UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  ¨                              Filed by a Party other than the Registrant  ¨

Check the appropriate box:

ITRON, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ITRON, INC.

2111 N. Molter Road

Liberty Lake, Washington 99019

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON MAY 8, 2015SEPTEMBER 14, 2016

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Itron, Inc. will be held at The Davenport HotelHilton Greenville in the PorterCongaree Room, at 1045 West Orchard Park Drive, Greenville, South Post Street, Spokane, Washington,Carolina, at 8:00 a.m., local time, on Friday, May 8, 2015,Wednesday, September 14, 2016, for the following purposes:

The Board of Directors has established the close of business on March 4, 2015July 25, 2016 as the record date for the determination of shareholders entitled to notice of and to vote at the annual meeting or any adjournment or postponement thereof.

Members of the Company’s management will not make any formal presentation as part of the annual meeting, but will be available in addition to all of our directors, to address questions from shareholders, as appropriate. In addition, all of our director nominees together with those directors continuing in office will attend the annual meeting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER ANNUAL MEETING TO BE HELD ON MAY 8, 2015:SEPTEMBER 14, 2016:

Our proxy statement is attached. Financial and other information concerning Itron is contained in our Annual Report to Shareholders for the 20142015 fiscal year. The proxy statement and our Annual Report are available for all shareholders atwww.edocumentview.com/ITRI

Your vote is very important. To ensure representation at the annual meeting, shareholders are urged to vote as promptly as possible. To vote your shares, please refer to the voting instruction form on the website noted above, or review the section titled “Quorum and Voting” beginning on page two of the accompanying proxy statement. Any shareholder attending the annual meeting may vote in person even if that shareholder has returned a proxy.

Liberty Lake, Washington

March 20, 2015August 3, 2016

TABLE OF CONTENTS

PROXY STATEMENT

This proxy statement is being furnished to shareholders of Itron, Inc. in connection with the solicitation by our Board of Directors of proxies for use at the 20152016 Annual Meeting of Shareholders. The meeting will be held in the PorterCongaree Room of The Davenport Hotel,Hilton Greenville, located at 1045 West Orchard Park Drive, Greenville, South Post Street, Spokane, Washington,Carolina, at 8:00 a.m., local time, on Friday, May 8, 2015,Wednesday, September 14, 2016, for the purposes listed in the accompanying Notice of Annual Meeting of Shareholders. The Company’s principal executive office is at 2111 North Molter Road, Liberty Lake, Washington 99019.

Internet Availability of Annual Meeting Materials

Our proxy materials will be available for you to access over the Internet. On or about March 26, 2015,August 3, 2016, we will mail to our shareholders a Notice of Internet Availability of Proxy Materials (Notice) directing shareholders to the web sitewebsite provided on the Notice where they can access our proxy materials and view instructions on how to vote via the Internet or by phone. The Notice will also provide instructions for obtaining paper copies of the proxy materials and a proxy card, if requested by a shareholder.

The following proxy materials will be available for you to review online:

Proposals to Be Voted On at the Annual Meeting

At the annual meeting, we will consider and vote on the following proposals:

Record Date and Outstanding Shares

Holders of record of our common stock at the close of business on March 4, 2015,July 25, 2016, are entitled to notice of, and to vote at, the annual meeting. On the record date, there were 38,533,90038,242,461 shares of our common stock outstanding. Each outstanding share of our common stock will entitle its holder to one vote on each of the foursix directors to be

elected and one vote on each other matter to be voted on at the annual meeting. Each of our directors and executive officers intends to vote or direct the vote of all shares of common stock over which he or she has

voting control in favor of: (1) the election of the nominees for director; (2) the re-approval of the Itron, Inc. Executive Management Incentive Plan; (3) the advisory approval of the compensation we paid our named executive officers in 2014;2015; and (4)(3) the ratification of ErnstDeloitte & YoungTouche LLP as our independent registered public accounting firm.accountant.

Quorum and Voting

Each shareholder is entitled to one vote per share of common stock held on each matter to be voted on. The presence at the annual meeting, in person or by proxy, of holders of a majority of the outstanding shares of common stock on the record date will constitute a quorum. Abstentions and “broker non-votes” (shares held by a broker or nominee who does not have the authority, express or discretionary, to vote on a particular matter) on any of the proposals to be voted on will be counted only for purposes of determining the presence of a quorum.

You may vote your shares in one of several ways, depending on how you own your shares.

Registered Shareholders (Shares held in your name)

Registered shareholders can vote in person, by Internet, by telephone or by mail, by casting their vote as follows:

Beneficial Shareholders (Shares held in the name of a broker, bank or other holder of record on your behalf)

If your shares are held in the name of a broker, bank, or other nominee or holder of record, follow the voting instructions on the voting instruction form provided to you by the holder of record to vote your shares.

Proposal One – Election of Directors: Each nominee for director is elected by the vote of the majority of the votes cast with respect to that director’s election. Holders of common stock are not entitled to cumulative votes in the election of directors. Abstentions from voting on this matter will not be counted. Brokers and other holders of record do not have discretionary voting authority to vote your shares in the election of directors, absent voting instructions from you. Therefore, if you are a beneficial shareholder and do not provide voting instructions on proposal number one to the holder of record for your shares, they willnot be voted in the election of directors.

Proposal Two – Itron, Inc. Executive Management Incentive Plan: The Itron, Inc. Executive Management Incentive Plan (Plan) will be re-approved if the number of votes cast “for” the Plan exceeds the number of votes cast “against” approval of the Plan. Abstentions from voting on this matter will not be counted. Brokers and other holders of record do not have discretionary voting authority to vote your shares on the approval of the Plan, absent voting instructions from you. Therefore, if you are a beneficial shareholder and do not provide voting instructions on proposal number two to the holder of record for your shares, they willnotbe counted in the vote for this proposal.

Proposal Three – Say-on-Pay Vote (non-binding): The advisory (non-binding) vote on this proposal will be approved if the number of votes cast “for” the proposal exceeds the number of votes cast “against” approval of

the proposal. Abstentions from voting on this matter will not be counted. Brokers and other holders of record do not have discretionary voting authority to vote your shares for this proposal, absent voting instructions from you. Therefore, if you are a beneficial shareholder and do not provide voting instructions on proposal number threetwo to the holder of record for your shares, they willnotbe counted in the vote for this proposal.

Proposal FourThree – Ratification of Appointment of Independent Auditor: The appointment of ErnstDeloitte & YoungTouche LLP as the Company’s independent registered public accounting firmaccountant for 20152016 will be ratified if the majority of the votes cast are in favor of the proposal. Abstentions from voting on this matter will not be counted. Brokers and other holders of recorddohave discretionary authority to vote shares on this matter. Therefore, there will be no broker non-votes on the ratification of the Company’s independent registered public accounting firm.accountant.

Unless contrary instructions are specified, if the proxy is completed and submitted (and not revoked) prior to the annual meeting, the shares represented by the proxy will be voted as follows: (i) FOR all fourthree proposals; and (ii) in accordance with the best judgment of the named proxies on any other matters properly brought before the annual meeting.

Revocability of Proxies

Shares represented at the annual meeting by properly signed proxies will be voted at the annual meeting in accordance with the instructions given in the proxy. A shareholder may revoke a proxy at any time before the vote. Mere attendance at the annual meeting will not revoke a proxy. A proxy may be revoked only by:

If you voted by telephone or the Internet and wish to change your vote, you may call the toll-free number or go to the Internet site, whichever is applicable to your earlier vote, and follow the directions for changing your vote. If the annual meeting is postponed or adjourned for any reason, at any subsequent reconvening of the annual meeting, all proxies will be voted in the same manner as the proxies would have been voted at the original convening of the annual meeting (except for any proxies that have at that time effectively been revoked or withdrawn).

Proxy Solicitation

For the 20152016 annual meeting, we have retained Innisfree M&A Incorporated to aid in the solicitation of proxies. We will bear the cost of such solicitation of proxies, which we estimate will be approximately $10,000,$9,000, plus expenses. Proxies may be solicited by personal contact, mail, email, telephone, or facsimile. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of our common stock for their reasonable expenses in forwarding solicitation materials to the beneficial owners. Our directors, officers, and employees may also solicit proxies personally or by telephone, without additional compensation.

PROPOSAL 1 – ELECTION OF DIRECTORS

The Board of Directors (Board) is divided into three classes, with each director holding office for a three-year term or until his or her successor has been elected and qualified. At the annual meeting, one director,two directors who waswere elected to the Board effective MarchJune 1, 2015, as a Class 1 director, will be electedMr. Jaehnert and Ms. Tremblay, have been nominated for a termterms of twoone year (Class 1) and three years (Class 3), respectively, or until his successor istheir respective successors are duly elected and qualified,qualified. In addition, Messrs. Lande and threeMainz, directors will be elected asto the Board effective December 10, 2015 and January 1, 2016, respectively, have been nominated for terms of one year (Class 1) and two years (Class 2), respectively, or until their respective successors are duly elected and qualified. Shareholders are also being asked to re-elect two Class 23 directors for terms of three years or until their respective successors are duly elected and qualified. Unless authority is withheld, the persons named as proxies will vote for the election of the nominees listed below. If any of the nominees become unavailable to serve, the persons named as proxies will have discretionary authority to vote for a substitute nominee.

Our Board has nominated the following persons for election to the Board. Each nominee is currently a director and has indicated that he or she is willing and able to continue to serve as a director.

Class 3 (to serve until the 2019 annual meeting)

Lynda L. Ziegler

Thomas S. Glanville

Diana D. Tremblay

Class 2 (to serve until the 2018 annual meeting)

Kirby A. Dyess

Philip C. Mezey

Daniel S. PelinoPeter Mainz

Class 1 (to serve until the 2017 annual meeting)

TimothyJerome J. Lande

Frank M. LeydenJaehnert

We have concluded that each of the nominees for re-election, as well as the other directors who will continue in office, have the skills, experience, knowledge, and personal attributes that are necessary to effectively serve on our Board. As described below in their biographies and the section “Director and Director Nominee Qualifications” that follows, the qualifications of our directors and director nominees support our conclusion that each of the individuals should serve as a director in light of our current business operations and structure.

THE BOARD RECOMMENDS THAT YOU VOTEFOR

THE ELECTION OF EACH OF THE FOURSIX NOMINEES FOR DIRECTOR.

Retiring Director – Class 3

Sharon L. Nelson, age 69, has been a director of Itron since 2003 and her current term will expire at the 2016 Annual Meeting. Ms. Nelson has elected not to stand for re-election to the Board and will therefore retire from the Board. We at Itron recognize and appreciate Ms. Nelson’s dedication and service to the Company during her tenure on the Board. Her position as a Class 3 director will be filled by Diana D. Tremblay upon Ms. Tremblay’s election by the shareholders at the 2016 Annual Meeting.

