UNION PACIFIC CORPORATION
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| | Union Pacific Corporation 1400 Douglas Street, 19th Floor Omaha, NE 68179 |
(1) | To elect the ten directors named in the Proxy Statement, each to serve for a term of one year or until his or her successor is elected and qualified; |
(2) | To ratify the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of the Company for |
(3) | To approve, by non-binding vote, the compensation of the Company’s Named Executive Officers; |
(4) | To |
(5) |
To consider and vote upon three shareholder proposals if properly presented at the Annual Meeting; and |
(6) | To transact such other businesses as may properly come before the Annual Meeting. |
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RECORD | ||||||
OWNERS | | | BENEFICIAL HOLDERS | |||
| | Vote via the Internet | ||||
| | Follow the instructions set forth on the Notice of Internet Availability of Proxy Materials or the voting instruction form provided by your broker with these proxy materials. | ||||
| | Vote by telephone Call toll free 1-800-690-6903 within the USA, US territories & Canada | | |||
| | Vote by Mail Complete, sign, date and return your proxy card in the envelope provided | | |||
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Voting Matters and Board Recommendations | ||||
Matter | | | Our Board’s Recommendations | |
Proposal 1 Election of ten (10) Director Nominees (page 17) | | | FOR Each Director Nominee | |
Proposal 2 Ratification of Appointment of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for | | |||
| FOR | |||
Proposal 3 Advisory Vote to Approve Executive Compensation (page | ||||
| | FOR | ||
Proposal 4 | | | 1 YEAR | |
Proposal 5 Shareholder Proposal | | | AGAINST | |
Proposal 6 Shareholder Proposal Requesting | | | AGAINST |
Proposal 7 Shareholder Proposal Requesting A Paid Sick Leave Policy (page 95) | | AGAINST |
▪ | For the full year |
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▪ | Our operating ratio |
▪ | Based on our preliminary year-end assessment, our reportable personal injury rate was 0.80 per 200,000 employee-hours compared to 0.98 for full year 2021 |
▪ | Freight car velocity, average train speed, and |
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| BUILDING RESPONSIBLE FOUNDATIONS Union Pacific understands the importance of health, safety and well-being, business ethics and conduct, cybersecurity and risk management and internal control as described in detail in our 2022 Building America Report, which will be available on our website up.com under the Investor drop-down menu, under “Sustainability.” | ||
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| | INVESTING IN OUR WORKFORCE At Union Pacific, we are committed to | |
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| | DRIVING SUSTAINABLE SOLUTIONS Rail remains the most fuel-efficient way to move freight overland, cutting greenhouse gas (GHG) emissions by up to 75% compared to commercial trucks. Our goal is to capitalize on the many advantages that rail transportation can offer and offer customers a more environmentally-friendly form of freight transportation. | |
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| | CHAMPIONING ENVIRONMENTAL STEWARDSHIP Our commitment to mitigating the impacts of climate change is underscored by our Science Based Targets Initiative-validated target to reduce absolute Scope 1 and 2 GHG emissions and GHG emissions on a well-to-wheel basis from locomotive operations 26% by 2030 from a 2018 base year. In 2022 we joined the Business Ambition for 1.5°C, an alliance of more than 3,000 companies pledged to taking bold action to limit global warming to 1.5°C. As part of that pledge, we committed to the SBTi to revalidate our short-term target in line with the 1.5°C global warming scenario and develop a long-term, science-based target to reach net-zero value chain GHG emissions by 2050. We expect to publish both our revised short-term target and our net-zero target after they are revalidated by the SBTi in 2023. See our 2022 Climate Action Plan for more information outlining the steps we are taking toward reaching these goals. | |
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| | STRENGTHENING OUR COMMUNITIES Union Pacific is dedicated to serving and investing in communities, improving the quality of life where our employees live and work. We pride ourselves on being a good corporate citizen in the communities in which we operate and a champion for diverse suppliers. |
| | Union Pacific earned a spot on America’s Most Just Companies List and was named an Industry Leader. | | | Member of Dow Jones Sustainability Indices Union Pacific was selected as a member of the | |
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Refinitiv Top 100 Company 2022 Diversity and Inclusion Index Refinitiv named Union Pacific to its top 100 Most Diverse and Inclusive Companies, ranking number #46 out of 12,000 publicly traded companies. | | | Fortune Magazine’s World’s Most Admired Companies Union Pacific was the highest ranked railroad in the Trucking, Transportation and Logistics category. | |||
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| | | Union Pacific earned a | | | For the sixth year in a row, Union Pacific was identified as a Trendsetter in the 2022 CPA-Zicklin Index compiled by the Center for Political Accountability. |
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| | Union Pacific earned top marks – and a top spot – on the Human Rights Campaign’s Best Places to | | | Newsweek’s 2023 America’s Most Responsible Companies Union Pacific ranked 9th in the Trucking, Transportation and Logistics sector. |
▪ | SBTi Target-Setting. We formally committed with the Science Based Target Initiative (SBTi) to revise our near-term emissions reduction target to support a 1.5ºC climate ambition, as well as set and validate a net-zero emissions target. |
▪ | Climate Scenario Analysis. We conducted an extensive climate scenario analysis to better understand the risks to and opportunities for our operations, infrastructure and supply chains from specific climate scenarios. The analysis is being used to evaluate and develop strategies to allow us to respond to both high- and low-carbon scenarios. |
▪ | Locomotive Modernizations. We modernized 120 and 133 older locomotives during 2021 and 2022 respectively and committed to spending more than $1 billion on modernizing an additional 600 locomotives from 2023 through 2025. These modernizations should provide approximately 350 tons of carbon reduction per locomotive per year, and the total order for 600 locomotives is expected to realize approximately 210,000 tons in annual emission reduction. |
▪ | Renewable Diesel and Biofuels. We worked with locomotive and fuel suppliers to increase our use of renewable diesel and biofuels. Our 2021 low-carbon fuel consumption rose to 3.0% of total diesel consumed, up from 2.2% in 2020. At the end of 2022, this number rose to 4.5% on the pathway to 20% by 2030. |
▪ | Battery-Electric Locomotives. We announced plans to purchase North America’s largest carrier-owned fleet of battery electric locomotives for testing in freight yard operations and are piloting this technology in its early adoption phase to better understand how we could deploy it at scale in our operations and provide feedback to manufacturers to advance battery-electric locomotive development. |
▪ | The Nature Conservancy Partnership. We announced a new partnership with The Nature Conservancy to support three separate nature-based solutions projects based in Nebraska, California and Texas. Project goals include grassland and wetland restoration, groundwater recharge, threatened species habitat conservation and community education. |
▪ | Climate Lobbying Alignment Assessment. We published a report describing if, and how, our lobbying activities align with the Paris Agreement—an international treaty with the goal of limiting global warming to well below 2º C above pre-industrial levels and pursuing efforts to limit it to 1.5º C. |
▪ | Green Financing Framework. We designed a Green Finance Framework, which will guide future green bond issuances. We successfully issued a $600 million inaugural green bond tranche during our September 9, 2022, debt issuance under this Green Financing Framework. Our Green Financing Framework is available on our website up.com under the Investor drop-down menu, under “Sustainability”. |
▪ | Board Nominees Composed of 90% Independent Directors (9 out of 10 Board Nominees) |
▪ | Board Meeting Attendance of 100% |
▪ | Commitment to Board Refreshment |
▪ | Annual Election of Directors with Majority Voting Standard |
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▪ | Average Board Tenure of |
▪ | “Proxy Access” Right |
▪ | Active Lead Independent Director |
▪ | Executive Sessions of Independent Directors at each Board and Committee Meeting |
▪ | Board Strategic Oversight and review of Enterprise Risk Management |
▪ | Four Fully Independent Board Committees |
▪ | Stringent Director and Executive Officer Stock Ownership Guidelines (7x Annual Salary for CEO and 4x Annual Salary for other Named Executive Officers) |
COMMITMENT TO ETHICAL BUSINESS CONDUCT | | | |
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Our Statement of Policy on Ethics and Business Conduct is called The How Matters. It outlines the principles of business conduct applicable to all Union Pacific employees. Ultimately the policy helps define what we expect of our team – honesty, fairness, integrity, and respect. Enabled by technology, 99% of our employees completed training on The How Matters in 2022. | |
▪ | Board of Directors – Provides oversight of sustainability strategy. |
▪ | Board Committees – The Corporate Governance, Nominating and Sustainability Committee oversees sustainability strategy development, goals, policies and performance. Other Board Committees have the sustainability oversight responsibilities as set forth in their respective Committee functions on pages 36-40. |
▪ | Chief Executive Officer – Provides executive direction on sustainability strategy. |
▪ | Management Leadership – Our Executive Vice President – Sustainability and Strategy oversees Company strategy and sustainability efforts. |
▪ | Sustainability Team – Oversees the day-to-day implementation of sustainability strategy. |
▪ | Sustainability Steering Committee – Senior leaders from Law, Finance, Marketing and Sales, Opera- tions (Mechanical & Engineering), Supply Chain, Environmental Management, Corporate Relations, Investor Relations, and Workforce Resources meet quarterly to drive decision-making, accountability and ownership of specific initiatives. |
| | ▪ Company safety, operational and financial performance | |
| | ▪ Strategic planning | |
| | ▪ Sustainability | |
| | ▪ Succession planning and governance | |
| | ▪ Human capital management, including diversity and inclusion | |
| | ▪Shareholder proposals |
▪ | In |
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▪ | Performance stock unit awards granted in |
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▪ | Under our formula-based annual incentive plan, performance for |
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Based on our three-year average return on invested capital (ROIC) of |
▪ | The compensation earned in |
• | Via the Internet — Shareholders who have received a Notice of Internet Availability of Proxy Materials by mail may submit proxies over the Internet by following the instructions on the notice. Shareholders who have received proxy materials by email may submit proxies over the Internet by following the instructions included in the email. Shareholders who have received a paper copy of a proxy card or voting instruction card by mail may submit proxies over the Internet by following the instructions on the proxy card or voting instruction card. |
• | By Telephone — Shareholders of record who live in the United States or Canada may submit proxies by telephone by calling 1-800-690-6903 and following the instructions. Shareholders of record who have received a Notice of Internet Availability of Proxy Materials by mail must have the control number that appears on their notice available when voting. Shareholders of record who have received a proxy card by mail must have the control number that appears on their proxy card available when voting. Shareholders who hold shares in street name who have received proxy materials by email must have the control number included in the email available when voting. |
• | By Mail — Shareholders who have received a paper copy of a proxy card or voting instruction card by mail may submit proxies by completing, signing and dating their proxy card or voting instruction card and mailing it in the accompanying pre-addressed envelope. |
| | INDEPENDENT | |||
Former Chief Executive Officer Sysco Corporation AGE: 67 DIRECTOR SINCE: 2018 COMMITTEES: | | | EXPERIENCE | ||
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| • CEO Experience, Risk Management Experience, International/Global Expertise, Operations Knowledge, Customer Perspective - gained while serving as • Economic/Finance Expertise - developed while serving as Sysco's Chief Financial Officer • Publicly Traded Company Experience - gained through service as CEO at Sysco and his significant experience serving on the • Investor Perspective - developed through his service as a CEO leading a public company | ||||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||||
