Plan benefit and Nonqualified Pension PlansPlan benefits were frozen with non-elective supplemental matching contributions equal to 6 percent of eligible compensation in excess of the Internal Revenue Code limit plus matching contributions, if any, lost under the 401(k) Retirement Savings Plan due to nondiscrimination test results and provides non-elective supplemental age and service points-based contributions that cannot be made to the 401(k) Retirement Savings Plan due to the Internal Revenue Code limit (“Supplemental Matching and Retirement Contributions”). It also provides supplemental target contributions equal to a percentage of compensation that may differ by executive, based on the executive’s current age and length of service with us, as determined by the plans’ actuary (“Supplemental Target Contributions”). Messrs. Evans, Kinzley, Iverson, Wevik and Keller and Messes. Jones and Nooney received Supplemental Target Contributions of 20 percent, 17.5 percent, 8 percent, 8 percent, 8 percent, and 8 percent respectively.
The deferrals are deposited into hypothetical investment accounts where the participants may direct the investment of the deferrals as allowed by the plan. The investment options are the same as those offered to all employees in the 401(k) Retirement Savings Plan except for a fixed rate option, which was set at 1.565.10 percent in 2021.2023. Investment earnings are
43
credited to the participants’ accounts. Upon retirement, we will distribute the account balance to the participant according to the participant's distribution election. The participants may elect either a lump sum payment or annual or monthly installments over a period of years designated by the participant, but not to exceed 10 years. As of January 1, 2022,2024, Messrs. Evans Kinzley,and Iverson and WevikMesses. Jones and Nooney are 100 percent vested in the plan.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The following table describes the potential payments and benefits under our compensation and benefit plans and arrangements to which our Named Executive Officers would be entitled upon termination of employment. Except for (i) certain terminations following a change in control (“CIC”), as described below, (ii) pro-rata payout of incentive compensation and the acceleration of vesting of equity awards upon retirement, death or disability, and (iii) certain pension and nonqualified deferred compensation arrangements described under Pension Benefits for 20212023 and Nonqualified Deferred Compensation for 20212023 above, there are no agreements, arrangements or plans that entitle the Named Executive Officers to severance, perquisites, or other enhanced benefits upon termination of their employment. Any agreements to provide other payments or benefits to a terminating executive officer would be in the discretion of the Compensation Committee.
The amounts shown below assume that such termination was effective as of December 31, 2021,2023, and thus includes estimates of the amounts that would be paid out to our Named Executive Officers upon their termination. The table does not include amounts such as base salary, short-term incentives and stock awards that the Named Executive Officers earned due to employment through December 31, 20212023 and distributions of vested benefits such as those described under Pension Benefits for 20212023 and Nonqualified Deferred Compensation for 2021.2023. The table also does not include a value for outplacement services because this would be a de minimis amount. The actual amounts to be paid can only be determined at the time of such Named Executive Officer’s separation from us.