Appointment of New Directors by the Board – Increase in Size of Board

Effective NovemberJune 1, 2014,2015, the Board elected Daniel S. PelinoFrank M. Jaehnert and Diana D. Tremblay to the Board, which increased the number of directors serving on our Board from ten to eleven.twelve. Subsequently, Michael V. Pulli resigned from the Board effectiveon December 31, 2014, so the number of directors was reduced back to ten. In February10, 2015, the Board elected Timothy M. LeydenJerome J. Lande to the Board effective Marchimmediately, and Peter Mainz to the Board effective January 1, 2015,2016, which increased the Board again to eleven members.thirteen members at the end of 2015, and to fourteen members effective January 1, 2016. Messrs. Lande and Mainz were appointed directors by the Board in accordance with a Cooperation Agreement amongst each of them, CopperSmith Capital Management LLC (for which Mr. Lande previously served as a managing partner) and affiliates, and the Company. As stated above, both Mr. Pelino and Mr. Leydenall four of these directors are nominees for election by the shareholders at the 20152016 Annual Meeting.See also “Retiring Director – Reduction in Size of Board”.Class 3”above.

Nominee to Serve until 2017 (Class 1)

Timothy M. LeydenJerome J. Lande(age 63) (age 40) was elected a director by the Board in December 2015. He serves as the Head of Special-Situation Investments at Scopia Capital Management LP. He was previously the Managing Partner of Coppersmith Capital Management LLC (Coppersmith), an asset management firm focused on equity investing in small to mid-cap markets and in long-term value creation, which he co-founded in April 2012. Prior to co-founding Coppersmith, Mr. Lande was a partner of MCM Capital Management, LLC, the general partner of MMI Investments, LP, a small-cap investment fund founded in 1996 to employ private equity investing methodologies in public equities, and where Mr. Lande oversaw research, trading and activism from 1998 to 2011. Prior to that time, he was associated with other equity investment firms where he was directly involved with corporate development as well as equity growth. Mr. Lande is a member of the board of directors of CONMED Corporation, a public, global medical technology company whose shares are traded on the NASDAQ stock exchange, where he also serves on the compensation and strategy committees.

Mr. Lande brings to the board financial and investing acumen gained through his many years of experience at several equity investment firms. Since his firm Scopia (and affiliates) is a principal shareholder of the Company, Mr. Lande also provides an understanding of an investor’s perspective of Itron and its operations as they relate to shareholder value.

Frank M. Jaehnert (age 58) was elected a director by the Board in May 2015. Mr. Jaehnert held several roles from 1995 to 2013 with Brady Corporation, a publicly traded manufacturer and marketer of complete solutions that identify and protect premises, products and people. This included President and Chief Executive Officer from 2003 to 2013, Senior Vice President and President of a business line from 2002 to 2003, and Vice President and Chief Financial Officer from 1996 to 2001. Prior to joining Brady Corporation, Mr. Jaehnert held various financial and management positions for Robert Bosch GmbH, a German entity. Mr. Jaehnert serves on the board of directors of Nordson Corporation, which he joined in 2012, and Briggs & Stratton Corporation, which he joined in 2014. Nordson (NASDAQ: “NDSN”) and Briggs & Stratton (NYSE: “BGG”) are both publicly traded large manufacturing companies. Mr. Jaehnert also serves on the audit and finance committees of Briggs & Stratton and the audit committee of Nordson.

Mr. Jaehnert has extensive, broad-based international business and executive management and leadership experience. Mr. Jaehnert’s diverse background and his experience with geographic expansion and acquisitions as well as his experience serving on other public company boards bring valuable perspectives to the Board.

Nominee to Serve until 2018 (Class 2)

Peter Mainz (age 52) was elected a director by the Board effective MarchJanuary 1, 2015. Since 1983 and until his retirement as CFO in September 2014,2016. Mr. Leyden served in various management and leadership roles at Western Digital Corporation, a NASDAQ company (WDC) and industry-leading developer and manufacturer of storage solutions for digital content. Those leadership roles included financial, accounting, manufacturing and information technology functions at WDC and its subsidiaries. WDC has manufacturing facilities in the U.S., China, Japan, Malaysia, the Philippines, Singapore and Thailand, as well as sales offices worldwide. Mr. Leyden left WDC for the period between 2000 and 2007, during which time he initiallyMainz served as a consultant principal for PRTM, an operational consultingNon-Executive Director of Cyan Holdings Plc (London Stock Exchange (LSE): “CYAN”) from 2014 until 2015, stepping down from that position upon his appointment to the Itron Board. Mr. Mainz also served as President, Chief Executive Officer and a director of Sensus Inc., a global solutions company followed by CFO positions for multiple divisions(and competitor of Sage Software USA, a subsidiary of Sage Software PLC and provider of business managementItron) offering smart meters, communications systems, software, and services. Upon his returnservices for the electricity, gas and water industries, from 2008 until 2014. Prior to WDC inthat, he served as the Chief Financial Officer of Sensus from 2003 to 2007 Mr. Leydenand also served as the Executive Vice President Finance and CFO until 2010 and as COO from 2010 to 2012. In 2012, after WDC acquired HGST, Inc., WDC was organized into a parent company with two operating subsidiaries, HGST and WD. of Operations for one year.

Mr. Leyden then served as President of the WD

subsidiary, from 2012 to 2013, and subsequently served as CFO of the parent company, WDC, from 2013 until he retired. For a period following his retirement, Mr. Leyden served as advisor to his successor and other WDC executive management until January 2015.

A native of Ireland, Mr. LeydenMainz brings to the Board a mixmore than 20 years of financial and operational experience (in hardware and software industries), in addition to a backgroundcommunication systems business expertise that includes mergersoperational and acquisitions and integration experience related to the assimilation of acquired companies into both WDC and Sage Software. His priorcommercial executive leadership expertise. Mr. Mainz’s experience with overseeing global manufacturing, engineering, marketing,the smart metering industry brings valuable industry and sales operations, when combined with his financial and accounting background, add a depth of international insightinnovative knowledge to the Board.

Nominees to Serve until 2018 (Class 2)

Kirby A. Dyess (age 68) has been a director since 2006. Ms. Dyess is a principal in Austin Capital Management LLC where she invests in and assists early stage companies. Prior to forming Austin Capital Management LLC in 2003, Ms. Dyess spent 23 years at Intel Corporation where she most recently served as its corporate vice president and as director of operations for Intel Capital, until her retirement in December 2002. While at Intel, she also served as vice president and director of new business development and corporate vice president and director of human resources worldwide. Ms. Dyess serves on the board of directors of Viasystems Group Inc., a public company whose shares are traded on NASDAQ. She also serves on the board of Complí, a privately-held company that provides compliance software to companies, and chairs the board of Prolifiq SW Inc., a privately-held enterprise software company. She has served as vice president and president of the Oregon Board of Higher Education, and served on its board from 2004 to 2009. In 2009, Ms. Dyess was elected to the board of directors of Portland General Electric (PGE), a public utility whose shares are traded on the New York Stock Exchange (NYSE).

Due to her positions at Intel Corporation and her more recent due diligence and investment in numerous early stage technology companies, Ms. Dyess provides the Board with a strong background in technology, brand marketing, human resources, mergers and acquisitions, and business development, in addition to business innovation and research and development knowledge.

Philip C. Mezey(age 55) was President and Chief Operating Officer (COO) of Itron’s Energy segment from March 2011 until December 31, 2012, and effective January 1, 2013, he was elected our President and Chief Executive Officer and a member of our Board of Directors. Mr. Mezey joined Itron in March 2003 as Managing Director of Software Development for Itron’s Energy Management Solutions Group as part of Itron’s acquisition of Silicon Energy Corp., where he had most recently served as its Senior Vice President of Product Development and Strategy. Mr. Mezey was promoted to Group Vice President and Manager of Software Solutions in 2004. In 2005, he became Sr. Vice President Software Solutions, and in 2007 Mr. Mezey became Sr. Vice President and Chief Operating Officer – Itron North America.

Mr. Mezey brings to the Board more than 13 years of experience in research and development, manufacturing, and business development for metering software and related services. While at Silicon Energy Corp., he managed the marketing and sales departments, and was directly involved with a number of mergers and acquisitions prior to Itron’s acquisition of that company. During his tenure at Itron, he has had extensive exposure to international systems and utilities throughout the world, and, as the only employee director, Mr. Mezey provides the Board with valuable insight into management’s views and perspectives, as well as the day-to-day operations of Itron.

Daniel S. Pelino (age 57) was elected as a director by the Board effective November 1, 2014. Mr. Pelino joined International Business Machines Corp (IBM) in 1980, and currently serves as general manager of its public sector business, where he leads IBM’s business in the government, education, healthcare, and life sciences industries, including IBM’s Smarter Cities initiative. He serves as a public sector expert and advisor to government officials, news media, and global publications, and his team helps organizations, states, and countries transform and create citizen-based, digitized services to improve economic vitality. Mr. Pelino currently serves on the Executive Committee for the Patient Centered Primary Care Collaborative (PCPCC) and on the Board of Directors of the Healthcare Executive Network (HEN).

Mr. Pelino provides the Board with a strong background in technology, brand marketing, and business innovation and development. With his worldwide experience in governmental business and strategies, he brings a current global business perspective to the Board. In addition, Mr. Pelino’s knowledge of digitized services created for economic development adds invaluable insight to the Company’s smart metering systems and strategies for its utility customers.

Directors Continuing in Office until 20162019 (Class 3)

Lynda L. Ziegler (age 62)64) has been a director since February2013 and was elected Vice Chairman of 2013.the Board in 2015. Ms. Ziegler recently retired from Southern California Edison (SCE), one of the largest electric utilities in the U.S. (and a customer of Itron), whose parent is Edison International. During her tenure at SCE, she held various management

positions related to customer program offerings, customer service, development, communication and implementation of energy efficiency programs, marketing and communication of smart meters, and generally led all aspects of delivering power to almost 5 million customers. From 2006 to 2011, Ms. Ziegler was Senior Vice President of Customer Service, and from January 1, 2011 until her retirement in September of 2012, she served as Executive Vice President of Power Delivery Services, where she was responsible for transmission and distribution construction and maintenance, customer service, information technology (IT), and support services including procurement and real estate management. In the past she has served on the advisory committee for power delivery and utilization at the Electric Power Research Institute (EPRI), and aswas a founding member of the Board of the Association for Women in Water and Energy.

Ms. Ziegler brings to the Board her extensive background with public utilities, especially with her recent responsibilities in the industry related to smart meters and customer relations from the utility perspective. Her breadth of knowledge of software services, transmission and distribution construction and maintenance, IT, and business development adds to the diverse business backgrounds of our other members of the Board.