| CURRENT • The Cigna Group (since 2018) FORMER • • | • Express Scripts Holding Company (2011 – 2018) (acquired by Cigna in 2018) |
| | INDEPENDENT | |||
Former Chairman and CEO The Kroger Co. AGE: 72 DIRECTOR SINCE: 2014 COMMITTEES: | | | EXPERIENCE | ||
| • Chairman of the Board (2004 – 2014), Chief Executive Officer (2003 – 2013), President (1995 – 2003), and Executive Vice President (1990 – 1995); The Kroger Co. • President (1986 – 1995), joined in 1976 and advanced through various management positions; Dillon Companies, Inc. (a subsidiary of The Kroger Co.) | ||||
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| • Risk Management Experience, Operations Knowledge, Customer Perspective, Economic/Finance Expertise - developed during his roles at Kroger and • Publicly Traded Company Experience - gained through his service as CEO of | • Legal Expertise and the Investor Perspective - gained through his legal education (J.D., Southern Methodist University) and service as a CEO leading a public company | |||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||||
| CURRENT |
• 3M Company (since 2015) |
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Former Executive Vice President and General Counsel Amcor plc AGE: 66 DIRECTOR SINCE: 2021 COMMITTEES: | | | EXPERIENCE | ||
| • Executive Vice President and General Counsel, Amcor plc, a global packaging company (2019 – 2021) • Senior Vice President, Chief Legal Officer and Secretary (2017 – 2019 when it was acquired by Amcor), Vice President, General Counsel and Secretary (2010 – 2016); Bemis Company, Inc., a global packaging company • Senior Vice President, Chief Administrative Officer (2007 – 2010), Vice President, General Counsel and Secretary (2004 – 2007), Hill-Rom Holdings, Inc, a global medical device company • Began her career as an attorney in private practice | ||||
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| • Risk Management Experience – gained during her legal roles and involvement in enterprise risk management at Amcor, Bemis and Hill-Rom • Customer Perspective and the | ||||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||||
| CURRENT • |
2020) | |||||
FORMER • AK Steel (2014 – 2020) |
TERESA M. FINLEY | | | INDEPENDENT |
Former Chief Marketing and Business Services Officer United Parcel Service, Inc. AGE: 61 DIRECTOR SINCE: 2022 | | | EXPERIENCE |
| • Senior Advisor; Boston Consulting Group, a global management consulting firm (2019 – 2021) • Chief Marketing and Business Services Officer (2015 – 2017), Treasurer & Vice President of Finance (2014 – 2014), Corporate Controller (2010 – 2013), Chief Financial Officer of International Package & Global Forwarding & Logistics (2007 – 2010), Vice President, Investor Relations (2003 – 2007), joined in 1984; United Parcel Service, Inc., a global package delivery company and leading provider of specialized transportation logistics services | ||
| SKILLS & QUALIFICATIONS | ||
| • Economic/Finance Expertise, Operations Knowledge, International/Global Expertise, Customer Perspective, Investor Perspective – developed during her time at UPS where she gained a deep understanding of how finance, investor relations, marketing, technology, and pricing operates in a complex organization that is at the center of global supply chains and logistics operations • Risk Management Experience – gained in her roles at UPS and Boston Consulting • Publicly Traded Company Experience – gained through her public board experience | ||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||
| CURRENT • TriMas Corporation (since 2020) |
LANCE M. FRITZ | | | MANAGEMENT |
Chairman, President and Chief Executive Officer Union Pacific Corporation and Union Pacific Railroad Company AGE: 60 DIRECTOR SINCE: 2015 | | | EXPERIENCE |
| • Chairman, President and Chief Executive Officer; Union Pacific Corporation (2015 – present) • Chairman, President and Chief Executive Officer (2015 – present), President and Chief Operating Officer (2014 – 2015), Executive Vice President-Operations (2010 – 2014), Vice President-Labor Relations (2008 – 2010), held several other executive positions in the operating, marketing and sales departments, joined in 2000; Union Pacific Railroad Company | ||
| SKILLS & QUALIFICATIONS | ||
| • CEO Experience, Operations Knowledge, Government and Regulatory Expertise, Customer Perspective – developed during his lengthy tenure with the Company and the Railroad • Risk Management Experience – developed through his involvement in the Company and the Railroad’ s enterprise risk management • Publicly Traded Company Experience – gained through his service as CEO as well as his public board experience • Investor Perspective – developed through service as a CEO leading a public company | ||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||
| CURRENT • Parker Hannifin Corporation (since 2021) |
DEBORAH C. HOPKINS | | | INDEPENDENT |
Former Chief Executive Officer Citi Ventures and Former Chief Innovation Officer Citi AGE: 68 DIRECTOR SINCE: 2017 COMMITTEES: | | | EXPERIENCE |
| • Chief Executive Officer, Citi Ventures (2008 – 2016), Chief Innovation Officer (2008 – 2016), Chief Operations and Technology Officer (2005 – 2008), Senior Advisor to Corporate and Investment Bank and Head of Corporate Strategy (2003 – 2005); Citigroup, Inc., a global investment bank and financial services corporation • Chief Financial Officer, Lucent Technologies (2000 – 2001) • Chief Financial Officer, The Boeing Company (1998 – 2000) • Vice President of Finance, Europe (1997 – 1998), General Auditor (1995 – 1997); General Motors Company • Corporate Controller, Unisys Corporation (1982 – 1995) | ||
| SKILLS & QUALIFICATIONS | ||
| • CEO Experience - gained as CEO of Citi Ventures • Economic/Finance Expertise, Wall Street Experience, Technology/Cyber Experience, Operations Knowledge, International/Global Expertise – developed during her various leadership positions at multinational companies overseeing finance, technology and innovation • Publicly Traded Company Experience – gained through her extensive experience serving on the boards of other public companies, including DuPont, in addition to those listed below • Risk Management Experience and the Investor Perspective – developed through her several leadership roles at publicly traded companies | ||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||
| CURRENT • Bridge Investment Group Holdings Inc. (since 2021) • Compass Digital Acquisition Corp. (since 2021) • Marsh and McLennan Companies (since 2017) FORMER • Virtusa Corporation (2018 – 2021) • Qlik Technologies Inc. (2011 – 2016) |
JANE H. LUTE | | | INDEPENDENT | ||
Strategic Advisor SICPA, North America AGE: 66 DIRECTOR SINCE: 2016 COMMITTEES: | | | EXPERIENCE | ||
| • Strategic Advisor (2021 – present), President and Chief Executive Officer (2017 – 2021); SICPA, North America | ||||
• Special Advisor to the Secretary-General of the United Nations • Director • Deputy • Led the United Nations Department of Field Supportand held several other senior leadership roles in UN Peacekeeping and Peacebuilding (2003 – 2009) • Served as Executive Vice President and Chief Operating Officer of the United Nations Foundation and Better World Fund (2000 – 2003) • Served on the National Security Council Staff under Presidents George H.W. Bush and William Jefferson • Served in the United States Army (1978 – 1994) | |||||
| SKILLS & QUALIFICATIONS | ||||
| • Technology/Cyber Expertise – developed through her role as Chief Executive Officer of | • Publicly Traded Company Experience – gained as an experienced board director, having served on the boards of large-market capitalization companies since 2016 • Legal Expertise – gained through her legal education (J.D., Georgetown University) | |||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||||
| CURRENT • 2021) • Marsh and McLennan Companies (since 2020) |
FORMER • |
| | INDEPENDENT | LEAD DIRECTOR | |||
Chairman McCarthy Group, LLC and Co-Chairman Bridges Trust Company AGE: 71 DIRECTOR SINCE: 2008 COMMITTEES: | | | EXPERIENCE | ||
| • Chairman and Co-Founder, McCarthy Group, LLC, a private investment group (1986 – present) • Co- Chairman, Bridges Trust Company, a wealth management firm (2021 – present) | ||||
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| • Economic/Finance Expertise, Wall Steet Experience, International/Global Expertise – developed while providing strategic economy • Operations Knowledge, Customer Perspective, and | ||||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||||
| FORMER • Cabela’s Incorporated (1996 – 2017) |
JOSE H. VILLARREAL | | | INDEPENDENT | ||
Retired Advisor Akin, Gump, Strauss, Hauer & Feld LLP AGE: 69 DIRECTOR SINCE: 2009 COMMITTEES: | | | EXPERIENCE | ||
| • Served in senior roles in numerous presidential campaigns • Served as Expo | ||||
| SKILLS & QUALIFICATIONS | ||||
| • International/Global Expertise, Government and Regulatory Expertise – developed during his service in state and federal public offices, his involvement in presidential campaigns, and as a partner with Akin, Gump, Strauss Hauer & Feld • Publicly Traded Company Experience – gained through his significant service and experience on boards of other public companies, including PMI Group, Inc., First Solar, Inc. and Walmart Inc. | • Risk Management Experience – developed through strategic planning and compliance experience |
CHRISTOPHER J. WILLIAMS | | | INDEPENDENT | ||
Chairman Siebert Williams Shank & Co. AGE: 65 DIRECTOR SINCE: 2019 COMMITTEES: | | | EXPERIENCE | ||
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• Founder, Chairman and • Held positions at Jeffries and Company and Lehman Brothers | |||||
| SKILLS & QUALIFICATIONS | ||||
| • CEO Experience – developed during his role as • Publicly Traded Company Experience – gained through his | • Risk Management Experience and the Investor Perspective – developed through service as a CEO of an investment banking and financial services company | |||
| OTHER PUBLIC DIRECTORSHIPS (within the last 5 years) | ||||
| CURRENT • Ameriprise Financial (since 2016) • The Clorox Company (since 2015) FORMER • Caesars Entertainment Corporation |
(1) | the director is, or within the last three years has been, an employee of the Company or an immediate family member of the director is, or within the last three years has been, an executive officer of the Company; |
(2) | the director (a) or an immediate family member is a current partner of a firm that is the Company’s internal or external auditor; (b) is a current employee of such a firm; (c) has an immediate family member who is a current employee of such firm and personally works on the Company’s audit; or (d) or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the Company’s audit within that time; |
(3) | the director, or a member of the director’s immediate family, is, or within the last three years has been, an executive officer of another company where any of the Company’s present executives at the same time serves or served on that company’s compensation committee; |
(4) | the director, or a member of the director’s immediate family, received or has received during any 12-month period within the last three years any direct compensation from the Company in excess of $120,000, other than compensation for Board service and pension or other forms of deferred compensation for prior service with the Company, and compensation received by the director’s immediate family member for service as a non-executive employee of the Company; |
(5) | the director is a current employee of a company, including a professional services firm, that has made payments to or received payments from the Company, or during any of the last three years has made payments to or received payments from the Company, for property or services in an amount that, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of the other company’s or firm’s consolidated gross revenues; |
(6) | a member of the director’s immediate family is a current executive officer of another company, or a partner, principal or member of a professional services firm, that has made payments to or received payments from the Company, or during any of the last three fiscal years has made payments to or received payments from the Company, for property or services in an amount that, in any of the last three fiscal years, exceeded the greater of $1 million or 2% of the other company’s or firm’s consolidated gross revenues; and |
(7) | the director is an executive officer, director or trustee of a non-profit organization to which the Company or Union Pacific Foundation makes, or within the last three years has made, payments that, in any single fiscal year, exceeded the greater of $1 million or 2% of the non-profit organization’s consolidated gross revenues (amounts that the Company or Union Pacific Foundation contribute under matching gifts programs are not included in the payments calculated for purposes of this standard). |
✔ | Preside at meetings of the Board at which the Chairman and CEO are not present, including executive sessions of the independent directors; |