| Cash |
|
| Incremental |
|
| Continuation |
|
| Acceleration |
|
| Total Benefits |
| ||||||
Linden R. Evans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Retirement |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 226,165 |
|
| $ | 226,165 |
|
Death or disability |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 1,658,322 |
|
| $ | 1,658,322 |
|
Involuntary termination |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
CIC (1) |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Involuntary or good reason termination after CIC(2) |
| $ | 5,342,131 |
|
| $ | 1,890,000 |
|
| $ | 81,600 |
|
| $ | 1,866,301 |
|
| $ | 9,180,032 |
|
Kimberly F. Nooney |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Retirement |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 41,181 |
|
| $ | 41,181 |
|
Death or disability |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 265,344 |
|
| $ | 265,344 |
|
Involuntary termination |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
CIC (1) |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Involuntary or good reason termination after CIC(2) |
| $ | 1,373,334 |
|
| $ | 309,760 |
|
| $ | 76,800 |
|
| $ | 293,848 |
|
| $ | 2,053,742 |
|
Brian G. Iverson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Retirement |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 53,324 |
|
| $ | 53,324 |
|
Death or disability |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 392,562 |
|
| $ | 392,562 |
|
Involuntary termination |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
CIC (1) |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Involuntary or good reason termination after CIC(2) |
| $ | 1,462,568 |
|
| $ | 338,606 |
|
| $ | 35,800 |
|
| $ | 444,744 |
|
| $ | 2,281,718 |
|
Marne M. Jones |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Retirement |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 22,207 |
|
| $ | 22,207 |
|
Death or disability |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 159,240 |
|
| $ | 159,240 |
|
Involuntary termination |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
CIC (1) |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Involuntary or good reason termination after CIC(2) |
| $ | 1,172,766 |
|
| $ | 286,440 |
|
| $ | 81,100 |
|
| $ | 181,019 |
|
| $ | 1,721,325 |
|
Erik D. Keller |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Retirement |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 26,649 |
|
| $ | 26,649 |
|
Death or disability |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 197,023 |
|
| $ | 197,023 |
|
Involuntary termination |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
CIC (1) |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
Involuntary or good reason termination after CIC(2) |
| $ | 1,097,001 |
|
| $ | 263,992 |
|
| $ | 53,200 |
|
| $ | 223,158 |
|
| $ | 1,637,351 |
|
Richard W. Kinzley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Retirement (6) |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 8,724 |
|
| $ | 8,724 |
|
Cash Severance Payment | Incremental Retirement Benefit (present value)(2) | Continuation of Medical/ Welfare Benefits (present value)(3) | Acceleration of Equity Awards(4) | Total Benefits | ||||||||||||||||||||||||||||
Linden R. Evans | ||||||||||||||||||||||||||||||||
• | Retirement | $ | — | $ | — | $ | — | $ | 588,877 | $ | 588,877 | |||||||||||||||||||||
• | Death or disability | $ | — | $ | — | $ | — | $ | 2,593,700 | $ | 2,593,700 | |||||||||||||||||||||
• | Involuntary termination | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
• | CIC | $ | — | $ | — | $ | — | $ | 2,532,279 | $ | 2,532,279 | |||||||||||||||||||||
• | Involuntary or good reason termination after CIC(1) | $ | 4,898,619 | $ | 1,683,000 | $ | 121,100 | $ | 2,532,279 | $ | 9,234,998 | |||||||||||||||||||||
Richard W. Kinzley | ||||||||||||||||||||||||||||||||
• | Retirement | $ | — | $ | — | $ | — | $ | 171,494 | $ | 171,494 | |||||||||||||||||||||
• | Death or disability | $ | — | $ | — | $ | — | $ | 769,152 | $ | 769,152 | |||||||||||||||||||||
• | Involuntary termination | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
• | CIC | $ | — | $ | — | $ | — | $ | 750,971 | $ | 750,971 | |||||||||||||||||||||
• | Involuntary or good reason termination after CIC(1) | $ | 1,543,600 | $ | 486,234 | $ | 43,700 | $ | 750,971 | $ | 2,824,505 | |||||||||||||||||||||
Brian G. Iverson | ||||||||||||||||||||||||||||||||
• | Retirement | $ | — | $ | — | $ | — | $ | 134,585 | $ | 134,585 | |||||||||||||||||||||
• | Death or disability | $ | — | $ | — | $ | — | $ | 602,535 | $ | 602,535 | |||||||||||||||||||||
• | Involuntary termination | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
• | CIC | $ | — | $ | — | $ | — | $ | 588,164 | $ | 588,164 | |||||||||||||||||||||
• | Involuntary or good reason termination after CIC(1) | $ | 1,272,534 | $ | 281,600 | $ | 39,400 | $ | 588,164 | $ | 2,181,698 | |||||||||||||||||||||
Stuart A. Wevik | ||||||||||||||||||||||||||||||||
• | Retirement | $ | — | $ | — | $ | — | $ | 130,375 | $ | 130,375 | |||||||||||||||||||||
• | Death or disability | $ | — | $ | — | $ | — | $ | 593,385 | $ | 593,385 | |||||||||||||||||||||
• | Involuntary termination | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
• | CIC | $ | — | $ | — | $ | — | $ | 579,530 | $ | 579,530 | |||||||||||||||||||||
• | Involuntary or good reason termination after CIC(1) | $ | 1,434,800 | $ | 202,300 | $ | 40,000 | $ | 579,530 | $ | 2,256,630 | |||||||||||||||||||||
Erik D. Keller | ||||||||||||||||||||||||||||||||
• | Retirement | $ | — | $ | — | $ | — | $ | 61,187 | $ | 61,187 | |||||||||||||||||||||
• | Death or disability | $ | — | $ | — | $ | — | $ | 456,731 | $ | 456,731 | |||||||||||||||||||||
• | Involuntary termination | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
• | CIC | $ | — | $ | — | $ | — | $ | 456,867 | $ | 456,867 | |||||||||||||||||||||
• | Involuntary or good reason termination after CIC(1) | $ | 1,014,999 | $ | 217,547 | $ | 56,800 | $ | 456,867 | $ | 1,746,213 |
44
In the event of a change in control without an involuntary or good reason termination after a change in control, the acceleration of equity awards only occurs if the awards are not assumed or replaced by the successor entity.
In the event of a change in control or an involuntary or good reason termination after a change in control, the acceleration of equity awards represents the acceleration of unvested restricted stock and the payout of the pro-rata share of the performance share units calculated as if the performance period ended on December 31, 20212023 for the January 1, 20202022 to December 31, 2022,2024, and January 1, 20212023 to December 31, 20232025 performance periods.
The valuation of the restricted stock and performance share units was based upon the closing price of our common stock on December 31, 2021, and the valuation2023.
Payments Made Upon Termination.
Regardless of the manner in which a Named Executive Officer’s employment terminates,Payments Made Upon Retirement.
In the event of retirement of a Named Executive Officer, in addition to the items identified above,Payments Made Upon Death or Disability.
In the event of death or disability of a Named Executive Officer, in addition to the items identified above for payments made upon termination,Payments Made Upon a Change in Control.
Our Named Executive Officers have change in control agreements that terminate November 15,A change in control is defined in the agreements as:
- | a merger, consolidation, or reorganization; |
- | liquidation or dissolution; or |
- | an agreement for sale or other disposition of all or substantially all of our assets, with exceptions for transactions which do not involve an effective change in control of voting securities or Board membership, and transfers to subsidiaries or sale of subsidiaries; and |
45
In the change in control agreements, a good reason for termination that triggers payment of benefits includes:
Upon a change in control, an employment contract with Mr. Evans will become effective for a three-year period and for a two-year period for the other Named Executive Officers. During this time, the executive will receive annual compensation at least equal to the highest rate in effect at any time during the one-year period preceding the change in control and will also receive employment welfare benefits, pension benefits and supplemental retirement benefits on a basis no less favorable than those received prior to the change in control. Annual compensation is defined to include amounts which are includable in the gross income of the executive for federal income tax purposes, including base salary, targeted short-term incentive, targeted long-term incentive grants and awards, and matching contributions or other benefits payable under the 401(k) Retirement Savings Plan, but exclude restricted stock awards, performance units or stock options that become vested or exercisable pursuant to a change in control.
If a Named Executive Officer’s employment is terminated prior to the end of the covered time by us for cause or disability, by reason of the Named Executive Officer’s death, or by the Named Executive Officer without good reason, the Named Executive Officer will receive all amounts of compensation earned or accrued through the termination date. If the Named Executive Officer’s employment is terminated because of death or disability, the Named Executive Officer or histheir beneficiaries will also receive a pro rata bonus equal to 100 percent of the target incentive for the portion of the year served.
If Mr. Evans’ employment is terminated during the employment term (other than by reason of death) (i) by us other than for cause or disability, or (ii) by Mr. Evans for a good reason, then Mr. Evans is entitled to the following benefits:
If any other NEO’s employment is terminated during the employment term (other than by death) (i) by us other than for cause or disability, or (ii) by the NEO for a good reason, then the NEO is entitled to the following benefits:
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The change in control agreements do not contain a benefit to cover any excise tax imposed by Section 4999 of the Internal Revenue Code of 1986.
PAY RATIO FOR 2021
We are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Evans, our Chief Executive Officer, in 2021.
Based on the information below for the fiscal year 20212023 and calculated in a manner consistent with Item 402(u) of Regulation S-K, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 42:54:1.
Name |
| Year |
| Salary |
|
| Stock |
|
| Non-Equity |
|
| Change in |
|
| All Other |
|
| Total |
| ||||||
Linden R. Evans |
| 2023 |
| $ | 893,333 |
|
| $ | 2,729,666 |
|
| $ | 1,372,785 |
|
| $ | 35,493 |
|
| $ | 607,725 |
|
| $ | 5,639,002 |
|
Median Employee (1) |
| 2023 |
| $ | 91,667 |
|
| $ | — |
|
| $ | 6,453 |
|
| $ | — |
|
| $ | 5,891 |
|
| $ | 104,011 |
|
Name | Year | Salary | Stock Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value(2) | All Other Compensation(3) | Total | ||||||||||||||||
Linden R. Evans | 2021 | $ | 819,167 | $ | 2,238,529 | $ | 708,252 | $ | — | $ | 674,960 | $ | 4,440,908 | ||||||||||
Median Employee (1) | 2021 | $ | 93,242 | $ | — | $ | 2,619 | $ | — | $ | 14,079 | $ | 109,940 |
PAY VERSUS PERFORMANCE
In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosures regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
|
|
|
|
|
|
|
| Value of initial Fixed $100 Investment Based on: |
|
|
| Company-Selected Performance Measure |
|
| |||||||||||
Summary Compensation Table Total for Linden R. Evans (1) |
| Compensation Actually Paid to Linden R. Evans (1) (2) (3) |
| Average Summary Compensation Table Total for Non-PEO NEOs (1) |
| Average Compensation Actually Paid to Non-PEO NEOs (1) (2) (3) |
| Total Shareholder Return |
| Peer Group Total Shareholder Return (4) |
| Net income (GAAP), in millions |
| EPS from ongoing operations, as adjusted (non-GAAP) |
| (5) | |||||||||
2023 | $ | 5,639,002 |
| $ | 1,951,347 |
| $ | 1,186,100 |
| $ | 631,015 |
| $ | 79.38 |
| $ | 91.30 |
| $ | 276.0 |
| $ | 3.93 |
|
|
2022 | $ | 4,486,548 |
| $ | 4,506,289 |
| $ | 1,208,492 |
| $ | 1,224,584 |
| $ | 99.15 |
| $ | 101.15 |
| $ | 270.8 |
| $ | 3.97 |
|
|
2021 | $ | 4,440,908 |
| $ | 5,151,457 |
| $ | 1,318,764 |
| $ | 1,453,664 |
| $ | 96.19 |
| $ | 117.12 |
| $ | 251.3 |
| $ | 3.74 |
|
|
2020 | $ | 4,221,114 |
| $ | 3,055,790 |
| $ | 1,565,573 |
| $ | 1,003,991 |
| $ | 80.92 |
| $ | 98.84 |
| $ | 242.8 |
| $ | 3.73 |
|
|
______________
2020 | 2021 | 2022 | 2023 |
Richard W. Kinzley | Richard W. Kinzley | Richard W. Kinzley | Kimberly F. Nooney |
Brian G. Iverson | Brian G. Iverson | Brian G. Iverson | Brian G. Iverson |
Stuart A. Wevik | Stuart A. Wevik | Erik D. Keller | Marne M. Jones |
Scott A. Buchholz | Erik D. Keller | Jennifer C. Landis | Erik D. Keller |
|
|
| Richard W. Kinzley |
47
Year |
| Summary Compensation Table Total for Linden R. Evans |
|
| Exclusion of Change in Pension Value for Linden R. Evans |
|
| Exclusion of Stock Awards for Linden R. Evans |
|
| Inclusion of Pension Service Cost for Linden R. Evans |
|
| Inclusion of Equity Values for Linden R. Evans |
|
| Compensation Actually Paid to Linden R. Evans |
| ||||||
2023 |
| $ | 5,639,002 |
|
| $ | (35,493 | ) |
| $ | (2,729,666 | ) |
| $ | - |
|
| $ | (922,496 | ) |
| $ | 1,951,347 |
|
Year |
| Average Summary Compensation Table Total for Non-PEO NEOs |
|
| Average Exclusion of Change in Pension Value for Non-PEO NEOs |
|
| Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs |
|
| Average Inclusion of Pension Service Cost for Non-PEO NEOs |
|
| Average Inclusion of Equity Values for Non-PEO NEOs |
|
| Average Compensation Actually Paid to Non-PEO NEOs |
| ||||||
2023 |
| $ | 1,186,100 |
|
| $ | (5,828 | ) |
| $ | (353,835 | ) |
| $ | - |
|
| $ | (195,422 | ) |
| $ | 631,015 |
|
The amounts in the Inclusion of exercise ofEquity Values in the SAR overtables above are derived from the exercise price. The Committee may grant SARs with such terms and conditions as the Committee may determine at the time of grant and asamounts set forth in the award agreement. SARs granted underfollowing tables:
Year |
| Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Linden R. Evans |
|
| Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Linden R. Evans |
|
| Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Linden R. Evans |
|
| Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Linden R. Evans |
|
| Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Linden R. Evans |
|
| Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for Linden R. Evans |
|
| Total - Inclusion of Equity Values for Linden R. Evans |
| |||||||
2023 |
| $ | 1,578,054 |
|
| $ | (2,654,316 | ) |
| $ | - |
|
| $ | 153,766 |
|
| $ | - |
|
| $ | - |
|
| $ | (922,496 | ) |
Year |
| Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs |
|
| Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs |
|
| Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs |
|
| Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs |
|
| Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non-PEO NEOs |
|
| Average Value of Dividends or Other Earnings Paid on Stock or Option Awards Not Otherwise Included for Non-PEO NEOs |
|
| Total - Average Inclusion of Equity Values for Non-PEO NEOs |
| |||||||
2023 |
| $ | 204,554 |
|
| $ | (350,241 | ) |
| $ | - |
|
| $ | 12,605 |
|
| $ | (62,340 | ) |
| $ | - |
|
| $ | (195,422 | ) |
Relationship between Pay and Performance
The charts shown below present a graphical comparison of grantcompensation actually paid to the PEO and the term shall not be longer than ten years, except in limited circumstances. The grant price of tandem SARs shall equalaverage compensation actually paid to the option price of the related option. SARs issued under the Plan may not be repriced, replaced, or regranted through cancellation without shareholder approval (except in connection with a corporate event or transaction that changes the Company’s capitalization, such as a stock dividend or a stock split).
48
49
Financial Performance units and restricted stock unit awards generally result in income recognition by a participant at the time settlement of such an award is made in an amount equal to the amount paid in cash or the then-current fair market value of the shares received, as applicable. Stock appreciation right awards result in income recognition by a participant at the time such an award is exercised in an amount equal to the amount paid in cash or the then-current fair market value of the shares received by the participant, as applicable. For each of these types of awards, the Company will generally have a corresponding deduction at the time the participant recognizes ordinary income.