Thomas S. Glanville(age 56) (age 58) has been a director since 2001. Since 2003, Mr. Glanville has been managing partnerthe Managing Partner of Eschelon Advisors,Energy Partners, LP, Eschelon Energy Partners,Advisors, LP, and affiliates, providing energy and private equity investment and advisory services. From 1999-2002,1999 to 2002, Mr. Glanville served as vice presidentVice President of technologyTechnology and new venturesNew Ventures for Reliant Energy, Inc., one of the world’s largest international energy services companies, and its affiliate, Reliant Resources, Inc. In September 2015 he was appointed to the board of directors of Mitcham Industries, Inc. (NASDAQ: MIND), a publicly traded seismic equipment company, where he also serves as chair of the board’s audit committee. He currently serves on the board of directors of thea privately-held oil and gas exploration and production company, Strand Energy, L.L.C.LLC. He also servesserved as chairmanChairman of the Texas Tri-Cities branch (Houston, Austin, San Antonio)TriCities Chapter of the National Association of Corporate Directors (NACD).(Houston, Austin, San Antonio) from 2011 through June 2016.

Mr. Glanville brings to the Board financial expertise, industry-related experience through his association with Reliant Energy, energy sector exposure through the Eschelon entities and Mitcham Industries, and technology skills that include his involvement with electric metering studies and research while he was vice presidentVice President of technologyTechnology and New Ventures for Reliant Energy.

Sharon L. NelsonDiana D. Tremblay (age 68) has been56) was elected a director since 2003.by the Board in May 2015. Since July 2013, Ms. Nelson is an attorney and served as chief of the Consumer Protection Division of the Washington State Attorney General’s Office from 2003 to 2006, and as director of the Shidler Center for Law, Commerce, and Technology at the University of Washington from 2000 to 2003. In addition, Ms. Nelson has been a consultant to both corporations and nonprofit organizations specializing in advice on public policy and regulation. In the past sheTremblay has served as chairthe Vice President of Global Business Services of General Motors Company (NYSE: GM). She has been with that company since 1977, and during her tenure at GM, she has held a variety of positions in engineering, manufacturing and labor relations, including direct operational responsibility for over 50,000 employees. As leader of the Washington Utilitiesnewly formed Global Business Services business unit, she is charged with streamlining administrative processes around the world to improve service quality, reduce complexity, and Transportation Commissionachieve cost efficiencies in such areas as finance, human resources, real estate, purchasing, asset management, and as president of the National Association of Regulatory Utility Commissioners. She served as a commissioner on the National Commission on Energy Policy from 2002master data.

Ms. Tremblay brings to 2010, and in 2011 she was co-chair of the State Energy Strategy Advisory Committee for the State of Washington. Previously, Ms. Nelson was a member of the Board of Trustees of the North American Electrical Reliability Corporation (NERC) based in Princeton, New Jersey. NERC’s members consist of the owners, operators, and users of the North American bulk electrical system. The U.S. Federal Energy Regulatory Commission granted NERC the legal authority to enforce reliability standards on users of the bulk power system.

Ms. Nelson has also served on the boards of two other public corporations, XO Telecommunications (now private) and Covad Communications. Herher broad business experience that includes her previous roles at GM as an executiveengineer, plant manager, head of manufacturing, and as a board member of other public companies, her legal background, andlead labor relations negotiator, which together with her knowledge of public policybusiness services and global manufacturing processes, provide additional international, administrative, and manufacturing perspectives to the utility and energy regulatory environment are of great value in her role as a director of Itron.Board.

Directors Continuing in Office until 2017 (Class 1)

Jon E. Eliassen(age 68)69) has been a director since 1987 and has served as our Chairman of the Board since January 1, 2010. In September 2013 he retired as the president, chief executive officer (CEO)President, Chief Executive Officer, and member of the Boardboard of Directorsdirectors of Red Lion Hotels Corporation, an NYSE traded company headquartered in Spokane, Washington, where he had served as presidentPresident and CEO since January 2010. From 2003 until 2007, Mr. Eliassen was presidentPresident and chief executive officerChief Executive Officer of the Spokane Area Economic Development Council, and from 1970 until 2003, he held numerous positions within Avista Corporation, a company involved in the production,

transmission, and distribution of electricity and natural gas, before retiring in 2003 as senior vice presidentSenior Vice President and chief financial officer,Chief Financial Officer, a position he had held since 1986. In addition, Mr. Eliassen is a member of the board of directors of ITL, Inc., a privately held technology company, and was a member of the board of Red Lion Hotels Corporation from September 2003 to September 2013.

In addition to his experience as President and CEOChief Executive Office of an NYSE traded hospitality company, Mr. Eliassen has an extensive background with public utilities and the utility industry in general. He contributes to our Board the knowledge gained from his association with a public utility that includes extensive financial experience with accounting, audit,auditing, strategic planning, business development, and financing strategy, as well as merger and acquisition involvement that has included due diligence processes, company and business valuation techniques, and financial analyses. In addition, Mr. Eliassen has been a principal or general partner in venture capital firms with expertise in evaluating businesses and has several years’ experience as an expert witness before utility regulatory commissions in matters relating to financial strategy and policy, credit ratings, cost of capital, and capital structure.

Charles H. Gaylord, Jr.(age 69)71) has been a director since 2006. Mr. Gaylord has been a private technology investor focusing on software and communications since 1994. Until his retirement in 1994, Mr. Gaylord was executive vice presidentExecutive Vice President for Intuit Inc., a leading developer of personal and small business finance software programs such as “Quicken” and “QuickBooks”. From 1990 to 1993, he served as chairmanChairman and chief executive officerChief Executive Officer of ChipSoft, Inc., the original publisher of the tax preparation software program “TurboTax”. Mr. Gaylord is a member of the board of directors and a member of the compensation committee of Proximetry Inc., a privately-held company, and is a former member of the advisory board of Technology Crossover Ventures I, an investment firm that invests primarily in private and public information technology companies.

During various periods from 1990 to approximately 2002, Mr. Gaylord was a member of the boards of directors and served on the compensation committees of the following public companies: Stac, Inc.; HNC Software, Inc.; Maxis, Inc.; and Retek, Inc.; and also served as a director of a number of private technology companies. His wealth of knowledge of software services, brand marketing, IT technology, and business development adds to the diverse business backgrounds of our other members of the Board.

Gary E. Pruitt (age 65)66) has been a director since 2006. From 2002 until his retirement in October 2009, Mr. Pruitt was chairman and chief executive officerthe Chief Executive Officer of Univar N.V., a chemical distribution company with distribution centers in the U.S., Canada, and Europe.Europe, where he also served as chairman of the board until November 2010. He had been associated with Univar and related entities since 1978 and held a variety of senior management positions within Univar and Van Waters & Rogers, Inc., which ultimately became Vopak USA Inc. Mr. Pruitt has also worked at Arthur Andersen & Co. as a chartered accountant with a public accounting firm.accountant. He currently serves on the board of Premera Blue Cross, and on the boards of directors of the following NYSE traded companies: Public Storage, Inc.; Esterline Technologies Corporation; and PS Business Parks, Inc. Mr. Pruitt also serves on the executive, compensation, and nominating and corporate governance committees of Esterline and on the audit committees of Public Storage and PS Business Parks.

Mr. Pruitt brings to the Board his experience as a chief executive officer of a multi-national company and all the business attributes required of that position, along with operational and manufacturing expertise through his various other management positions held with Univar. His public accounting financial background and other public board experiences provide strategic and global perspectives on our business as well.

Timothy M. Leyden (age 64) was elected a director by the Board effective March 2015. For the past eight years, Mr. Leyden has been associated with Western Digital Corporation (WDC), a NASDAQ company that manufactures hard-disk drives (HDDs) used to record, store and recall volumes of data. WDC is also a leader in solid-state drives (SSDs). He served as WDC’s Executive Vice President of Finance and Chief Financial Officer from 2007 to 2010, and as its Chief Operating Officer from 2010 to 2012. He served as President of Western Digital, one of WDC’s two operating subsidiaries, from 2012 to 2013, and then returned to WDC as its Chief Financial Officer in 2013 until January 2015, when he retired. WDC currently has manufacturing facilities in the

Retiring Director – ReductionU.S., China, Japan, Malaysia, the Philippines, Singapore and Thailand, as well as sales offices worldwide. Prior to joining WDC, Mr. Leyden was Vice President and then Senior Vice President of Finance and Chief Financial Officer for Sage Software PLC, a customized software solutions business, from 2001 to 2007. Mr. Leyden serves on the board of directors of Oakgate Technology, Inc., a privately-held company that provides test, validation and benchmarking products and services to the storage industry. He also serves on the board of directors of Virtium LLC, a private company that provides storage and memory innovation for various imbedded industrial segments.

Mr. Leyden brings to the Board a mix of financial and operational experience (in both hardware and software industries), in Sizeaddition to a background that includes mergers and acquisitions and integration experience related to the assimilation of Boardacquired companies into both WDC and Sage Software. His prior experience with overseeing global manufacturing, engineering, marketing, and sales operations, when combined with his financial and accounting background, adds a depth of international insight to the Board.

Graham M. WilsonDirectors Continuing in Office until 2018 (Class 2)

Kirby A. Dyess (age 70) has been a director since 2006. Ms. Dyess is a principal in Austin Capital Management LLC where she invests in and assists early stage companies. Prior to forming Austin Capital Management LLC in 2003, Ms. Dyess spent 23 years at Intel Corporation where she most recently served as its Corporate Vice President and as Director of Operations for Intel Capital, until her retirement in December 2002. While at Intel, she also served as Vice President and Director of New Business Development and Corporate Vice President and Director of Human Resources worldwide. Ms. Dyess previously served on the board of directors and as chairman of the compensation committee of Viasystems Group Inc., a public company whose shares were traded on the NASDAQ stock exchange prior to its acquisition by TTM Technologies last year. She currently serves on the board of Complí, a privately-held company that provides compliance software to companies, and chairs the board of Prolifiq SW Inc., a privately-held enterprise software company. In 2009, Ms. Dyess was elected to the board of directors of Portland General Electric (PGE), a public utility whose shares are traded on the NYSE, where she serves as a member of its audit committee and chairs the compensation and human resources committee.

Due to her positions at Intel Corporation and her more recent due diligence and investment in numerous early stage technology companies, Ms. Dyess provides the Board with a strong background in technology, brand marketing, human resources, mergers and acquisitions, and business development, in addition to business innovation and research and development knowledge.

Philip C. Mezey (age 56) has been a director since 2013. He was President and Chief Operating Officer of Itron’s Energy segment from March 2011 until December 31, 2012. Effective January 1, 2013, he was elected Itron’s President and Chief Executive Officer. Mr. Mezey joined Itron in March 2003 as Managing Director of Software Development for Itron’s Energy Management Solutions Group as part of Itron’s acquisition of Silicon Energy Corp., where he had most recently served as its Senior Vice President of Product Development and Strategy. Mr. Mezey was promoted to Group Vice President and Manager of Software Solutions in 2004. In 2005, he became Senior Vice President Software Solutions, and in 2007 Mr. Mezey became Senior Vice President and Chief Operating Officer Itron North America.