✔ | Approve the flow of information sent to the Board, and approve the agenda, schedule and what materials are sent for the Board meetings; |
✔ | Serve as the liaison between the independent directors and the Chairman and CEO; |
✔ | Be available for consultation and communication with major shareholders as appropriate; |
✔ | Oversee the process of evaluating and compensating the Chairman and CEO (in conjunction with the Compensation and Benefits Committee); |
✔ | Assure that a succession plan is in place for the Chairman and CEO, as well as the lead independent director; |
✔ | Authorize or recommend the retention of consultants who report directly to the full Board; and |
✔ | Assist the Board and Company officers in compliance with, and implementation of, the Company’s governance guidelines and policies. |
✔ | Calling special meetings of the full Board and meetings of independent directors; |
✔ | Guiding Board discussions and facilitating discussions between the Board and the Company’s management; and |
✔ | Such other duties as may be set forth in the Bylaws of the Company or delegated by the Board. |
✔ | Holding executive sessions of the non-management, independent directors after every Board meeting; |
✔ | Providing that only independent directors serve on key Board committees; and |
✔ | Conducting an annual performance evaluation of the Chairman and CEO by the independent directors. |
David B. Dillon Chair Other Members: William J. DeLaney Deborah C. Hopkins Jane H. Lute Christopher J. Williams Meetings in 2022: 11 FINANCIAL EXPERTS ON AUDIT COMMITTEE The Board | | | Overview | | | Committee Functions | ||||||||
| The Audit Committee assists the Board in fulfilling its function. The Audit Committee meets regularly with the independent registered public accounting firm of the Company, financial management, the internal auditors, the chief accounting, risk and compliance officer and the chief legal officer to provide oversight of the financial reporting process, internal control structure, and the Company’s compliance requirements and activities. The independent registered public accounting firm, the internal auditors, the chief accounting, risk and compliance officer and the chief legal officer have unrestricted access to the Committee and meet regularly with the Committee, without Company management representatives present, to discuss the results of their examinations, their opinions on the adequacy of internal controls and quality of financial reporting, and various legal matters. The Audit Committee has established policies and procedures for the pre-approval of all services provided by the independent registered accounting firm (as described on page The Audit Committee’s Report is included on page | | | • Appoint, evaluate and retain our independent registered public accounting firm • Maintain direct responsibility for the compensation, termination and oversight of the work of our independent registered public accounting firm and evaluate the independent registered public accounting firm’s qualifications, performance and independence • Review and discuss earnings releases, audited financial statements and unaudited quarterly financial statements, including reviewing specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented in the Company’s Form 10-K and 10-Q filings • Oversee the independent registered public accounting firm’s work related to required review or assurance, if any, presented in the Company’s Form 10-K and 10-Q filings with respect to sustainability matters • Review the Company’s policies and procedures to maintain the adequacy and effectiveness of internal controls and disclosure controls • Review the scope, resources and results of the internal audit program, including participation in the Chief Internal Auditor performance review • Oversee the Company’s enterprise risk management program as well as the annual enterprise risk assessment, including the oversight of risks related to financial statements and financial reporting processes, sustainability, climate, cybersecurity, environmental and litigation matters, safety and compliance • Oversee the administration of the Company’s Code of Ethics for the Chief Executive Officer and Senior Financial Officers and the Statement of Policy on Ethics and Business Conduct for employees | ||||||||||
• Review reporting of metrics and key performance indicators regarding the Company’s safety and climate initiatives | • Oversee the Company’s compliance program with respect to legal and regulatory requirements and developments and review annually the effectiveness of the Company’s compliance program with the chief risk and compliance officer |
Deborah C. Hopkins Chair Other Members: Teresa M. Finley Michael R. McCarthy Christopher J. Williams Meetings in | | | Overview | | | Committee Functions | ||||||||
| The Finance Committee is responsible for assisting the Board with its review and oversight of the Company’s financial position, plans and programs and dividend policy and actions. The Finance Committee also assists the Board by reviewing strategic options and opportunities for the Company, including acquisitions and divestitures. | | | • Review, monitor and oversee Company’s financial policies and financial plans, the Company’s capital structure, balance sheet, credit ratings, short-and long-term financing plans and programs, derivatives policy, share repurchases and dividend policy • Review the Company’s liquidity position, including the Company’s credit facilities • investor relations programs, including the Company’s interaction with the investor community • Company’s internal investment committee that investment management of assets held by the Company’s pension, thrift and other funded employee benefit programs | • Review and update the Board with respect to the Company’s issuance of debt or other finance transactions that include sustainability related financing transactions • Evaluate the implications of the Company’s enterprise risk management framework and risk assessment related to the duties and responsibilities outlined above, including in the context of the Company’s business strategy, regulatory, competitive, macroeconomic environments, as well as sustainability and climate initiatives |
William J. DeLaney Chair Other Members: David B. Dillon Sheri H. Edison Teresa M. Finley Jose H. Villarreal Meetings in COMPENSATION AND BENEFITS INTERLOCKS AND INSIDER PARTICIPATION There were no Compensation and Benefits Committee interlocks or insider participation in | | | Overview | | | Committee Functions | ||||||||
| The Compensation and Benefits Committee equity-based plans, and (iii) assist the Board in fulfilling its responsibilities regarding the design, establishment, and termination of employee benefit plans and practices subject to the Employee Retirement Income Security Act of 1974, as amended. The Committee also will perform such duties and responsibilities as may be assigned to it under the terms of the Company’s general compensation and employee benefit plans. The Compensation and Benefits Committee annually reviews and approves corporate goals and objectives relevant to the compensation of the Chairman and CEO and certain other elected executives. The details of the processes and procedures involved are described in the Compensation Discussion and Analysis (CD&A). The independent members of the full Board The Compensation and Benefits Committee Report is included on page | | | • and, independent directors, determine and approve the CEO’s compensation • Review and approve, subject to ratification by the Board, the compensation of the Company’s elected officers and other executives determined by the Committee or the Board • Oversee and approve, subject to ratification by the Board, the determination of annual incentive compensation under the executive incentive plan • Review and discuss with management the CD&A and recommend to the Board its inclusion in our Proxy Statement and Annual Report on Form 10-K • Oversee the assessment of the risks related to the Company’s compensation policies and programs and annually review the results of this assessment • Oversee the administration of the Company’s general compensation plans and employee benefit plans and including pension and thrift plans • Oversee the Company’s human capital management strategies and policies, including diversity, equity and inclusion programs; initiatives, recruitment, development and retention of Company personnel; employee effectiveness and engagement; and workplace environment | • Oversee the Company’s talent management and development process |
Michael R. McCarthy Chair Other Members: Edison Jane H. Lute Jose H. Villarreal Meetings in | | | Overview | | | Committee Functions | ||||||||
| The Corporate Governance, Nominating and | | | • Develop and recommend to the Board criteria for identifying and evaluating candidates for the Board • Identify and recruit qualified director candidates for the Board • Review annually the contributions and independence of existing directors and recommend director nominee candidates to the Board for election or re-election at the Annual Meeting of Shareholders • Review periodically the composition and activities of the Board, including, but not limited to, committee structure and responsibilities, committee memberships, Board size, the director retirement policy and director compensation and stock ownership requirements • Review the Board’s leadership structure annually, recommending changes to the Board when appropriate, and oversee the election of the lead independent director • Oversee the Corporate Governance Guidelines and Policies and the Company’s Code of Business Conduct and Ethics for members of the Board of Directors • oversee procedures for administering and promoting compliance with the policy • Reviews annually the Company’s political contributions and lobbying activities and the Company’s political contributions policy and any applicable Company guidelines • Oversees sustainability strategy development, goals, and policies • Oversees external reporting and stakeholders on sustainability matters |
Element | | | 2022 | | | 2023 |
Annual Retainer | | | $280,000 ($160,000 annual mandatory deferral into a Stock Unit Account, remainder ($120,000) may be deferred at the director’s election or taken in cash) | | | $300,000 ($175,000 annual mandatory deferral into a Stock Unit Account, remainder ($125,000) may be deferred at the director’s election or taken in cash) |
Annual Mandatory Deferral | | | $160,000 of the Annual Retainer deferred in the Stock Unit Account described below | | | $175,000 of the Annual Retainer deferred in the Stock Unit Account described below |
Committee Chair Retainer | | | $20,000 for each standing Committee chair | | | Audit: $25,000 Others: $20,000 (no change) |
Audit Committee Member Retainer | | | $10,000 | | | $10,000 (no change) |
Lead Director Retainer | | | $30,000 | | | $45,000 |
NAME | | | FEES EARNED OR PAID IN CASH | | | STOCK AWARDS (a) | | | OPTION AWARDS | | | ALL OTHER COMPENSATION (b) | | | TOTAL COMPENSATION | | | FEES EARNED OR PAID IN CASH | | | STOCK AWARDS (a) | | | OPTION AWARDS | | | ALL OTHER COMPENSATION (b) | | | TOTAL COMPENSATION |
Andrew H. Card, Jr. | | | $273,958 | | | $0 | | | $0 | | | $28,536 | | | $302,494 | | | 116,667 | | | 0 | | | 0 | | | 1,860 | | | 118,527 |
Erroll B. Davis, Jr. (c) | | | 122,084 | | | 0 | | | 0 | | | 29,744 | | | 151,828 | |||||||||||||||
William J. DeLaney | | | 290,833 | | | 0 | | | 0 | | | 23,292 | | | 314,125 | | | 310,000 | | | 0 | | | 0 | | | 125,217 | | | 435,217 |
David B. Dillon | | | 297,500 | | | 0 | | | 0 | | | 13,452 | | | 310,952 | | | 310,000 | | | 0 | | | 0 | | | 15,057 | | | 325,057 |
Sheri H. Edison | | | 280,000 | | | 0 | | | 0 | | | 2,130 | | | 282,130 | |||||||||||||||
Teresa M. Finley | | | 256,667 | | | 0 | | | 0 | | | 29,807 | | | 286,474 | |||||||||||||||
Deborah C. Hopkins | | | 279,166 | | | 0 | | | 0 | | | 24,072 | | | 303,238 | | | 303,333 | | | 0 | | | 0 | | | 6,185 | | | 309,518 |
Jane H. Lute | | | 279,166 | | | 0 | | | 0 | | | 26,332 | | | 305,498 | | | 290,000 | | | 0 | | | 0 | | | 22,162 | | | 312,162 |
Michael R. McCarthy | | | 315,834 | | | 0 | | | 0 | | | 26,549 | | | 342,383 | | | 330,000 | | | 0 | | | 0 | | | 1,860 | | | 331,860 |
Thomas F. McLarty III | | | 288,334 | | | 0 | | | 0 | | | 29,147 | | | 317,481 | |||||||||||||||
Bhavesh V. Patel | | | 270,000 | | | 0 | | | 0 | | | 6,575 | | | 276,575 | |||||||||||||||
Jose H. Villareal | | | 270,000 | | | 0 | | | 0 | | | 9,115 | | | 279,115 | |||||||||||||||
Thomas F. McLarty III (c) | | | 125,000 | | | 0 | | | 0 | | | 1,860 | | | 126,860 | |||||||||||||||
Jose H. Villarreal | | | 280,000 | | | 0 | | | 0 | | | 4,307 | | | 284,307 | |||||||||||||||
Christopher J. Williams | | | 277,499 | | | 0 | | | 0 | | | 1,867 | | | 279,366 | | | 290,000 | | | 0 | | | 0 | | | 1,911 | | | 291,911 |
(a) | The following table provides the outstanding equity awards at fiscal year-end held by all individuals who served as non-management directors in |
NAME | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS | | | NUMBER OF SHARES VESTING UPON TERMINATION | | | NUMBER OF UNITS IN DEFERRED STOCK UNIT ACCOUNT | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS | | | NUMBER OF SHARES VESTING UPON TERMINATION | | | NUMBER OF UNITS IN DEFERRED STOCK UNIT ACCOUNT |