The following table includes information as of December 31, 2021 with respectpresents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our equity compensation plans. These plans include the 2005 Omnibus Incentive PlanPEO and 2015 Omnibus Incentive Plan.
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||||||||||||
(a) | (b) | (c) | |||||||||||||||||||||
Equity compensation plans approved by security holders | 194,591 | (1) | $ | — | (1) | 416,325 | (2) | ||||||||||||||||
Equity compensation plans not approved by security holders | — | $ | — | — | |||||||||||||||||||
Total | 194,591 | $ | — | 416,325 |
Most Important Performance Measures |
EPS from ongoing operations, as adjusted (non-GAAP) |
Net income |
Total Shareholder Return |
50
TRANSACTION OF OTHER BUSINESS
Our Board of Directors does not intend to present any business for action by our shareholders at the meeting except the matters referred to in this proxy statement. If any other matters should be properly presented at the meeting, it is the intention of the persons named in the accompanying form of proxy to vote thereon in accordance with the recommendations of our Board of Directors.
Shareholder proposals intended to be presented at our 20232025 annual meeting of shareholders and considered for inclusion in our proxy materials must be received by our Corporate Secretary in writing at our executive offices at 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, South Dakota 57709, on or prior to November 17, 2022.15, 2024. Any proposal submitted must be in compliance with Rule 14a-8 of Regulation 14A of the Securities and Exchange Commission.
Additionally, a shareholder may submit a proposal or director nominee for consideration at our 20232025 annual meeting of shareholders, but not for inclusion of the proposal or director nominee in our proxy materials, if the shareholder gives timely written notice of such proposal in accordance with Article I, Section 9 of our Bylaws. In general, Article I, Section 9 provides that, to be timely, a shareholder’s notice must be delivered to our Corporate Secretary in writing not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting of shareholders.
Our 20232025 annual meeting is scheduled for April 25, 2023.23, 2025. Ninety days prior to the first anniversary of this date will be January 26, 2023,23, 2025, and 120 days prior to the first anniversary of this date will be December 27, 2022.24, 2024. For business to be properly requested by the shareholder to be brought before the 20232025 annual meeting of shareholders, the shareholder must comply with all of the requirements of Article I, Section 9 of our Bylaws, not just the timeliness requirements set forth above. In addition to satisfying the foregoing requirements, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Board's nominees must provide notice that sets forth the information required by Rule 14a-19 under the exchange Act no later than February 24, 2025.
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In accordance with a notice sent to eligible shareholders who share a single address, we are sending only one annual report and proxy statement to that address unless we receive instructions to the contrary from any shareholder at that address. This practice, known as “householding,” is designed to reduce our printing and postage costs. However, if a shareholder of record residing at such an address wishes to receive a separate annual report or proxy statement in the future, he or she may contact Shareholder Relations at the below address.
Shareholder Relations
Black Hills Corporation
7001 Mount Rushmore Road
P.O. Box 1400
Rapid City, SD 57709
(605) 721-1700
Eligible shareholders of record receiving multiple copies of our annual report and proxy statement can request householding by contacting us in the same manner. Shareholders who own shares through a bank, broker or other nominee can request householding by contacting the nominee.
We hereby undertake to deliver promptly, upon written or oral request, a separate copy of the annual report to shareholders, or proxy statement, as applicable, to our shareholders at a shared address to which a single copy of the document was delivered.
Please vote your shares by telephone, by the Internet or by promptly returning the accompanying form of proxy, whether or not you expect to be present at the annual meeting.
ANNUAL REPORT ON FORM 10-K
A copy of our Annual Report on Form 10-K (excluding exhibits) for the year ended December 31, 2021,2023, which is required to be filed with the Securities and Exchange Commission, will be made available to shareholders to whom this proxy statement is mailed, without charge, upon written or oral request to Shareholder Relations, Black Hills Corporation, 7001 Mount Rushmore Road, P.O. Box 1400, Rapid City, SD 57709, Telephone Number: (605) 721-1700. Our Annual Report on Form 10-K also may be accessed through our website at
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE SHAREHOLDER MEETING TO BE HELD ON APRIL 26, 2022
Shareholders may view this proxy statement, our form of proxy and our 20212023 Annual Report to Shareholders over the Internet by accessing our website at
By | Order of the Board, | |
/s/ AMY K. KOENIG | |||||||||
Amy K. Koenig | |||||||||
Vice President - Governance, Corporate Secretary and Deputy General Counsel | |||||||||
Dated: March 15, 2024 | |||||||||
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BLACK HILLS CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
Tuesday, April 26, 2022
9:30 a.m., Local Time
Horizon Point
Company’s Corporate Headquarters
7001 Mount Rushmore Road
Rapid City, SD 57702
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and our 20222023 Annual Report to Shareholders are available at
____________________________________________________________________________________________________
Black Hills Corporation | ||||||||
7001 Mount Rushmore Road, Rapid City, SD 57702 | PROXY |
This proxy is solicited by the Board of Directors for use at the Annual Meeting on April 26, 2022.
The undersigned hereby appoints Linden R. Evans, Brian G. Iverson and Richard W. Kinzley,Kimberly F. Nooney, and each of them, with full power of substitution, to vote all shares of the undersigned at the Annual Meeting of Shareholders to be held at 9:30 a.m., local time, April 26, 2022,23, 2024, at Horizon Point, the Company’s corporate headquarters, 7001 Mount Rushmore Road, Rapid City, SD 57702, and at any adjournment thereof, upon all subjects that may properly come before the meeting, including the matters described in the Proxy Statement furnished herewith.
Your vote is important! Ensure that your shares are represented at the meeting.
Either (1) submit your proxy by touchtone telephone, (2) submit your proxy by Internet, or (3) mark, date, sign, and return this proxy in the envelope provided.
If no directions are given, properly executed proxies will be voted in accordance with theSee reverse for voting instructions.
COMPANY # |
VOTE BY INTERNET, TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
Your phone or Internet vote authorizes the named Proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
VOTE BY INTERNET/MOBILE —
www.proxypush.com/bkhUse the Internet to vote your proxy until 11:59 p.m. (CT) on April 25, 2022.
VOTE BY PHONE— 1-866-883-3382
Use a touch-tone telephone to vote your proxy until 11:59 p.m. (CT) on April 25, 2022.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope provided.
If you vote your proxy by internet or by phone, you do NOT need to mail back your Proxy Card.
The Board of Directors Recommends a Vote FOR the Nominees in Item 1 and FOR Items 2 3 and 4.
1. | Election of Directors: | 01 | Vote FOR ¨ | Vote WITHHELD ¨ | ||||||||||||||||||||||||||||
02 | all nominees | from all nominees | ||||||||||||||||||||||||||||||
03 | (except as marked) |
04 Steven R. Mills |
(Instructions: To cumulate votes for any indicated nominee for election to the | ||
nominee's class, write the number(s) of the nominee(s) and the number of shares | ||
for such nominee in the box provided to the right.) |
For | Against | Abstain | ||||||||||||||||||||||||||||||||||||
2. | ||||||||||||||||||||||||||||||||||||||
Ratification of the appointment of Deloitte & Touche LLP to serve as Black Hills Corporation’s independent registered public accounting firm for | ||||||||||||||||||||||||||||||||||||||
For | Against | Abstain | ||||||||||||||||||||||||||||||||||||
3. | ||||||||||||||||||||||||||||||||||||||
Advisory resolution to approve executive compensation. |
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED
FOR THE NOMINEES IN ITEM 1 AND FOR ITEMS 2Address change? Mark Box | ¨ | ||||||||||
Indicate changes below: | Date |
Please sign exactly as your name(s) appear on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.