Mr. Mezey brings to the Board more than 13 years of experience in research and development, manufacturing, and business development for metering software and related services. While at Silicon Energy Corp., he managed the marketing department, and was directly involved with a number of mergers and acquisitions prior to Itron’s acquisition of that company. During his tenure at Itron, he has had extensive exposure to international systems and utilities throughout the world, and, as the only employee director, Mr. Mezey provides the Board with valuable insight into management’s views and perspectives, as well as the day-to-day operations of Itron.

Daniel S. Pelino (age 59) has been a director since 1990,2014. Mr. Pelino joined International Business Machines Corp (IBM) in 1980, and currently serves as General Manager of its public sector business, with a focus on government, education, healthcare, and life sciences industries, including IBM’s Smarter Cities initiative.

Mr. Pelino is a recognized expert in the public sector. He and his team have helped organizations, states and countries transform and digitize their systems. Additionally, he has advised government officials around the world, is a frequent contributor to the public sector dialogue having appeared on numerous news media programs, and has been quoted in various national and global publications. Mr. Pelino currently serves on the executive committee for the Patient Centered Primary Care Collaborative and on the board of directors of the Healthcare Executive Network.

Mr. Pelino provides the Board with a strong background in technology, brand marketing, and business innovation and development. With his worldwide experience in governmental business and strategies, he brings a current term will expire atglobal business perspective to the 2015 Annual Meeting.Board. In addition, Mr. Wilson has reached the agePelino’s knowledge of 70 and will retire in accordance withdigitized services created for economic development adds invaluable insight to the Company’s Corporate Governance Guiding Principles. During his twenty-five years of service on our Board, Mr. Wilson helped steer the Company through a period of tremendous growthsmart metering systems and prosperity which resulted in the recognition of Itron as a world leader in our industry. His financial acumen and business leadership have been invaluable to the Company and the other Board members. We at Itron recognize and appreciate Mr. Wilson’s dedication and service to the Company.strategies for its utility customers.

Mr. Wilson’s position as a Class 2 director will be filled by Mr. Pelino, upon his re-election by the shareholders at the 2015 meeting. With the retirement of Mr. Wilson, the number of directors serving on our Board will be reduced from eleven to ten.

Director and Director Nominee Qualifications

Our Corporate Governance Committee assists the Board in reviewing the business and personal background of each of our directors with respect to Itron’s business and its business goals. Our skill criteria for our Board members includes the following: executive leadership experience; functional knowledge of technology and technology applications; international business experience; knowledge of the utility and energy industry; marketing and sales experience; financial experience gained from a chief financial officer position, a CPA or other financial reporting background; expertise in manufacturing or software services; experience as an independent board member with a public company; and experience in business integrations, including mergers and acquisitions; and legal or corporate law background.acquisitions. In addition, we look for the following personal criteria: an effective negotiator, listener, and team player; a visionary with a strategic and global perspective; a successful leader with a proven record of accomplishments; a problem-solver; an effective decision-maker; and a person who will take a strong interest in the Company.

Our Corporate Governance Committee generally considers diversity as one of several factors relating to overall composition when making nominations to our Board. While we do not have a formal policy governing how diversity is considered, the Corporate Governance Committee generally considers diversity by examining the entire Board membership and, when making nominations to our Board, by reviewing the diversity of the entire Board. The Corporate Governance Committee construes Board diversity broadly to include many factors. As a result, the Corporate Governance Committee strives to ensure that our Board is represented by individuals with a variety of different opinions, perspectives, personal, professional, and industry experience and backgrounds, skills, and expertise. Currently, of the 13 independent directors on our Board, 5 are either former CFOs or former CEOs, 6 are under the age of 60, 5 have global business experience, and 4 are women, including our Vice Chairman of the Board.

When the Corporate Governance Committee considers candidates to be recommended to the Board for inclusion on the slate of director nominees for the next annual meeting of shareholders, it creates a matrix for each candidate to address our criteria. In addition to the qualities described in the individual director biographies, the following matrix summarizes the skills and attributes of our directors and director nominees for 20152016 that we believe are essential to our business:

Director Qualifications and Attributes

We have concluded that all of our directors, including the nominees for re-election, have the skills, experience, knowledge, and personal attributes that are necessary to effectively serve on our Board and to contribute to the overall success of our Company. We believe that the diverse background of each of our Board members ensures that we have a Board that has a broad range of industry-related knowledge, experience, and business acumen.See also “CORPORATE GOVERNANCE – Director Nominations by Shareholders” in this proxy statement.

MORE INFORMATION ABOUT OUR DIRECTORS

COMPENSATION OF DIRECTORS

The compensation paid to our directors has remained the same since 2011, except for the compensation paid to the Vice Chairman and the Value Enhancement Committee members, both of which were established in 2015, as described below. Both equity and cash compensation was determined using benchmark data from our peer companies provided by the Compensation Committee’s independent compensation consultant, Frederic W. Cook & Co. In 2015, our Corporate Governance Guiding Principles were amended to provide for the position of Vice Chairman, and the compensation for that position is described below.See also“Leadership Structure of the Board of Directors” in this proxy statement.

Director Fees. Our non-employee directors (other than our Chairman and Vice Chairman) receive an annual retainer of $165,000, with $65,000 paid in cash and $100,000 paid in shares of our common stock. For our Chairman, the annual retainer paid is $230,000, with $110,000 paid in cash and $120,000 paid in shares of our common stock. For our Vice Chairman, the annual retainer paid is $200,000, with $100,000 paid in cash and $100,000 paid in shares of our common stock. Members of the Audit/Finance Committee and the Value Enhancement Committee receive an additional annual retainer of $10,000, paid in cash, and members of our Compensation and Corporate Governance Committees receive an additional annual retainer of $6,500 and $5,000, respectively, paid in cash. The committee chairsCommittee Chairs for the Corporate Governance and Compensation Committees receive an additional annual retainer of $15,000, and the chairChairs of the Audit/Finance Committee receivesand Value Enhancement Committee receive an additional annual retainer of $20,000, all paid in cash on a quarterly basis. Our Chairman receives no additional retainers for serving on any of our committees.

For new non-employee directors, we issue restricted stock units (RSUs) equal in value to fifty percent50% of the annual cash retainer (currently at $65,000 for directors other than the Chairman and Vice Chairman) upon the individual’s election to the Board, with the RSUs vesting ratably over three years. Shares of our common stock and RSUs granted to non-employee directors that are issued as compensation are issued under our 2010 Amended and Restated 2010 Stock Incentive Plan.

In 2014 we adopted a policy that, upon attainment of age 65, a Director can choose to receive all of his or her retainer in cash, provided they continuously meet the stock ownership guidelines described in the following paragraph.

Stock Ownership Guidelines. Since 2006, we have maintained stock ownership guidelines for our non-employee directors, including our Chairman.directors. We expect our directors and Chairman to purchase (or hold) shares equal to five times their annual cash retainer within five years from their initial appointment or election as a director, or to be making substantial progress towards meeting the guidelines. For our Chairman that equates to $550,000 worth of stock, for our Vice Chairman that equates to $500,000 worth of stock, and for the other directors, it equates to $325,000 worth of stock. All of our non-employee directors currently comply with these ownership guidelines, with the exception of our recently elected non-employee directors, Lynda Ziegler, Daniel Pelino, and Timothy Leyden, whoDiana Tremblay, Frank Jaehnert, Jerome Lande and Peter Mainz, all of whom joined the Board within the last two years, and Lynda Ziegler whose guidelines were increased in February2015 upon her election as Vice Chairman. All of 2013, November of 2014, and March of 2015, respectively, and all of whomthese directors are making progress towards their goal.goals.

Deferred Compensation Plan. Pursuant to the Company’s Amended and Restated Executive Deferred Compensation Plan dated January 1, 2012, our non-employee directors are eligible to participate in that plan, and may defer up to 100% of any director fees and 100% of any RSUs that he or she anticipates receiving into a nonqualified account.

20142015 Director Compensation Table (for all non-employee Directors)

LEADERSHIP STRUCTURE OF THE BOARD OF DIRECTORS

The leadership of our Board is managed by our Chairman of the Board (Chairman). Our Corporate Governance Guiding Principles (Governance Principles) require the role of Chairman to be held by an independent director who meets the independence requirements of NASDAQ. The Board believes having separate roles of Chairman and Chief Executive Officer (CEO) allows for a more balanced workload between the Chairman and the CEO, especially in light of the current duties and responsibilities of the Chairman, which include the following:

Pursuant to the Company’s Governance Principles, which may be found online atwww.itron.com, the Chairman must be an independent director unless the Board determines that the best interests of shareholders would otherwise be better served. The Chairman is elected by the members of the Board following the annual meeting of shareholders (or at such other time as a vacancy for the role of Chairman may occur). The Chairman serves for a term of three years (provided such director is re-elected by shareholders if his or her term as a director does not coincide with his or her term as Chairman). The Chairman does not serve more than two consecutive terms, unless the Board approves an extended term. Our current Chairman, Jon Eliassen, is serving his second term that will expire at the 2016 annual meeting. At the annual meeting of the Board that takes place immediately following the 2016 Annual Meeting, the Board will appoint the replacement for Mr. Eliassen.

If the Board determines that it is in the best interests of the shareholders to combine the roles of CEO and Chairman, the Board will appoint a Lead Independent Director with the duties set forth in the Governance Principles.

In February 2015, the Board’s Corporate Governance Committee recommended that the Governance Principles be amended to provide for the role of Vice Chairman, also to be held by an independent director who meets the independence requirements of NASDAQ, unless the Board determines that the best interests of shareholders would otherwise be better served. Effective April 1, 2015, and upon the recommendation of the Corporate Governance Committee, the Board appointed Lynda Ziegler to that position. As stated in the Governance Principles, the Vice Chairman is appointed by the members of the Board and serves for a term to be determined by the Board (provided such director is re-elected by shareholders if his or her term as a director does not coincide with his or her term as Vice Chairman).

The Vice Chairman, who like the Chairman may serve on Board committees, has the following duties and responsibilities:

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Review the agendas of each Board and Committee meeting; assist in the preparation of agendas as needed for executive sessions of the Independent Directors;

In December 2015, again upon the recommendation of the Board’s Corporate Governance Committee, the Governance Principles were amended (i) to clarify the process by which directors may access executive management of the Company, and (ii) to define what the Company considers to be Confidential Information, and restrictions on the disclosure of any such Confidential Information by a director. The Governance Principles may be found online atwww.itron.com.

See“CORPORATE GOVERNANCE” in this proxy statement for additional information on our Board of Directors.