Andrew H. Card Jr. | | | 0 | | | 4,000 | | | 32,470 | | | 0 | | | 4,000 | | | 35,052 (e) |
Erroll B. Davis, Jr. (c) | | | 0 | | | 4,000 (d) | | | 39,378 (d) | |||||||||
William J. Delaney | | | 0 | | | 0 (e) | | | 2,097 | |||||||||
William J. DeLaney | | | 0 | | | 0 (d) | | | 3,670 | |||||||||
David B. Dillon | | | 0 | | | 4,000 | | | 8,150 | | | 0 | | | 4,000 | | | 9,976 |
Sheri H. Edison | | | 0 | | | 0 (d) | | | 597 | |||||||||
Teresa M. Finley | | | 0 | | | 0 (d) | | | 490 | |||||||||
Deborah C. Hopkins | | | 0 | | | 4,000 | | | 7,248 | | | 0 | | | 4,000 | | | 9,202 |
Jane H. Lute | | | 0 | | | 4,000 | | | 5,065 | | | 0 | | | 4,000 | | | 6,762 |
Michael R. McCarthy | | | 0 | | | 4,000 | | | 54,200 | | | 0 | | | 4,000 | | | 59,532 |
Thomas F. McLarty III | | | 0 | | | 4,000 | | | 31,805 | |||||||||
Bhavesh V. Patel | | | 0 | | | 4,000 | | | 3,305 | |||||||||
Thomas F. McLarty III (c) | | | 0 | | | 4,000 | | | 34,359 (e) | |||||||||
Jose H. Villarreal | | | 0 | | | 4,000 | | | 25,194 | | | 0 | | | 4,000 | | | 27,733 |
Christopher J. Williams | | | 0 | | | 0 (e) | | | 1,422 | | | 0 | | | 0 (d) | | | 3,133 |
(b) | Excess liability insurance premiums paid in |
(c) | Mr. |
(d) |
Upon recommendation of the Corporate Governance, Nominating and |
(e) | Mr. Card’s and Mr. McLarty’s 4,000 shares vested upon their retirement. Their Deferred Stock Unit Accounts were paid out in full on January 3, 2023. |
• | Enhanced Audit Quality. Through more than 50 years of experience with the Company, Deloitte & Touche LLP has gained institutional knowledge and deep expertise regarding the Company’s rail operations and business, accounting policies and practices and internal control over financial reporting. |
• | Competitive Fee Structure. Due to Deloitte & Touche LLP’s familiarity with the Company, audit fees are competitive with peer companies. |
• | Avoids Costs Associated with New Auditor. Onboarding a new independent accountant is costly and requires a significant time commitment that could distract from management’s focus on financial reporting and controls. |
| | YEAR ENDED DECEMBER 31, | | | YEAR ENDED DECEMBER 31, | |||||||
| | 2020 | | | 2019 | | | 2022 | | | 2021 | |
Audit Fees | | | $3,057,700 | | | $2,974,700 | | | $3,271,600 | | | $3,226,600 |
Audit-Related Fees | | | 460,262 | | | 509,603 | | | 538,700 | | | 440,764 |
Tax Fees | | | 201,023 | | | 244,713 | | | 219,200 | | | 211,648 |
All Other Fees | | | 0 | | | 0 | | | 0 | | | 0 |
Total | | | $3,718,985 | | | $3,729,016 | | | $4,029,500 | | | $3,879,012 |
Award | | | Number Outstanding | | | Weighted Average Exercise Price | | | Weighted Average Remaining Term |
Options | | | 2,568,542 | | | $132.47 | | | 6.4 years |
Full Value Awards (1) | | | 2,281,201 (1) | | | N/A | | | N/A |
Total Overhang | | | 10.0% (2) | | | | |
Fiscal Year | | | Options Granted | | | Total Full- Value Awards | | | Time-based Full-Value Awards granted (1) | | | Perf-based Full-Value Awards earned | | | Weighted Avg. CSO | | | Burn Rate |
2020 | | | 558,000 | | | 654,000 | | | 315,000 | | | 339,000 | | | 677,300,000 | | | 0.32% |
2019 | | | 573,000 | | | 653,000 | | | 384,000 | | | 269,000 | | | 703,500,000 | | | 0.31% |
2018 | | | 800,000 | | | 637,000 | | | 542,000 | | | 95,000 | | | 750,900,000 | | | 0.32% |
Serve: Driving operational excellence to create a safer, more reliable and efficient service product. Precision scheduled railroading (PSR) is the foundation for delivering customer-centered operational excellence by: | ||||||
1. | | | Shifting the focus of operations from moving trains to moving cars. | | | |
2. | | | Minimizing car dwell, car classification events, and locomotive power requirements. | | ||
3. | | | Utilizing general-purpose trains by blending existing train service. | | ||
4. | | | Balancing train movements to improve the utilization of crews and rail assets. | | ||
We aim to move cars faster and reduce the number of times each car is touched, resulting in terminal consolidation opportunities, improved asset utilization, and fewer car classifications, which in turn leads to products getting to the market more quickly and reliably. The result is a better customer experience, which enables us to grow our market share. | |
• | Pay for Performance — We tie pay to performance by aligning a significant portion of the executive’s opportunity for compensation to annual (short-term) and long-term Company strategy. We also integrate the Company’s critical business objectives (safety, service, and financial performance) into the Company’s strategy and compensation programs to reflect individual performance and management effectiveness, along with other qualitative factors, which contribute to the Company’s performance. |
• | Align with Shareholder Interests — We link a substantial portion of executive compensation to both short-term and long-term financial performance that benefits our shareholders and aligns the interests of management with those of our shareholders by providing equity incentives. |
• | Attract and Retain Top Talent — We are able to attract and retain key executives critical to our long-term success by structuring compensation levels to reflect the competitive marketplace for similar positions at other comparable peer group companies. |
✔ | Company performance against objectives; |
✔ | Guidance from the Committee’s compensation consultant; |
✔ | Input from the CEO; and |
✔ | Appropriate peer |
Canadian National | | | Canadian Pacific | | | CSX |
Deere & Co | | | Delta Airlines | | | Exelon |
FedEx | | | Honeywell International | | | NextEra Energy |
Norfolk Southern | | | Northrop Grumman | | | Raytheon Technologies |
Southern Co. | | | Southwest Airlines | | | UPS |
| | PEER GROUP | | | UNION PACIFIC | | | PEER GROUP | | | UNION PACIFIC | |||||||||||||
| | MEDIAN | | | 75TH PERCENTILE | | | COMPANY DATA | | | PERCENTILE RANK | | | MEDIAN | | | 75TH PERCENTILE | | | COMPANY DATA | | | PERCENTILE RANK | |
Net Revenue | | | $29,176 | | | $37,971 | | | $21,708 | | | 38th | | | $29,899 | | | $39,361 | | | $21,804 | | | 41st |
Operating Income | | | $4,531 | | | $ 5,505 | | | $8,615 | | | 100th | | | $5,141 | | | $7,484 | | | $9,363 | | | 95th |
Total Assets | | | $57,857 | | | $71,483 | | | $61,673 | | | 61st | | | $69,405 | | | $105,891 | | | $63,525 | | | 42rd |
Market Capitalization | | | $ 52,980 | | | $61,801 | | | $119,992 | | | 100th | | | $70,088 | | | $116,342 | | | $145,119 | | | 84th |
Employees | | | 60,767 | | | 90,612 | | | 37,483 | | | 44th | | | 55,093 | | | 93,500 | | | 32,124 | | | 43st |
What We Do | | | What We Don’t Do | ||||||||
✔ | | | Emphasize Performance-Based Variable Compensation | | | ✘ | | | No Repricing or Back-Dating of Options Allowed | ||
✔ | | | Utilize a Compensation Recoupment Policy | | | ✘ | | | No Individual Supplemental Executive Retirement Plans | ||
✔ | | | Tie Compensation to Short-and-Long-Term Performance | | | ✘ | | | No Tax Gross-Up Payments Allowed for NEOs, including on Change-in-Control | ||
✔ | | | Allow Only Minimal Perquisites | | | ✘ | | | No Employment Agreements with any of our Executive Officers, including NEOs | ||
✔ | | | Utilize Double Trigger Change-in-Control Plan | | | ✘ | | | |||
✔ | | | Target Base Salaries Below the Median of our Peer Group | | | ✘ | | | No granting of time-vested RSUs to NEOs as part of the annual LTI program | ||
✔ | | | Enforce Stringent Executive Stock Ownership Guidelines | | | | | ||||
✔ | | | Conduct Annual Compensation Risk Assessment | | | | | ||||
✔ | | | Require Trading Plans for Executive Officers (as set forth on page | | | | |
Lance M. Fritz Chairman, President and Chief Executive Officer | ||||||||
Age: 60 Tenure: | | | Compensation Decisions for | |||||
| • Increased base salary by 3.7% • Annual incentive target unchanged • LTI target increased by $1.5 million • Increased Total Target Direct Compensation by | | |
Jennifer L. Hamann Executive Vice President and Chief Financial Officer | ||||||||||||||
Age: 55 Tenure: | | | Compensation Decisions for 2022 | |||||||||||
| • Increased base salary by 9.1% • Annual incentive target unchanged • LTI target increased by $500,000 • Increased Total Compensation by 16.7% | | |
Elizabeth F. Whited Executive Vice President | ||||||||
Age: 57 Tenure: | | | Compensation Decisions for | |||||
| • Increased base salary by 8.6% • Annual incentive target unchanged • LTI target increased by $250,000 • Increased Total Target Direct Compensation by | | |
Kenny G. Rocker Executive Vice President, Marketing and Sales | ||||||
Age: 51 Tenure: 28 years | | | Compensation Decisions for 2022 | |||
| • Increased base salary by 5.6% • Annual incentive target increased by $50,000 • LTI target increased by $100,000 • Increased Total Target Direct Compensation by 6.9% | | |
Eric J. Gehringer Executive Vice President, | ||||||||||||||
Age: 44 Tenure: | | | Compensation Decisions for | |||||||||||
| • Increased base salary by 10.5% • Annual incentive target increased by $100,000 • LTI target increased by $500,000 • Increased Total Target Direct Compensation by | | |
What We Do | | | What We Don’t Do | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Emphasize Performance-Based Variable Compensation | | | ✘ | | | No Repricing or Back-Dating of Options Allowed | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Utilize a Compensation Recoupment Policy | | | ✘ | | | No Individual Supplemental Executive Retirement Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Tie Compensation to Short-and-Long-Term Performance | | | ✘ | | | No Tax Gross-Up Payments Allowed for | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Allow Only Minimal Perquisites | | | ✘ | | | No Employment Agreements with any | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Utilize Double Trigger Change-in-Control Plan | | | ✘ | | | No Pledging or Hedging of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Target Base Salaries Below the Median of our Peer Group
| | | No granting of time-vested RSUs to | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Enforce Stringent Executive Stock Ownership Guidelines | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Conduct Annual Compensation Risk Assessment | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
✔ | | | Require Trading Plans for Executive Officers (as set forth on | | | | |
Lance M. Fritz Chairman, President and Chief Executive Officer | ||||||
Age: 60 Tenure: 23 years | | | Compensation Decisions for 2022 | |||
| • Increased base salary by 3.7% • Annual incentive target unchanged • LTI target increased by $1.5 million • Increased Total Target Direct Compensation by 0.32% | | |
Jennifer L. Hamann Executive Vice President and Chief Financial Officer | ||||||
Age: 55 Tenure: 31 years | | | Compensation Decisions for 2022 | |||
| • Increased base salary by 9.1% • Annual incentive target unchanged • LTI target increased by $500,000 • Increased Total Target Direct Compensation by 16.7% | | |
Elizabeth F. Whited Executive Vice President Sustainability & Strategy | ||||||
Age: 57 Tenure: 35 years | | | Compensation Decisions for | |||
| • Increased base salary by 8.6% • Annual incentive target unchanged • LTI target increased by $250,000 • Increased Total Target Direct Compensation by 10.7% | | |
Kenny G. Rocker Executive Vice President, Marketing and Sales | ||||||
Age: 51 Tenure: 28 years | | | Compensation Decisions for | |||
| • Increased base salary by 5.6% • Annual $50,000 • LTI target $100,000 • Increased Total Target Direct Compensation by 6.9% | | |
What We Do | | | What We Don’t Do | ||||||
✔ | | | Emphasize Performance-Based Variable Compensation | | | ✘ | | | No Repricing or Back-Dating of Options Allowed |
✔ | | | Utilize a Compensation Recoupment Policy | | | ✘ | | | No Individual Supplemental Executive Retirement Plans |
✔ | | | Tie Compensation to | | | ✘ | | | No Tax Gross-Up Payments Allowed for NEOs, including on Change-in-Control |
✔ | | | Allow Only Minimal Perquisites | | | ✘ | | | No Employment Agreements with any of our |
| | | | ✘ | | | No Pledging or Hedging of Company Stock by NEOs | ||
✔ | | | Target Base Salaries Below the Median of our Peer Group | | | ✘ | | | No granting of time-vested RSUs to NEOs as part of the |
✔ | | | Enforce Stringent Executive Stock Ownership Guidelines | | | | | ||
✔ | | | Conduct Annual Compensation Risk Assessment | | | | | ||
✔ | | | Require Trading Plans for Executive Officers (as set forth on page 89) and Directors | | | | |
Lance M. Fritz Chairman, President and Chief Executive Officer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Fritz was elected President and Chief Executive Officer on February 5, 2015. The Compensation and Benefits Committee increased Mr. Fritz’s salary for 2022 to $1,275,000, a 3.7% increase, and maintained Mr. Fritz’s 2022 Annual Incentive Plan bonus target of $2,200,000. Mr. Fritz received an annual incentive bonus for 2022 of $963,600 at 44% of target based on the formulaic bonus program under the Company’s 2022 Annual Incentive Plan. The Committee increased Mr. Fritz’s long-term incentive target grant value to approximately $12,000,000 consisting of 60% performance stock units and 40% stock options granted on February 3, 2022. Mr. Fritz’s 2020 grant of performance stock units paid out at 72% of target.