PROPOSAL 2 – APPROVAL OF THE ITRON, INC. EXECUTIVE MANAGEMENT INCENTIVE

PLAN (AS AMENDED AND RESTATED)

Proposal

We are seeking approval of amendments to and the restatement of the Itron, Inc. Executive Management Incentive Plan, or EMIP, to allow the Company to retain the ability to grant awards to our CEO and such other senior executives (generally, the three other most highly compensated officers other than the chief financial officer) who are considered “covered employees” under Section 162(m) of the Code that are deductible for U.S. federal income tax purposes under Section 162(m) of the Internal Revenue Code (Code). If the amendments to and restatement of the EMIP are approved by our shareholders, the EMIP, as amended and restated, will become effective for awards granted following the Company’s 2015 Annual Shareholders Meeting.

To preserve the Company’s ability to deduct for U.S. federal income tax purposes compensation that certain of our executive officers may recognize in connection with performance-based awards that may be granted in the future under the EMIP, shareholders are being asked to approve certain material terms of the EMIP related to such awards. Section 162(m) of the Code eliminates a federal income tax deduction for compensation in excess of $1 million paid by the Company (or our subsidiaries) to any covered employee each year, unless that compensation is conditioned upon the attainment of one or more “performance-based” goals and otherwise meets the requirements of “qualified performance-based compensation” under Section 162(m) of the Code. Among the requirements for compensation to be considered qualified performance-based compensation is that the material terms of the performance goals pursuant to which performance-based compensation is paid have been disclosed to and approved by the shareholders every five years. The material terms of the EMIP were last approved by the shareholders at the Company’s 2010 Annual Meeting. The material terms of the performance goals under which compensation may be paid under the EMIP include: the eligibility requirements for participation in the EMIP; the performance criteria upon which performance awards may be based; and the maximum amount of compensation that can be paid to any employee under the EMIP. Each of these terms is discussed below, and approval of the EMIP will constitute approval of the material terms of the performance goals.

The EMIP was adopted by the Board on February 12, 2010 and approved by the shareholders on May 4, 2010. Accordingly, in order to continue to be able to make awards under the EMIP that will constitute “qualified performance-based compensation” under Section 162(m) of the Code, the material terms of the EMIP must be approved by the Company’s shareholders. At the recommendation of the Compensation Committee, the Board has adopted amendments to the EMIP, subject to approval by the Company’s shareholders, to clarify tax and legal requirements applicable to awards made under the EMIP, providing for the ability to vary terms to address non-US requirements, and to otherwise implement certain current best practices.

Purpose of the EMIP

The purpose of the EMIP is to provide the material terms, including the performance criteria on which performance goals may be based, that will allow the awards granted under the EMIP to be treated as qualified performance-based compensation under Section 162(m) of the Code and, therefore, preserve for the Company the federal income tax deductibility of incentive compensation paid to senior executive officers who are covered employees. Additionally, the EMIP enhances the Company’s ability to attract and retain highly qualified executives and to provide those executives with additional financial incentives to promote the success of the Company.

The following description of the EMIP is a summary and does not purport to be fully descriptive. SeeAppendix Aattached to this proxy statement for a copy of the entire EMIP.

Summary of the EMIP

Administration. The EMIP will generally be administered by the Compensation Committee of the Board, which is comprised solely of “outside directors” under Section 162(m) of the Code. Each year the Compensation Committee (or the Board, for the CEO) will set incentive targets, establish performance goals and approve incentive awards to the Chief Executive Officer and other participants in the EMIP.

Performance Criteria and Goals. Annually, the Committee must objectively define the manner of calculating the results for the performance criteria used to establish the performance goals and targets for that performance period. The performance period over which the performance goals are measured is generally the fiscal year of the Company, but the period could be of a different duration.

The criteria are limited to the following: net earnings (either before or after interest, taxes, depreciation and/or amortization), sales or revenue, income or net income (either before or after taxes), operating income or net operating income, operating profit or net operating profit, cash flow (including, but not limited to, operating cash flow and free cash flow), economic profit (including economic profit margin), return on equity or average shareholders’ equity, total shareholder return, growth in sales or return on sales, gross, operating or net profit margin, working capital, earnings per share, growth in earnings or earnings per share, price per share of our common stock, market share, overhead or other expense reduction, growth in shareholder value relative to various indices, safety, and strategic plan development and implementation, any of which may be used to measure the performance of the Company as a whole or with respect to any affiliate, or division, business unit or business segment of the Company or an affiliate, either individually, alternatively or in any combination, and may be measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous period results or to a designated comparison group, in each case as specified in the actual award.

Depending on the performance criteria used to establish the performance goals, the performance goals may be expressed in terms of overall Company performance, the performance of an affiliate of the Company, or the performance of a division, business unit or segment of the Company or an affiliate of the Company, or the performance of an individual, in each case as specified in the document evidencing the award.

The Compensation Committee (or the Board, for the CEO) may, in its discretion, at the time of grant, specify that one or more objectively determinable adjustments will be made to one or more of the performance goals.

Terms of Awards. Within 90 days after the beginning of each performance period (or, if earlier, within a number of days which is equal to 25% of the performance period), the Compensation Committee will determine, in writing (i) the applicable performance period, (ii) specific performance goals for the performance period, (iii) the specific target payout and, if applicable, the maximum payout for each covered employee as a percentage of base salary or based on other formulae, (iii) specific objectively determinable adjustments applicable to the performance goals, (iv) the form of payment and denomination of the award (cash, Company stock, or a combination of both), and (iv) any other terms and conditions for the determination and payment of the award, including the extent to which the award is payable following the employee’s termination of employment.

Form of Payment. If an award granted under the EMIP is payable in shares of our common stock, the shares will be issued under and in accordance with the terms of our Amended and Restated 2010 Stock Incentive Plan.

Maximum Award. The maximum award that may be paid to any participant in a year may not exceed $3,000,000.

Certification.At the end of the performance period, the Compensation Committee must certify the attainment level of the performance goals and determine the amount of the awards to be paid to the participants. In determining the amount payable under an award, the Compensation Committee has the sole discretion to reduce or eliminate (but not increase) the amount otherwise payable to a participant notwithstanding the attainment of the performance goals.

Payment of Awards. After certification, the awards must be paid to the participants no later than 90 days following the close of the performance period or March 15 of the year following the year in which the performance period ends, if earlier.

Amendment and Termination of the Plan.The Board or the Committee may at any time amend, suspend, or terminate the EMIP, subject to shareholder approval to the extent required under Section 162(m) of the Code, and no modification to the Performance Goals (or adjustments) applicable to any outstanding awards may cause the award to fail to be treated as qualified performance-based compensation under Section 162(m) of the Code.

Clawback/Recovery.Awards will be subject to recoupment under any clawback policy that the Company is required to adopt under applicable stock exchange listing rules or as otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Compensation Committee may impose other clawback, recovery or other recoupment provisions.

Non-US Participants. The Compensation Committee is vested with the authority to adopt sub-plans, rules and modify the terms of awards to facilitate compliance with the laws in a non-US jurisdiction and/or to take advantage of specific tax treatment for awards granted to participants in such jurisdictions.

Section 409A. To the extent applicable, the EMIP and any written instrument evidencing any award will be interpreted in accordance with Section 409A of the Code and any regulations or other interpretive guidance issued thereunder, including any that may be issued after the effective date of the EMIP.

If the shareholders do not approve the amendments to and restatement of the EMIP, awards will not be granted under the EMIP after 2015, and we will be limited in our ability to grant incentive awards to our covered employees that are deductible under Section 162(m) of the Code to the extent that, when combined with other nonexempt compensation, the awards exceed the $1 million limit under Section 162(m) of the Code.

THE BOARD BELIEVES APPROVAL OF THE AMENDMENTS TO AND RESTATEMENT OF THE

EMIP IS IN THE BEST INTERESTS OF THE SHAREHOLDERS AND RECOMMENDS A VOTE “FOR”

THE RE-APPROVAL OF THE ITRON, INC. EXECUTIVE MANAGEMENT INCENTIVE PLAN (AS

AMENDED AND RESTATED).

PROPOSAL 3 –ADVISORY APPROVAL OF EXECUTIVE COMPENSATION (Say-on-Pay)

We are asking our shareholders to approve a non-binding advisory resolution on the Company’s executive compensation programs for our Named Executive Officers (NEOs) (commonly known as “say-on-pay”) as we have described them in this proxy statement. Although this advisory vote is nonbinding, the Board and the Compensation Committee will take into account the outcome of the vote when considering future compensation decisions for our executives. In addition, the Board has determined that it will seek say-on-pay votes annually, with the next vote occurring at the Company’s 20162017 annual meeting.

As discussed in the Compensation Discussion and Analysis (CD&A) section of this proxy statement, beginning on page 23, we believe our compensation programs are reasonable, competitive, and strongly focused on pay-for-performance principles that will result in the creation of long-term shareholder value. Some of the features of our compensation programs that illustrate our philosophy are:

Committee (and the independent members of the Board, for ourthe CEO), which provides overall direction for our compensation programs, believes the fiscal year 20142015 compensation paid to our NEOs is reasonable and appropriate and adequately reflects the Company’s overall performance in 2014.2015.

Shareholders are encouraged to read the full details of our executive compensation programs as described in the CD&A section of this proxy statement.

For the reasons provided above, we recommend that the shareholders vote in favor of the following resolution:

RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the Company’s NEOs, as disclosed in the Compensation Discussion and Analysis (“CD&A”)&A section of the Company’s proxy statement for the 20152016 Annual Meeting of Shareholders (which disclosure includes the CD&A, the Executive Compensation Tables,executive compensation tables, and the accompanying footnotes and narratives within the CD&A section of the proxy statement).

THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR THE APPROVAL OF THE

EXECUTIVE COMPENSATION OF OUR NEOs.

PROPOSAL 43 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMACCOUNTANT

The Board, upon the recommendation of its Audit/Finance Committee, has selected ErnstDeloitte & YoungTouche LLP to serve as the Company’s independent registered public accounting firmaccountant for the 20152016 fiscal year, subject to ratification by our shareholders. Although not required to do so, the Board is submitting the selection of ErnstDeloitte & YoungTouche LLP for ratification by the Company’s shareholders for their views on the Company’s independent registered public accounting firmaccountant and as a matter of good corporate practice. ErnstDeloitte & YoungTouche LLP has advised the Company that it has no direct, nor any material indirect, financial interest in the Company or any of its subsidiaries. Representatives of Ernst & Young LLP will be present at the annual meeting to answer questions and will have the opportunity to make a statement if they desire to do so.

In the event that our shareholders fail to ratify the selection, it will be considered as a direction to the Board and the Audit/Finance Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit/Finance Committee in its discretion may select a different independent registered public accounting firm, subject to ratification by the Board, at any time during the year if it determines that such a change would be in the best interest of the Company and our shareholders.

THE BOARD RECOMMENDS THAT YOU VOTEFOR THE RATIFICATION

OF ERNSTDELOITTE & YOUNGTOUCHE LLP AS OUR INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRMACCOUNTANT FOR THE 20152016 FISCAL YEAR.

CORPORATE GOVERNANCE

Corporate Governance Guiding Principles

The Company has adopted Corporate Governance Guiding Principles (Governance Principles), which are available on the Company’s website,www.itron.com, by selecting “About Itron”, “Investors” and then “Corporate Governance”. Also, Itron has been a long time member of the National Association of Corporate Directors (NACD), which promotes director education, leadership, and effective governance practices.

Board Matters – Meeting Attendance

Our business, property, and affairs are managed under the direction of our Board. Members of our Board are kept informed of our business through discussions with our CEO and other officers, by reviewing materials provided to them, by visiting our offices, and by participating in meetings of the Board and its committees.

In accordance with our Corporate Governance Guiding Principles, directors are expected to attend the Company’s annual meeting of shareholders. All but one of our directors attended the 20142015 annual meeting of shareholders. During 2014,2015, the Board met sixteenfifteen times. With the exception of Mike Pulli, eachAll of the directors attended at least 75% of the meetings of the Board and 75% of the meetings of each committee of which he or she was a member during the periods in which they were directors or members of such committees. Mr. Pulli resigned from the Board effective December 31, 2014.

Also in accordance with our Corporate Governance Guiding Principles, our independent directors meet in an executive session as often as necessary, but no less than four times annually.

Director Independence

Our common stock is listed on the NASDAQ stock exchange. Under the rules of NASDAQ, independent directors must comprise a majority of a listed company’s board of directors. In addition, the rules of NASDAQ require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under the rules of NASDAQ, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

The Corporate Governance Committee has determined that a majority of our Board are independent directors as defined under the rules of NASDAQ and the SEC, with Mr. Mezey serving as the sole non-independent director. As Mr. Mezey does not sit on any committees, the Corporate Governance Committee has determined that all members of Itron’s committees are independent under SEC rules and NASDAQ listing standards. In making these determinations, the Corporate Governance Committee reviewed and discussed information provided by the directors and the Company with regard to each director’s business and personal activities and relationships as they may relate to the Company and our management.

Committees of the Board

We have threefour committees to assist the Board in fulfilling its responsibilities: Corporate Governance, Audit/Finance, Value Enhancement, and Compensation. Each of the threefour committees operates under a written charter that has been approved by the Board. The charters are available on our website,www.itron.com, by selecting “About Itron”, “Investors” and then “Corporate Governance”. The committee charters are reviewed annually and are updated as necessary to reflect changes in regulatory requirements and evolving oversight practices.

The following table shows the current membership of each committee at the end of fiscal 2014:2015 unless otherwise noted:

Director Dan Pelino was elected to the Board in November of 2014 and he will be appointed to one or more committees at the annual meeting of the Board in May following his re-election to the Board by our shareholders. Similarly, Director Tim Leyden was elected to the Board in March of 2015, and he also will be appointed to one or more committees at the annual meeting of the Board in May following his re-election to the Board by our shareholders.

Our sole employee director, Philip Mezey, does not sit on any committees.

Corporate Governance Committee. The Corporate Governance Committee is responsible for developing and implementing our Corporate Governance Guiding Principles, evaluating the performance of our Chairman of the Board and the CEO, as well as the other directors and the Board as a whole, soliciting recommendations for candidates for the Board, determining the qualification and independence of the directors serving on the Board, making recommendations to the Board regarding candidates to serve on the Board, and reviewing and making recommendations to the Board with

respect to candidates for directors proposed by shareholders. ItTo assist the committee in its identification of qualified director candidates, it has historically engaged an outside search firm. The committee also reviews the compensation paid to our directors, and makes recommendations to the Board on director fees and other compensation payable to the Board members.

The Corporate Governance Committee amended its charter in December 2015 to increase the minimum number of directors required to serve on it (from two to three) and to clarify language regarding succession planning and that the Chair of that committee must be an independent director under SEC rules and NASDAQ listing standards. A copy of the charter, as amended, can be found on our website,www.itron.com, by selecting “About Itron”, “Investors” and then “Corporate Governance”. As previously stated, the Corporate Governance Committee has determined that all of the non-employee directors of the Board (including Graham M. Wilson during his term of service in 2015) are independent (and Mike Pulli, prior to his resignation, was independent) under SEC rules and NASDAQ listing standards. The Corporate Governance Committee held thirteentwelve meetings during 2014.2015.

Audit/Finance Committee. The Audit/Finance Committee monitors our borrowings and capital structure, accounting policies, internal controls over financial reporting, and financial results, and reviews at least quarterly our business financial risks to determine if management and our internal controls are identifying and mitigating risks associated with our business operations. In addition, the Committee has sole authoritydetermines the compensation of our independent auditors, and makes recommendations to the Board to retain compensate, andor terminate our independent auditors. The Corporate Governance Committee has determined that all members of the Audit/Finance Committee are independent under SEC rules and NASDAQ listing standards.

The Audit/Finance Committee amended its charter in 2015 to expand language related to its purpose with respect to risk assessment and analysis over the Company’s financial reporting and internal control systems,

and to include shareholder capital returns and overall capital deployment policies within its stated purposes. A copy of the charter, as amended, can be found on our website,www.itron.com, by selecting “About Itron”, “Investors” and then “Corporate Governance”. The Corporate Governance Committee has also determined that threeall of the four current members of the Audit/Finance Committee (Messrs Glanville, Pruitt and Wilson) are financially literate in accordance with the Standards of NASDAQ Rule 5605(c)(2)(A)(iv), and that five of the same threesix current members (Messrs. Glanville, Pruitt, Lande, Leyden, and Jaehnert) are also “audit committee financial experts” as defined in Item  407(d)(5) of Regulation S-K promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the Exchange Act).S-K. The Audit/Finance Committee held eightten meetings during 2014.2015.

Compensation Committee. The Compensation Committee is responsible for making recommendations to the Board for our CEO’s total annual and long-term incentive compensation and setting compensation levels for our other named executive officers. The Compensation Committee also oversees the administration of various incentive compensation and benefit plans, which includes an annual evaluation of our compensation plans and policies. In addition, the Committee performs any other functions regarding compensation that the Board may delegate to it.

In 2014, the Compensation Committee amended its charter to reflect changes in NASDAQ rules that were effective in 2014. The revised and current charter can be found on our website atwww.itron.com by selecting “About Itron”, “Investors” and then “Corporate Governance”.

The Corporate Governance Committee has determined that all members of the Compensation Committee are independent under SEC rules and NASDAQ listing standards. The Compensation Committee held tennine meetings during 2014. 2015.See “EXECUTIVE COMPENSATION – CD&A” in this proxy statement for more information on the Compensation Committee’s responsibilities regarding the compensation of our executives.

Value Enhancement Committee. The Board created the Value Enhancement Committee in December 2015 to review, study and develop potential initiatives (including transactions) designed to create durable, sustainable long-term shareholder value. The Value Enhancement Committee is charged with making recommendations to the Board regarding actions to be considered in furtherance of the Committee’s purpose. The Corporate Governance Committee has determined that all five members of the Value Enhancement Committee are independent under SEC rules and NASDAQ listing standards. The Value Enhancement Committee held one meeting in 2015.

Compensation Committee Interlocks and Insider Participation

No member of our Board’s Compensation Committee has served as an officer or employee of the Company. None of our executive officers serve as a member of the compensation committee of any other company that has an executive officer serving as a member of our Board. None of our executive officers serve as a member of the board of directors of any other company that has an executive officer serving as a member of our Board’s Compensation Committee.

Transactions with Related Persons

There were no related person transactions required to be disclosed pursuant to Item 404(a) of Regulation S-K in fiscal year 2014.2015. In order to determine this, the Board requires our executive officers, directors, or director nominees to disclose certain information related toregarding related person transactions. A “related person transaction” generally is a transaction (including any indebtedness or a guarantee of indebtedness) that involves the Company’s directors, executive officers, director nominees, 5% or more beneficial owners of the Company’s common stock, immediate family members of these persons, or entities in which one of these persons has a direct

or indirect material interest. The current threshold required to be disclosed under SEC regulations is $120,000. Under its charter, the Corporate Governance Committee of the Board has been delegated with the responsibility of reviewing and approving any related person transactions.

Our Board’s Role in Risk Oversight

The Board has overall responsibility for risk oversight, including, as part of regular Board and committee meetings, general oversight of our executives’ management of risks relevant to the Company. The Board routinely determines, directly or through Board committees, that: (i) there are adequate processes designed and implemented by Company management such that risks have been identified and are being managed; (ii) the risk

management processes are intended to ensure that Company risks are taken into account in corporate decision-making; and (iii) the risk management system ensuresprocesses and procedures ensure that material risks to the Company are brought to the attention of the Board or an appropriate committee of the Board. Each of the Company’s risk management processes are reviewed periodically (but at least once a year) by either the Board or an appropriate committee to which the Board has delegated specific oversight responsibility, as described below. Throughout the year, the Board and each committee spend a portion of their time reviewing and discussing specific risk topics. Committee chairsChairs regularly report to the full Board on actions taken at committee meetings. At least annually, the Board conducts a review of our long-term strategic plans, and at each of our quarterly meetings, our General Counsel updates the Board on material legal and regulatory matters.

The Audit/Finance Committee is responsible for reviewing our major financial risk exposures, financial reporting, internal controls, credit and liquidity risk, compliance risk, and key operational risks. It meets regularly with our independent auditors and in executive session to facilitate a full and candid discussion of risk and other issues. Our Compensation Committee is responsible for overseeing compensation risks, including assessing possible risks from our compensation plans and policies for our executives and ensuring that our executive compensation is aligned with Company performance. The Compensation Committee reviews a summary and assessment of such risks annually and in connection with discussions of various compensation elements and benefits throughout the year. Our Corporate Governance Committee oversees risks related to our overall corporate governance, including Board and committee composition, Board size and structure, and our director independence. The Corporate Governance Committee is also involved with succession planning for the Board and management, and its charter requires it to annually review annually our Corporate Governance Guiding Principles.

Following a review of the Company’s current risk management systems and processes, the Board has concluded that the current allocation of oversight responsibilities between the Board and its committees is adequate, provided that the committees continue to coordinate their risk oversight responsibilities, share information appropriately with the other Board members, and provide timely and adequate reports to the full Board. The Board will continually evaluateevaluates its risk oversight role.

Code of Conduct

The Company has adopted a Code of Conduct that applies to all directors, officers, and employees of the Company and any subsidiary of the Company, including the CEO and chief financial officerChief Financial Officer (CFO), and is available on the Company’s website,www.itron.com, by selecting “About Itron”, “Investors” and then “Corporate Governance.” In addition, we have adopted policies and procedures for reporting and investigating suspected violations of the Code of Conduct. The Company intends to satisfy any future disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to or waiver from application of the code of ethics or provisions of the Code of Conduct, that applies to the CEO or the CFO, by posting such information on our website,www.itron.com.