Ms. Hamann was elected Executive Vice President and Chief Financial Officer effective January 1, 2020. Ms. Hamann previously served as Senior Vice President-Finance from April 2019 to December 2019 and Vice President-Planning & Analysis from October 2017 to March 2019. The Compensation and Benefits Committee set Ms. Hamann’s salary for 2022 at $600,000 and maintained her 2022 Annual Incentive Plan bonus target at $750,000. Ms. Hamann received an annual incentive bonus for 2022 of $328,500 at 44% of target based on the formulaic bonus program under the Company’s 2022 Annual Incentive Plan. The Committee set Ms. Hamann’s long-term incentive target grant value at approximately $2,500,000 consisting of 60% performance stock units and 40% stock options granted on February 3, 2022. Ms. Hamann’s 2020 grant of performance stock units paid out at 72% of target. 56 Named Executive Officers
Ms. Whited was elected Executive Vice President-Sustainability & Strategy on February 3, 2022. Ms. Whited previously served as Executive Vice President and Chief Human Resource Officer from August 2018 to February 2022 and Executive Vice President and Chief Marketing Officer from December 2016 to August 2018. The Compensation and Benefits Committee increased Ms. Whited’s salary for 2022 to $530,000, a 8.6% increase, and maintained Ms. Whited’s 2022 Annual Incentive Plan bonus target of $750,000. Ms. Whited received an annual incentive bonus for 2022 of $338,500 at 45% of target based on the formulaic bonus program under the Company’s 2022 Annual Incentive Plan. The Committee increased Ms. Whited’s long-term incentive target value to approximately $1,750,000 consisting of 60% performance stock units and 40% stock options granted on February 3, 2022. Ms. Whited’s 2020 grant of performance stock units paid out at 72% of target. 57 Named Executive Officers
Mr. Rocker has been Executive Vice President-Marketing and Sales since August 15, 2018. Mr. Rocker previously served as Vice President-Marketing and Sales-Industrial team from October 2016 to August 2018. The Compensation and Benefits Committee increased Mr. Rocker’s salary for 2022 to $475,000, a 5.6% increase, and increased Mr. Rocker’s 2022 Annual Incentive Plan bonus target to $750,000. Mr. Rocker received an annual incentive bonus for 2022 of $335,500 at 45% of target based on the formulaic bonus program under the Company’s 2022 Annual Incentive Plan. The Committee increased Mr. Rocker’s long-term incentive target grant value to approximately $1,500,000 consisting of 60% performance stock units and 40% stock options granted on February 3, 2022. Mr. Rocker’s 2020 grant of performance stock units paid out at 72% of target.
Mr. Gehringer was elected Executive Vice President-Operations effective January 1, 2021. Mr. Gehringer previously served as Senior Vice President-Transportation from July 2020 to December 2020, Vice President-Mechanical & Engineering from January 2020 to July 2020, Vice President-Engineering from March 2018 to January 2020, and Assistant Vice President-Engineering from September 2016 to March 2018. The Compensation and Benefits Committee increased Mr. Gehringer’s salary to $475,000. Mr. Gehringer’s 2022 Annual Incentive Plan bonus target was set at $750,000. Mr. Gehringer received an annual incentive bonus for 2022 of $323,500 at 43% of target based on the formulaic bonus program under the Company’s 2022 Annual Incentive Plan. The Committee increased Mr. Gehringer’s long-term incentive target grant value to approximately $1,500,000 consisting of 60% performance stock units and 40% stock options granted on February 3, 2022. Mr. Gehringer’s 2020 grant of performance stock units paid out at 72% of target. 58 Named Executive Officers The majority of the compensation awarded to our CEO and other NEOs, is performance-based, variable compensation and “at-risk.” These characteristics are illustrated in the charts below that show the pay mix for Mr. Fritz, our CEO, and for our other NEOs as a group based on the Total Target Direct Compensation received by these executives in fiscal 2022. 59 Base Salary The CEO reviews base salaries and prior year performance and accomplishments for the other NEOs and recommends to the Committee a base salary for the coming year for each. The Committee considers and evaluates these base salary recommendations. Among many considerations, the Committee reviews: (i) the executive’s position and responsibility in the organization, (ii) the executive’s experience and expertise, (iii) Company performance, (iv) individual accomplishments and job performance during the year, (v) Peer Group pay data, (vi) internal benchmarking relative to the Company’s pay structure, and (vii) current salary. In making salary recommendations to the Board of Directors, the Committee exercises subjective judgment in evaluating many factors but applies no specific weights to any factor. The Committee, with input from its compensation consultant, and the Board’s review of CEO performance, assesses and determines the base salary of the CEO for subsequent Board approval based on the same considerations described above. In February 2022 and 2023, the Committee reviewed each of our NEO’s base salary. Upon review of competitive market data, including our Peer Group, the Committee reviewed and recommended the salary increases shown below. The Board approved the Committee’s recommended salary increases.
Seventy percent (70%) of the target annual incentive cash bonuses paid to executives, including the NEOs, is based on the attainment of pre-established objective Company financial performance goals, twenty percent (20%) is based on a shared set of Company goals in key areas such as safety, customer service, trip plan compliance, market share, employee engagement and renewable fuel blend and ten percent (10%) is based on individual performance. The financial performance goals were equally weighted based on operating income and operating ratio. If the minimum performance thresholds for neither operating income nor operating ratio are achieved, then no annual incentive cash bonus is paid to executives. For performance that exceeds target levels, the annual incentive plan payout is capped at 200% of target. When determining individual annual incentive bonus targets for each of the NEOs, the Committee generally targeted the 50th percentile of Target Total Cash Compensation. These individual annual incentive bonus targets for each of the NEOs were approved by the Committee and then recommended to the Board and approved in February of 2022. 60 Elements of Our Executive Compensation Program 2022 Target Total Cash Compensation
Annual incentive compensation supports the Committee’s pay-for-performance philosophy and further aligns individual goals with Company goals as set forth in the Company’s annual operating plan. For 2022, the Committee selected Operating Income and Operating Ratio as the key financial metrics because they are key performance measures in the rail industry and focus our executives’ performance on operating results. Operating Income Directly tied to Operating Ratio targets and quantifies our profitability. Operating Ratio A key indicator of the Company’s efficiency.
The table below shows the weighted average annual incentive payout for the NEOs given the Company’s 2022 year-end results relative to the Operating Income and Operating Ratio targets approved in February 2022.
Non-Formulaic Component The non-formulaic component of the 2022 Annual Incentive Plan is divided into two parts: twenty percent (20%) is based on a shared set of strategic goals in key areas such as safety, customer service, trip plan compliance, market share, employee engagement and renewable fuel blend and ten percent (10%) is based on individual performance. 61 Elements of Our Executive Compensation Program Our Company strategy, Serve, Grow, Win – Together, serves the basis for the strategic scorecard component of the 2022 Annual Incentive Plan. We communicate to executives, and the Committee assesses, the individual strategic scorecard items shown below, without assigning particular weighting to any one item. The Company exceeded its goal of 80% participation in the employee engagement survey with an 88% participation rate and exceeded its goal of 4% biofuel blend, with a biofuel blend of over 4.5% in 2022. Our 2022 personal injury rate did not satisfy our high expectations and the reportable derailment rate did not improve compared to 2021 . However, service challenges affected our ability to further improve our operating metrics in 2022, lowering trip plan compliance for both Intermodal and Manifest/Autos from 2021. While market share improved, carload growth and net promoter score fell short of expectations due to service issues. Based on the Committee’s evaluation of the Company’s achievement of the strategic scorecard items, the Committee awarded this component at 50% of target for each of the NEOs. The Committee awarded, based on Mr. Fritz’s recommendation, the individual executive performance component (10%) at 100% for Ms. Hamann, 113% for Ms. Whited, 109% for Mr. Rocker and 93% for Mr. Gehringer. The Committee awarded Mr. Fritz’s individual executive performance component at 100% of target. The table below reflects the aggregate actual performance incentive cash bonus reported for each of the NEOs for 2022.
62 Elements of Our Executive Compensation Program Long-Term Equity Incentive Compensation The components of our long-term incentive compensation are:
In February 2023, the PSUs granted for the 2020-2022 performance period were settled at an overall payout of 72% of target, based on 15.9% average ROIC over the three-year performance period. Our relative OIG was in the 43rd percentile so the modifier had no effect on the final payout. Performance stock units earned under the 2020 grants for each of the NEOs are included as Earned Performance Stock Units in the Stock Awards column of the Outstanding Equity Awards at 2022 Fiscal Year-End Table on page 72. The table below summarizes how the performance stock units granted in 2020 were earned, and how the performance stock units granted in 2021 and 2022 are tracking as of the end of 2022.
64 Elements of Our Executive Compensation Program The table below shows the application of the OIG modifier based on the Company’s operating income growth percentile compared to the S&P 500 Industrials Index for the PSUs granted in 2020.
The table below shows the application of the one-third (1/3) relative OIG based on the Company’s operating income growth percentile compared to the OIG of the companies in the S&P 100 Industrials Index and the Class I Railroads for the PSUs granted in 2021 and 2022.
In February 2023, the Compensation and Benefits Committee reviewed and approved the following compensation changes for the NEOs and the Board of Directors reviewed and approved Mr. Fritz’s compensation. The following table summarizes adjustments made to CEO and other NEO compensation for 2023.
The Committee increased Mr. Fritz’s Target Annual Incentive for 2023 to reflect his experience and tenure as CEO and to better align his compensation with the Peer Group median benchmark. Ms. Hamann also received an increase in her Target Annual Incentive and Target Long-Term Incentive for 2023 to incentivize her continued growth in her role as Executive Vice President and Chief Financial Officer. Mr. Gehringer received increases to his salary and Target Long-Term Incentive for 2023. The increases reflect the Committee’s alignment of his compensation with the Peer Group and his responsibilities following his appointment to his current position and are intended to incentivize his continued growth and development as the Executive Vice President-Operations. Perquisites The Committee reviews perquisites periodically for both appropriateness and effectiveness. Key executives, including the NEOs, receive tax and financial counseling services and personal excess liability coverage. In 2016, the Committee eliminated the requirement for the CEO to use Company aircraft for all air travel and set 65 Elements of Our Executive Compensation Program an annual limit for personal flights at $90,000 for the CEO and $45,000 for the other NEOs. Executives will pay for any personal flights beyond these limits in accordance with applicable tax rules and regulations and Federal Aviation Administration rules and regulations, as stated in the Company’s policy regarding use of corporate aircraft. Income is imputed to the CEO and NEOs for personal travel below the limits and tax gross-ups are not provided. All use of Company aircraft must be approved in advance by the CEO or a specifically authorized designee. The value of perquisites provided to the NEOs by the Company is not a significant portion of any of the NEOs’ compensation on an annual basis. Due to the relatively low cost to the Company of these perquisites, combined with the policy regarding use of Company aircraft, the Committee does not consider perquisites in its analyses of Total Direct Compensation for the CEO and the other NEOs. Deferred Compensation The Committee, pursuant to its charter, is responsible for oversight of our deferred compensation arrangements. Management and the Committee believe that deferred compensation arrangements are important benefits that contribute to the Company’s competitive compensation arrangements and help attract and retain executives. The Company’s deferred compensation programs allow for elective deferrals of (i) salary, (ii) bonus (iii) performance stock units, and (iv) retention stock units, which accrue earnings during the deferral period as described on page Pension Plan and Supplemental Pension Plan The Company sponsors a tax-qualified defined benefit Pension Plan and a non-qualified excess Supplemental Pension Plan. Management and the Committee believe that the defined benefit Pension Plan and the Supplemental Pension Plan (with respect to our executives, including the NEOs) provide employees with a competitive retirement benefit. The Company offers the Supplemental Pension Plan to allow executives to receive pension benefits for compensation and benefits that exceed government imposed limits applicable to defined benefit plans and to allow for the inclusion of compensation that has been deferred, which cannot be included as compensation under the defined benefit Pension Plan. Benefit amounts are based on the employee’s years of service, salary, bonus and age. More detailed descriptions of the Pension Plan and Supplemental Pension Plan are set forth on pages Change-in-Control Arrangements The NEOs do not have individual severance agreements or employment agreements with the Company. In November 2000, the Board adopted the Union Pacific Corporation Key Employee Continuity Plan (the Continuity Plan). The purpose of the Continuity Plan is to assure the smooth transition of management and effective operation of the Company in the event of a change-in-control by providing (i) sufficient economic security to allow key executives to focus on overall shareholder value without concern about personal financial interests and (ii) severance benefits in the event their employment with the Company is terminated within two years following a change-in-control. The Continuity Plan provides severance benefits to certain senior level executives, including the NEOs, in the event (i) a change-in-control occurs and (ii) the covered executive is involuntarily terminated or constructively discharged within two years following the change-in-control. This two-step requirement will allow the new controlling party to retain certain executives and terminate others with the obligation to provide the benefits set forth in the Continuity Plan. Severance benefits are the same for all covered executives, except for the multiple used to determine an executive’s lump-sum severance payment. The lump-sum severance payment is equal to three times the sum of base salary plus the average of the annual bonus payments earned in the three most recent calendar years for Mr. Fritz and two times this sum for each of 66 Elements of The Continuity Plan In December 2021, the Committee recommended, and the Board approved the following changes to the Continuity Plan in the event of a qualifying severance following a change-in-control: the elimination of the automatic vesting and receipt of an additional three years of age and service credit in the Company’s Supplemental Pension Plan, proration of the current year’s annual incentive bonus and the addition of best net treatment for excise taxes associated with Section 280G of the Internal Revenue Code (the Code). In September 2003, the Board adopted the Union Pacific Corporation Policy Regarding Shareholder Approval of Future Severance Agreements (Severance Policy). Under this Severance Policy, the Company agreed not to enter into a future severance agreement with a senior executive that provides for benefits in an amount generally exceeding 2.99 times salary plus bonus unless such agreement is approved by a vote of our shareholders. Payments and certain severance benefits for the NEOs upon a change-in-control, as well as a description of the Continuity Plan are set forth on pages Recoupment Policy Effective January 1, 2020, the Company adopted its Policy for Recoupment of Incentive Compensation. This policy allows the Committee to require Company executives to repay to the Company certain incentive compensation (or if such incentive compensation has not been paid or settled, the Company may cancel such incentive compensation) if the Committee determines either (i) that a financial restatement is required due to the Company’s material noncompliance with financial reporting requirements or if there was a material error in incentive compensation calculations, or (ii) if the executive engaged in certain types of detrimental conduct, as more particularly described in the policy. The Company intends to supplement our recoupment policy as necessary to comply with any listing standards adopted by the New York Stock Exchange implementing the SEC’s finalized Exchange Act Rule 10D-1. Deductibility of Grandfathered Compensation Due to the amendment to Section 162(m) of the For Grandfathered Compensation intended to satisfy the requirements of Section 162(m) of the Code for performance based compensation, the Committee has, where it deemed appropriate, taken steps intended to preserve the deductibility of said compensation to the CEO and certain executive officers. However, because there are uncertainties as to the application and interpretation of Section 162(m) of the Code and the transition relief described above, it is possible that the Company’s deductions may be challenged or disallowed. Accordingly, there is no certainty that elements of any Grandfathered Compensation discussed in this Proxy Statement will in fact be deductible by the Company. The Committee reviewed and discussed with management the CD&A and based on that review and discussion, the Committee recommended to the Board of Directors that the CD&A be included in the Company’s The Compensation and Benefits Committee William J. DeLaney, Chair David B. Dillon Sheri H. Edison Teresa M. Finley Jose H. Villarreal 67 The following table provides a summary of compensation awarded to, earned by or paid to the NEOs, including salary, bonus, the value of stock awards and option awards and other compensation for
68 Executive Compensation
69 Executive Compensation The following table sets forth additional information concerning Stock Awards and Option Awards reported in the Summary Compensation Table as part of the NEOs’ compensation for
70 Executive Compensation Annual bonuses are awarded under the Executive Incentive Plan, which allows the Committee to establish performance objectives annually in order to adjust to the changing business climate; provided that annual bonuses may not exceed 0.25% of operating income for the CEO or 0.15% of operating income for each other “covered employee” On February If the Company does not meet the threshold ROIC level and OIG level for the three-year performance period, executives Performance stock units that have been earned over the three-year performance period will be paid out in Company common stock Stock option grants vest one-third of total each year over a three-year period from the grant date of February As part of the February 71 Executive Compensation The following table sets forth additional information concerning Option Awards and Stock Awards held by the NEOs as of our most recent fiscal year-end, including awards granted during
72 Executive Compensation
73 Executive Compensation The following table shows a summary of the stock options exercised by the NEOs and stock awards that vested during the year.
74 Executive Compensation The table below sets forth the estimated present value of accumulated benefits payable under the Company’s defined benefit pension plans to the NEOs For both mortality tables, no pre-retirement decrements (i.e., death, disability) were assumed.
Pensions for our NEOs are provided through the Pension Plan for Salaried Employees of Union Pacific Corporation and Affiliates (Basic Plan) and the Supplemental Pension Plan for Officers and Managers of Union Pacific Corporation and Affiliates (Supplemental Plan). The pension benefit formula for both the Basic Plan and the Supplemental Plan is (i) 1.667% of final average compensation times credited service (up to 30 years), plus (ii) 1% of final average compensation times credited service above 30 years (not to exceed 40 years) minus (iii) 1.5% of Social Security or Railroad Retirement benefit times credited service (not to exceed 40 years). The amount of the annual pension benefit from both Plans is based upon final average compensation for the 36 consecutive months of highest regular compensation (base salary and up to three annual bonus plan awards within the 36-month period) within the 120-month period immediately preceding retirement. Credited service includes the years and months of service as a non-agreement employee and may include certain periods of agreement service or service with an acquired company. Both the Basic Plan and the Supplemental Plan were amended effective January 1, 2018 to provide that an employee hired or rehired on or after January 1, 2018, or who otherwise was not accruing a benefit under the Basic Plan on December 31, 2017 is not eligible to participate in the Basic Plan or the Supplemental Plan. 75 Executive Compensation The Supplemental Plan is an unfunded non-contributory plan that, unlike the Basic Plan, provides for the grant of additional years of service and deemed age, for the inclusion of compensation in excess of IRS prescribed limits ($ Under both the Basic Plan and the Supplemental Plan, an executive’s age and vesting service upon termination of employment with the Company determines whether the executive is eligible for a normal retirement, early retirement, postponed retirement, or a vested benefit. Vesting service generally includes all service while an employee is with the Company, whether or not the employment counts as credited service. Normal retirement is offered to employees who end their employment at Benefits from both Plans are normally paid as a single life annuity providing monthly benefits for the employee’s life. The employee may waive the single life annuity and elect to receive the benefit in a different optional form. With respect to the Supplemental Plan benefit, this election must occur at least six months before, and no later than, the calendar year immediately preceding the benefit start date. Subject to eligibility conditions, the available optional forms of benefit include: 25%, 50%, 75%, or 100% Joint and Survivor Annuity; 10-Year Certain and Continuous; or, for the Basic Plan benefit only, a Level 76 Executive Compensation The Company has two non-qualified deferred compensation plans: the Supplemental Thrift Plan, which permits an executive to defer amounts from base salary; and the Deferred Compensation Plan, which permits deferral of bonuses awarded under the Executive Incentive Plan and deferral of stock unit awards made under the 2004 Stock Incentive Plan, the 2013 Stock Incentive Plan and the
Deferral Amounts Supplemental Thrift Plan. The Supplemental Thrift Plan is available to executives who otherwise participate in the Company’s Thrift Plan, which is a defined contribution plan intended to be a plan qualified under Section 401(a) of the Code. The Qualified Thrift Plan permits executives to contribute, on a pre-tax, Roth and/or after-tax basis from 77 Executive Compensation in the Supplemental Thrift Plan before the start of the calendar year in which one of these limits is reached will have payroll deductions on a pre-tax basis continued from his/her base pay for the remainder of the calendar year at a percentage that may differ from the percentage rate(s) the executive elected under the Qualified Thrift Plan as of the first day of the calendar year. Under the Supplemental Thrift Plan, the executive may defer from The Supplemental Thrift Plan was amended effective January 1, 2018, as part of the changes made to the Company’s overall retirement plan design strategy, including closing the Company’s pension plan for certain employees (see pages Deferred Compensation Plan. The Deferred Compensation Plan allows for the deferral of all or a portion of a bonus awarded under the Executive Incentive Plan and for the deferral of payment of stock units, both retention and performance based, awarded under the Stock Incentive Plan. An executive must elect by June 30th of the calendar year for which the bonus amount is awarded whether to defer any or all of his or her bonus award for such year. For retention stock units, an executive’s election to defer payment of a vested award must be made prior to the beginning of the calendar year for which the retention stock unit award is granted to the executive. For performance stock units, an executive must elect by June Rate of Return Provisions Notional accounts in the Supplemental Thrift Plan are deemed to be invested in one or more of the investment options offered in the Qualified Thrift Plan, as selected by the participating executive. Notional accounts in the Deferred Compensation Plan for bonus amounts deferred currently can be invested in the same investment options, along with the Company’s Fixed Rate Fund that bears interest equal to 120% of the Applicable Federal Long-Term Annual rate for January of the applicable year. The Vanguard Group administers all notional accounts. Executives can generally transfer amounts between investment funds each business day. Earnings reflect the increase or decrease in the value of those investment funds and any interest or dividends earned by those funds, to the same extent as if amounts were actually invested in those investment funds. Notional accounts in the Deferred Compensation Plan for stock units deferred are invested in notional shares of the Company’s common stock. The value of each stock unit deferred is equivalent to that of one share of Company common stock. Amounts equivalent to the dividends paid on Company common stock are added to an executive’s notional account when actual dividends are paid and are credited as reinvested in additional notional shares. These amounts are tracked through notional accounts maintained by the Company. Payment Elections, Withdrawals and Distributions The Company adopted amended and restated plans effective as of January 1, 2009, in order to satisfy the requirements of Section 409A of the Code. Non-qualified deferred compensation amounts not subject to Section 409A of the Code, (i.e., amounts credited to an executive’s notional account as of December 31, 2004, and earnings thereon), are available for distribution or withdrawal in accordance with the terms of the Grandfathered Component of the Supplemental Thrift Plan or the Grandfathered Component of the Deferred Compensation Plan, as applicable. Non-qualified deferred compensation amounts subject to Section 409A of 78 Executive Compensation the Code, (i.e., amounts credited to an executive’s notional account on and after January 1, 2005, and earnings thereon), are available for distribution in accordance with the terms of the Non-Grandfathered Component of the Supplemental Thrift Plan or Non-Grandfathered Component of the Deferred Compensation Plan, as applicable. 409A Non-Grandfathered Components-Supplemental Thrift and Deferred Compensation Plans NEOs made payment elections with respect to their then-existing notional account balances under the Non-Grandfathered Component of both the Supplemental Thrift Plan and the Deferred Compensation Plan prior to the end of 2008. Generally speaking, NEOs who first participated in the Non-Grandfathered Component of the Supplemental Thrift Plan in 2009 or later may make a payment election under the Non-Grandfathered Component of the Supplemental Thrift Plan in the calendar year prior to the calendar year his or her initial deferral election becomes effective. A payment election made under the Non-Grandfathered Component of the Supplemental Thrift Plan also will apply with respect to compensation an executive elects to defer in the future under the Non-Grandfathered Component of the Supplemental Thrift Plan. Executives may make a separate payment election with respect to each bonus, retention stock unit or performance stock unit award deferred under the Non-Grandfathered Component of the Deferred Compensation Plan at the same time the deferral election is made. Generally, the same payment option must be elected for all awards of the same type (i.e., bonus or stock units) deferred to separation from service under the Non-Grandfathered Deferred Compensation Plan. The Non-Grandfathered Component of both the Supplemental Thrift Plan and Deferred Compensation Plan provide the following payment options: (i) a single Generally speaking, under both plans, an executive who does not make a timely election will receive the Non-Grandfathered Component of his or her notional account at the time of his or her separation from service in a single will receive his or her notional account in January of the year following the executive’s separation from service, subject to the six-month delay rule. In the event an executive dies before receiving payment of his or her entire notional account balance, the unpaid balance is paid in a single Generally, no withdrawals are permitted from the notional accounts maintained in connection with the Non-Grandfathered Components of either the Supplemental Thrift Plan or the Deferred Compensation Plan prior to the executive’s separation from service. Under the terms applicable to the Non-Grandfathered Components of the Deferred Compensation Plan and the Supplemental Thrift Plan, an executive may modify his or her payment election if such modification election is made prior to the executive’s separation from service and at least 12 months prior to the date payments would have commenced in accordance with the prior election. In addition, the modification must have the effect of postponing the payment commencement date by at least five years. An executive can take a withdrawal in cash from the Grandfathered Component of his or her notional account under the Supplemental Thrift Plan or the Deferred Compensation Plan prior to separation from service, provided that 10% of the amount withdrawn will be irrevocably forfeited by the executive. 79 Executive Compensation Following an executive’s separation from service, the general rule is that an executive’s notional account under the Grandfathered Component of either plan is distributed in a single sum cash payment as soon as administratively practicable. However, an executive can elect at least six months prior to his or her separation from service and in the calendar year preceding such separation from service that such component be paid under one of the following payment options: (i) a single sum cash payment at separation from service or in January of the year next following his or her separation from service, (ii) annual installments over a period not exceeding 15 years, with the initial installment being paid as soon as administratively practicable following the executive’s separation from service or in January of the year next following such separation from service, or (iii) a single sum cash payment in January of a specified year that is not later than 15 years following the executive’s separation from service. The Grandfathered Component of the Deferred Compensation Plan also permits an executive to elect to receive payment at the earlier of: (i) July of a year specified by the executive, or (ii) separation from service. This election may be changed at least six months prior to the scheduled payment date and in the calendar year preceding such date. With respect to the Grandfathered Component of the Supplemental Thrift Plan, an executive’s payment election applies to the executive’s entire notional account balance. With respect to the Grandfathered Component of the Deferred Compensation Plan, an executive may make a separate payment election for each bonus award under the Executive Incentive Plan or stock unit award under the Stock Incentive Plan; provided that the executive must elect the same payment option for all such awards of the same type (i.e., bonus or stock units) deferred to separation from service. The information below describes certain compensation that would have become payable by the Company under existing plans assuming a separation from service or change-in-control and separation from service occurred on December 31, Separation from Service In the event of the separation from service of any of the NEOs on December 31, 80 Executive Compensation Each of the NEOs would also be entitled to the amount shown in the Nonqualified Deferred Compensation at For any unvested equity awards, the Compensation and Benefits Committee may, but is not required to, waive the related restriction period and/or employment requirements. As described in the Narrative Disclosure to the Summary Compensation Table and Grants of Plan-Based Awards Table on page Change-in-Control The Continuity Plan provides severance benefits to the NEOs in the event (i) a change-in-control occurs and (ii) the NEO incurs a severance within the two-year period following such change-in-control. Severance means a separation from service (as such term is defined in Section 409A of the Code and the regulations promulgated thereunder): (i) by the Company other than for cause or pursuant to mandatory retirement policies in existence prior to the change-in-control, or (ii) by the NEO for good Under the Continuity Plan, a change-in-control means any of the following: any “person,” as defined in the Exchange Act, becomes the “beneficial owner,” as defined in the Exchange Act, of 20% or more of our outstanding voting securities; there is a change in 50% of the composition of the Board of Directors (such change must be due to new directors not recommended by the Board); a merger, consolidation or reorganization that results in our shareholders holding 50% or less of the outstanding voting securities of the post-transaction entity; or a liquidation, dissolution or sale of all or substantially all of our assets. The Continuity Plan defines a severance “for cause” if it is for any of the following reasons: (i) the NEO has willfully and continually failed to substantially perform his duties, or (ii) the NEO has willfully engaged in conduct that is demonstrably injurious to the Company, monetarily or otherwise. A severance of the NEO is for “good reason” if it is for any of the following immediately prior to the change-in-control; provided, however, that such reduction results in a material diminution in the total package of compensation and benefits provided to the NEO; or (iv) the failure by any successor, to all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform under the Continuity Plan. In the event of a qualifying severance following a change-in-control, each of the NEOs receives a lump-sum severance payment equal to the sum of (i) his or her annual base salary in effect at the time of his severance and (ii) the average annual bonus earned under the Executive Incentive Plan in the most recent three calendar years; multiplied by 3 for Mr. Fritz and by 2 for The Continuity Plan provides in the event of a qualifying severance following a change-in-control that all restrictions on outstanding retention stock units awarded to each NEO lapse and all unvested stock options granted to each NEO vest and become exercisable for a period of three years (or five years if the NEO is retirement eligible) from the NEO’s separation from service. In no event will the period exceed the remaining term of the option. For outstanding performance stock units, the NEO will be entitled to receive shares equal to the number of performance stock units at the level of performance criteria actually achieved through the end of each year prior to the date of the change-in-control and through the end of the most recent fiscal quarter ending prior to the date of the change-in-control. 81 Executive Compensation Other benefits under the Continuity Plan include the continuation of health coverage and dental coverage for three years following a NEO’s severance (or, if sooner, until the NEO attains the age of 52, at which time the NEO is eligible to receive benefits under the Company’s retiree medical benefit In December 2021, the Committee recommended, and the Board approved the following changes to the Continuity Plan in the event of a qualifying severance following a change-in-control: the elimination of the automatic vesting and receipt of an additional three years of age and service credit in the Company’s Supplemental Pension Plan, proration of the current year’s annual incentive bonus and the addition of best net treatment for excise taxes associated with Section 280G of the Code. The table below sets forth the estimated value of the severance payments, welfare benefits, and accelerated equity awards
82 Executive Compensation In the event the NEO ceases to be an employee by way of death or disability under the Company’s long-term disability plan, the NEO would be entitled to receive shares of stock equal to a pro-rata portion of the number of outstanding performance stock units earned at the end of the Set forth below is the estimated value of the accelerated vesting of performance stock units, retention stock units and stock options for each NEO as of December 31,
83 The median In determining the median employee, we utilized reasonable estimates. We identified the median employee by examining the After identifying the median employee based on Taxable Income, we calculated annual total compensation for such employee using the same methodology we use for our Named Executive Officers as set forth in the The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
84 Pay versus Performance Disclosure The following table provides a summary of compensation actually paid, as defined by the SEC (CAP), to the principal executive officer (PEO), the average CAP for the other non-PEO named executive officers (Other NEOs), total shareholder return (TSR), net income and the Company-selected financial measure (CSM) of operating income for 2022, 2021 and 2020.
PEO SCT Total to CAP Reconciliation:
Average Non-PEO NEOs SCT Total to CAP Reconciliation:
85 Pay versus Performance Disclosure
Most Important Measures to Determine 2022 CAP Below lists the most important financial metrics used to link 2022 CAP to Company performance. Operating income, operating ratio and return on invested capital are further described in our CD&A within the sections titled “2022 Annual Incentive Plan” and “Long-Term Equity Incentive Compensation.” Operating Income Operating Ratio Return on Invested Capital TSR: Company versus Peer Group The following chart presents the cumulative total shareholder return, assuming reinvestment of dividends, over the three-year period for the Company (UNP) and the Dow Jones Transportation Index (DJ Trans). As the table demonstrates, the Company’s 3-year cumulative TSR is generally aligned with our peer group index. 86 Pay versus Performance Disclosure CAP versus TSR As shown in the chart below, the PEO’s CAP and Other NEOs’ Average CAP amounts are directionally aligned with the Company’s TSR. This is due primarily to the Company’s use of equity incentives, the value of which moves in line with our TSR, in addition to the Company’s financial performance. The Other NEOs’ Average CAP in 2020 also reflects the compensation of a more senior executive who ceased to serve as one of the Other NEOs in 2021. CAP versus Net Income The Company’s net income increased in 2021 and 2022 while the PEO and Other NEOs’ CAP has varied significantly each year. This is due in large part to the significant emphasis the Company places on equity incentives, the value of which are affected by our TSR. In addition, the Company does not use net income to determine compensation levels or incentive plan payouts. CAP versus Operating Income - Company-Selected Measure (CSM)
Operating income and operating ratio (of which operating income is a component) are equally weighted financial measures used in our annual incentive plan, as described in our CD&A. In addition, performance stock units awarded to our NEOs are earned based one-third (1/3) on operating income growth (OIG). The Company’s operating income has steadily increased year-over-year, although its impact on the PEO’s and Other NEO’s CAP has been muted or offset by other performance measures and by changes in the Company’s stock price. 87 The following table sets forth the number of shares of common stock beneficially owned as of March
88 Security Ownership of Certain Beneficial Owners and Management The Company’s Compensation and Benefits Committee believes that stock ownership will better align the interests of our executives, including the Named Executive Officers, with those of our shareholders by enhancing the focus of executives on the long-term success of the Company. We require our executives to achieve and maintain a specified amount of stock ownership acquired primarily through the exercise of options and the receipt of retention stock or retention stock units under our equity compensation programs. Our Stock Ownership Guidelines require that the CEO hold at least seven (7) times annual salary and that the other Named Executive Officers hold at least four (4) times annual salary in stock or stock units. Until the required ownership target is achieved, executives must retain all of the shares of stock they receive from our plans, net of the shares of stock required, if any, to cover tax expense and the cost of exercising options. We do not include the following types of equity interests when calculating stock ownership under these guidelines: (i) unexercised stock options, (ii) unvested retention shares or units, and (iii) any investment in the Company stock fund under the Thrift Plan, the Supplemental Thrift Plan or the Executive Incentive Deferral Plan. As of December 31, Company policy prohibits directors and all employees (including our officers) from hedging Union Pacific common stock, such as (i) buying, selling or writing puts, calls or options related to our common stock and (ii) executing straddles, equity swaps and similar derivative arrangements that hedge our common stock. In addition, directors and executive officers may not pledge, deliver as collateral, or maintain a margin account with respect to shares of our common stock. Executive Officers (including the Named Executive Officers and certain other executives in key positions) and directors who meet their applicable ownership requirements as described above may sell shares of our common stock subject to the following restrictions: Executive officers and directors may only sell shares of our common stock that exceed their ownership target (the Eligible Shares). Eligible Shares may be sold only pursuant to a written trading plan designed to comply with SEC Rule 10b5-1, that: was adopted when a quarterly trading blackout was not in effect and when such executive officer or director was not in possession of material nonpublic information regarding the Company, has been reviewed and approved by the Chief Legal Officer, has been disclosed to the public in a manner determined by the Chief Legal Officer (public disclosure may not be required for certain executives who are not executive officers), and has been in effect for at least
For purposes of this policy, the number of shares beneficially owned by an executive officer or director includes shares and units deferred by the executive officer or director and excludes any shares disclaimed by the executive officer or director for purposes of reporting beneficial ownership under Section 16 reporting of the Securities Exchange Act of 1934 (Exchange Act). All of the reporting obligations of the executive officer or director under Section 16 apply to sales made pursuant to a 10b5-1 trading plan. 89 PROPOSAL NUMBER Proposal 5 - Independent Board Chairman Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO. Whenever possible, the Chairman of the Board shall be an Independent Director. The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board. Although it is a best practice to adopt this policy This proposal topic won 52% support at Boeing and 54% support at Baxter International in 2020. Boeing then adopted this proposal topic. The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and our company. A Lead Director is no substitute for an independent Board Chairman. According to the Union Pacific
When the Lead Director shares roles with others it means that the Lead Director may need to do little or nothing in those roles in a given year. Plus management fails to give shareholders enough information on this topic to make an informed decision. There is no comparison of the exclusive powers of the Office of Chairman and the exclusive powers of the Lead Director. 90 PROPOSAL NUMBER 5 – Shareholder Proposal Regarding Independent Board Chairman The ascending complexities of a company with $120 Billion in market capitalization, like Union Pacific, Please vote yes: Independent Board Chairman — Proposal 5 Recommendation of the Board of Directors Our Board carefully considered this shareholder proposal and concluded that its The Board’s Recently Amended Corporate Governance Guidelines and Policies Provide for an Independent Board Chairman and Ensure that Independent Directors Operate Effectively on the Board. The Board’s current policies demonstrate the Board’s continuing commitment to The Company Maintains Effective and Progressive Governance Practices. The Board believes that effective independence and oversight are currently maintained through the Board Leadership Structure detailed beginning on page 33 of this Proxy Statement, and through the Company’s sound Corporate Governance Guidelines and Policies which can be found on our website at www.up.com/investors/governance. The independence of the Board as a whole satisfies both Company and New York Stock Exchange guidelines and independence standards, as 9 of 10 current directors are outside independent directors, and the Audit, Compensation, Finance, and Governance Committees are all composed entirely of independent outside directors. Moreover, the Board routinely holds scheduled sessions of independent directors at each Board meeting, and each director may originate action items for The Board of Directors respectfully requests that shareholders vote AGAINST Proposal 5. 91 PROPOSAL NUMBER 6 – Shareholder Proposal Requesting Proposal 6 - Fair Elections Resolved James McRitchie and other shareholders request that directors of Union Pacific Corporation (“
Under SEC Rule 14a-19, the universal proxy card must include all director nominees presented by management and shareholders for election.1 Although the Rule implies each side’s nominees must be grouped together and clearly identified as such, The power to amend bylaws is shared by directors and Bloomberg’s Matt Levine speculates by laws might require disclosure submissions “on paper woven from unicorn manes,”2 with requirements waived for the board’s nominees. While Mr. Levine depicts humorous and exaggerated possibilities, some companies are adopting amendments clearly designed to discourage fair elections.
92 PROPOSAL NUMBER 6 – Shareholder Proposal Requesting An Amendment To Our Bylaws Directors of at least one company (Masimo Corp.) recently adopted bylaw amendments that could deter legitimate efforts by shareholders to seek board representation through a proxy contest. Masimo’s advance notice bylaws “resemble the ‘nuclear option’ and offers a case study in how rational governance devices an become unduly weaponized,” writes Leonard Cunningham.3 Directors other companies are considering similar proposals. To ensure shareholders can vote on any proposal that would impose inequitable restrictions, we urge a vote FOR Fair Elections. To Enhance Shareholder Value, Vote FOR Fair Elections -Proposal 6. Recommendation of the Board of Directors Our existing corporate governance policies and practices already promote Board accountability and responsiveness to shareholders. Union Pacific’s existing governance controls ensure that the Board is accountable to and responsible for acting in the best interests of our shareholders, allaying the need for the unusual and inflexible Bylaw restrictions requested by this proposal. As discussed earlier in this proxy statement, the Company maintains an active shareholder engagement program, and the Board and management believe that engagement with our shareholders is an important part of our Company’s success. Our shareholder engagement efforts help the Board and management to better understand our shareholders’ priorities and concerns and enable the Company to effectively address issues important to our shareholders. And the Board has a strong track record of being proactive on governance topics and listening to shareholders throughout the year on a wide range of environmental, social, and governance matters. Moreover, the Company’s existing governance provisions promote the Board’s accountability and responsiveness. For example, all directors are elected annually and are subject to a majority vote standard in uncontested director elections. Most of our directors, other than the CEO, are independent, and our lead independent director is available as appropriate for consultation and communication with major shareholders. The Board routinely reviews all of the Company’s corporate governance documents, including the Bylaws, in response to changes in the law or in best practices. As is common with most publicly traded companies, the Board periodically reviews the Company’s corporate governance documents, including the Bylaws, Corporate Governance Guidelines and Policies, and Board committee charters, and updates these documents to reflect changes in relevant laws and stock exchange requirements, best practices, and input from shareholders, including in response to votes on shareholder proposals. This includes reviewing provisions in the Bylaws addressing procedures that shareholders must follow when seeking to nominate director candidates or introduce business for a vote at a meeting of shareholders – generally referred to as “advance notice” bylaw provisions, which would be affected by this proposal. The Board believes that such provisions can serve the appropriate goal of assuring that shareholders and the Board have a sufficient opportunity to learn, evaluate and thoughtfully consider relevant information regarding nominations or proposals to be brought before a meeting of shareholders, and to ensure that relevant information is distributed to shareholders. Accordingly, the advance notice provision in the Company’s Bylaws currently states that it is designed “In order to assure that shareholders and the Company have a reasonable opportunity to consider business proposed to be brought before a meeting of shareholders and to allow for full information to be distributed to shareholders.” While some companies may adopt bylaw provisions that unduly restrict shareholders’ right to present matters at a meeting of shareholders, such provisions are rare and, regardless, can be addressed effectively by means other than the prescriptive provision requested by this proposal. The shareholder approval process requested by the proposal is unusual and unnecessarily restrictive. Our Bylaws give the Board the ability to adopt, amend or repeal bylaws without shareholder approval, while giving shareholders the same ability to adopt, amend or repeal our Bylaws. As discussed above, this provides the Board the ability, in the exercise of its fiduciary duties, to periodically reviews the Bylaws and adopt appropriate updates. In contrast, this proposal would result in an unusual, restrictive, and unnecessarily complex process for a vaguely described range of bylaw amendments. For example, the SEC staff has acknowledged that companies may adopt advance notice bylaw provisions that require notice earlier than what is required under the SEC’s recently adopted ”universal proxy card” rules, and the Company’s bylaws (as with a proxy access rule that was previously adopted by the SEC) require earlier notice than allowed for under this proposal for nomination of director candidates that are to be included in a company’s proxy statement under the Company’s proxy access bylaw provisions. The Board believes that shareholder votes of
93 PROPOSAL NUMBER 6 – Shareholder Proposal Requesting An Amendment To Our Bylaws the type requested by the proposal would be highly unusual, inefficient, and impractical, given the broad wording of the proposal that could require holding a shareholder vote for any amendment deemed to “impose new disclosure requirements” on director nominees, even if such amendments were designed, for example, to inform shareholders whether a nominee would qualify as an independent director or would satisfy any new legal standards, or even if the amendment were minor, clarifying, or otherwise designed to enhance transparency for our shareholders. As discussed above, given the Company’s existing governance processes and active shareholder engagement program, the Board believes that there are better existing avenues for shareholders to address any concerns raised by the proposal, rather than the unusual and overly restrictive approach requested by the proposal. The Board of Directors respectfully requests that shareholders vote AGAINST Proposal 6. 94 PROPOSAL NUMBER 7 – Shareholder Proposal Requesting Whereas One out of As the COVID-19 pandemic has shown, paid sick leave is a crucial contributor to public health by allowing sick workers who are contagious to isolate themselves from their coworkers and the public. One study found a 56% reduction in COVID-19 cases as a result of Under the We believe adopting a comprehensive, permanent, and public paid sick leave policy would help make the future Resolved Shareholders of the Directors. This policy should not expire after a set time or depend upon the existence of a global pandemic.
95 PROPOSAL NUMBER A Paid Sick Leave Policy Recommendation of the Board of Directors The policy requested in this proposal is unnecessary because Union Pacific and the Board of Directors supports providing paid sick leave to our employees, but under federal law the Board cannot unilaterally provide sick leave benefits to our unionized employees. The Board of Directors has considered the proposal and recommends shareholders do not support it because the Board believes that the proposal fails to consider the actions the Company has
The Company already provides paid leave and
The Transportation Communications International Union’s (TCU) collective bargaining agreement already provides paid sick leave, bringing the total number of Union Pacific 96 PROPOSAL NUMBER A Paid Sick Leave Policy The recent round of labor negotiations that were concluded in December 2022 resulted in the largest wage increases in nearly five decades, including a 24% pay increase that will result in average railroad salaries being $110,000 a year by 2025 while maintaining employees’ platinum-level healthcare coverage. However, the Company recognizes that those negotiations did not resolve the issue of paid sick leave, and since then the Company has Union Pacific well-being of our employees. At Union Pacific, The proposal fails to acknowledge or recognize that the Company is required by law to collectively bargain with its rail unions regarding paid sick leave and that the Board cannot unilaterally implement a paid sick leave policy as the proposal requests. The Company is committed to continue collective bargaining with its rail unions regarding paid sick leave as shown by the recent agreements reached with a majority of our rail unions. While the Company has discussed these considerations with the proponent of the proposal, the proponent sought additional commitments or agreements beyond those requested in the proposal. Despite the Company’s progress on the number of agreements reached with our unions to provide paid sick leave, the Company was unable to reach a resolution with the proponent for withdrawal of the proposal. For the proposal is unnecessary because Union Pacific supports providing paid sick leave to our employees and is The Board of Directors respectfully requests that shareholders vote AGAINST Proposal 97 Under SEC rules, any shareholder who wishes to present a proposal to be included in our Proxy Statement and introduced at our Shareholders may obtain a printed copy of the Company’s Any eligible shareholder wishing to nominate director candidates for inclusion in our Proxy Statement under our proxy access Section 16(a) of the Exchange Act requires the Company’s executive officers, directors and persons who own more than 10% of a registered class of the Company’s equity securities to file initial reports of ownership and reports of changes in ownership of the Company’s common stock with the SEC. SEC regulations require executive officers, directors and greater than 10% shareholders to furnish the Company with copies of all forms they file pursuant to Section 16(a). As a matter of practice, the Company’s administrative staff assists the Company’s executive officers and directors in preparing initial reports of ownership and reports of changes in ownership and filing such reports with the SEC. Based solely on a review of the copies of such forms furnished to the Company and written representations from the Company’s executive officers and directors, there were The broker, bank or other nominee for any shareholder who is a beneficial owner, but not the record holder, of the Company’s common stock may deliver only one copy of the Company’s Proxy Statement and annual report to multiple shareholders who share the same address, unless that broker, bank or other nominee has received contrary instructions from one or more of the shareholders. The Company will deliver promptly, upon written or oral request, a separate copy of the Proxy Statement and annual report to a shareholder at a shared address to which a single copy of the documents was delivered. A shareholder who wishes to receive a separate copy of the Proxy Statement and annual report, now or in the future, should submit a request to the Secretary of the Company by telephone at 402-544-5000 or by submitting a written request to the Secretary of the Company at the address listed below. Beneficial owners sharing an address who are receiving multiple copies of proxy materials and annual reports and wish to receive a single copy of such materials in the future will need to contact their broker, bank or other nominee to request that only a single copy of each document be mailed to all shareholders at the shared address in the future. 98 Other Matters If you would like an additional copy of the Annual Report on Form 10-K for the year ended December 31, The references to the Company’s website in this Proxy Statement do not constitute, and should not be deemed, an incorporation by reference of the information contained on, or available through, the website. Therefore, such information should not be considered part of this Proxy Statement. The Board does not currently intend to bring any other business before the Annual Meeting, and is not aware of any other business to be brought before the Annual Meeting. If any other business is properly brought before the Annual Meeting, the proxies will be voted in accordance with the judgment of the proxy holders. Whether or not you plan to attend the Annual Meeting, please vote by telephone or Internet or complete, sign, date and promptly return the accompanying proxy card in the enclosed envelope.
99 UNION PACIFIC CORPORATION AND SUBSIDIARY COMPANIES Reconciliation of Non-GAAP Financial Measures
A-1 |