Anti-Hedging Policy

The Company has adopted an Anti-Hedging Policy that prohibits our directors, officers, and employees from entering into transactions involving our securities that are designed to hedge or offset any decrease in the market value of Itron securities.See“EXECUTIVE COMPENSATION – CD&A – Anti-Hedging Policy” in this proxy statement for more information on this policy.

ClawbackIncentive Repayment (Clawback) Policy

The Company has adopted a repayment or “clawback” policy, which provides that if a bonus or equity award (award)(Award) is paid that is conditioned on meeting certain financial metrics, and, subsequently, there is a required financial restatement, which had the correct information been known at the time would have resulted in a lower award, then the Board has the right to demand repayment of the excess amount of the award,Award, net of taxes, from an executive officer who has received an award.Award.See also “CD&A – Other Practices, Policies and Guidelines –Incentive Repayment (Clawback) Policy” in this proxy statement.

Director Nominations by Shareholders

In accordance with the Company’s Amended and Restated Bylaws, in order to nominate a director for election to the Board at an annual meeting of shareholders, a shareholder must deliver written notice of such nomination to the Corporate Secretary of the Company at the Company’s executive offices no fewer than 60 days nor more than 90 days prior to the date of the annual meeting (or if less than 60 days’ notice or prior public disclosure of the date of such annual meeting is given or made to the shareholders, not later than the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure was made). The notice of a shareholder’s intention to nominate a director must include:

and the following information with respect to the person nominated by the shareholder:

Other directors and senior management of the Company may also recommend director nominees for consideration by the Corporate Governance Committee. The Corporate Governance Committee evaluates director nominees, including nominees that are submitted to the Company by a shareholder, taking into consideration the qualification criteria set forth under “ELECTION OF DIRECTORS – Director and Director Nominee Qualifications” in this proxy statement. In the event of a shareholder recommendation, the Corporate Governance Committee screens and evaluates the person recommended in the same manner as other candidates. In addition, the Corporate Governance Committee determines if the proposed director nominee will have sufficient time available to carry out his or her Board duties and responsibilities effectively. The Corporate Governance Committee may then recommend the director candidate to the Board for its consideration, if deemed appropriate.

Shareholder Communications with the Board

The Company’s Board provides a process whereby shareholders may contact the Board or any committee as a group or any committee chairCommittee Chair or individual director, by email addressed toboardofdirectors@itron.com. Shareholders should clearly specify in each communication the name of the director to whom the communication is addressed. Shareholders may also write to the Board or any committee as a group or any committee chairCommittee Chair or individual director by sending the communication to: Itron, Inc., Attn: Corporate Secretary, 2111 N. Molter Road, Liberty Lake, WA 99019. Communications may also be submitted through our website atwww.itron.com by selecting “About Itron”, “Investors,” “Corporate Governance,” and then “Contact the Board”.

Shareholder communications are delivered directly to the Corporate Secretary of the Company, who then determines whether to forward such communications to the specified director addressees. You can access a description of the process that the Corporate Secretary uses for determining whether to forward shareholders’ communications to directors at our website,www.itron.com, by selecting “About Itron”, “Investors,” “Corporate Governance,” and then “Contact the Board.”

Shareholders wishing to submit proposals for inclusion in the proxy statement relating to the 20162017 annual shareholders meeting should follow the procedures specified under “SHAREHOLDER PROPOSALS FOR 2016”THE 2017 ANNUAL MEETING”in this proxy statement. Shareholders wishing to nominate directors should follow the procedures specified under “CORPORATE GOVERNANCE – Director Nominations by ShareholdersShareholders”” in this proxy statement.

EXECUTIVE COMPENSATION

Compensation Discussion and& Analysis (CD&A)

InThis CD&A explains our executive compensation program for our named executive officers (NEOs) listed below. The CD&A also describes the following CD&A, we will present (1) an executive summary that provides an overview of our 2014 financial and operational performance,Compensation Committee’s process for making pay decisions, as well as significant aspectsits rationale for specific decisions related to fiscal 2015.

On May 4, 2015, Itron announced that Mr. Holleran would be departing the Company effective December 31, 2015. Mr. Deitrich succeeded Mr. Holleran as Itron’s COO effective October  10, 2015.

Executive Summary

During 2015, we continued to execute our restructuring plans previously announced in 2014. We intensified our focus on operational effectiveness and added new executive leadership to the Company. We grew our already strong backlog by 4%. We hired a new Senior Vice President of Software and Services to enhance our 2014 compensation programs; (2)expertise in that area, and in October, a new COO, Tom Deitrich, joined Itron. He brings with him several years of multi-national operations experience in industry. We remained focused on expanding our compensation philosophyenergy solutions, especially as they relate to smart systems and smart cities initiatives. We believe these investments will continue to drive our leadership in our industry, help optimize our customers’ investments in their smart systems, and help create a more resourceful world.

Despite these successes, we underachieved against our internal business plan and missed our performance targets. As a result, the processes we use to make compensation decisionsCompensation Committee took the following compensation-related actions for our NEOs; (3) the components of our compensation and benefits plans; and (4) detailed 2014 compensation information for our NEOs.

Our 2014 NEOs, as determined by SEC rules, are as follows:fiscal 2015:

These actions demonstrate the Compensation Committee’s commitment to aligning executive pay with Company performance. The Compensation Committee believes that the design and structure of the Company’s incentive programs provide a direct link between performance and pay outcomes. When Company performance and/or shareholder returns lag, compensation to our NEOs is directly impacted, as described in greater detail in the following section.

Additionally, as a result of an accounting review and analysis of revenue recognition for certain software and maintenance contracts, the Company revised its 2013 and 2014 financial results and finalized its results for 2015 (as reported in our Annual Report on Form 10-K for the year ended December 31, 2015). The revisions primarily

reflect deferrals of software-related revenues and associated costs that were previously recognized in one year, to be recognized in a subsequent year. Consistent with our Incentive Repayment (Clawback) Policy, the Compensation Committee, as designated by the Board, reviewed the revised results relative to the cash and equity incentive awards that may have been earned during this timeframe. After careful review, and based on the circumstances of the revision and the immateriality of the adjustments, the Compensation Committee determined that the impact on annual cash incentives paid or PRSUs earned (if any) between 2013 and 2015 was not material and it would not seek recovery from any of the executives.See also “Incentive Repayment (Clawback) Policy” in this CD&A.

Linking CEO Pay and Performance

A key component of our executive compensation philosophy is the link between compensation and overall business results and shareholder value creation. We strive to clearly communicate this to our shareholders and believe that looking at realizable pay in different contexts can illustrate this point effectively:

CEO Realizable Pay versus Pay Opportunity. Many of the required disclosures concerning CEO compensation discuss pay elements or opportunities that may be earned by the CEO. Realizable pay, on the other hand, more closely considers actual compensation earned (or earnable) based on performance. To illustrate the differences, we compared pay opportunity to realizable pay on a year-by-year basis over the past three years; for this purpose, we use the following definitions:

Pay opportunityrepresents:

Executive SummaryRealizable pay

Overview of our 2014 Financial and Operational Performance.

We made progress in fiscal 2014 compared with fiscal 2013 on many fronts, ending the year with higher revenues, significant backlog growth and increased cash flow.

Business highlights for 2014 include the following: represents:

The chart below illustrates Mr. Mezey’s realizable pay compared to his pay opportunity, as well as the corresponding year-end stock price. As the chart indicates, Mr. Mezey’s realizable pay was well below his pay opportunity for 2013 through 2015, and his realizable pay declined in 2015, tracking closely with our stock price performance.

CEO Realizable Pay for Performance Relative to Peer Group. To provide another perspective, it is also helpful to understand the degree of alignment between CEO realizable pay andperformance relative to our peer companies (See “Our Decision Making Process – The Role of Peer Companies” in this CD&A for a list of the peer companies). To evaluate this alignment, we analyzed the relationship between realizable total direct compensation (TDC) for the CEO over 2013-14 for the peer companies and for the Company, and TSR for the two years ended December 31, 2014. This time period was selected because it was most closely aligned with the compensation information available for our peer group companies for the years that Mr. Mezey has been our CEO.

For this purpose, realizable TDC is defined as the sum of:

Total revenues increased by 1% compared with 2013. Revenues

The chart below illustrates the percentile ranking of our three-year TSR and Mr. Mezey’s realizable TDC relative to our peer companies. As the chart indicates, during the two-year period our TSR performance was below the median of the peer companies and Mr. Mezey’s realizable TDC was also below the median. Mr. Mezey’s realizable TDC was within an “alignment corridor” representing a strong correlation between compensation and performance.

Best Compensation Practices & Policies

We also believe the following practices and policies promote sound compensation governance and are in the Waterbest interests of our shareholders and Gas segments grew year-over-year by 7% and 5%, respectively, which offset a decline in the Electricity segment. Electricity’s revenues were impacted by weaker sales in the European, Middle East and African (EMEA) regions and our decision to exit the standard residential meter business in Brazil. Our gross margin remained relatively flat, with a slight improvement from 2013 of 31.5% to 31.6% for 2014.

During the year, we continued to focus on streamlining our operations and developed a plan to improve the profitability of the Electricity segment. Operating performance in the Electricity segment improved in 2014 due to higher revenues from smart grid projects in North America and reduced costs driven by our execution of restructuring efforts announced in September 2013. In November 2014, we announced another and more

aggressive restructuring project to further reduce costs and improve efficiencies in the Electricity segment and related general and administrative activities, in order to achieve annualized cost savings of approximately $40 million by the end of 2016.

Our sales success in 2014 delivered an impressive year-end backlog of $1.49 billion. This success and momentum has been spurred by our continued commitment to provide innovative products and services to our customers. In October we launched our Itron OpenWay Riva™ software service, which delivers edge intelligence and adaptive communications technology to provide optimal network performance and better support at the device level for analytics such as load management and distribution automation, at lower total cost of ownership. Earlier in the year we introduced Itron^® TOTAL Services, where we provide complete managed services for utilities’ data collection systems and operations, with predictable subscription-based pricing.

We were also honored with the 2014 Frost & Sullivan “Company of the Year” award for Smart Cities. The award recognizes Itron’s smart city growth strategy, diversified offerings, and excellence in implementation. Itron is strongly positioned to participate in the coming Internet of Things (IoT) technology advancements that cities around the world are increasingly demanding so they may enhance their sustainability and become more energy efficient, automated and integrated.

Finally, we hired two new senior executives with extensive global experience whom we believe bring enhanced expertise and capabilities to Itron. Michel Cadieux was appointed Senior Vice President of Human Resources in February 2014, and Mark Schmitz was appointed Executive Vice President and CFO in September 2014.

2014 Compensation Program Overview.

We continue our long-standing commitment to strong corporate governance that includes aligning a significant portion of compensation with performance. As a result, our programs contain the following attributes:executives:

Compensation paid to our NEOs in 2014 was consistent with and reflective2015 Say-On-Pay & Shareholder Engagement

Each year, we carefully consider the results of our pay-for-performance philosophy. Each yearshareholder say-on-pay vote from the preceding year. We also take into account the feedback we receive from our major shareholders, which is solicited by the Chairman of the Board, the Vice Chairman of the Board, and the Chairman of the Compensation Committee, (Committee) sets specific compensation targets and goals consistent with this pay-for-performance philosophy. See “Componentseither in person or via telephone. These discussions generally take place during the first quarter of Our Compensation Program” in this CD&A. Given our less than robust financial performance in 2013, there were no payouts under our equity-based Long-Term Incentive Plan (LTIP), and minimal cash payouts under our annual Executive Management Incentive Plan (EMIP) in 2013 to three of our five NEOs. Performance-based RSUs (PRSUs) granted under the LTIP account for 50% of an NEO’s long-term incentive opportunity. each year.

In 2014, our NEOs earned modest performance-based compensation under both our LTIP and our EMIP. There were payouts under the LTIP totaling 9,472 PRSUs distributed to the NEOs (out of a possible 49,332 PRSUs maximum opportunity) for the two-year performance period 2013-2014, and annual cash incentives earned under the 2014 EMIP by our NEOs averaged 73%2015, approximately 76% of the target payout.See“2014 Compensation Paid to Our NEOs” in this CD&A.

Say-on-Pay.

In 2014, shareholders were presented with an advisory vote to approvevotes cast supported our executive compensation paid in 2013. Approximately 75% of our shareholders who voted were in favor of our executive compensation programs. We implemented extensive changes to our compensation programs in 2013, and, followingdecisions. Based on the positive feedback we received from our major shareholders, at that time, in addition to the favorable shareholder vote on say-on-payresult in 2014,2015, we did not make substantive changes to the structure of our program. We did, however, adjust the metric weightings for the CEO and COO under the EMIP. The CEO and COO now have continued the same programs in 2014. The programs, as summarized above, were meant to reinforce our strong corporate governance policies and continue our policy of aligning our executive compensation to the financial performance objectives and weightings as all of the Company. In orderother NEOs as shown in the table below. The Committee felt that creating a common emphasis on strategic objectives for all the NEOs was critical to emphasize our commitment to these programs, we are reaching out to our shareholders in early 2015 to discuss our executive compensation paid in 2014, togetherdrive results aligned with the Committee’s decisions that affected our policiesoverall business strategy. The Committee, specifically, placed more focus on growing the software services business, creating a high-performance culture, and the 2014 compensation, as describeddriving improvements in the following pages of this CD&A.quality and on time delivery.

What Guides Our Program

ExecutiveOur Compensation Philosophy and& Objectives

Philosophy

The philosophy underlying our executive compensation program – employ the Company’s compensation plans is to provide compensation that attracts and retains top performers and rewards individual, Company, and business line performance in line with our shareholders’ interests. Our programs provide a competitive package of annual base pay, annual cash incentives, and long-term equity based incentives, with a majority of compensation tied to at-risk or performance-based financial measurements (See “Components of Our Compensation Program”.) Our executive incentive compensation plans (both annual and long-term) align with the Company’s performance which is generally defined in terms of revenue, EBITDA, and comparative total shareholder return (TSR). The short-term annual cash compensation is tied partially to individual performance objectives for certain NEOs, as well as business line performance. These objectives are set by the CEO and agreed to annually by the executive, and they are intended to motivate and reward achievement of strategic goals which we believe will help build organizational competitiveness. The Committee believes these individual goals are important to motivate our NEOs to focus on strategic objectives in addition to the long-term success of the Company.

Because Itron is widely recognized as a world leaderbest leaders in our industry to ensure we recruit, motivate, and retain exceptional, highly talented people who are key toexecute on our continued leadership and success. This is especially important while we work through a significant restructuring which we expect will enable us to grow the Company in terms of revenue and profitability. We focus on creating a pay-for-performance culture, but one that does not encourage excessive or unnecessary risk-taking. Our executive compensation programs are reviewed annually, and targets and metrics may be changed to support Itron’s business goals, and promote both short-and long-term profitable growth of the Company. Currently we target our full compensation package for our executives to fall within the 50^th to 75^th percentile of peer compensation data for comparable positions. We design our compensation programs to achieveCompany, and create long-term shareholder value is grounded in the following objectives through a combination of fixed and variable cash and equity-based elements:

The Principal Elements of Pay: Total Direct Compensation (TDC)

Our compensation philosophy is supported by the following principal pay elements:

Pay Mix

The charts below show the target TDC of our CEO and our other NEOs for fiscal 2015. These charts illustrate that a majority of NEO TDC is variable (84% for our CEO and an average of 75% for our other NEOs).

Our Decision Making Process

The Role of the Compensation Committee

The Compensation Committee Compensation Consultant, and Executive Officers

oversees the executive compensation program for our NEOs. The Committee provides oversightis comprised of independent, non-employee members of the Board of Directors (the “Board”). The Committee works very closely with its independent consultant and direction for ourmanagement to examine the effectiveness of the Company’s executive compensation plans, policies, and programs, and determinesprogram throughout the components of compensation for each of our NEOs. Each memberyear. Details of the Committee qualifies as an independent director under NASDAQ listing standardsCommittee’s authority and SEC rules. In addition, each member is a “non-employee director” withinresponsibilities are specified in the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended,Committee’s charter, which may be accessed at our website,www.itron.com, by clicking “About Itron,” “Investors,” and an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (Code).then “Corporate Governance.”

The Committee makes all final compensation and equity award decisions regarding our NEOs, except for the CEO, whose compensation is determined by the independent members of the full Board, based upon recommendations of the Committee.

The Role of Management

Members of our management team typically attend meetings where executive compensation, Company and individual performance, and competitive compensation levels and practices are discussed and evaluated; however, only the Committee members are allowed to vote on decisions regarding executive compensation. The Committee also receives recommendations from the CEO regarding the compensation of our other executive officers, including the other NEOs. The CEO does not participate in the deliberations of the Committee regarding his own compensation.

The Role of the Independent Consultant

The Committee engages an independent compensation consultant to provide expertise on competitive pay practices, program design, and an objective assessment of any inherent risks of any programs. Pursuant to authority granted to it under its charter, the Committee has hired Frederic W. Cook & Co. (FWC) as its independent consultant. FWC reports directly to the Committee and does not provide any additional services to management. The Committee has conducted an independence assessment of FWC in accordance with recently adopted SEC rules.rules and has determined that work performed by FWC does not create a conflict of interest.

Members

The Role of Peer Companies

For some of our management team typically attend meetings wheredirect competitors who are not publicly held, or are smaller business units within a conglomerate, there is limited compensation information available. As a result, our Peer Companies for purposes of benchmarking executive compensation Company and individual performance, and competitive compensation levels and practices are discussed and evaluated; however, only the Committee members are allowed to vote on decisions regarding executive compensation. The Committee also receives recommendations from the CEO regarding the compensationgenerally consist of our other executive officers. The Committee meets in executive session to discuss other compensation matters, including its recommendations to the full Board on the CEO’s compensation.

Peer Data as it Relates to Compensation Decisions

To determine market-based compensation for our executives, the Committee, after consultation with FWC, identified a relevant group of peer companiesdirect competitors for which therepublic information is publicly available, compensation information, whichwho are part of the same broad Standard & Poor’s (S&P) industry classification,classifications of technology hardware and equipment or in software and services, and who are similar in size and scope of global operations (Peer Companies). Many of our direct competitors (Elster, Sensus, and Landis & Gyr) are private, and there is no publicly available compensation information about them. For 2014, ouras Itron. The Committee reviews the Peer Companies are named below,on an annual basis.

For 2015, in conjunction with those we considerthe recommendation of FWC, the Committee increased the number of Peer Companies from 14 to be direct competitors17, keeping eight companies from 2014 to maintain consistency, and adding five companies with software services as part of Itron identified with an asterisk. The other 12 companies in our Peer Group, like Itron, are in the S&P industry classification of technology hardware and equipment, and also have significant international operations. The size criteria generally ranged from one-third to three times Itron’s revenues and market capitalization. During the 2014 year, Molex, Inc, was omitted because it merged into another entity.

For each of the Peer Companies, FWC obtained data regarding base salaries, annual incentives, and long-term incentives was obtained from their annual proxy statements.statements and reviewed by the Committee’s compensation consultant, FWC. This data was supplemented with survey data prepared by Radford Survey & Consulting (Radford Survey), a unit of Aon Consulting, which provides compensation market information on more than 700 technology companies, presented anonymously. Itron participates in this survey. The Radford Survey is well-known within the technology industry, and it provides total direct compensation levels for specific executive-level positions, including base salary, annual short-term incentive compensation, and long-term incentive compensation. The Radford Survey data was narrowed to those technology companies with revenues similar to Itron’s of between $1 billion and $3 billion.

TheWith the support of FWC, the Committee uses the Peer Companies and the Radford Surveyevaluates this data as benchmarks to establishfor informational purposes when establishing a range of competitive compensation for our NEOs. For each NEO, the Committee determineddetermines the salary range, annual incentive target, and long-term incentive based upongenerally between the median toand 75th percentile of the market data for the position being evaluated. Then, takingHowever, market data is not the sole determinant of the Company’s practices or executive compensation levels. The Committee also takes into account the experience, performance, responsibilities, and contributions to the Company by each executive, the Committee makes a decision for each executive (other than the CEO) on base pay, annual incentive pay opportunity, and long-term incentive opportunity.NEO when making its decisions. For the CEO, the Committee makes a recommendation to the full Board, and the Board reviews and approves the CEO’s compensation.

The Committee (and the Board for the CEO) decided to make no adjustments to the base salaries of our NEOs2015 Executive Compensation Program in 2014, with the exception of Messrs. Schmitz and Cadieux, who were new to the Company in 2014 and whose salaries and compensation were determined as set forth in the following pages under “2014 Compensation Paid to Our NEOs”.

See “Modifications Made to Peer Companies for 2015 Compensation DecisionsDetail” in this CD&A for information about proposed changes to the Peer Companies for compensation planning in 2015.

Components of Our Compensation ProgramBase Salary

Total Compensation.Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain talent. In making base salary decisions, the Committee considers the CEO’s recommendations, as well as each NEO’s position and level of responsibility within the Company. The Committee designs the compensation plans to rewardtakes into account factors such as relevant market data, individual performance and encouragecontributions, and length of service. The Committee determined the appropriate annual base salary rate for each NEO as follows: