Exchange Act of 1934
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☑ No fee required ☐ Fee paid previously with preliminary materials ☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 Energy for what matters most Welcome to |
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Always There.®
CenterPoint Energy Inc.
Notice of Annual Shareholder Meeting of Shareholders
to be held on April 26, 2018
and Proxy Statement
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2024
We
As explained Details regarding how to attend the meeting and the business to be conducted are in the enclosed proxy statement, at this year’s meeting you will be askedaccompanying Notice of Annual Meeting and Proxy Statement.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | | |
YourAnnual Report.
Only shareholders of record at the close of business on March 1, 2018, or their proxy holders,Annual Meeting, we encourage you to vote promptly. You may vote aton the meeting. Attendance at the meeting is limited to shareholdersinternet; by telephone; or their proxy holdersby completing, signing, dating, and CenterPoint Energy guests. Only our shareholders or their valid proxy holders may address the meeting.
Please review thereturning a proxy card for the instructions on how you can vote your shares over the internet, by telephone or by mail. It is important that all CenterPoint Energy shareholders, regardless of the number of shares owned, participate in the affairs of the Company. At CenterPoint Energy’s 2017 Annual Shareholder Meeting, approximately 86 percent of the Company’s outstanding shares were represented in person or by proxy.
voting instruction form.
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Phillip R. Smith Independent Chair of the Board | | |
Jason P. Wells President, | |
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| Appendix A | | | | | | | |
| | | | | A-1 | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | | |
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Notice of Annual Meeting of Shareholders | | | |
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| TIME AND DATE 9:00 a.m. Central Time on April 26, 2024 | | | | PLACE The CenterPoint Energy auditorium at 1111 Louisiana, Houston, Texas | | | | RECORD DATE March 1, 2024 | |
| Items of Business | |
| • Elect the eleven nominees named in the Proxy Statement as directors to hold office until the 2025 annual meeting; | |
| • Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024; | |
| • Conduct an advisory vote on executive compensation; | |
| • Vote on a shareholder proposal relating to setting additional interim and long-term Scope 3 emissions goals; and | |
| • Conduct other business if properly raised. | |
9:00 a.m. Central Time on April 26, 2018.
PLACE
The
ITEMS OF BUSINESS
elect the ten nominees named in the proxy statement as directors to hold office until the 2019 annual meeting;
ratify the appointment of Deloitte & Touche LLP as our independent auditors for 2018;
conduct an advisory vote on executive compensation; and
conduct other business if properly raised.
RECORD DATE
Shareholders of recordcommon stock at the close of business on March 1, 20182024 are entitled to vote.
Sincerely,
Vincent A. Mercaldi
Corporate Secretary
| Sincerely, | | | ||
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| Vincent A. Mercaldi Corporate Secretary | | | Dated and first mailed to shareholders on or about March 15, 2024 | |
| Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholder Meeting to be Held April 26, 2024 | |
| The proxy statement and annual report to shareholders are available at: https://materials.proxyvote.com/15189t | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | | |
to shareholders
on or about March 15, 2018
Important Notice Regarding the Availability of Proxy Materials
forVoting Recommendations
vote on the following four proposals. The proxy statement and annual report to shareholders are available at:
http://materials.proxyvote.com/15189T
| Proposal | | | More Information | | | Board Recommendation | |
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CENTERPOINT ENERGY, INC.
1111 Louisiana
Houston, Texas 77002
(713)207-1111
For deliveries by U.S. Postal Service:
P.O. Box 4567
Houston, Texas 77210-4567
Proxy Statement
FREQUENTLY ASKED QUESTIONS ABOUT VOTING
On what am I voting?
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Item 1: Election of directors | | | Page | | | FOR each | |||||||
| Item 2: Ratification of appointment of the independent accounting firm | | | Page | | | FOR | ||||||
| Item 3: Advisory vote on executive compensation | | | Page | | | FOR | | |||||
| Item 4: Shareholder Proposal – Setting additional interim and long-term Scope 3 emissions goals | | Page 86 | | AGAINST | |
Who may vote?
Shareholders recorded
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 1 | |
Name and Primary Occupation | | | Age | | | Director Since | | | Independent | | | Committee Membership | | |||
| | Wendy Montoya Cloonan Houston Managing Partner at Cantu Harden Montoya LLP | | | 44 | | | 2021 | | | | | Compensation; Governance, Environmental and Sustainability (Chair) | | ||
| | Earl M. Cummings Former Independent Chair of Board of CenterPoint Energy, Managing Partner of MCM Houston Properties, LLC, and Chief Executive Officer of The BTS Team | | | 59 | | | 2020 | | | | | | | ||
| | Barbara J. Duganier Former Managing Director and Global Chief Strategy Officer of the Outsourcing Business at Accenture plc | | | 65 | | | First Time Nominee | | | | | | | ||
| | Christopher H. Franklin Chairman, Chief Executive Officer of Essential Utilities | | | 58 | | | 2022 | | | | | Audit; Governance, Environmental and Sustainability | | ||
| | Raquelle W. Lewis Southeast Texas Director of Communications & Public Information Officer for the Texas Department of Transportation | | | 53 | | | 2021 | | | | | Compensation; Governance, Environmental and Sustainability | | ||
| | Thaddeus J. Malik Principal at S2T Solutions and Attorney | | | 57 | | | Sept. 2023 | | | | | Audit; Compensation; Governance, Environmental and Sustainability | | ||
| | Theodore F. Pound Private Investor and Attorney | | | 69 | | | 2015 | | | | | Audit; Compensation (Chair) | | ||
| | Ricky A. Raven Senior Vice President and Deputy General Counsel at Allstate Insurance Company | | | 63 | | | Sept. 2023 | | | | | Compensation; Governance, Environmental and Sustainability | | ||
| | Phillip R. Smith Independent Chair of the Board of CenterPoint Energy and Chief Financial Officer of Marathon-Sparta Holdings, Inc. | | | 72 | | | 2014 | | | | | Audit (Chair); Governance, Environmental and Sustainability | | ||
| | Barry T. Smitherman President of Barry Smitherman, P.C. and Managing Partner of Smitherman + Associates, L.P. | | | 66 | | | 2020 | | | | | Audit; Compensation | | ||
| | Jason P. Wells President and Chief Executive Officer of CenterPoint Energy | | | 46 | | | Jan. 2024 | | | | | | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 2 | |
| Current / Former CEO of a Public Company Public Company Governance Experience Cybersecurity and Physical Security Risk Management Finance and Accounting | | | Community Involvement Human Capital Management Strategic Planning Utility Industry Experience | | | Government, Legal, and Regulatory Technology and Customer Experience Sustainability Operations and Safety Experience | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 3 | |
How many votes do I have?
You have one vote for each shareexecutive compensation program. Our executive compensation program is designed to recruit and retain talent, align payment with performance, and align our executive officers’ interests with those of our common stock you owned asshareholders. For more information on our compensation program, see “Compensation Discussion and Analysis” below.
| Key Features of Our Executive Compensation Program | | | | | Strong Pay for Performance | | |
| | | No Employment Agreements | | ||||
| | | “Double Trigger” Provisions for Change in Control Plan and Equity Awards | | ||||
| | | No Excise Tax Gross Up Payments | | ||||
| | | Stock Ownership Guidelines | | ||||
| | | Benchmark Pay to Market | | ||||
| | | Incentive Recoupment Policies | | ||||
| | | Anti-Hedging Policy | | ||||
| | | 100% Independent Compensation Committee | | ||||
| | | Independent Compensation Consultant | | ||||
| | | Executive Severance Guidelines | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 4 | |
How do I vote?
Your vote is important. You may vote in person at the meeting or by proxy. We recommend you vote by proxy even if you plan to attend the meeting. You may always change your vote at the meeting if you are a holder of record or have a proxy from the record holder. Giving us your proxy means that you authorize us to vote your shares at the meeting in the manner you indicated on your proxy card. You may also provide your proxy using the Internet or telephone procedures described on the proxy card.
You may vote for or against each director nominee under Item 1 (election of directors) and the proposals under Item 2 (ratification of appointment of independent auditors) and Item 3 (advisory vote on executive compensation), or you may abstain from voting on these items. If you give us your proxy but do not specify how to vote, we will vote your shares in accordance with the Board’s recommendations.
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Frequently Asked Questions About Voting (continued)
What are the Board’s recommendations?
The Board’s recommendations are set forth together with the description of each item in this proxy statement. In summary, the Board and, with respect to the ratification of the appointment of the independent auditors, the Audit Committee, recommends a vote as follows:
FOR the election of the ten nominees named in this proxy statement as directors;
FOR the ratification of the appointment of Deloitte & Touche LLP as our independent auditors for 2018; and
FOR the approval, on an advisory basis, of thetarget total direct compensation paidopportunities provided to our named executive officers as disclosed in this proxy statement.
If any other matters properly come before the annual meeting, we will vote the shares in accordance with our best judgment and discretion.
What if I change my mind after I have voted?
You may revoke your proxy before it is voted by:
submittingofficers. As depicted below, a new proxy card with a later date;
voting in person at the meeting; or
giving written notice to Mr. Vincent A. Mercaldi, Corporate Secretary, at CenterPoint Energy’s address shown above.
Will my shares be voted if I do not provide my proxy?
It depends on whether you hold your shares in your own name or in the name of a bank or brokerage firm. If you hold your shares directly in your own name, they will not be voted unless you provide a proxy or vote in person at the meeting.
Brokerage firms generally have the authority to vote their customers’ unvoted shares on certain “routine” matters. If your shares are held in the name of a broker, bank or other nominee, such nominee can vote your shares for the ratificationsubstantial portion of the appointmentcompensation for our named executive officers is at risk and performance based, meaning that actual compensation realized in a given year will vary depending on Company financial and stock price performance and individual performance.
For all items other than ratificationaverage size of the appointment of our independent auditors, brokers holding shares must vote according to specific instructions they receive from the beneficial owners of those shares because the New York Stock Exchange precludes brokers from exercising voting discretion on certain proposals without specific instructions from the beneficial owner as to how to vote. Brokers cannot vote on Item 1 (election of directors) or Item 3 (advisory vote on executive compensation) without instructions from the beneficial owners. If you do not instruct your broker how to vote with respect to Item 1 or Item 3, your broker will not vote for you with respect to those items.
Do I need a ticket to attend the meeting?
To be admitted to the meeting, you must provide proof of ownership of our common stock and proof of identification. If you plan to attend the meeting and your shares are held by banks, brokers, stock plans or other holders of record (in “street name”), you will need to provide proof of ownership. Examples of proof of ownership include a recent brokerage statement or letter from your broker or bank. All shareholders will be required to present valid picture identification, sucheach component as a driver’s license, before being admitted topercentage of each named executive officer’s (other than the meeting.
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 5 | |
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Frequently Asked Questions About Voting (continued)
What constitutes a quorum?
To carry on the business of the meeting, we must have a quorum. This means at least a majority of the shares of common stock outstanding as of the record date must be represented at the meeting, either by proxy or in person. Shares of common stock owned by CenterPoint Energy are not voted and do not count for this purpose.
Abstentions and proxies submitted by brokers that do not indicate a vote because they do not have discretionary authority and have not received instructions as to how to vote on a proposal(so-called “brokernon-votes”) will be considered as present for quorum purposes.
What vote is required to approve each of the proposals?
Under our third amended and restated bylaws (bylaws), directors are elected by a majority of the votes cast at the meeting. This means that the number of votes cast “for” a director must exceed the number of votes cast “against” that director. Abstentions and brokernon-votes will not affect the outcome of the vote. For additional information on the election of directors, see “Item 1: Election of Directors—Majority Voting in Director Elections.”
Each of the ratification of the appointment of independent auditors in Item 2 and the approval of the resolution included in Item 3 regarding the advisory vote on executive compensation requires the affirmative vote of a majority of the shares of common stock entitled to vote and voted for or against the item. Abstentions and brokernon-votes will not affect the outcome of the vote on these items.
Who conducts the proxy solicitation and how much will it cost?
CenterPoint Energy is requesting your proxy for the annual shareholder meeting and will pay all the costs of requesting shareholder proxies, including a fee of $13,000 plus expenses to Morrow Sodali LLC, 470 West Ave, Stamford, CT 06902, who will help us solicit proxies. We can request proxies through the mail, in person, or by telephone, fax or Internet. We can use directors, officers and other employees of CenterPoint Energy to request proxies. Directors, officers and other employees will not receive additional compensation for these services. We will reimburse brokerage firms, nominees, fiduciaries, custodians and other agents for their expenses in distributing proxy material to the beneficial owners of our common stock.
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2025. Proxies cannot be voted for a greater number of persons than the number of nominees named below.2019. of Directors can name a substitute nominee, and proxies will be voted for the substitute nominee pursuant to discretionary authority.Directors collectively representsdirectors with complementary qualifications, skills and expertise is essential to effectively discharging its oversight responsibility while advancing the following backgrounds,Company’s long-term business strategy. Accordingly, the Board is focused on striking an appropriate balance between retaining directors with a deep knowledge of the Company and adding new directors with a fresh perspective, among other factors that are set forth below with respect to the nominees for election this year. 6
| Skills and Qualifications | | | W. Cloonan | | | E. Cummings | | | B. Duganier | | | C. Franklin | | | R. Lewis | | | T. Malik | | | T. Pound | | | R. Raven | | | P. Smith | | | B. Smitherman | | | J. Wells | |
| Age (as of March 15, 2024) | | | 44 | | | 59 | | | 65 | | | 58 | | | 53 | | | 57 | | | 69 | | | 63 | | | 72 | | | 66 | | | 46 | |
| CNP Tenure (in years) | | | 3 | | | 4 | | | 0 | | | 2 | | | 2 | | | <1 | | | 9 | | | <1 | | | 10 | | | 4 | | | <1 | |
| Current / Former CEO of Public Company: An understanding of the complexities inherent in running a public company provides a unique perspective that helps the Board independently oversee the Company’s management, long-term strategic planning, shareholder value creation, human capital management, risk oversight, governance, and shareholder engagement. | | | | | | | | | | | | ● | | | | | | | | | | | | | | | | | | | | | ● | |
| Risk Management: Managing risk in a rapidly changing environment is critical. We seek directors with experience managing or overseeing the management of business, financial, environmental, and other risks similar to those faced by the Company. | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | |
| Utility Industry Experience: Due to the highly regulated nature of our business, we believe it is important to seek directors with experience in the regulated utility industry. | | | | | | | | | | | | ● | | | | | | | | | | | | | | | | | | ● | | | ● | |
| Operations and Safety Experience: We seek directors with operational experience in businesses with capital intensive infrastructure projects while ensuring the safety of employees and the public to help the Company develop and implement its capital plan and business strategy and continuously improve our operations. | | | ● | | | | | | | | | ● | | | ● | | | ● | | | | | | | | | | | | | | | ● | |
| Finance and Accounting: A deep understanding of finance and financial reporting processes is essential to the Board’s oversight of our strategic performance, capital allocation, financial reporting, and internal controls. We seek directors with knowledge and experience in corporate finance, accounting, and financial reporting as well as directors with “accounting or related financial management expertise” as required by the NYSE listing standards. | | | ● | | | ● | | | ● | | | ● | | | | | | ● | | | ● | | | | | | ● | | | ● | | | ● | |
| Community Involvement: As a utility that provides the energy necessary to fuel the business, innovation, and lives of the communities we serve, we seek directors with strong ties to and engagement with the communities we serve. | | | ● | | | ● | | | | | | | | | ● | | | | | | | | | ● | | | | | | ● | | | ● | |
| Government, Legal, and Regulatory: Our business is heavily regulated and is directly impacted by governmental actions. Further, the success of our long-term plan may be impacted by certain regulatory, legal or governmental decisions. We seek to have directors with experience in law, public policy, and regulatory matters to provide insight and develop strategies that incorporate current and potential changes in these areas. | | | ● | | | ● | | | | | | ● | | | ● | | | ● | | | ● | | | ● | | | | | | ● | | | ● | |
| Public Company Governance Experience: Directors with public company governance experience, including serving on other public company boards, are able to help ensure the Board focuses on appropriate matters and functions effectively in the development and oversight of our long-term plan and implementation of best practices for the Company. | | | | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | | | | ● | | | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 7 | |
| Skills and Qualifications | | | W. Cloonan | | | E. Cummings | | | B. Duganier | | | C. Franklin | | | R. Lewis | | | T. Malik | | | T. Pound | | | R. Raven | | | P. Smith | | | B. Smitherman | | | J. Wells | |
Human Capital Management: Building and maintaining a talented, engaged, and diverse workforce is a critical part of | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | |
| Technology and Customer Experience: Our industry is undergoing transformational change as a result of advances in technology and changing customer expectations about the products and services they want. Directors with experience in customer-facing businesses and new technology can provide the Board with critical insights and perspectives on adapting to and implementing new technologies to enhance the experience of our customers. | | | | | ● | | | | | | ● | | | ● | | | ● | | | | | | | | | | | | ● | | | ● | | |
| Cybersecurity and Physical Security: Maintaining the security of our assets, both physical and digital, is critical to our success. Therefore, we seek out directors with an understandig of these risks and who can provide valuable insight to the Board | | ● | | | | | | ● | | | ● | | | ● | | | ● | | | | | | | | | ● | | | ● | | | | | |
| Strategic Planning: As CenterPoint Energy continues to execute on its long-term strategy, including the transition to a pure-play utility, we seek directors who have experience with strategic transactions and strategic planning in overseeing the Company’s continued execution of its long-term strategy as well as development of future plans and strategies for the Company. | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | | ● | | |
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| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 8 | |
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Item 1: Election of Directors (continued)
The teneleven nominees for election at the annual meeting are listed below.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 9 | |
Wendy Montoya Cloonan Houston Managing Partner at Cantu Harden Montoya LLP | | |||||||||
| | | Key Qualifications and Skills Leading to Board Nomination • Government, Legal, and Regulatory—As a public law attorney and a Commissioner of the Port of Houston, Ms. Cloonan brings beneficial experience addressing the relationship among national, state, and local governments and businesses and individuals in our service territory. This experience helps the Board oversee and support the relationship between the Company and its various regulators as the Company continues to execute on its ten-year plan. • Community Involvement—As someone who has deep ties to the Houston community, Ms. Cloonan provides valuable insights regarding how the Company’s policies, and short- and long-term plans, impact our communities. • Risk Management— As a Commissioner of the Port Authority of Houston, the largest port in tonnage and busiest waterway in the nation, Ms. Cloonan sets policies and guides in a constantly evolving environment balancing leading-edge technologies, including billion-dollar improvements in productivity, reliability, and resiliency, with sustainability, environmental stewardship and community initiatives. In addition, Ms. Cloonan’s experience advising clients on capital projects within legal, compliance and regulatory frameworks brings a critical perspective to the Board’s enterprise risk management oversight role. Experience • Houston Managing Partner (Jan. 2023 – Present) at Cantu Harden Montoya LLP, a public law and public finance firm • Founder and Sole Shareholder (Aug. 2019 – Dec. 2022) of The Law Office of Wendy Montoya Cloonan, PLLC, a public law and public finance firm based in Houston, Texas • Senior Program Officer in Education, Assistant General Counsel and Director of Legal (Feb. 2015 – July 2019) at the Houston Endowment, Inc., a private foundation that partners with other organizations in the non-profit, public, and private sectors to improve quality of life for the residents of greater Houston • Public law and finance attorney at Hunton Andrews Kurth LLP (formerly Andrews Kurth LLP) (2013 – 2015), Schwartz, Page & Harding, L.L.P. (2011 – 2013) and Vinson & Elkins L.L.P. (2006 – 2011) Other Boards (For Profit and Non-Profit Entities) • Commissioner—Port of Houston Authority and Chair Business Equity/Procurement Committee, Community Relations Committee, Governance Committee, Audit Committee, Compensation Committee, Dredge Task Force Committee (2019 – Present) • Board Member—Harris County Hospital District Foundation (2021 – Present) • Executive Board Member—ALMAAHH—Advocates of a Latino Museum of Art & Architecture Houston/Harris County (2021 – Present) • • National Association of Corporate Directors Tri-Cities Chapter (2021 – Present) • Morgan Stanley Women Energy Directors Network (2021 – Present) • Latino Corporate Directors Association (2021 – Present) • Chair (2024 – Present) and Board Member (2023 – Present), Harris County Commissioner Precinct One Community Foundation • Executive Board Member and Secretary Officer—Houston Downtown Management District (2016 – 2021) Education and Credentials • B.A., Yale University • M.P.P., John F. Kennedy School of Government, Harvard University • J.D., with Honors, The University of Texas School of Law • NACD Directorship Certified® • Harvard Business School Corporate Director Certificate (Governance, Audit, Compensation) • Harvard Business School, Certificate in Financial Accounting • CERT Certificate: Cybersecurity Oversight, Carnegie Mellon University Software Engineering • Digital Directors Network, Certificate in Systemic Cyber Risk Governance for U.S. Public Company Corporate Directors | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 10 | |
Earl M. Cummings Managing Partner of MCM Houston Properties, LLC, and Chief Executive Officer of The BTS Team | | |||||||||
Age: 59 Independent Director Since 2020 Committees: • None | | | Key Qualifications and Skills Leading to Board Nomination • Public Company Governance Experience—As a member of the board of directors of another public company, Mr. Cummings is able to provide valuable insights regarding good governance and efficient board management practices, which are critical to the functioning of our Board for the benefit of our shareholders. • Strategic Planning—As a Chief Executive Officer, Managing Partner of a real estate fund and as a member of the board of directors of another public company, Mr. Cummings’ experience is beneficial to the Board as the Board develops and oversees the Company’s strategic plans. • Human Capital Management—As a Chief Executive Officer and Managing Partner, Mr. Cummings provides valuable experience regarding recruiting, managing, and retaining talent. Effective human capital management is critical to the execution of Experience • Managing Partner (2012 – Present) of MCM Houston Properties, LLC, a real estate fund that invests in single family residential properties in Houston, Texas • Served in various positions, including currently as Chief Executive Officer, at The BTS Team (1997 – Present), that started as an information technology and staffing firm providing solutions and services across various regions and evolved into a company that also invests financial resources in various industries • Chief Executive Officer (2008 – 2014) of BestAssets, Inc., a private company providing real estate portfolio management and related services Other Boards (For Profit and Non-Profit Entities) Public Company • Halliburton Company (2022 – Present) Other • Texas Children’s Hospital (2022 – Present) • UH Energy Advisory Board (2021 – Present) • Board of Visitors of University of Houston (2016 – 2018) • Yellowstone Academy (2004 – 2017) • C-STEM Robotics (2002 – 2017) Education and Credentials • BBA, University of Houston • EMBA, Pepperdine University • Certificate: Director Education Program, NACD Corporate Director Institute • Certificate: Real Estate, Ross Minority Program, USC | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 11 | |
Barbara J. Duganier Former Managing Director and Global Chief Strategy Officer of the Outsourcing Business at Accenture plc | | |||||||||
Age: 65 Independent Director Nominee | | | Key Qualifications and Skills Leading to Board Nomination • Finance and Accounting—Ms. Duganier has extensive experience serving on public and private company audit committees, including as chair of audit committees as well as a • Strategic Planning—Ms. Duganier has extensive experience serving on both private and public company boards in a diversity of industries. This experience provides a unique perspective to the • Sustainability—As a member of Experience • Held various positions (2004 – 2013) of increasing responsibility as a Managing Director including the position of Global Chief Strategy Officer of the Outsourcing Business and Global Growth and Offering Development Lead of the Global Business Process Outsourcing Business at Accenture plc, a leading provider of strategy, consulting, technology and operations services to various industries and sectors. • Independent Consultant, Finance Transformation Program (2002 – 2003) at Duke Energy North America, a subsidiary of Duke Energy, one of America’s largest energy holding companies that provides electric utility and natural gas services. • Held various positions (1979 – 2002) of increasing responsibility as an equity Partner Other Boards (For Profit and Non-Profit Entities) U.S. Public Company • Texas Pacific Land Corporation (2021 – Present) • MRC Global Inc. (2015 – Present) • Noble Energy, Inc. (2018 – 2020) • Buckeye Partners, L.P. (2013 – 2019) • HCC Insurance (2015 – 2015) Other Public Company • Arcadis NV (ENXTAM) (2023 – Present) Other • McDermott International (2020 – Present) • Pattern Energy (2021 – Present) • John Carroll University (2019 – Present) • National Association of Corporate Directors Texas Tri-Cities Chapter (2015 – 2024) • West Monroe Partners (2018 – 2021) Education and Credentials • B.B.A., John Carroll University • Licensed CPA—Texas • NACD Director Certified (NACD.DC™) • CERT Certificate: Cybersecurity Oversight, Carnegie Mellon University Software Engineering Institute | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 12 | |
Christopher H. Franklin Chairman, Chief Executive Officer and President of Essential Utilities | | |||||||||
Age: 58 Independent Director Since 2022 Committees: • Audit • Governance, Environmental and Sustainability | | | Key Qualifications and Skills Leading to Board Nomination • Utility Industry Experience—As the Chief Executive Officer of a public utility company, Mr. Franklin provides key experience and understanding regarding the management of a public utility that provides the Board with valuable insight as the Board oversees the Company’s short- and long-term plans and oversees the Company’s regulatory and legislative priorities for the benefit of the Company’s stakeholders. • Technology and Customer Experience—As the Chief Executive Officer of a public utility company, Mr. Franklin provides valuable insight regarding the relationship between a public company and its customers, including as customers continue to seek additional technological resources to improve the customer experience. This insight is critical to the Board and the Company as it continuously seeks to improve its service for the benefit of its • Operations and Safety Experience—As the Chief Executive Officer of a public utility, Mr. Franklin has extensive experience regarding the operations of a utility and managing the utility operations in a safe manner for the Experience • Chairman, Chief Executive Officer and President (2015 – Present) of Essential Utilities, Inc., a public company providing regulated utilities, including water, wastewater and natural gas, to customers in Other Boards (For Profit and Public Company • Chairman, Essential Utilities, Inc. (2015 – Present) • ITC Holdings (2011 – 2016) Other • University of • Franklin Institute of
Education and Credentials • B.S., West Chester University • M.B.A., Villanova University | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 13 | |
Raquelle W. Lewis Southeast Texas Director of Communications & Public Information Offices for the Texas Department of Transportation | | |||||||||
Age: 53 Independent Director Since 2021 Committees: • Compensation • Governance, Environmental and Sustainability | | | Key Qualifications and Skills Leading to Board • Government, Legal, and Regulatory—Ms. Lewis provides valuable government relations experience, including navigating federal, state, and local regulations covering transportation projects. Ms. Lewis is able to use this experience to help the Board as it oversees the relationship of the Company with government entities and as it navigates various federal, state, and local regulations to complete infrastructures projects to better serve its stakeholders. • Sustainability—As the Company continues its generation transition planning, Ms. Lewis’ more than 25 years experience of addressing, preparing, and delivering environmental studies and overseeing environmental impacts of various transportation projects provides the Board with a critical perspective regarding the oversight of the Company’s generation transition plans. • Technology and Customer Experience—As a Public Information Office leader at the Texas Department of Transportation (TxDOT), Ms. Lewis has extensive experience receiving and facilitating communications with community leaders, businesses, and individuals, which provides valuable insight to the Board as it oversees the Company’s outreach strategy for serving its communities and stakeholders to provide critical services. Experience • Held various positions (2008 – Present) of increasing responsibilities including the position of Southeast Texas Director of Communications & Public Information Offices (2017 – Present) of TxDOT, a state government organization that • Served as Special Advisor to TxDOT Executive Director and the Executive Administration (2015) • Held various positions (1998 – 2008) of increasing responsibilities including the position of Supervising Planner/Program Manager at Parsons Brinkerhoff, Inc., a multinational engineering and design firm that specializes in strategic consulting, planning, engineering, construction management, energy, infrastructure, and community planning Other Boards (For Profit and Non-Profit Entities) • Success House A Road to Recovery, Inc. (2023 – Present) • South Main Alliance Advisory Board (2022 – Present) Other Professional Experience and Community Involvement • National Association for • WTS International • Leadership Women, Inc. Education and Credentials • B.A., University of Texas at Austin • National Association of Corporate Directors—Master Class on Cyber Risk Oversight • Certificate: Stanford Directors’ College—Stanford Law School • CERT Certificate: Cybersecurity Oversight, Carnegie Mellon University Software Engineering Institute | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 14 | |
Thaddeus J. Malik Principal at S2T Solutions and Attorney | | ||||||||||||||
Age: 57 Independent Director Since Sept. 2023 Committees: • Audit • Compensation • Governance, Environmental and Sustainability | | | Key Qualifications and Skills Leading to Board Nomination • Public Company Governance Experience—Having previously served as General Counsel of a
• Cybersecurity and Physical Security—As part of | ||||||||||||
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• Strategic Planning—As the former chair the Mergers and Acquisitions Practice Group and a member of the Policy Committee for a global law firm, as well as chairing the Strategy and Risk Committee for the largest customer-owned health insurer in the U.S. with more than $50 billion in revenue, Mr. Malik has Experience • Principal (2022 – Present) at S2T Solutions, LLC, a • Partner (2010 – 2022) at Paul Hastings, LLP, a global law firm • Partner (2002 – 2010) at Jenner & Block, LLP, an international law firm • Vice President and Other Boards (For Profit and • Health Care Service Corporation • President (2022 – 2024) and • Illinois PGA Foundation (2005 – Present) • The TimeLine Theater Company (2014 – 2020; 2023 – Present) Education and Credentials • B.A., With Distinction, Northwestern University • J.D., Cum Laude, Harvard Law School • CERT Certificate: Cybersecurity Oversight, Carnegie Mellon University Software Engineering Institute • Certificate: Corporate Director, Harvard Business School | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 15 | |
Theodore F. Pound Private Investor and Attorney | | ||||||||||||||
Age: 69 Independent Director Since 2015 Committees: • Compensation (Chair) • Audit | | | Key Qualifications and Skills Leading to Board Nomination • Public Company Governance Experience—As a
• Human Capital Management—Mr. • Finance and Accounting—As a former General Counsel of | ||||||||||||
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Item 1: Election of Directors (continued)
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Experience • Private Investor and Attorney (2016 – Present) • Vice President, General Counsel and Corporate Secretary • Vice President, General Counsel and Secretary Education and Credentials • B.A., The University of Texas at Austin • J.D., University of Houston | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 16 | |
Ricky A. Raven Senior Vice President and Deputy General Counsel at Allstate Insurance Company | | |||||||||
Age: 63 Independent Director Since Sept. 2023 Committees: • Compensation • Governance, Environmental and Sustainability | | | Key Qualifications and Skills Leading to Board Nomination • Government, Regulatory, and Legal—Mr. Raven has extensive experience in advising and managing legal issues for companies both from • Risk Management—Mr. • Community Involvement—Mr. Raven is heavily involved with various for Experience • Senior Vice President and
• Partner (2013 – 2021) at Reed Smith, LLP, an international law firm Other Boards (For Profit and Non-Profit Entities) • National Judicial College Board • International Academy of Trial Lawyers Board of Directors (2022 – Present) • University of Houston Board of Regents (2021 – Present) • Southwestern University Board of Trustees (2015 – Present) • City of Houston Civil Service Commission (1999 – Present), previously serving as the Commissioner of the City of Houston Civil Service Commission Education and Credentials • B.A., University of Houston • J.D., University of Houston Law Center | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 17 | |
Phillip R. Smith Independent Chair of the Board and Chief Financial Officer of Marathon-Sparta Holdings, Inc. | | |||||||||
Age: 72 Independent Director Since 2014 Committees: • Audit (Chair) • Governance, Environmental and Sustainability | | | Key Qualifications and Skills Leading to Board Nomination • Finance and Accounting—Mr. • Cybersecurity and Physical Security—As part of Mr. Smith’s auditing experience and as part of maintaining his CPA license, he has received significant training regarding cybersecurity, including risk oversight, that he uses to provide insight regarding the Company’s ongoing cybersecurity program. • Sustainability—As the Company continues its generation transition plan and pursues its carbon emissions reduction goals, Mr. Smith is able to provide valuable insight regarding the development of renewable generation to the Company from his prior leadership at a wind and solar renewable project developer. Experience • Chief Financial Officer (2023 – Present) and previously President and Chief Executive Officer (2019 – 2022) of Marathon-Sparta Holdings, Inc., a private company involved in • President and Chief Executive Officer (2013 – 2019) of Torch Energy Advisor Inc., a private • Partner (2002 – 2012) at KMPG LLP, a global network of professional firms providing audit, tax and advisory services Other Boards (For Profit and Non-Profit Entities) • Health Care Service Corporation (2021 – Present) • Oilstone Energy Services, Inc. (2014 – 2016) Education and Credentials • B.A., Baylor University • M.B.A., Baylor University • Licensed CPA—Texas | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 18 |
Barry T. Smitherman President of Barry Smitherman, P.C. and Managing Partner of Smitherman + Associates, L.P. | | ||||||||||
Age: 66 Independent Director Since 2020 Committees: • Audit • Compensation | | | Key Qualifications and Skills Leading to Board Nomination • Utility Industry Experience—Mr. Smitherman’s extensive utility experience, including as the former chairman of the Railroad Commission of Texas and Public Utility Commission of Texas as well as a former member of the board of the Electric Reliability Council of Texas, provides critical insights to the Board as the Board oversees and develops the Company’s short- and long-term strategies to effectively serve the Company’s customers and to increase value for its shareholders. • Government, Regulatory, and Legal—Mr. Smitherman’s extensive experience with the Texas energy regulation framework as a result of his board service for various regulatory commissions provides valuable insight as the Board’s understanding of the Texas energy regulatory system is critical for developing the Company’s short- and long-term strategy to provide value to its stakeholders. • Sustainability—As the Company continues its generation transition planning and pursues its carbon emissions reduction goals, Mr. Smitherman, as an attorney, provides valuable insight into the environmental laws, regulations, and significant federal environmental cases, which he stays up to date on as part of his adjunct position at the University of Texas where he teaches an energy law course that includes environmental law issues. Experience • President and principal attorney (2017 – Present) of Barry Smitherman, P.C., a law firm specializing in water, electricity and natural gas • Managing Partner (2017 – Present) of Smitherman + Associates, a firm providing consulting services to energy infrastructure-related entities • Adjunct Professor (2016 – Present) at The University of Texas School of Law • Partner (2015 – 2017) at Vinson & Elkins LLP, an international law firm • Managing Director and National Head of Tax-Exempt Securities (1999 – 2002), Banc One Capital Markets (later acquired by J.P. Morgan) Other Boards (For Profit and Non-Profit Entities) Public Company • NRG Energy, Inc. (2017 – 2018) Other • Chairman and President, Texas Geothermal Energy Alliance (2022 – Present) • Chairman, Brookwood in Georgetown (2018 – 2023) • Centric Infrastructure Group, LLC (2019 – 2021) • Chairman (2012 – 2014) and Commissioner (2011 – 2014), Railroad Commission of Texas • National Association of Regulatory Utility Commission (2011 – 2014) • Southern States Energy Board (2011 – 2013) • Member, Interstate Oil and Gas Compact Commission (2011 – 2013) • Southwest Power Pool (SPP) Regional State Committee (2008 – 2011) • Member, U.S. Department of Energy Electricity Advisory Committee (2008 – 2011) • Vice-Chair, Texas Advisory Panel on Federal Environmental Regulations (2008 – 2009) • Chairman (2007 – 2011) and Commissioner (2004 – 2011), Public Utility Commission of Texas • Electric Reliability Council of Texas (2007 – 2011) • Member, Texas Public Finance Authority (2002 – 2004) Education and Credentials • B.B.A., summa cum laude, Texas A&M University • M.P.A., Harvard University • J.D., The University of Texas School of Law |
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 19 | |
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Item 1: Election of Directors (continued)
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Jason P. Wells President and Chief Executive Officer of CenterPoint Energy,
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Age: 46 Non-Independent Director Since 2024 Committees: • None | | |
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Key Qualifications and Skills Leading to Board Nomination • Current CEO of a
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• Utility Industry Experience—Mr. Wells has over 10 years of experience as • Operations and Safety Experience—Mr. Wells previously served as President and Chief Operating Officer where he oversaw the day-to-day operations of the business, including its safety program. This experience supports the Board as it oversees and develops short- and long-term business strategies and oversees the Company’s safety program. Experience • President and Chief Executive Officer • President and Chief Operating Officer (2023 – 2024) of CenterPoint Energy, Inc. • President, Chief Operating Officer and Chief Financial Officer (2023) of CenterPoint Energy, Inc. • Executive
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Item 1: Election of Directors (continued)
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• Executive Vice President and Chief Financial Officer (2019 – 2020) of • Senior Vice President and Chief Financial Officer (2016 – 2019) at PG&E Corporation • Vice President, Business Finance (2013 – 2016) at Pacific Gas and Electric Company Other Boards (For Profit and Non-Profit Entities) • M.D. Anderson Cancer Center, Board of Visitors (2022 – Present) • Kinder Rice Institute for Urban Development Advisory Board (2021 – Present) • Central Houston, Inc. (2022 – Present) • Bauer College Board of the C.T. Bauer College of Business at the University of Houston (2022 – Present) • Executive Education and Credentials • B.A., University of • M.A., University of Florida • Licensed CPA (inactive) | |
| | | The Board | |||||||||
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The Board of Directors recommends a vote FOR the election of each of the nominees as directors.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 20 | |
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• The nominee’s personal and professional integrity, experience, reputation, and skills; | |
• The nominee’s ability and willingness to devote the time and effort necessary to be an effective board member; | |
• The nominee’s commitment to act in the best interests of CenterPoint Energy and its shareholders; | |
• The requirements under the listing standards of the New York Stock Exchange (NYSE) for a majority of independent directors, as well as qualifications applicable to membership on Board committees under the listing standards and various regulations; and | |
• The Board’s desire that the directors possess a broad range of business experience, diversity, professional skills, geographic representation, and other qualities it considers important in light of our business plan. | |
|
Item 1: Election of Directors (continued)
At least annually, the Governance, Environmental and Sustainability Committee reviews the overall composition of the Board, including the skills represented by incumbent directors, and the need for Board refreshment or expansion. The Board evaluates the makeup of its membership in the context of the Board as a whole, with the objective of recommending a group that (i) can effectively work together using its diversity of experience, skills, perspectives, and backgrounds to see that the Company is well-managed with a focus on achieving the Company’s near- and long-term business strategy and (ii) represents the interests of the Company and its shareholders.
employee population at large, represent the diverse communities in our service territories in order to better serve our customers. This commitment to diversity has been incorporated throughout the Company including, among other items:
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 21 | |
Shareholders may submittime and the namesskills needed to achieve the Company’s near- and other information regarding individuals they wish to be considered for nominationlong-term business strategy.
Company first makes public announcement of the date of such meeting. Any such notice must also comply with the timing, disclosure, procedural and other requirements as set forth in our Bylaws, including the information and statement required by the universal proxy rules under Rule 14a-19(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act). You may obtain a copy of our Bylaws describing the requirements for the nomination of director candidates by shareholders on our website at
https://investors.centerpointenergy.com/governance.In February 2017, we proactively adopted amendments for Director Nominations
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 22 | |
and Director Peer Evaluation
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Item 1: Election of Directors (continued)
in conjunction with this process, each director completes an individual evaluation for each of the other directors. The collective ratings and comments of the directors are compiled and presented by Mr. Pound, the chairmanIndependent Chair of the Board, or by the Chair of the Governance, Environmental and Sustainability Committee, or by Mr. Carroll, with respect to Mr. Pound’sthe Independent Chair of the Board’s evaluation, to the Governance, Environmental and Sustainability Committee and the full Board for discussion and action.
NYSE.
As contemplated by New York Stock Exchange rules then in effect,
The categorical standards cover two types of relationships. The first type involves relationships of the kind addressed in either:
•
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 23 | |
|
Item 1: Election of Directors (continued)
SEC.
actual conflict of interests.
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Item 1: Election of Directors (continued)
Majority Voting in Director Elections
Overview.
Bylaws. Our Corporate Governance Guidelines include director nominee resignation procedures. In brief, these procedures provide that:
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 24 | |
| • Incumbent director nominees must submit irrevocable resignations that become effective upon and only in the event that (1) the nominee fails to receive the required vote for election to the Board at the next annual meeting of shareholders at which such nominee facesre-election and (2) the Board accepts such resignation; | |
| • Each director candidate who is not an incumbent director must agree to submit an irrevocable resignation upon election or appointment as a director; | |
| • Upon the failure of any nominee to receive the required vote, the Governance, Environmental and Sustainability Committee makes a recommendation to the Board on whether to accept or reject the resignation; | |
| • The Board takes action with respect to the resignation and publicly discloses its decision and the reasons therefor within 90 days from the date of the certification of the election results; and | |
| • The resignation, if accepted, will be effective at the time specified by the Board when it determines to accept the resignation, which effective time may be deferred until a replacement director is identified and appointed to the Board. | |
A presiding independent director (typically the Independent Chair of the Board) leads the executive sessions. The presiding director provides the independent directors with a key means for communication and collaboration.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 25 | |
|
Item 1: Election of Directors (continued)
the Chief Financial Officer,as well as reviews risk assessments and controls for certain business activities, among other things. The Company’s Executive Vice President and General Counsel facilitates risk oversight committee meetings,meetings. The Company’s enterprise risk management function further supports executive management’s, operational management’s, and provides daily risk assessment and control oversight for commercial activities. Membersfunctional management’s execution of executive management also participate inthe Company’s strategic business objectives by conducting ongoing risk assessments and assisting with risk mitigation planning.
| | | Safety | | | | | Regulatory and legislative developments | | ||
| | | Business strategy and policy, including industry and economic developments | | | | | Cybersecurity and data privacy | | ||
| | | Operations and system integrity | | | | | Human capital management | | ||
| | | Litigation and other legal matters | | | | | Annual budget, including capital investment plan | | ||
| | | Supply chain | | | | | Net zero and carbon emissions reduction goals and generation transition | |
| Committee | ||||
| Risk Oversight Responsibilities | | |||
| Audit |
| | Accounting and | |
| Compensation | | | Compensation policies and practices, human capital management, and succession planning | |
| Governance, Environmental and Sustainability |
| |||
| | Corporate governance, including Board structure, environmental matters, including those related to climate change, and sustainability, including our net zero and carbon emissions reduction goals | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 26 | |
Our
served during 2023.
Director | Audit Committee | Compensation Committee | Finance Committee | Governance Committee | ||||
Michael P. Johnson* | ✓ | ✓ | ||||||
Janiece M. Longoria* | ✓ | ✓ | ||||||
Scott J. McLean | ✓ | ✓ | ||||||
Theodore F. Pound | ✓ | Chair | ||||||
Susan O. Rheney | Chair | ✓ | ||||||
Phillip R. Smith | Chair; Financial Expert | ✓ | ||||||
John W. Somerhalder II | ✓ | ✓ | ||||||
Peter S. Wareing | Chair | ✓ | ||||||
Number of Meetings Held in 2017 | 5 | 4 | 4 | 4 |
| Director | | | Audit Committee | | | Compensation Committee | | | Governance, Environmental and Sustainability Committee | |
| Wendy Montoya Cloonan | | | | | | ✓ | | | Chair* | |
| Christopher H. Franklin | | | ✓ | | | | | | ✓ | |
| Raquelle W. Lewis | | | | | | ✓ | | | ✓ | |
| Thaddeus J. Malik** | | | ✓ | | | ✓ | | | ✓ | |
| Theodore F. Pound | | | ✓ | | | Chair | | | | |
| Ricky A. Raven** | | | | | | ✓ | | | ✓ | |
| Phillip R. Smith | | | Chair; Financial Expert | | | | | | ✓ | |
| Barry T. Smitherman | | | ✓ | | | ✓ | | | | |
| Number of Meetings Held in 2023 | | | 7 | | | 5 | | | 5 | |
| CenterPoint Energy, Inc. 2024 Proxy Statement |
| | 27 | |
| Audit Committee | ||
| | The primary responsibilities of the Audit Committee are to assist the Board in fulfilling its oversight responsibility for: • the integrity of our financial statements; • the qualifications, independence and performance of our independent registered public accounting firm; • the performance of our internal audit function; • compliance with legal and regulatory • our systems of disclosure controls and internal controls; • our enterprise risk management process; • our cybersecurity program; and • political contributions made by the Company’s political action committees. The Audit Committee has sole responsibility to appoint and, where appropriate, replace our independent The Board | |
| Compensation Committee | ||
| | The primary responsibilities of the Compensation Committee are to: • oversee compensation for our • administer incentive compensation plans; • oversee the Company’s recoupment policies; • evaluate our Chief Executive • review management succession planning and development; • review and monitor the Company’s • select, retain, and oversee the Company’s compensation consultant. For information concerning policies and procedures relating to the consideration and determination of executive compensation, including the role of the Compensation Committee and its report concerning Compensation Discussion and Analysis, see “Compensation Discussion and Analysis” and “Report of the Compensation Committee,” respectively. |
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 28 | |
Item 1: Election of Directors (continued)
| Governance, Environmental and Sustainability Committee | ||
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| The primary responsibilities of the Governance, Environmental and Sustainability Committee are to: • identify, evaluate, and recommend, for the approval of the entire Board, • recommend membership on standing committees of the Board; • address and resolve any issues with respect to related-party transactions and conflicts of interest involving our executive officers, directors or other “related persons”; • review the independence of each Board member and make recommendations to the Board regarding director independence; • oversee annual evaluations of the Board and its standing committees, including individual director evaluations; • review any shareholder proposals submitted for inclusion in our proxy statement and make recommendations to the Board regarding the Company’s response; • review and recommend fee levels and other elements of compensation fornon-employee directors; • evaluate whether to accept a conditional resignation of an incumbent director who does not receive a majority vote in favor of election in an uncontested election; • review the Company’s programs, practices, initiatives, and strategies relating to environmental and sustainability matters, including matters related to climate change; and • establish, periodically review, and recommend to the Board any changes to our Corporate Governance Guidelines. For information concerning policies and procedures relating to the consideration and determination of compensation of our directors, including the role of the Governance, Environmental and Sustainability Committee, see “Compensation of Directors.” | |
of Directors who are not officers of CenterPoint Energy will hold regular executive sessions without management participation. If at any time thenon-management directors include one or more directors who do not meet the listing standards of the New York Stock ExchangeNYSE for general independence, the Board must hold an executive session at least once each year includingAlways There®15
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Item 1: Election of Directors (continued)
only thenon-management directors who are also independent. An executive session of independent directors is currently scheduled in conjunction with each regular meeting of the Board of Directors.Board. Currently, the Governance Committee ChairmanIndependent Chair of the Board (Mr. Pound)Smith) presides at these sessions.
highlights recent shareholder engagement efforts.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 29 | |
| CenterPoint Energy Annual Engagement Program | | ||||||
| Engagement Objectives • Use multiple engagement channels throughout the year: • Conduct direct meetings with shareholders • Engage with proxy governance teams of institutional investors • Attend analyst conferences and road shows • Host investor days from time to time • Attend industry specific conferences | | | Company Participants • Team of individuals who may meet with shareholders, including representatives from: • Senior Leadership (executive officers and future leaders of the Company) • Investor Relations • Corporate Governance • HR/Compensation • Environmental and Corporate Sustainability • Compensation Committee | | | Topics Discussed • In addition to any topics raised by a shareholder, we solicit feedback on a range of topics, including: • Executive compensation program and practices • Corporate governance matters, including succession planning and Board refreshment • Environmental matters, including our carbon emissions reduction disclosures and goals | |
| Recent Shareholder Engagements | | ||||||
| Engagement Objectives • As part of our annual meeting engagement process, we contacted shareholders representing 67% of our outstanding shares of common stock and engaged with shareholders representing approximately 35% of our outstanding shares in late 2023 and early 2024 | | | Company Participants • Shareholders met with key members of our executive leadership representing Human Resources, Investor Relations, and Corporate Governance • For our late 2023—early 2024 engagement, the Chair of the Compensation Committee was available upon the request of the shareholder. Only one shareholder requested a meeting with the Chair of the Compensation Committee, who met with that shareholder. | | | Topics Discussed • In addition to any topics raised by a shareholder, we solicited feedback on a range of topics, including: • CEO transition and management succession planning; • Executive compensation program; • Board succession planning; and • Our generation transition and net zero and carbon emissions reduction goals | |
| Feedback Received | | ||||||
| • Shareholders were generally supportive of the Company’s executive compensation structure • At the 2023 Annual Meeting, approximately 82.6% of shareholders voted for the Company’s executive compensation • Shareholders were generally supportive of the Company’s sustainability efforts • Shareholders were pleased with the communication regarding the Company’s executive succession planning, noting that the Company’s organizational changes were effectively communicated through press releases | |
Proxy Statement.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 30 | |
The Governance, Environmental and Sustainability Committee evaluates on an annual basis the non-employee director compensation program with a view to approximate CenterPoint Energy’s peer group median and align non-employee director compensation with our shareholders’ interests. This evaluation considers the significant time expended and background, experience and skill levels required to fulfill the duties of a non-employee director. The Governance, Environmental and Sustainability Committee’s independent compensation consultant annually benchmarks and evaluates the competitiveness of CenterPoint Energy’s non-employee directors’ compensation program, including a comparison of the compensation components to that of peer companies. Based on the Governance, Environmental and Sustainability Committee’s recommendations, the Board then determines the final compensation for all non-employee directors each year.
fees.
| Type of Retainer Fee | | | Current Retainer Fee | | |||
| Annual Cash Retainer for Non-Employee Directors | | | | $ | 125,000 | | |
| Annual Standing Committee Chair Supplemental Retainers | | | | | | | |
| Audit Committee Chair | | | | $ | 20,000 | | |
| Compensation Committee Chair | | | | $ | 20,000 | | |
| Governance, Environmental and Sustainability Committee Chair | | | | $ | 15,000 | | |
| Annual Independent Chair of the Board Retainer | | | | $ | 185,000 | | |
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Item 1: ElectionIndependent Chair Retainer
the Independent Chair as the leader of the Board, a retainer for the Independent Chair continues to be warranted and is generally consistent with the practice at other large public companies who have an Independent Chair. For example, the Independent Chair serves as a trusted advisor to the Chief Executive Officer and a qualified and experienced Independent Chair supports the Company’s performance as it continues to execute on its near- and long-term strategic plan. In addition, the Independent Chair takes on additional responsibilities as discussed above in “Board Leadership.”
Grants made The annual stock awards granted under this plan vest on the first anniversary of the grant date. Grants alsoour Stock Plan for Outside Directors are immediately fully vest in the event of the director’s death orvested upon a change in control (defined in substantially the same manner as in the change in control plan for certain officers described in “Potential Payments upon Change in Control or Termination”). Upon vesting of the awards, each director receives, in addition to the underlying shares, a cash payment equal to the amount of dividend equivalents earned since the date of grant.
If a director’s service on the Board is terminated for any reason other than death or a change in control, the director forfeits all rights to the unvested portion of any outstanding grants as of the termination date. If the director is 70 years of age or older when he or she ceases to serve on the Board of Directors, the director’s termination date is deemed to be December 31st of the year in which he or she leaves the Board.
Messrs. Malik and Raven of 3,786 shares of common stock.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 31 | |
| |
• An early distribution of either 50% or 100% of their deferrals for the year in any year that is at least four years from the year of deferral or, if earlier, the year in which they attain their normal retirement date under the plan (the first day of the month coincident with or next following attainment of age 70); | |
• A lump sum distribution payable in the year after the year in which they reach their normal retirement date or leave the Board, | |
• In 15 annual installments beginning on the first of the month coincident with or next following their normal retirement date or upon leaving the Board, | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | |
32 |
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Item 1: Election of Directors (continued)
Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(3) ($) | Total ($) | ||||||||||||
Michael P. Johnson | 103,270 | 130,000 | — | 233,270 | ||||||||||||
Janiece M. Longoria | 96,786 | 130,000 | 9,722 | 236,508 | ||||||||||||
Scott J. McLean | 101,649 | 130,000 | — | 231,649 | ||||||||||||
Theodore F. Pound | 106,965 | 130,000 | — | 236,965 | ||||||||||||
Susan O. Rheney | 106,965 | 130,000 | — | 236,965 | ||||||||||||
Phillip R. Smith | 116,786 | 130,000 | — | 246,786 | ||||||||||||
John W. Somerhalder II | 96,786 | 130,000 | 2,641 | 229,427 | ||||||||||||
Peter S. Wareing | 115,220 | 130,000 | 43,718 | 288,938 |
| Name | | | Fees Earned or Paid in Cash(1) ($) | | | Stock Awards(2) ($) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings(3) ($) | | | Other Compensation(4) ($) | | | Total ($) | | |||||||||||||||
| Wendy Montoya Cloonan | | | | | 121,951 | | | | | | 170,000 | | | | | | — | | | | | | 32,564 | | | | | | 324,515 | | |
| Earl M. Cummings(5) | | | | | 206,829 | | | | | | 170,000 | | | | | | — | | | | | | 15,000 | | | | | | 391,829 | | |
| Christopher H. Franklin | | | | | 121,951 | | | | | | 170,000 | | | | | | — | | | | | | 50,000 | | | | | | 341,951 | | |
| Raquelle W. Lewis | | | | | 121,951 | | | | | | 170,000 | | | | | | 859 | | | | | | 16,103 | | | | | | 308,913 | | |
| Thaddeus J. Malik(6) | | | | | 32,269 | | | | | | 100,783 | | | | | | — | | | | | | 11,599 | | | | | | 144,651 | | |
| Martin H. Nesbitt(7) | | | | | 237,073 | | | | | | 170,000 | | | | | | — | | | | | | 50,000 | | | | | | 457,073 | | |
| Theodore F. Pound | | | | | 141,951 | | | | | | 170,000 | | | | | | — | | | | | | — | | | | | | 311,951 | | |
| Ricky A. Raven(6) | | | | | 32,269 | | | | | | 100,783 | | | | | | — | | | | | | — | | | | | | 133,052 | | |
| Phillip R. Smith | | | | | 141,951 | | | | | | 170,000 | | | | | | — | | | | | | — | | | | | | 311,951 | | |
| Barry T. Smitherman | | | | | 121,951 | | | | | | 170,000 | | | | | | — | | | | | | 11,625 | | | | | | 303,576 | | |
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 33 | |
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| Name | | | Shares of Common Stock Owned Beneficially at December 31, 2023 | | | Percent of Common Stock Owned Beneficially at December 31, 2023 | | ||||||
Capital International Investors 333 South Hope Street, 55th Floor Los Angeles, CA 90071 | | | | 84,810,750(1) | | | | | | 13.5% | | | ||
| The Vanguard Group, Inc. | |||||||||||||
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| | | | | 76,442,771(2) | | | | | | 12.11% | | | |
| BlackRock, Inc. | |||||||||||||
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| | | | | 49,577,998(3) | | | | | | 7.9% | | | |
| State Street Corporation | |||||||||||||
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| | | | | 33,059,817(4) | | | | | | 5.25% | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 34 | |
| Name | | | Number of Shares of Common Stock Beneficially Owned(1) | | | Percent Owned(2) | | ||||||
| Wendy Montoya Cloonan | | | 17,017 | | | | | | * | | | ||
| Earl M. Cummings | | | 25,004 | | | | | | * | | | ||
| Scott E. Doyle | | | | 141,698(3) | | | | | | * | | | |
| Barbara J. Duganier | | | — | | | | | | * | | | ||
| Christopher A. Foster | | | | 68,893(4) | | | | | | * | | | |
| Christopher H. Franklin | | | 10,670 | | | | | | * | | | ||
| Lynne Harkel-Rumford | | | | | 76,991 | | | | | | * | | |
| Monica Karuturi | | | | | 91,970 | | | | | | * | | |
| David J. Lesar | | | | | 1,497,327 | | | | | | * | | |
| Raquelle W. Lewis | | | | | 14,289 | | | | | | * | | |
| Thaddeus J. Malik | | | | | 3,786 | | | | | | * | | |
| Martin H. Nesbitt | | | 36,113 | | | | | | * | | | ||
| Theodore F. Pound | | | 46,541 | | | | | | * | | | ||
| Ricky A. Raven | | | 3,786 | | | | | | * | | | ||
| Jason M. Ryan | | | | 103,832(3) | | | | | | * | | | |
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Phillip R. Smith | | | 61,445 | | | | | | * | | | |||
| Barry T. Smitherman | | | 21,075 | | | | | | * | | | ||
| Jason P. Wells | | | 228,702 | | | | | | * | | | ||
| All current executive officers and directors as a group | | | | 851,038(3)(5) | | | | | | * | | |
CenterPoint Energy, Inc. |
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Stock Ownership (continued)
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Where to Find ItExecutive Summary21Objectives and Design of Executive Compensation Program29Role of the Compensation Committee29Our 2017 Peer Group30Role of Executive Officers31Elements of Compensation322017 Executive Compensation Program372018 Executive Compensation Program37Benefits40Overview. In this section, we describediscusslong-term performance against financial, operational, and strategic goals that are key to delivering long-term value for our shareholders. This Compensation Discussion and Analysis (CD&A) describes our executive compensation program, including the objectives and elements of compensation, as well as recommendations and determinations made by the Compensation Committee of the Board of Directors regarding the compensation of our named executive officers.2017 are:Scott M. ProchazkaWilliam D. RogersTracy B. BridgeMilton CarrollDana C. O’BrienPresident, Chief Executive Officer and DirectorExecutive Vice President and Chief Financial OfficerExecutive Vice President and President, Electric DivisionExecutive ChairmanSenior Vice President and General CounselSince 2014Since 2015Since 2014Since 2013Since 2014
2023 include the individuals listed below:Always There®21 2018Compensation Discussion and Analysis (continued)In this proxy statement, we refer to our “executive officers,” who are the individuals identified by the Company as “executive officers” under Rule 3b-7 of the Exchange Act and include Jason P. Wells, Christopher A. Foster, Monica Karuturi, Lynne Harkel-Rumford and Jason M. Ryan and former executives David J. Lesar (January 5, 2024 departure) and Scott M. Prochazka, William D. Rogers, Tracy B. Bridge and Dana C. O’Brien as our “seniorE. Doyle (January 3, 2023 departure). Our “non-executives” are employees who are not executive officers.” We also describe 36
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 37 | |
set forth under the applicable award agreement.
| Recruit and Retain Talent | | | |||
| A key objective of | | ||||
| Pay for Performance | | | |||
| We have structured our compensation program to motivate our executives to achieve individual and business performance objectives by varying their compensation in accordance with the success of our businesses. Accordingly, while compensation targets will to a large extent reflect the market, actual compensation realized will reflect | | ||||
| Align Interests of Executives with Shareholders | | | |||
| We believe compensation programs can drive our employees’ behavior. We try to design our executive compensation program to align compensation with current and desired corporate performance and shareholder interests by providing a significant portion of total compensation in the form of stock-based incentives and requiring target levels of stock ownership. |
Pay For Performance
The guiding principle of our compensation philosophy is that the interests of executives and shareholders should be aligned and that pay should be based on performance. Our program provides upside and downside potential, depending on actual results, as compared to predetermined measures of success.
A significant portion of our named executive officers’ total direct compensation, which includes base salary in addition to the short-term and long-term incentive components, as applicable, is conditioned upon achieving results that are key to our long-term success and increasing shareholder value.
As illustrated below, the variable and equity-based components of our compensation program are a short-term incentive annual cash bonus plan and a long-term incentive three-year equity-based compensation plan, consisting of performance shares and restricted stock units. Actual payout of the short-term incentive is dependent on corporate, operational and individual performance and the payout of the performance share component of the long-term incentive is dependent on corporate performance. Under our long-term incentive plan, in 2017, performance is measured on financial metrics, including total shareholder return and three-year cumulative operating income.
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CenterPoint Energy, Inc. 2024 Proxy Statement |
Compensation Discussion and Analysis (continued)
The following graphics reflect the components of the target total direct compensation opportunities provided to our named executive officers.
TARGET COMPENSATION MIX AS OF DECEMBER 31, 2017
(consisting of base salary, short-term incentives and long-term incentives)
*The graphic represents the average size of each component as a percentage of each named executive officer’s (other than the Chief Executive Officer’s) target total direct compensation opportunities.
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Align Interests of Named Executive Officers with Shareholders
Best Practices
| KEY FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAM | | |||||||
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Strong Pay for Performance. A substantial portion of the compensation for our named executive officers | | ||||||||
| | | No Employment Agreements. We do not maintain executive employment agreements with any of our named executive officers, and our named executive officers are not entitled to guaranteed cash severance payments upon a termination of employment except pursuant to our change in control plan. | | |||||
| | | “Double Trigger” Provisions for Change in Control Plan and Equity Awards. Our change in control plan | | |||||
| | No Excise Tax Gross Up Payments. Our change in control plan does not provide for excise tax gross up payments. | | ||||||
| | | Stock Ownership Guidelines. We have established executive stock ownership guidelines applicable to all of our officers | ||||||
| | Benchmark to Market. We benchmark each major element of target compensation against the middle of the market (25th – 75th percentiles) because we believe the middle of the market is a generally accepted benchmark of external competitiveness. | | ||||||
| | | Recovery and Recoupment Policies. We have implemented an Executive Officer Recovery Policy in compliance with the NYSE listing standards issued in accordance with the Dodd Frank Act of | | |||||
| | Anti-Hedging Policy. As part of our insider trading policy, we have a policy prohibiting all of our officers and directors from hedging the risk of stock ownership by purchasing, selling, or writing options on CenterPoint Energy securities or engaging in transactions in other third-party derivative securities with respect to CenterPoint Energy stock. | | ||||||
| | 100% Independent Compensation Committee. The Compensation Committee consists entirely of independent directors. | | ||||||
| | | Independent Compensation Consultant. The Compensation Committee retains an independent consultant to provide advice on executive | | |||||
| | | Executive Severance Guidelines. The Compensation Committee has | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | 39 | |
| | | | | | ELEMENT | | | | FORM OF AWARD | | | | PERIOD | | | | PURPOSE | | | ||
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| | | | Base Salary | | | | Cash | | | | One year | | | | ✓ Fixed, competitive level of compensation based on scope and | | | |||
| | At Risk | | | | Short-Term Incentive | | | | Cash | | | | One year | | | | ✓ Rewards delivery of near-term objectives aligned with the ✓ Considers individual performance and contributions to Company performance ✓ Short-term incentive funding for ✓ Potential payout subject to ✓ Potential payout also subject to | |
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Long-Term Incentives | | | | Performance Share Units (PSUs) 75% | | | | Three-year cliff vesting, subject to cumulative Adjusted EPS performance | | | | ✓ Rewards creation of long-term value through cumulative Adjusted EPS ✓ Aligns with shareholder interests ✓ PSUs based on cumulative Adjusted EPS represent 35% of total award value | | | |
| Three-year cliff vesting, subject to relative stock performance | | | | ✓ Incentivizes Company outperformance relative to peer companies ✓ Aligns with shareholder interests ✓ TSR target and maximum performance based on a percentile achievement based on position relative to peer group ✓ PSUs based on TSR represent 35% of total award value | | | ||||||||
| Three-year cliff vesting, subject to carbon emissions reduction goals | | | | ✓ Aligns with the Company’s long-term net zero and decarbonization goal ✓ PSUs based on carbon emissions reduction goals account for 5% of the total award | | | ||||||||
| Restricted Stock Units (RSUs) 25% | | | | Three-year cliff vesting, subject to continued employment and positive operating income | | | | ✓ Promotes retention, facilitates stock ownership, and supports succession planning ✓ Aligns with long-term shareholder interests ✓ RSUs represent 25% of total award value and will vest only if CenterPoint Energy achieves positive operating income for the last full calendar year of the vesting period | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 40 | |
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CenterPoint Energy, Inc. 2024 Proxy Statement |
Compensation Discussion and Analysis (continued)
Other features of our executive compensation program include the following:
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Compensation Discussion and Analysis (continued)
Our 2017
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Prior to conducting its 2017 analysis, the Compensation Committee asked Pearl Meyer & Partners (“Pearl Meyer”), the Committee’s independent executive compensation consultant at the time, to review the 2016 peer group. Pearl Meyer compared the 2016 peer group to CenterPoint Energy based on key financial and other metrics. In consideration of Pearl Meyer’s recommendations, the Compensation Committee approved (i) the removal of two companies (AGL Resources Inc. and Duke Energy Corporation) from and (ii) the addition of three companies (Alliant Energy Corporation, Eversource Energy and NiSource Inc.) to the 2017 peer group. We believe that the use of this group as a reference for evaluating our compensation policies helps align us with our peers and competitors. We also believe this group of companies provides a sufficiently large data set that is generally not subject to wide changes in compensation data. See “—Role of the Compensation Committee—Decisions Made by the Compensation Committee” for additional information about the peer group.
At its July 2017 meeting, the Compensation Committee engaged in a request for proposal process for compensation consulting services. Following the review, the Committee retained Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant beginning in August 2017. The Compensation Committee selected Meridian based largely on Meridian’s competitive market intelligence for executive pay and governance in the utilities and energy services industries.
Impact of Our Performance on 2017 Short-term Incentive Compensation and Vesting of 2015 Performance Share Grants.We reported net income of $1,792 million, or $4.13 per diluted share, for 2017. Our utility operations delivered solid results in 2017. CenterPoint Energy’s “core operating income,” which is a primary performance objective used under our executive compensation program for determining payouts under short-term incentive compensation awards, was $871 million in 2017, which exceeded the target amount under our 2017 short-term incentive plan by $19 million. CenterPoint Energy’s core operating income is determined by adjusting reported operating income to remove the effect of specified items, either positive or negative, to reflect what we consider to be our core operational business performance in the period being measured. For more information regarding the determination of core operating income, please refer to “Executive CompensationTables—Non-Equity Incentive Plan Awards.”
Our short-term incentive plan provides an annual cash award based on the achievement of annual performance objectives specified for each of our senior executive officers, including specific objectives relating to core operating
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Compensation Discussion and Analysis (continued)
income, consolidated diluted earnings per share, controlling expenditures and othernon-financial operational performance objectives.
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Based on our level of achievement of the 2017 performance objectives at 133% and an assessment of each individual’s performance by the Compensation Committee, the 2017 short-term incentive awards for our senior executive officers, expressed as a percentage of their individual target awards, were as follows:
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Mr. Carroll was not eligible to participate in, and did not receive a payment under, our short-term incentive plan for 2017. Please refer to “Executive CompensationTables—Non-Equity Incentive Plan Awards” for information regarding the specified performance objectives and our actual achievement levels during 2017.
In April 2015, we granted performance share awards to Messrs. Prochazka, Rogers, Bridge and Carroll and to Ms. O’Brien under our long-term incentive plan. The awards were made in two separate grants, with the payout opportunity for each grant based on a different performance objective to be measured over the three-year performance cycle of January 2015 through December 2017. The first performance objective was based on total shareholder return as compared to that of other publicly traded companies in our total-shareholder-return peer group (see “—Elements of Compensation—Long-Term Incentives”) and the second was based on achieving a cumulative core operating income goal. Based on our performance over the three-year cycle, the 2015 performance share awards vested based on an achievement level of 66% and 94%, respectively. Please refer to “Executive Compensation Tables—Option Exercises and Stock Vested for Fiscal Year 2017” for information regarding the number of gross shares distributed and the total value realized on vesting.
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Compensation Discussion and Analysis (continued)
Actions Taken Regarding 2018 Executive Compensation Program
Consistent with our compensation philosophy of targeting the market median (50th percentile) of our peers for each major element of compensation, in February 2018, the Compensation Committee (or the independent members of the Board of Directors, with respect to Mr. Carroll) considered competitive market data provided by Meridian and made the following adjustments for each of the named executive officers to provide each officer with a more fully competitive total direct compensation opportunity:
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Neither the Compensation Committee nor the independent members of the Board of Directors made any other changes to the compensation arrangements for the senior executive officers or Mr. Carroll, respectively.
In February 2018, the Compensation Committee also reviewed and approved the long-term incentive compensation awards to be made to our executives in 2018, including allocations between performance shares and stock awards, as well as the performance goals that would determine the payout opportunities under the planned awards.
For more information regarding the actions taken by our Compensation Committee with respect to our 2018 Executive Compensation Program, please see below under “2018 Executive Compensation Program.”
Shareholder Advisory“Say-on-Pay” Vote
At our 2018 annual meeting, we are providing our shareholders with the opportunity to cast an advisory vote on the compensation of our named executive officers, commonly known as a“say-on-pay” vote. This vote provides our shareholders the opportunity to express their views regarding the compensation program for our named executive officers as disclosed in this proxy statement. As an advisory vote, thesay-on-pay vote at our 2018 annual meeting will not be binding upon CenterPoint Energy or the Board of Directors. However, the Board of Directors values the opinions expressed by our shareholders, and the Compensation Committee (and, with respect to Mr. Carroll, the independent members of the Board of Directors) will consider the outcome of the vote when making future compensation decisions for our named executive officers. For additional information, please refer to “Advisory Vote on Executive Compensation (Item 3).”
The advisory vote on executive compensation at our 2018 annual meeting will be our eighth“say-on-pay” vote. We conducted our seventhsay-on-pay vote at our 2017 annual meeting at which an advisory resolution approving the compensation of our named executive officers, as disclosed in the proxy statement for our 2017 annual meeting, was approved by approximately 94% of the shares that were voted either for or against the resolution (excluding abstentions and brokernon-votes). We have considered the favorable results of this vote, and the Compensation Committee has not made any changes to our overall executive compensation program as a result of the vote.
The advisory vote on the frequency of future shareholder advisory votes on executive compensation at our 2017 annual meeting was our second advisory vote onsay-on-pay frequency, with the priorsay-on-frequency vote held at
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Compensation Discussion and Analysis (continued)
our 2011 annual meeting. At our 2017 annual meeting, we conducted an advisory vote on the frequency of future shareholder advisory votes on executive compensation, at which the Board of Directors recommended that our shareholders vote in favor of holding annualsay-on-pay votes instead of the other options presented. At our 2017 annual meeting, approximately 86.8% of the shares that were voted in favor of one of the three available frequency recommendations (excluding abstentions and brokernon-votes) voted in favor of an annual frequency, approximately 0.5% voted in favor of holding future votes once every two years, and approximately 12.7% voted in favor of holding future votes once every three years. Since our 2011 annual meeting, consistent with the results of both the 2011 and 2017 advisory votes, we held futuresay-on-pay votes annually.
Objective and Design of Executive Compensation Program
Recruit and Retain Talent. We strive to provide compensation that is competitive, both in total level and in individual components, with the companies we believe are our peers and other likely competitors for executive talent. By competitive, we mean that total compensation and each element of compensation corresponds to a market-determined range. We target the market median (50th percentile) for each major element of compensation because we believe the market median is a generally accepted benchmark of external competitiveness. We believe competitive compensation is normally sufficient to attract executive talent to the Company and also makes it less likely that executive talent will be lured away by higher compensation to perform a similar role with a similarly sized competitor.
To help ensure market-based levels of compensation, we measure the major elements of compensation annually for a position against available data for similar positions in other companies. We believe annual measurement is generally appropriate because the market is subject to variations over time as a result of changes within peer companies and the supply and demand for experienced executives. Once the market value for a position is determined, we compare the compensation levels of individual incumbents to these market values. The salary level and short-term and long-term incentive target percentages for our senior executive officers are based on market data for the officer’s position. Compensation levels can vary compared to the market due to a variety of factors such as experience, scope of responsibilities, tenure, internal equity and individual performance.
We maintain benefit programs for our employees, including our senior executive officers, with the objective of retaining their services. Our benefits reflect competitive practices at the time the benefit programs were implemented and, in some cases, reflect our desire to maintain similar benefits treatment for all employees in similar positions. To the extent possible, we structure these programs to deliver benefits in a manner that is tax efficient to both the recipient and CenterPoint Energy.
Pay for Performance; Align Interests of our Executives with our Shareholders. We also motivate our executives to achieve individual and business performance objectives by varying their compensation in accordance with CenterPoint Energy’s overall success. Actual compensation in a given year will vary based on CenterPoint Energy’s performance, and to a lesser extent, on qualitative appraisals of individual performance. We expect our senior executive officers to have a higher percentage of their total compensation at risk and therefore, we try to align each of our senior executive officers with the short-term and long-term performance objectives of CenterPoint Energy and with the interests of our shareholders. The size ofat-risk compensation is expressed as a percentage of base salary.
Role of the Compensation Committee
The Compensation Committee of the Board of Directors oversees compensation for our senior executive officers, our Executive Chairman and other senior executives, including base salary and short-term and long-term incentive awards. The Compensation Committee also administers incentive compensation plans, evaluates our Chief Executive Officer’s performance and reviews management succession planning and development. The Board has determined that the members of the Compensation Committee meet the applicable requirements for independence under the standards of the Securities and Exchange Commission and the New York Stock Exchange discussed under “Director Independence.”
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Compensation Discussion and Analysis (continued)
Decisions Made by the Compensation Committee. The Compensation Committee reviews each element of compensation annually to improve alignment with stated compensation objectives. As a result of its review, the Compensation Committee approves adjustments to base salary for our senior executive officers and reports these adjustments to the Board. In addition, the Compensation Committee may adjust short-term and long-term incentive target compensation levels for the senior executive officers to better align compensation with our market-based pay philosophy. In its review, the Compensation Committee also takes into consideration whether any incentive compensation target or performance objective could lead to a decision by an executive to take an inappropriate level of risk for the Company. In establishing individual incentive targets and awards, the Compensation Committee considers the data provided by its consultant, the level and nature of the executive’s responsibility, the executive’s experience and the Compensation Committee’s own qualitative assessment of the executive’s performance. In making these determinations, the Compensation Committee also takes into account our Chief Executive Officer’s performance evaluations of and recommendations regarding such executive officers.
The Compensation Committee, together with Meridian, has conducted a compensation risk assessment, including review of performance metrics, pay mix, pay leverage, checks and balances, external market references and goal setting, and no areas of concern were identified in the assessment. The Compensation Committee considers the results of this assessment in developing and evaluating compensation program design.
Annually, the Compensation Committee directs its consultant to review the base salary and short-term and long-term incentive levels of our senior or named executive officers, as applicable. To ensure that our compensation programs are market-based, the Committee’s consultant analyzes and matches the position and responsibilities of each senior executive officer to proxy statement data from a peer group of utility companies and to published compensation surveys covering both the utility industry and general industry. We do not consider geographical differences to be a relevant factor since we recruit on a national basis.
Our 2017 Peer Group. For 2017, the peer group for proxy statement data consisted of the following 17 publicly traded utility companies:
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This peer group had median revenues and market capitalization comparable to CenterPoint Energy. This group of companies was identical to the group of companies used for measuring our relative total shareholder return under our 2017 long-term incentive compensation awards.
Prior to conducting its 2018 analysis, the Compensation Committee asked Meridian to review the 2017 peer group. Meridian compared the 2017 peer group to CenterPoint Energy based on key financial and other metrics and recommended the addition of two companies (Avangrid, Inc. and Edison International) to the existing peer group for the Company, which the Committee evaluated and approved. Factors considered by Meridian include our current peer group membership, companies within comparable Global Industry Classification Standard sectors, companies who list CenterPoint Energy as a peer in their proxies, the peers that the current peer group list as comparables, companies listed in shareholder advisor reports regarding CenterPoint Energy and companies within a reasonable range of CenterPoint Energy relative to12-month trailing revenue and current market capitalization. We believe that the use of this group as a reference for evaluating our compensation policies helps align us with our peers and
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Compensation Discussion and Analysis (continued)
competitors. We also believe this group of companies provides a sufficiently large data set that is generally not subject to wide changes in compensation data.
Role of Consultant. To assist in carrying out its responsibilities, the Compensation Committee retains a consultant to provide independent advice on executive compensation and to perform specific tasks as requested by the Committee. The consultant reports directlyJanuary 3, 2023, prior to the Compensation Committee which preapproves the scope of workreviewing and the fees charged. The Compensation Committee or the Governance Committee may direct our compensation consultant to perform additional analyses or research related to compensation issues.
From August 2014 to August 2017, Pearl Meyer served as consultant to the Compensation Committee. From time to time, the Governance Committee also retained Pearl Meyer to provide independent advice on director compensation. At its July 2017 meeting, the Compensation Committee decided to engage in a request for proposal process for compensation consulting services. Following the review, the Compensation Committee retained Meridian, effective August 2017, as its independent compensation consultant. The Compensation Committee selected Meridian due in large part to its competitive market intelligence for executive pay and governance in the utilities and energy services industries. The Governance Committee has also retained Meridian to periodically provide independent advice on director compensation as requested.
The Compensation Committee reviews and assesses the independence and performance of its consultant in accordance with applicable Securities and Exchange Commission and New York Stock Exchange rules on an annual basis to confirm that the consultant is independent and meets all applicable regulatory requirements. In making this determination, the Compensation Committee reviewed information provided by its compensation consultant including the following factors:
the provision of other services to CenterPoint Energy by the compensation consultant;
the amount of fees received from CenterPoint Energy by the compensation consultant as a percentage of total revenue of the compensation consultant;
the policies and procedures of the compensation consultant that are designed to prevent conflicts of interest;
any business or personal relationship of the Compensation Committee’s advisor with a member of the Compensation Committee;
any stock of CenterPoint Energy owned by the Compensation Committee’s advisor or the advisor’s immediate family members; and
any business or personal relationship of the Compensation Committee’s advisor or any other employee of the advisor with anapproving executive officer at CenterPoint Energy.
In particular,
Role ofCompany as Executive Officers
Of our senior executive officers, only ourVice President and Chief ExecutiveFinancial Officer has a role in determining executive compensation policies and programs. Our Chief Executive Officer works with business unit and functional leaders along with our internal compensation staff to provide information to the Compensation Committee to help ensure that all elements of compensation support our business strategy and goals. Our Chief Executive Officer reviews internally developed materials before they are furnished to the Compensation Committee.
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Compensation Discussion and Analysis (continued)
Our Chief Executive Officer also periodically reviews and recommends specific Company performance metrics to be used in short-term and long-term incentive plans. Our Chief Executive Officer works with the various business units and functional departments to develop these metrics, which are then presented to the Compensation Committee for its consideration and approval.
Our Chief Executive Officer reviews and recommends changes to the peer companies used for compensation purposes using internal analyses of revenue, market capitalization and comparable business mix (e.g., natural gas versus electric; regulated versus unregulated; generation versus transmission and distribution). These recommendations are reviewed by the Compensation Committee’s independent consultant and then presented to the Committee for its consideration and approval.
Within the parameters of the compensation policies established by the Compensation Committee, our Chief Executive Officer also makes preliminary recommendations for base salary adjustments and short-term and long-term incentive levels for the other senior executive officers. Our Chief Executive Officer also recommends payment amounts for the other executive officers’ short-term incentive plan awards. Our Chief Executive Officer bases his recommendations on a variety of factors such as his appraisal of the executive’s job performance and contribution to CenterPoint Energy, improvement in organizational and employee development and accomplishment of strategic priorities. Our Chief Executive Officer does not make any recommendations regarding his own compensation.
| NAME(1) | | | 2023 BASE SALARY | |
| David J. Lesar | | | $1,500,000 (increase of 2% from 2022) | |
| Jason P. Wells | | | $980,000 (increase of 41% from 2022) | |
| Christopher A. Foster(2) | | | $700,000 | |
| Monica Karuturi | | | $700,000 (increase of 21% from 2022) | |
| Jason M. Ryan | | | $510,000 | |
| Lynne Harkel-Rumford | | | $460,000 | |
Compensation Committee reviewing and approving executive officer compensation for 2023.
salary.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 42 | |
The achievement of
|
Compensation Discussion and Analysis (continued)
Internal Revenue Code. However, effective for taxable years beginning after December 31, 2017, the performance-based compensation exclusion under Section 162(m) of the Internal Revenue Code was eliminated under the Tax Cuts and Jobs Act (“Tax Reform”) that was signed into law December 22, 2017.
Performance objectives under the short-term incentive plan are based on financial and operational factors determined to be critical to achieving our desired business plans and are designed to reflect goals and objectives to be accomplished over a12-month measurement period. As such, incentive opportunities under the plan are not impacted by compensation amounts earned in prior years. After the end of the year, the Compensation Committee compares the actual results to thepre-established performance objectives and certifies the extent to which the objectives are achieved for determining the funding pool under the plan. TheFor the 2023 year, consistent with 2022 and in response to shareholder feedback, the Compensation Committee has discretion to decrease the amount payable pursuant to any performance award, but, under the current terms ofestablished that the short-term incentive plan may not increasefor our named executive officers would be based on achieving a non-GAAP EPS target, “Adjusted EPS”, with a negative modifier for diversity, equity, and inclusion metrics.
Beginning in 2017, the entirety of each individual award is subject to the Compensation Committee’s discretion, consistent with the Company’s philosophy to pay for performance. For years prior to 2017, Further, when evaluating overall Company performance, the Compensation Committee was guided by our policy providing that absent performance issues, individual performance awards undermay determine to exercise its discretion and has committed, with management’s support, to reducing the plan will not be less than 50% of the individual award when determined formulaically based on the level of achievement of the specified corporate and business performance objectives.
In addition, the Compensation Committee has discretionpayout to pay awards that are not tiednamed executive officers to performance objectives. This authority provides the Compensation Committeealign with the flexibility to provide awards for executive performance in connection with extraordinary circumstances or events. Any such amount is reported as a bonus instead ofnon-equity incentive plan compensation.
In 2018, the Compensation Committee will review the application and impact of Tax Reform, if any, on the Company’s compensation programs, and the Board will modify the terms of thenon-executive short-term incentive plan for 2018payouts, which reflect non-financial performance such as safety and thereafter as it determines to be in the best interest of the Companycybersecurity, managed O&M, managed capital, customer reliability, and its shareholders, including addressing the elimination of the performance-based compensation exception under Section 162(m) of the Internal Revenue Code and the ability of the Compensation Committee to decrease or increase the amount payable pursuant to aother performance award.
Because an important component of our business planmetrics. The structure is successful financial performance, core operating income and consolidated diluted earnings per share were the primary performance objectives for 2017. illustrated below.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 43 | |
| PERFORMANCE OBJECTIVES | | | WEIGHTING | | | DESCRIPTION | | | STRATEGY ALIGNMENT | |
| Adjusted EPS | | | 100% | | | Adjusted EPS is a non-GAAP metric which includes net income from electric and natural gas segments, as well as after-tax corporate and other operating income and corporate overhead. It is also adjusted for certain factors to reflect what we consider to be our fundamental business performance.* | | | An EPS measure aligns with our commitment to return value to investors through earnings and dividends paid. This measure is focused on Adjusted EPS, which excludes activities not considered a principal driver of overall long-term financial performance.* | |
| Diversity, Equity, and Inclusion Negative Modifier | | | Modifier | | | This modifier is focused on meeting certain diversity, equity and inclusion goals: diversity of applicants and diversity of suppliers. This modifier is a negative-only modifier and can only reduce the potential payout by a combined total of up to 5%; it cannot increase the short-term incentive plan awards. | | | This diversity, equity, and inclusion negative modifier aligns with our commitment to recruit and retain a diverse workforce and diverse supplier base that is reflective of the communities we serve. The negative modifier highlights our belief that meeting these diversity, equity and inclusion goals is expected. | |
| Discretion of Compensation Committee to align executive short-term incentive award with non-executive short-term incentive performance | | | Modifier | | | The Compensation Committee, with the support of management, is committed to exercising its discretion to reduce the payout for executive officers under the short-term incentive plan, as applicable, in order to align with the achievement of non-financial metrics applicable to the payout for non-executives. Non-financial metrics include safety and cybersecurity, managed O&M, managed capital, and other performance metrics. | | | The Compensation Committee’s exercise of its discretion aligns with our commitment to motivating employees, including executive officers, to meet these important non-financial metrics while also recognizing the importance of EPS performance to our shareholders and encouraging our executive officers to continue to advance and support the Company’s position as a premium utility. | |
For 2017, the performance objectives of our senior executive officers were based on our core operating income, consolidated diluted earnings per shareAwards” disclosure and operational objectives, which include (i) controlling expenditures and(ii) non-financial operational performance objectives such as safety-related incident and participation rates and customer satisfaction measures relatinga reconciliation to the services provided by CenterPoint Energy. Thesenearest GAAP metric can be found in Appendix A.
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Compensation Discussion and Analysis (continued)
Additional detail regarding specific performance objectives for our senior executive officers for 2017 and the specified threshold, target, maximum and exceptional achievement levels, and an example of the payout calculation are provided under “Executive CompensationTables—Non-Equity Incentive Plan Awards.”
The scaling of the levels necessary to achieve threshold, target and maximum and exceptional performance, is based on strategic priorities for the organization and an assessment of expected business performance during the measurement period. Over a periodThe 2023 Adjusted EPS target level is based on achieving 9% growth relative to 2022 actual performance, which is in the top decile for the utility sector. The diversity, equity and inclusion negative modifier’s targets were set considering 2021 and 2022 actual results.
| Performance Objectives | | | Threshold (75%) | | | Target (125%) | | | Maximum (200%) | | | Actual Results | | | Actual Achievement | | |||||||||||||||
| Adjusted EPS | | | | $ | 1.48 | | | | | $ | 1.49 | | | | | $ | 1.50 | | | | | $ | 1.50 | | | | | | 200% | | |
| Diversity, Equity and Inclusion Performance Objectives | | | Target | | | Actual Achievement | | ||||||
| Diversity of Applicants | | | | | | | | | | | | | |
| Represents the percentage of competitive job postings that include a gender and/or racially/ethnically diverse applicant at the interviewing stage | | | | | 88% | | | | | | 90% | | |
| Diversity of Suppliers | | | | | | | | | | | | | |
| Represents the percentage of diverse spend | | | | | 12.6% | | | | | | 13.7% | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 44 | |
Also in a given year, we believe there should be a reasonable likelihood of achieving target performance. To create additional incentiveup to 5%. Based on the Company’s achievement with respect to these metrics, the negative modifier was not applied for exceptional performance, funding for2023. However, pursuant to management’s recommendation, the Compensation Committee exercised negative discretion to reduce the overall short-term incentive goals relatedachievement level for executive officers based on other considerations as described in the below paragraph.
Currently, retirement-eligible participants (age 55 with five years of service) who terminate employment after at least 90 days of service duringexercise its discretion to modify the year will receive a short-term incentive payment, if any,payout under the short-term incentive plan for executive officers in order to align with the payout for non-executive employees. Therefore, pursuant to management’s recommendation, based on the actual achievement of the non-financial metrics applicable to non-executive officer employees under the short-term incentive plan, the Compensation Committee exercised its discretion to modify the award to the executive officers from 200% to 175% based on management’s recommendation. The Compensation Committee noted the underperformance of the Company with regards to safety and with regards to certain reliability metrics. The table below shows the impact that the Compensation Committee’s exercise of negative discretion had on our named executive officers’ short-term incentive payout:
| Name | | | Reduction in Short-Term Incentive Payout as a Result of Compensation Committee Exercise of Negative Discretion | | |||
| David J. Lesar* | | | | | N/A | | |
| Jason P. Wells | | | | $ | (281,750) | | |
| Christopher A. Foster | | | | $ | (140,000) | | |
| Monica Karuturi | | | | $ | (140,000) | | |
| Jason M. Ryan | | | | $ | (89,250) | | |
| Lynne Harkel-Rumford | | | | $ | (80,500) | | |
| Name | | | 2023 Short-Term Incentive Achievement (as a Percentage of Target) | | |||
| David J. Lesar* | | | | | N/A | | |
| Jason P. Wells | | | | | 175% | | |
| Christopher A. Foster | | | | | 175% | | |
| Monica Karuturi | | | | | 175% | | |
| Jason M. Ryan | | | | | 175% | | |
| Lynne Harkel-Rumford | | | | | 175% | | |
short-term incentive awards for 2023, but in recognition of his continued employment through the end of 2023, the Compensation Committee and the Board approved payment of an amount equal to his short-term incentive award for the 2023 performance year determined at the approved achievement level for other executive officers. Refer to “Continued Execution of Succession Planning—Chief Executive Officer Transition—January 2024.”
We haveplan, our practice is to price annual grants of equity awards at the closing market price for our common stock on the NYSE on the grant date, which is the date the Compensation Committee approves the grants.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 45 | |
As a result of the three-year performance period, in any given year, our named executive officers generally have outstanding grants covering three concurrent periods.
On February 21, 2017, the Committee authorized awards as shown in the columns captioned “Estimated Future Payouts Under Equity Incentive Plan Awards” in the Grants of Plan-Based Awards for Fiscal Year 2017 table. The
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Compensation Discussion and Analysis (continued)
Committee set a target percentage of each named executive officer’s base salary that was consistent with our objective of targeting the market median compensation level as described above. Vesting and payout of the performance shares will be determined based on the level of achievement of each performance objective over the three-year cycle of January 2017 through December 2019. For additional detail regarding the grants, see “Executive Compensation Tables—Equity Incentive Plan Awards—Long-term Incentive Plan Awards Granted in 2017.”
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objective. The first is based on total shareholder returnTSR over the three-year performance cycle as compared to that of the other 18 companies consisting of CenterPoint Energy and the other 17 companies listed under the heading “Total Shareholder Return”included in the “Executive Compensation Tables” section (we refer to this group as the total-shareholder-returnour peer group or the TSR peer group). Fortygroup. Thirty-five percent of long-term incentive compensation is based on the total shareholder returnTSR metric. The remaining 30%Thirty-five percent is based on achieving a specified cumulative operating income goalsnon-GAAP Adjusted EPS goal over the three-year performance cycle.
Total shareholder return The remaining 5% is a widely utilized metric that captures stock price appreciation and dividend yield. By comparing CenterPoint Energy’s total shareholder return to the other companies included in the TSR peer group, achievement for this metric is as follows:
We intend for the total shareholder return measure to provide a reasonable chance of threshold performance, thus enhancing the motivational effects of the plan, while requiring a rank in the top two companies for maximum payout. We believe the TSR peer group is a reasonable proxy for the universe of companies engaged in businesses similar to ours.
The Compensation Committee established a cumulative operating income target as the other performance objective for long-term incentive awards made in 2017. We calculate operating income based on generally accepted accounting principles, adjusted for certain factors to reflect what we consider to beachieving a specified carbon emissions reduction goal over the three-year performance cycle. Based on our core operating income. We intend that this objective will provide a reasonable chanceshareholder engagement and our internal strategy, these three metrics were identified as important indicators of achieving threshold performance, thus enhancing the motivational
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Compensation Discussion and Analysis (continued)
effects of the plan, while requiring significant earnings growth for maximum payout. For a detailed description of the calculation of cumulative operating income, see “Executive Compensation Tables—Three-Year Cumulative Operating Income.”
If actual achievement for the performance objective under an award does not meet at least the threshold level, the Compensation Committee will not approve a distribution underfor the plan related to that award. If a performance objective meets or exceeds the threshold level, the threshold payout for these awards is 33% of target for the total shareholder returnTSR performance objective and 50% of target for the cumulative operating income objective,applicable Adjusted EPS performance and carbon emissions reduction objectives, and the maximum payout opportunity is 200% of target.
target for all three performance metrics.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 46 | |
Payments The RSUs (other than any sign-on awards) are subject to CenterPoint Energy achieving positive operating income for the last full calendar year of boththe vesting period.
| Description | | | Lesar(1) | | | Wells | | | Foster(2) | | | Karuturi | | | Ryan(3) | | | Harkel-Rumford | | ||||||||||||||||||
| Base Salary | | | | $ | 1,500,000 | | | | | $ | 980,000 | | | | | $ | 700,000 | | | | | $ | 700,000 | | | | | $ | 510,000 | | | | | $ | 460,000 | | |
| Long-term incentive target | | | 660% | | | 400% | | | 260% | | | 260% | | | 200% | | | 200% | | ||||||||||||||||||
| Long-term incentive compensation at target | | | | $ | 9,900,000 | | | | | $ | 3,920,000 | | | | | $ | 1,820,000 | | | | | $ | 1,820,000 | | | | | $ | 1,020,000 | | | | | $ | 920,000 | | |
| Performance share unit portion (75%) | | | | $ | 7,425,000 | | | | | $ | 2,940,000 | | | | | $ | 1,365,000 | | | | | $ | 1,365,000 | | | | | $ | 765,000 | | | | | $ | 690,000 | | |
| Stock award portion (25%) | | | | $ | 2,475,000 | | | | | $ | 980,000 | | | | | $ | 455,000 | | | | | $ | 455,000 | | | | | $ | 255,000 | | | | | $ | 230,000 | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 47 | |
Both the performance shares and the stock awardsRSUs accrue dividend equivalents over the performance cycle or vesting period, respectively, until they are delivered, at the same level as dividends earned by shareholders on shares of our common stock outstanding. Dividend equivalents on the shares which are vested are paid in cash when the shares are delivered. Dividend equivalents are not paid with respect to unearned and unvested shares.
| 2021 – 2023 PSU AWARD GOALS | | | AWARD DETERMINATION ($ in millions) | | | WEIGHTING | | | ACHIEVEMENT | | |||||||||
| TSR Performance | | | Threshold (33%) 14th Position | | | | | | Maximum (200%) 2nd Position | | | 45% | | | 2nd Position | | | 200% | |
| Cumulative non-GAAP Adjusted EPS | | | Threshold (50%) $3.94 | | | Target (100%) $4.02 | | | Maximum (150%) $4.09 | | | 30% | | | $4.15 | | | 150% | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 48 | |
Further, for awards made beginning in February 2018, subject to Compensation Committee approvalmay elect to approve such retirement vesting for certain of our officers, including ourany named executive officers, a “retirement eligible” participant will vest in amounts that wouldofficer who does not otherwise be forfeited upon retirement due tomeet one or more of the prorationrequirements described above if: (1)if it is determined to be in the award was granted prior to the year of termination of employment; (2) the sumbest interests of the retirement eligible participant’s service and age is 65 or greater; (3)Company. The Compensation Committee modified the retirement eligible participant provides at least six months’ written notice of his or her retirement; and (4)provisions to reinforce the retirement eligible participant submits a transition plan. Any such vesting for our named executive officers will be at the sole discretion of the Compensation Committee. This change reinforces theCompany’s overall compensation philosophy by further supporting its strategic workforce planning, increasing employee engagement, and providesencouraging the development of robust succession and transition plans to effect a smooth transition and retirement from the organization while continuing to provide an opportunity for executives to become eligible for compensation that was previously awarded and was designated as total compensation but was partiallywould otherwise be forfeited upon retirement.
The retirement provisions that applied prior to these modifications are described in “Executive Compensation Tables—Equity Incentive Plan Awards—Additional Information—Additional Information Regarding Our Equity Incentive Plan Awards.”
Awards made beginning in February 2018 also include restrictive covenants that are beneficial to the Company by requiring forfeiture of unpaid awards and return of paid awards upon breach of confidentiality,non-solicitation andnon-competition obligations.
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Compensation Discussion and Analysis (continued)
The awards also provide for full vesting upon the participant’s death or termination of employment due to disability (as defined under our long-term disability plan). For performance shares, such vesting is at the target level of achievement. Awards prior to February 2018 provided for pro rata vesting upon the participant’s death or termination of employment due to disability, with such pro rata vesting basedunderlying units will vest on the number of days employed in the performance cycle and the target level of achievement for performance shares and on the number of days employed in the vesting period for stock awards.
2017 Executive Compensation Program
For 2017 base salaries and short-term and long-term incentive targets for our named executive officers, please see “—Executive Summary—Our 2017 Executive Compensation Program.”
In 2017, the Compensation Committee structured the short-term incentive plan for 2017 for our senior executive officers to include an “umbrella” feature. Under this “umbrella” feature, maximum bonus amounts were initially determined based on achievement of one or more threshold performance goals which were established by the Committee on or before March 31, 2017. The threshold goal for 2017 was $425 million in core operating income. The Committee could exercise its negative discretion to determine the actual bonuses payable to our senior executive officers, in each case considering our actual performance with respect to the separate annual performance goals approved by the Committee in February 2017. This design was implemented to better enable us to make bonus awards intended to qualify as “performance-based” compensation within the meaning of Section 162(m) such that, if so qualified, payouts under the short-term incentive plan would be deductible for federal income tax purposes. However, under Tax Reform, the performance-based compensation exclusion under Section 162(m) was eliminated. As a result, effective for taxable years beginning after December 31, 2017, payouts under the short-term incentive plan to our senior executive officers will not be deductible for federal income tax purposes to the extent the 162(m) deduction limit is exceeded regardless of any umbrella feature. As such, an umbrella feature was not adopted for the 2018 plan year.
2018 Executive Compensation Program
Consistent with our compensation philosophy of targeting the market median (50th percentile) of our peers for each major element of compensation, in February 2018, the Compensation Committee considered competitive market data provided by Meridian and made adjustments to the compensation for each of the named executive officers as describedfirst three anniversaries of the grant date, subject to continued employment and achievement of positive operating income for the last full calendar year preceding the applicable vesting date. Prior to this change, RSUs vested under a three-year cliff vesting schedule, but also subject to continued employment and achievement of positive operating income for the last full calendar year of the restricted period. This change in “—Executive Summary—Actions Taken Regarding 2018 Executive Compensation Program.”
In February 2018,vesting schedule will allow participants to share ownership in the Compensation Committee also determined that 2018company more quickly and increase interest in the company’s performance while continuing to encourage retention of key employees.
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Compensation Discussion and Analysis (continued)
Thirty The remaining five percent of long-term compensation iswere based on the achievement ofachieving a three-year cumulative utility net income goal. Forspecified carbon emissions reduction goal over the three-year performance cycle ending December 31, 2020, the cumulative utility net income performance goal reflects annual growth targets for each of 2019 and 2020 relative to the 2018 utility net income target from our approved five-year plan.
cycle.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 49 | |
market-based pay philosophy. In February 2018,its review, the Compensation Committee approved thealso takes into consideration whether any incentive compensation target or performance objectivesobjective could lead to a decision by an executive to take an inappropriate level of risk for our short-term incentive plan for fiscal year 2018. The performance goals approved for 2018 consist of the following:
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The Compensation Committee may exercise its discretion to determine the actual bonuses payable to our senior executive officers, in each case considering our actual performance with respect to the performance goals. The Compensation Committee intends to not make any payments for the 2018 plan year if core operating income does not equal or exceed $725 million.
CenterPoint Energy, Inc. 2024 Proxy Statement | | | 50 | |
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Compensation Discussion
In accordance with the terms of our long-term incentive plan, our practice is to price annual grants of equity awards, at the closing market price for our common stock on the New York Stock Exchange on the grant date, which is the date the Compensation Committee approvesconsiders the grants. Long-term incentive grants made other than atdata provided by its consultant, the timelevel and nature of the annual grantsexecutive’s responsibility, the executive’s experience and the Compensation Committee’s own qualitative assessment of the executive’s performance and contribution to the execution of the Company’s strategy. In making these determinations, the Compensation Committee also takes into account our Chief Executive Officer’s performance evaluations of and recommendations regarding his direct reports.
The Board has implemented a policy for the recoupment of short-term and long-term incentive paymentslevels for the other named executive officers. Our Chief Executive Officer also recommends payment amounts for the other executive officers’ short-term incentive plan awards. Our Chief Executive Officer bases his recommendations on a variety of factors such as his appraisal of the executive’s job performance and contribution to CenterPoint Energy, improvement in organizational and employee development and accomplishment of strategic priorities. Our executive officers do not determine or approve any element or component of their own compensation, nor are they present during the Compensation Committee’s discussions regarding their own compensation. This includes base salary, short-term or long-term incentive targets, and all other aspects of compensation.
CenterPoint Energy team) with a member of the Compensation Committee;
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 51 | |
| Alliant Energy Corporation | | | Entergy Corporation | |
Ameren Corporation | | | | ||
| American Electric Power Company, Inc. |
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| Atmos Energy Corporation |
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| Avangrid, Inc. |
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| CMS Energy Corporation | | | Public Service Enterprise Group Incorporated | |
| Consolidated Edison, Inc. | | | Sempra Energy | |
| DTE Energy Company | | | WEC Energy Group, Inc. | |
| Edison International | | | Xcel Energy Inc. | |
For purposes of
| | | | TOTAL REVENUE | | | TOTAL ASSETS | | ||||||
| | | | (in millions, except for percentages) | | |||||||||
| CenterPoint Energy, Inc. | | | | $ | 9,225 | | | | | $ | 39,001 | | |
| Relative Percentile Rank Position | | | | | 44% | | | | | | 33% | | |
| Data is presented as of September 30, 2023 and sourced from FactSet Revenue represents trailing twelve months ended September 30, 2023 | | | | | | | | | | | | | |
In addition to shares of CenterPoint Energy common stock owned outright, equivalent shares held in our savings plan, unvested stock awards, and shares held in trust are counted towards the guidelines. Unvested performance share awards do not count towards the guidelines for our officers. Until the designated ownership level is reached, the officer is expected to retain at least 50% of theafter-tax shares delivered through the long-term incentive plan. Certain exclusions apply to the retention expectation, such as estate planning, gifts to charity, education and the purchase of a primary residence. Newly hired or recently promoted officers are given a reasonable period of time to comply with these guidelines. The Committee reviews our officers’ stock holdings annually to monitor compliance with these guidelines. We have also adopted a policy prohibiting directors and corporate and senior division officers from pledging shares to secure loans, subject to grandfathering of existing arrangements, or otherwise holding shares of our common stock in margin accounts.
Although we do not conduct formal benchmarking studies of ownership guidelines, the ownership guidelines and the administration of the program are reviewed annually by the Compensation Committee with advice from the Committee’s consultant.
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Compensation Discussionevaluated and Analysis (continued)
CenterPoint Energy has a change in control plan that is intended to help ensure that our officers, including our senior executive officers
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 52 | |
Our senior
We also have an executive life insurance plan providing endorsement split-dollar life insurance in the form of a death benefit fornon-employee directors who were elected to the Board prior to January 1, 2001 (Mr. Carroll). The purpose of this plan is to assist the executive’s beneficiaries with the impact of estate taxes on deferred compensation plan distributions. Due to changes in tax laws, we froze entry into this plan effective January 1, 2002. See footnote 6(e) to the Summary Compensation Table for a description of the plan.
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Compensation Discussion and Analysis (continued)
We also provide executives with the same health and welfare benefits provided to all other similarly situated employees, and at the same cost charged to all other eligible employees. Executives are also entitled to the same post-retirement health and welfare benefits as those provided to similarly situated retirees.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 53 | |
| EXECUTIVE | | | GUIDELINES FOR OWNERSHIP OF COMMON STOCK | | |||
| Chief Executive Officer | | | 5X | | | Market value of five times base salary | |
| Executive Vice Presidents | | | 3X | | | Market value of three times base salary | |
| Senior Vice Presidents | | | 2X | | | Market value of two times base salary | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 54 | |
The Compensation Committee believes that, in establishing the compensation program for our executives, the potential deductibility of the compensation should be only one of a number of relevant factors taken into consideration. For that reason, the Compensation Committee may deem it appropriate to provide one or more of our executives with the opportunity to earn compensation, whether through incentive awards or otherwise, which may not be deductible by reason of Section 162(m) or other provisions of the Internal Revenue Code. The Compensation Committee believes it is important to maintain flexibility in structuring compensation at the requisite level to attract and retain the individuals essential to our financial success, even if all or part of that compensation may not be deductible by reason of Section 162(m) of the Internal Revenue Code. In 2018, the Compensation Committee will review the application and impact of the Tax Reform, if any, on our compensation programs, and the Board will evaluate this impact in the context of the other competing aims of the Company’s compensation programs.
Unlike certain of our change in control agreements, which expired on December 31, 2014, our
Our executive plans and agreements that are subject to Section 409A of the Internal Revenue Code are intended to comply with Section 409A of the Internal Revenue Code.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | |
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Name and Principal Position | Year | Salary ($) | Bonus(1) ($) | Stock Awards(2) ($) | Option Awards(3) ($) | Non-Equity Incentive Plan Compensation(4) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) ($) | All Other Compensation(6) ($) | Total ($) | |||||||||||||||||||||||||||
Scott M. Prochazka | 2017 | 1,154,925 | — | 4,799,991 | — | 1,766,458 | 159,193 | 143,958 | 8,024,525 | |||||||||||||||||||||||||||
President and Chief Executive Officer | 2016 | 996,525 | — | 3,976,820 | — | 1,315,413 | 130,855 | 318,623 | 6,738,236 | |||||||||||||||||||||||||||
2015 | 920,250 | — | 2,643,980 | — | 1,039,882 | 87,517 | 124,841 | 4,816,470 | ||||||||||||||||||||||||||||
William D. Rogers | 2017 | 555,000 | — | 1,111,500 | — | 545,000 | 70,600 | 51,249 | 2,333,349 | |||||||||||||||||||||||||||
Executive Vice President and Chief Financial Officer | 2016 | 485,000 | — | 866,994 | — | 450,000 | 37,696 | 154,287 | 1,993,977 | |||||||||||||||||||||||||||
2015 | 367,292 | — | 961,484 | — | 330,000 | 17,491 | 63,775 | 1,740,042 | ||||||||||||||||||||||||||||
Tracy B. Bridge | 2017 | 512,499 | — | 832,015 | — | 515,000 | 113,323 | 57,103 | 2,029,940 | |||||||||||||||||||||||||||
Executive Vice President and President Electric Division | 2016 | 481,250 | — | 784,010 | — | 410,000 | 97,932 | 53,392 | 1,826,584 | |||||||||||||||||||||||||||
2015 | 451,250 | — | 689,246 | — | 380,000 | 36,826 | 52,879 | 1,610,201 | ||||||||||||||||||||||||||||
Milton Carroll | 2017 | 662,500 | — | 2,025,014 | — | — | 37,145 | 6,767 | 2,731,426 | |||||||||||||||||||||||||||
Executive Chairman | 2016 | 618,750 | — | 1,875,006 | — | — | 33,648 | 6,264 | 2,533,668 | |||||||||||||||||||||||||||
2015 | 600,000 | — | 1,823,427 | — | — | 31,235 | 7,510 | 2,462,172 | ||||||||||||||||||||||||||||
Dana C. O’Brien | 2017 | 492,500 | — | 774,991 | — | 430,000 | 45,937 | 51,433 | 1,794,861 | |||||||||||||||||||||||||||
Senior Vice President and General Counsel | ||||||||||||||||||||||||||||||||||||
| Name and Principal Position | | | Year | | | Salary ($) | | | Bonus(1) ($) | | | Stock Awards(2) ($) | | | Option Awards(3) ($) | | | Non-Equity Incentive Plan Compensation(4) ($) | | | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) ($) | | | All Other Compensation(6) ($) | | | Total ($) | | |||||||||||||||||||||||||||
| David J. Lesar Former Chief Executive Officer | | | | | 2023 | | | | | | 1,493,269 | | | | | | — | | | | | | 9,900,034 | | | | | | — | | | | | | 4,068,750 | | | | | | — | | | | | | 742,421 | | | | | | 16,204,475 | | |
| | | 2022 | | | | | | 1,423,241 | | | | | | — | | | | | | 8,481,240 | | | | | | — | | | | | | 3,407,250 | | | | | | — | | | | | | 632,243(7) | | | | | | 13,943,974 | | | |||
| | | 2021 | | | | | | 1,425,000 | | | | | | — | | | | | | 33,359,999 | | | | | | — | | | | | | 2,116,125 | | | | | | — | | | | | | 908,686 | | | | | | 37,809,810 | | | |||
| Jason P. Wells President and Chief Executive Officer | | | | | 2023 | | | | | | 969,039 | | | | | | — | | | | | | 3,919,966 | | | | | | — | | | | | | 1,972,250 | | | | | | — | | | | | | 220,210 | | | | | | 7,081,465 | | |
| | | 2022 | | | | | | 667,463 | | | | | | — | | | | | | 1,737,497 | | | | | | — | | | | | | 860,063 | | | | | | — | | | | | | 193,847 | | | | | | 3,458,870 | | | |||
| | | 2021 | | | | | | 665,000 | | | | | | — | | | | | | 1,675,003 | | | | | | — | | | | | | 548,625 | | | | | | — | | | | | | 362,752 | | | | | | 3,251,380 | | | |||
| Christopher A. Foster Executive Vice President and Chief Financial Officer | | | | | 2023 | | | | | | 433,461 | | | | | | — | | | | | | 5,720,028 | | | | | | — | | | | | | 980,000 | | | | | | — | | | | | | 690,273 | | | | | | 7,823,763 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| Monica Karuturi Executive Vice President and General Counsel | | | | | 2023 | | | | | | 695,385 | | | | | | — | | | | | | 1,819,984 | | | | | | — | | | | | | 980,000 | | | | | | 64,802 | | | | | | 91,667 | | | | | | 3,651,838 | | |
| | | 2022 | | | | | | 552,462 | | | | | | 100,000 | | | | | | 1,102,006 | | | | | | — | | | | | | 669,900 | | | | | | 9,454 | | | | | | 71,527 | | | | | | 2,505,350 | | | |||
| | | 2021 | | | | | | 527,500 | | | | | | 80,000 | | | | | | 971,997 | | | | | | — | | | | | | 377,163 | | | | | | 30,437 | | | | | | 65,754 | | | | | | 2,052,851 | | | |||
| Jason M. Ryan Executive Vice President, Regulatory Services & Government Affairs | | | | | 2023 | | | | | | 505,962 | | | | | | 200,000 | | | | | | 1,570,014 | | | | | | — | | | | | | 624,750 | | | | | | 58,652 | | | | | | 99,211 | | | | | | 3,058,589 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| Lynne Harkel-Rumford Executive Vice President and Chief Human Resources Officer | | | | | 2023 | | | | | | 455,961 | | | | | | — | | | | | | 920,013 | | | | | | — | | | | | | 563,500 | | | | | | 91,185 | | | | | | 80,993 | | | | | | 2,111,652 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| Scott E. Doyle Former Executive Vice President, Utility Operations | | | | | 2023 | | | | | | 85,384 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (102,747) | | | | | | 2,114,193 | | | | | | 2,096,830 | | |
| | | 2022 | | | | | | 563,504 | | | | | | — | | | | | | 1,500,005 | | | | | | — | | | | | | — | | | | | | (119,284) | | | | | | 90,477 | | | | | | 2,034,702 | | | |||
| | | 2021 | | | | | | 518,750 | | | | | | — | | | | | | 997,503 | | | | | | — | | | | | | 399,437 | | | | | | 34,944 | | | | | | 100,381 | | | | | | 2,051,015 | | |
|
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 56 | |
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Executive
Plans and Employee Benefit Plans” in Note 8 to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2023. For purposes of the tables above and below, the effects of estimated forfeitures are excluded. Please also refer to the Grants of Plan-Based Awards for Fiscal Year 2023 table and the accompanying footnotes.
Name | Year | Maximum Value of Stock Awards ($) | ||||||
Prochazka | 2017 | 8,159,983 | ||||||
2016 | 6,760,594 | |||||||
2015 | 4,478,015 | |||||||
Rogers | 2017 | 1,889,549 | ||||||
2016 | 1,473,890 | |||||||
2015 | 1,351,316 | |||||||
Bridge | 2017 | 1,414,428 | ||||||
2016 | 1,332,817 | |||||||
2015 | 1,167,362 | |||||||
Carroll | 2017 | 3,442,521 | ||||||
2016 | 3,187,511 | |||||||
2015 | 2,638,530 | |||||||
O’Brien | 2017 | 1,317,488 |
|
(3) CenterPoint Energy has not granted stock options since 2004. (4) Non-Equity Incentive Plan Compensation represents short-term incentive awards earned with respect to performance in the designated year and paid in the following year. For more information on the 2023 short-term incentive awards, refer to the |
|
Name | Change in Pension Value(a) ($) | Above Market Earnings on Nonqualified Deferred Compensation(b) ($) | Total ($) | |||||||||
Prochazka | 154,543 | 4,650 | 159,193 | |||||||||
Rogers | 60,911 | 9,689 | 70,600 | |||||||||
Bridge | 113,323 | — | 113,323 | |||||||||
Carroll | — | 37,145 | 37,145 | |||||||||
O’Brien | 45,937 | — | 45,937 |
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|
|
Name | Perquisites and Other Personal Benefits(a) ($) | Tax Reimbursements(b) | Contributions to Vested and Unvested Defined Contribution Plans (qualified)(c) ($) | Contributions to Vested and Unvested Defined Contribution Plans (nonqualified)(d) ($) | Insurance Premiums(e) | Total All Other Compensation | ||||||||||||||||||
Prochazka | — | — | 16,200 | 126,020 | 1,738 | 143,958 | ||||||||||||||||||
Rogers | — | 11 | 16,200 | 33,300 | 1,738 | 51,249 | ||||||||||||||||||
Bridge | — | 15 | 16,200 | 39,150 | 1,738 | 57,103 | ||||||||||||||||||
Carroll | — | 906 | — | — | 5,861 | 6,767 | ||||||||||||||||||
O’Brien | — | 45 | 16,200 | 33,450 | 1,738 | 51,433 |
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Executive Compensation Tables (continued)
|
|
|
|
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Grants of Plan-Based Awards for Fiscal Year 2017
2023 table and the accompanying footnotes. Under the terms of our short-term incentive plan, an individual age 55 or older with at least five years of service satisfies certain retirement vesting provisions under the plan, and if the individual terminates employment during the plan year, he or she is eligible for a pro rata payment at the target level of achievement. For 2023, amounts for Mr. Lesar consist of an amount equal to Mr. Lesar’s short-term incentive award for the 2023 performance year, determined at the approved achievement level for other executive officers, as approved by the Board and Compensation Committee in connection with his retirement (refer to “Continued Execution of Succession Planning—Chief Executive Officer Transition—January 2024”).
| Name | | | Change in Pension Value(a) ($) | | | Above Market Earnings on Nonqualified Deferred Compensation(b) ($) | | | Total ($) | | |||||||||
| Lesar | | | | | — | | | | | | — | | | | | | — | | |
| Wells | | | | | — | | | | | | — | | | | | | — | | |
| Foster | | | | | — | | | | | | — | | | | | | — | | |
| Karuturi | | | | | 64,802 | | | | | | — | | | | | | 64,802 | | |
| Ryan | | | | | 58,272 | | | | | | 380 | | | | | | 58,652 | | |
| Harkel-Rumford | | | | | 91,185 | | | | | | — | | | | | | 91,185 | | |
| Doyle | | | | | (102,747) | | | | | | — | | | | | | (102,747) | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 57 | |
| Name | | | Perquisites and Other Personal Benefits(a) ($) | | | Tax Reimbursements ($)(b) | | | Contributions to Vested and Unvested Defined Contribution Plans (qualified)(c) ($) | | | Contributions to Vested and Unvested Defined Contribution Plans (nonqualified)(d) ($) | | | Insurance Premiums ($) | | | Other(e) ($) | | | Charitable Contributions(f) ($) | | | Total All Other Compensation ($) | | ||||||||||||||||||||||||
| Lesar | | | | | 251,374 | | | | | | — | | | | | | 29,700 | | | | | | 411,347 | | | | | | — | | | | | | — | | | | | | 50,000 | | | | | | 742,421 | | |
| Wells | | | | | 30,591 | | | | | | — | | | | | | 29,700 | | | | | | 134,919 | | | | | | — | | | | | | — | | | | | | 25,000 | | | | | | 220,210 | | |
| Foster | | | | | 649,891 | | | | | | 21,171 | | | | | | 9,900 | | | | | | 9,312 | | | | | | — | | | | | | — | | | | | | — | | | | | | 690,273 | | |
| Karuturi | | | | | — | | | | | | — | | | | | | 19,800 | | | | | | 62,117 | | | | | | — | | | | | | — | | | | | | 9,750 | | | | | | 91,667 | | |
| Ryan | | | | | — | | | | | | — | | | | | | 19,800 | | | | | | 54,411 | | | | | | — | | | | | | — | | | | | | 25,000 | | | | | | 99,211 | | |
| Harkel-Rumford | | | | | — | | | | | | — | | | | | | 19,800 | | | | | | 36,193 | | | | | | — | | | | | | — | | | | | | 25,000 | | | | | | 80,993 | | |
| Doyle | | | | | 16,570 | | | | | | — | | | | | | 5,123 | | | | | | — | | | | | | — | | | | | | 2,092,500 | | | | | | — | | | | | | 2,114,193 | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 58 | |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | |||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold: Number of Shares (#) | Target: Number of Shares (#) | Maximum: Number of Shares (#) | All Other Stock Awards: # of Shares of Stock or Units | Grant Date Fair Value of Stock Awards ($) | |||||||||||||||||||||||||||
Scott M. Prochazka | 664,082 | 1,328,164 | 2,523,511 | |||||||||||||||||||||||||||||||||
2/21/2017 | 54,115 | 1,440,000 | ||||||||||||||||||||||||||||||||||
2/21/2017 | 23,810 | 72,153 | 144,306 | 1,919,991 | ||||||||||||||||||||||||||||||||
2/21/2017 | 27,058 | 54,115 | 108,230 | 1,440,000 | ||||||||||||||||||||||||||||||||
William D. Rogers | 206,250 | 412,500 | 783,750 | |||||||||||||||||||||||||||||||||
2/21/2017 | 12,531 | 333,450 | ||||||||||||||||||||||||||||||||||
2/21/2017 | 5,514 | 16,708 | 33,416 | 444,600 | ||||||||||||||||||||||||||||||||
2/21/2017 | 6,266 | 12,531 | 25,062 | 333,450 | ||||||||||||||||||||||||||||||||
Tracy B. Bridge | 192,187 | 384,374 | 730,311 | |||||||||||||||||||||||||||||||||
2/21/2017 | 9,380 | 249,602 | ||||||||||||||||||||||||||||||||||
2/21/2017 | 4,127 | 12,507 | 25,014 | 332,811 | ||||||||||||||||||||||||||||||||
2/21/2017 | 4,690 | 9,380 | 18,760 | 249,602 | ||||||||||||||||||||||||||||||||
Milton Carroll | — | — | — | |||||||||||||||||||||||||||||||||
2/22/2017 | 22,873 | 607,507 | ||||||||||||||||||||||||||||||||||
2/22/2017 | 10,064 | 30,497 | 60,994 | 810,000 | ||||||||||||||||||||||||||||||||
2/22/2017 | 11,437 | 22,873 | 45,746 | 607,507 | ||||||||||||||||||||||||||||||||
Dana C. O’Brien | 160,063 | 320,125 | 608,238 | |||||||||||||||||||||||||||||||||
2/21/2017 | 8,737 | 232,492 | ||||||||||||||||||||||||||||||||||
2/21/2017 | 3,845 | 11,650 | 23,300 | 310,007 | ||||||||||||||||||||||||||||||||
2/21/2017 | 4,369 | 8,737 | 17,474 | 232,492 |
| | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | ||||||||||||||||||||||||||||||||||||||||||
| Name | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold: Number of Shares (#) | | | Target: Number of Shares (#) | | | Maximum: Number of Shares (#) | | | All Other Stock Awards: # of Shares of Stock or Units | | | Grant Date Fair Value of Stock Awards ($) | | |||||||||||||||||||||||||||
| David J. Lesar | | | | | | | | | | | 1,743,750 | | | | | | 2,906,250 | | | | | | 4,650,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 84,964 | | | | | | 2,475,001 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 39,254 | | | | | | 118,950 | | | | | | 237,900 | | | | | | | | | | | | 3,465,014 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 59,475 | | | | | | 118,950 | | | | | | 237,900 | | | | | | | | | | | | 3,465,014 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 8,497 | | | | | | 16,993 | | | | | | 33,986 | | | | | | | | | | | | 495,006 | | | |||
| Jason P. Wells | | | | | | | | | | | 845,250 | | | | | | 1,408,750 | | | | | | 2,254,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 33,642 | | | | | | 979,991 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 15,543 | | | | | | 47,099 | | | | | | 94,198 | | | | | | | | | | | | 1,371,994 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 23,550 | | | | | | 47,099 | | | | | | 94,198 | | | | | | | | | | | | 1,371,994 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 3,364 | | | | | | 6,728 | | | | | | 13,456 | | | | | | | | | | | | 195,987 | | | |||
| Christopher A. Foster | | | | | | | | | | | 420,000 | | | | | | 700,000 | | | | | | 1,120,000 | | | | | | | | | | | | | | | | | | | | | | | | 14,908 | | | | | | 454,992 | | |
| | | 5/5/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 127,785 | | | | | | 3,899,998 | | | |||
| | | 5/5/2023 | | | | | | | | | | | | | | | | | | | | | | | | 6,888 | | | | | | 20,872 | | | | | | 41,744 | | | | | | | | | | | | 637,013 | | | |||
| | | 5/5/2023 | | | | | | | | | | | | | | | | | | | | | | | | 10,436 | | | | | | 20,872 | | | | | | 41,744 | | | | | | | | | | | | 637,013 | | | |||
| | | 5/5/2023 | | | | | | | | | | | | | | | | | | | | | | | | 1,491 | | | | | | 2,982 | | | | | | 5,964 | | | | | | | | | | | | 91,011 | | | |||
| Monica Karuturi | | | | | | | | | | | 420,000 | | | | | | 700,000 | | | | | | 1,120,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 15,620 | | | | | | 455,011 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 7,216 | | | | | | 21,867 | | | | | | 43,734 | | | | | | | | | | | | 636,986 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 10,934 | | | | | | 21,867 | | | | | | 43,734 | | | | | | | | | | | | 636,986 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 1,562 | | | | | | 3,124 | | | | | | 6,248 | | | | | | | | | | | | 91,002 | | | |||
| Jason M. Ryan | | | | | | | | | | | 267,750 | | | | | | 446,250 | | | | | | 714,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,754 | | | | | | 255,004 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 4,044 | | | | | | 12,255 | | | | | | 24,510 | | | | | | | | | | | | 356,988 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 6,128 | | | | | | 12,255 | | | | | | 24,510 | | | | | | | | | | | | 356,988 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 876 | | | | | | 1,751 | | | | | | 3,502 | | | | | | | | | | | | 51,007 | | | |||
| | | 7/18/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,671 | | | | | | 137,514 | | | |||
| | | 7/18/2023 | | | | | | | | | | | | | | | | | | | | | | | | 2,158 | | | | | | 6,539 | | | | | | 13,078 | | | | | | | | | | | | 192,508 | | | |||
| | | 7/18/2023 | | | | | | | | | | | | | | | | | | | | | | | | 3,270 | | | | | | 6,539 | | | | | | 13,078 | | | | | | | | | | | | 192,508 | | | |||
| | | 7/18/2023 | | | | | | | | | | | | | | | | | | | | | | | | 467 | | | | | | 934 | | | | | | 1,868 | | | | | | | | | | | | 27,497 | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 59 | |
| | | | | | | | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | ||||||||||||||||||||||||||||||||||||||||||
| Name | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold: Number of Shares (#) | | | Target: Number of Shares (#) | | | Maximum: Number of Shares (#) | | | All Other Stock Awards: # of Shares of Stock or Units | | | Grant Date Fair Value of Stock Awards ($) | | |||||||||||||||||||||||||||
| Lynne Harkel-Rumford | | | | | | | | | | | 241,500 | | | | | | 402,500 | | | | | | 644,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,896 | | | | | | 230,010 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 3,648 | | | | | | 11,054 | | | | | | 22,108 | | | | | | | | | | | | 322,003 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 5,527 | | | | | | 11,054 | | | | | | 22,108 | | | | | | | | | | | | 322,003 | | | |||
| | | 2/15/2023 | | | | | | | | | | | | | | | | | | | | | | | | 790 | | | | | | 1,579 | | | | | | 3,158 | | | | | | | | | | | | 45,996 | | |
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Executive Compensation Tables (continued)
The estimated payouts under non-equity incentive plan awards are based on the terms of our 2023 short-term incentive plan. Based on the goals adopted in 2023, the maximum payout amount (as shown in the Maximum column) is 200% of target for our named executive officers. Actual amounts paid in 2024 for 2023 performance are shown in the |
|
Non-Equity Incentive Plan Awards
For our short-term incentive plan, under the umbrella feature, core operating income had to equal or exceed $425 million before any payouts to our senior executive officers for the 2017 plan year could occur. Further, the Committee intended to exercise its negative discretion and to not fund any short-term incentive awards for the 2017 plan year if core operating income did not equal or exceed $725 million.
Short-Term Incentive Targets. The base salary earned and short-term incentive target for each of our senior executive officers for the 2017 plan year were as follows:
Prochazka | Rogers | Bridge | O’Brien | |||||||||||||
Base salary earned in 2017 | $ | 1,154,925 | $ | 555,000 | $ | 512,499 | $ | 492,500 | ||||||||
Target short-term incentive award percentage for 2017 | 115 | % | 75 | % | 75 | % | 65 | % |
Mr. Carroll is not eligible to participate in our short-term incentive plan.
Short-term Incentive Plan Awards. The achievement of performance objectives, which the Compensation Committee establishesto an individual executive officer in excess of the actual performance level of the underlying performance objectives is reflected in the Summary Compensation Table in the Bonus column.
For each performance objective, a target performance level is established at the beginning of the year. Target levels are established by the Compensation Committee based on our 2017 business plan, which is approved by the Board. If actual performance is achieved at that target level, the funding for that performance objective is 100% of the target amount.
A threshold level of achievementincome and corporate overhead. It is also establishedadjusted for the performance objective. Achievement must meet at least the threshold level for any funding to be provided on that performance objective. At the threshold level, the funding for that performance objective is 50% of the target amount. Similarly, a maximum level of performance is established for each performance objective, which results in funding for that objective at 150% of the target amount if the maximum level of performance is achieved. An exceptional achievement level is established at 200% of target for performance objectives related to overall company core operating income, consolidated diluted earnings per share and overall company operations and maintenance expenditures. Linear interpolation is used to determine the funding for performance between achievement levels. The Committee may determine the actual amount payable from the funding pool to a senior executive officer to reflect the executive’s individual performance and any special
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Executive Compensation Tables (continued)
circumstance by exercising its negative discretion under the umbrella feature. The performance objectives used to determine the funding pool for the 2017 short-term incentive plan awards were as follows:
Performance Objectives | Performance Objectives Actual Achievement | Weightings of Performance Objectives | ||||||
Overall Company Core Operating Income | 128 | % | 35 | % | ||||
Consolidated Diluted Earnings Per Share | 200 | % | 20 | % | ||||
Overall Company Operations and Maintenance Expenditures | 109 | % | 25 | % | ||||
Customer Satisfaction Composite | 130 | % | 10 | % | ||||
Safety Composite | 83 | % | 10 | % | ||||
Total Weightings | 100 | % | ||||||
Funded Achievement Level | 133 | % |
Each of the performance objectives is described in detail below.
To determine “Overall Company Core Operating Income,” we adjust our reported operating income to remove the effect of specified items, either positive or negative,certain factors to reflect what we consider to be our core operationalfundamental business performance inperformance.
plus or minus income or loss
plus or minusmark-to-market accounting entries and net natural gas inventory adjustments not reflected in the plan;
plus or minus the financial impacts of any changes in accounting standards, the unplanned change in application of accounting standards and impairments of goodwill;
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For 2017, the2023, various levels of achievement for “Overall Company Core Operating Income,” the most significant performance objective for CenterPoint Energy,“Adjusted EPS” were as follows:
In Millions | Actual | |||||||||||
Threshold $ | Target $ | Maximum $ | Exceptional $ | $ | % | |||||||
Overall Company Core Operating Income | 801 | 852 | 886 | 920 | 871 | 128% |
| | | | Threshold (2022 Actual plus 7%) $ | | | Target (2022 Actual plus 8%) $ | | | Maximum (2022 Actual plus 9%) $ | | | Actual $ % | | ||||||||||||||||||
| Adjusted EPS | | | | $ | 1.48 | | | | | $ | 1.49 | | | | | $ | 1.50 | | | | | $ | 1.50 | | | | | | 200%* | | |
“Consolidated Diluted Earnings Per Share” is definedachievement for the diversity and inclusion negative modifier were as diluted earnings per sharefollows:
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 60 | |
| Performance Objectives | | | Target (100%) | | | Actual Achievement | | | | | ||||||
| Diversity and Inclusion Negative Modifier* | | | | | | | | | | | | | | | | |
| Diversity of Applicants | | | | | | | | | | | | | | | | |
| Represents the percentage of competitive job postings that include a gender and/or racially/ethnically diverse applicant at the interviewing stage | | | | | 88% | | | | | | 90% | | | | | |
| Diversity of Suppliers | | | | | | | | | | | | | | | | |
| Represents the percentage of diverse spend | | | | | 12.6% | | | | | | 13.7% | | | | |
plus or minus the financial impacts of any changes in accounting standards, the unplanned change in application of accounting standards“Compensation Discussion and impairments of goodwill;
plus or minus any impact to income from the change in the value of the ZENS-related securities;
plus or minusmark-to-market accounting entries and net natural gas inventory adjustments not reflected in the plan;
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Analysis—2023 Executive Compensation Tables (continued)
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For 2017, various levels of achievement for “Consolidated Diluted Earnings Per Share” were as follows:
Actual | ||||||||||||
Threshold $ | Target $ | Maximum $ | Exceptional $ | $ | % | |||||||
Consolidated Diluted Earnings Per Share | 1.18 | 1.27 | 1.31 | 1.36 | 1.37 | 200% |
The threshold, maximum and exceptional levels are based on target less 7%, target plus 3.5% and target plus 7%, respectively.
“Overall Company Operations and Maintenance Expenditures” is defined as:
All operations and maintenance expenses (excluding transmission cost of service, stranded cost recovery and system restoration bonds)
plus or minus the financial impacts of any changes in accounting standards, the unplanned change in application of accounting standards and impairments of goodwill;
minus energy efficiency costs (which includes mandated spending and tracked costs but excludes bonus achievement for conservation incentive program costs, energy efficiency costs, gas affordability program and any similar newly approved regulatory mechanisms);
minus any differences between plan and actual expenditures required to generate additional revenues, including Home Service Plus labor and benefits costs;
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For 2017, various levels of achievement for “Overall Company Operations and Maintenance Expenditures” were as follows:
In Millions | Actual | |||||||||||
Threshold $ | Target $ | Maximum $ | Exceptional $ | $ | % | |||||||
Overall Company Operations and Maintenance Expenditures | 1,352 | 1,300 | 1,248 | 1,196 | 1,291 | 109% |
The target level above is based on our 2017 business plan as approved by the Board of Directors. The threshold, maximum and exceptional levels are based on target plus 4%, target less 4% and target less 8%, respectively.
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Executive Compensation Tables (continued)
“Customer Satisfaction Composite” goal includes results from a weighted average of the Customer Satisfaction Survey for Gas Operations and Houston Electric and Power Alert Service Survey for Houston Electric according to the following weights and measures:
Actual | ||||||||||||||||||||||||
Threshold | Target | Maximum | Weight | # | % | |||||||||||||||||||
Gas Operations | ||||||||||||||||||||||||
Customer Satisfaction Survey | 4.28 | 4.39 | 4.48 | 50% | 4.46 | 139% | ||||||||||||||||||
Houston Electric | ||||||||||||||||||||||||
Customer Satisfaction Survey | 3.76 | 3.86 | 3.94 | 25% | 3.92 | 138% | ||||||||||||||||||
Power Alert Service Survey | 4.39 | 4.50 | 4.59 | 25% | 4.51 | 106% | ||||||||||||||||||
Goal Achievement | 130% |
The target level above is based on prior year data. The threshold and maximum levels are based on target less 2.5% and target plus 2%, respectively.
“Safety Composite” goal incorporates the Houston Electric, Gas Operations and/or CenterPoint Energy Corporate Safety Achievements, excluding non-preventable vehicle collisions, according to the following weights and measures:
Actual | ||||||||||||||||||||||||
Threshold | Target | Maximum | Weight | # | % | |||||||||||||||||||
Total Safety Engagements* | 125,000 | 132,000 | 139,000 | 10 | % | 202,328 | 150 | % | ||||||||||||||||
Safety Participation Rate* | 35 | % | 40 | % | 45 | % | 20 | % | 62 | % | 150 | % | ||||||||||||
Days Away, Restricted or Transferred | 0.95 | 0.86 | 0.82 | 25 | % | 0.56 | 150 | % | ||||||||||||||||
Preventable Vehicle Incident Rate | 1.64 | 1.56 | 1.48 | 45 | % | 1.80 | 0 | % | ||||||||||||||||
Goal Achievement | 83 | % |
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The threshold level for Total Safety Engagements and Safety Participation Rate is based on 2016 performance. The target level is based on threshold plus 5% and the maximum level is then based on target plus 5%. The target level for Days Away, Restricted or Transferred (DART) is based on the 2014–2016 average. The threshold and maximum levels are based on target plus 10% and target less 5%, respectively. DART achievement excludesnon-preventable vehicle collisions. The target level for Preventable Vehicle Incident Rate is based on prior year data. The threshold and maximum levels are based on target plus 5% and target less 5%, respectively.
Example of Short-termProgram—2023 Short-Term Incentive Plan Awards Calculation
The following example is provided to illustrate the determination of the funding pool for the short-term incentive plan awards. For purposes of this example, we have assumed a base salary earned of $500,000, a short-term incentive plan target of 75% and an achievement level of 120%. We have also assumed that the threshold performance goal under the umbrella feature has been achieved.
Determination of the Funding Pool:
Base salary earned during the year | $ | 500,000 | ||
Short-term incentive plan target percentage | X 75 | % | ||
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Target individual award amount | $ | 375,000 | ||
Achievement level | X 120 | % | ||
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Contribution to the funding pool | $ | 450,000 | ||
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Executive Compensation Tables (continued)
Beginning in 2017, the Committee determined that the entirety of each individual award will be subject to the Committee’s discretion (rather than partially determined formulaically as in years prior to 2017), consistent with the Company’s philosophy to pay for performance and to further align our compensation objectives. For 2017, the Committee’s discretion was subject to the maximum payout available under the umbrella feature.
Long-term Incentive Plan Awards GrantedAwards—Additional Information
Description | Prochazka | Rogers | Bridge | Carroll | O’Brien | |||||||||||||||
Base Salary | $1,200,000 | $570,000 | $520,000 | $675,000 | $500,000 | |||||||||||||||
Long-term incentive target | 400 | % | 195 | % | 160 | % | 300 | % | 155 | % | ||||||||||
Long-term incentive compensation at target | $4,800,000 | $1,111,500 | $832,000 | $2,025,000 | $775,000 | |||||||||||||||
Performance share portion (70%) | $3,360,000 | $778,050 | $582,400 | $1,417,500 | $542,500 | |||||||||||||||
Performance shares granted at target (rounded) | 126,268 | 29,239 | 21,887 | 53,370 | 20,387 | |||||||||||||||
Stock award portion (30%) | $1,440,000 | $333,450 | $249,600 | $607,500 | $232,500 | |||||||||||||||
Stock award shares granted at target (rounded) | 54,115 | 12,531 | 9,380 | 22,873 | 8,737 |
Performance Shares. Participants received two separate awards totaling2021, the performance shares granted at target shown above, with vesting of each award based on one of the independent performance objectives listed below. “Retirement eligible” participants (age 55 with five years of service) will receive a payment under the award, if any, based on the actual achievement of the performance objective at the end of the performance period with any such amountpro-rated for the period of their employment during the performance period.
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Total Shareholder Return
One performance share award vests based on total shareholder return achieved over the three-year cycle in comparison to a subset of 18 companies (including CenterPoint Energy) in the TSR peer group as of January 1, 2017. Maximum achievement (200% of target) requires CenterPoint Energy to rank second or higher in that comparison, but no shares would vest if the company ranks below the 25th percentile in that comparison (threshold level). For this performance objective, the number of performance shares granted will vest using linear interpolation between the threshold and maximum achievement levels. Forty percent of long-term compensation is based on the total shareholder return metric.
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Executive Compensation Tables (continued)
The 18 companies included in our peer group as of January 1, 2017 were:
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Three-Year Cumulative Operating Income
One performance shareunit award vests based on our achievement of a three-year cumulative operating incomeAdjusted EPS goal. For the three-year performance cycle ending on December 31, 2019,2023, the cumulative operatingnet income performance goal reflects annual growth targets for each of 2018 and 2019 relative to the 2017 operating incomeAdjusted EPS target from our approved five-yearten-year financial plan.
plus or minus anymark-to-market accounting entries•
plus
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The three-year cumulative operating income target will be updated if our financial plan changes as a result of any acquisitions, mergers and divestitures.
Refer to “Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives” for a discussion of vesting and dividend rights associated with awards under our long-term incentive plan.
Stock Awards. Participants received a restricted stock unit award, which we sometimes refer to as a “stock award” in this proxy statement, representing shares of CenterPoint Energy common stock, as shown in the table under the heading “Executive Compensation Tables—Grants of Plan-Based Awards for Fiscal Year 2017.” The award is a three-year service-based award and will vest on February 21, 2020. “Retirementbuy-out awards), “retirement eligible” participants (age 55 or greater with at least five years of service or, for Mr. Lesar, at least three years of service) who terminate employment for any reason (other than by the Company for cause or due to death or disability) will receive a payment under the award, if any, based on the actual achievement of the applicable performance objective at the end of the performance period or vesting period with any such amountpro-rated for the period of their employment during the performance or vesting period.
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 61 | |
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2023
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(1) | Market of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) | Equity ($) | |||||||||||||||||||||||||||
Prochazka | — | — | — | — | — | 154,853 | 4,391,631 | 412,329 | 11,693,650 | |||||||||||||||||||||||||||
Rogers | — | — | — | — | — | 34,292 | 972,521 | 92,337 | 2,618,677 | |||||||||||||||||||||||||||
Bridge | — | — | — | — | — | 31,621 | 896,772 | 76,994 | 2,183,550 | |||||||||||||||||||||||||||
Carroll | — | — | — | — | — | 69,358 | 1,966,993 | 185,602 | 5,263,673 | |||||||||||||||||||||||||||
O’Brien | — | — | — | — | — | 24,916 | 706,618 | 64,761 | 1,836,622 |
| | | | Option Awards | | | Stock Awards | | ||||||||||||||||||||||||||||||||||||||||||||||||
| Name | | | Number of Securities Underlying Unexercised Options Exercisable (#) | | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested(1) (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | |||||||||||||||||||||||||||
| Lesar | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 256,934 | | | | | | 7,340,604 | | | | | | 950,131 | | | | | | 27,145,243 | | |
| Wells | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 69,005 | | | | | | 1,971,473 | | | | | | 288,815 | | | | | | 8,251,445 | | |
| Foster | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 142,693 | | | | | | 4,076,739 | | | | | | 86,470 | | | | | | 2,470,448 | | |
| Karuturi | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 37,012 | | | | | | 1,057,433 | | | | | | 150,017 | | | | | | 4,285,986 | | |
| Ryan | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 30,607 | | | | | | 874,442 | | | | | | 123,238 | | | | | | 3,520,910 | | |
| Harkel-Rumford | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,006 | | | | | | 600,141 | | | | | | 81,788 | | | | | | 2,336,683 | | |
| Doyle | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,385 | | | | | | 725,249 | | | | | | 80,885 | | | | | | 2,310,884 | | |
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Grant Date | Type of Stock Award | Vesting Date | Prochazka | Rogers | Bridge | Carroll | O’Brien | |||||||||||||||||||
2/19/2015 | Stock Award | 2/19/2018 | 37,480 | 7,970 | 9,770 | 16,660 | 6,460 | |||||||||||||||||||
2/24/2016 | Stock Award | 2/24/2019 | 63,258 | 13,791 | 12,471 | 29,825 | 9,719 | |||||||||||||||||||
2/21/2017 | Stock Award | 2/21/2020 | 54,115 | 12,531 | 9,380 | — | 8,737 | |||||||||||||||||||
2/22/2017 | Stock Award | 2/22/2020 | — | — | — | 22,873 | — | |||||||||||||||||||
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Total | 154,853 | 34,292 | 31,621 | 69,358 | 24,916 | |||||||||||||||||||||
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CenterPoint Energy, Inc. 2024 Proxy Statement |
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Grant Date | Type of Stock Award | Vesting Date | Prochazka | Rogers | Bridge | Carroll | O’Brien | |||||||||||||||||||
2/24/2016 | Performance Shares(a) | 12/31/2018 | 231,946 | 50,567 | 45,727 | 109,359 | 35,637 | |||||||||||||||||||
2/21/2017 | Performance Shares(b) | 12/31/2019 | 180,383 | 41,770 | 31,267 | — | 29,124 | |||||||||||||||||||
2/22/2017 | Performance Shares(b) | 12/31/2019 | — | — | — | 76,243 | — | |||||||||||||||||||
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Total | 412,329 | 92,337 | 76,994 | 185,602 | 64,761 | |||||||||||||||||||||
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62 |
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Executive Compensation Tables (continued)
| Grant Date | | | Type of Stock Award | | | Vesting Date | | | Lesar | | | Wells | | | Foster | | | Karuturi | | | Ryan | | | Harkel-Rumford | | | Doyle | | ||||||||||||||||||||||||
| 2/18/2021 | | | Stock Award | | | | | 2/18/2024 | | | | | | 93,119 | | | | | | 19,209 | | | | | | — | | | | | | 11,147 | | | | | | 9,358 | | | | | | 6,904 | | | | | | 11,439 | | |
| 2/15/2022 | | | Stock Award | | | | | 2/15/2025 | | | | | | 78,851 | | | | | | 16,154 | | | | | | — | | | | | | 10,245 | | | | | | 7,824 | | | | | | 6,206 | | | | | | 13,946 | | |
| 2/15/2023 | | | Stock Award | | | | | 2/15/2026 | | | | | | 84,964 | | | | | | 33,642 | | | | | | — | | | | | | 15,620 | | | | | | 8,754 | | | | | | 7,896 | | | | | | — | | |
| 5/05/2023 | | | Stock Award | | | | | 5/05/2024 | | | | | | — | | | | | | — | | | | | | 63,893 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| 5/05/2023 | | | Stock Award | | | | | 5/05/2025 | | | | | | — | | | | | | — | | | | | | 63,892 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| 5/05/2023 | | | Stock Award | | | | | 5/05/2026 | | | | | | — | | | | | | — | | | | | | 14,908 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| 7/18/2023 | | | Stock Award | | | | | 2/15/2026 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,671 | | | | | | — | | | | | | — | | |
| Total | | | | | | | | | | | | | | 256,934 | | | | | | 69,005 | | | | | | 142,693 | | | | | | 37,012 | | | | | | 30,607 | | | | | | 21,006 | | | | | | 25,385 | | |
| Grant Date | | | Type of Stock Award | | | Vesting Date | | | Lesar | | | Wells | | | Foster | | | Karuturi | | | Ryan | | | Harkel- Rumford | | | Doyle | | ||||||||||||||||||||||||
| 2/15/2022 | | | Performance Share Units(a) | | | | | 12/31/2024 | | | | | | 457,338 | | | | | | 93,691 | | | | | | — | | | | | | 59,425 | | | | | | 45,377 | | | | | | 35,993 | | | | | | 80,885 | | |
| 2/15/2023 | | | Performance Share Units(a) | | | | | 12/31/2025 | | | | | | 492,793 | | | | | | 195,124 | | | | | | — | | | | | | 90,592 | | | | | | 50,771 | | | | | | 45,795 | | | | | | — | | |
| 5/05/2023 | | | Performance Share Units(a) | | | | | 12/31/2025 | | | | | | — | | | | | | — | | | | | | 86,470 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| 7/18/2023 | | | Performance Share Units(a) | | | | | 12/31/2025 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 27,090 | | | | | | — | | | | | | — | | |
| Total | | | | | | | | | | | | | | 950,131 | | | | | | 288,815 | | | | | | 86,470 | | | | | | 150,017 | | | | | | 123,238 | | | | | | 81,788 | | | | | | 80,885 | | |
2023
Option Awards | Stock Awards(1) | |||||||||||||||
Name | Number of Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||
Prochazka | — | — | 102,399 | 3,080,292 | ||||||||||||
Rogers | — | — | 22,502 | 668,309 | ||||||||||||
Bridge | — | — | 25,584 | 770,234 | ||||||||||||
Carroll | — | — | 75,510 | 2,306,125 | ||||||||||||
O’Brien | — | — | 16,673 | 502,107 |
| | | | Option Awards | | | Stock Awards(1) | | ||||||||||||||||||
| Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | ||||||||||||
| Lesar | | | | | — | | | | | | — | | | | | | 1,229,432 | | | | | | 37,601,296 | | |
| Wells | | | | | — | | | | | | — | | | | | | 129,358 | | | | | | 3,920,786 | | |
| Foster | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Karuturi | | | | | — | | | | | | — | | | | | | 66,816 | | | | | | 2,053,809 | | |
| Ryan | | | | | — | | | | | | — | | | | | | 59,794 | | | | | | 1,842,487 | | |
| Harkel-Rumford | | | | | — | | | | | | — | | | | | | 41,482 | | | | | | 1,275,298 | | |
| Doyle | | | | | — | | | | | | — | | | | | | 71,421 | | | | | | 2,192,489 | | |
CenterPoint Energy, Inc. 2024 Proxy Statement | | | 63 | |
Name | Performance Share Awards for the 2015-2017 Performance Cycle(a) | Stock Awards Granted March 20, 2014 That Vested February 18, 2017 | Stock Awards Granted May 12, 2014 That Vested February 18, 2017 | Stock Awards Granted February 9, 2015 That Vested February 9, 2017 | Stock Awards Granted February 19, 2015 That Vested June 1, 2017 | |||||||||||||||||||||||||||||||||||
Number of Shares (#) | Value Realized on Vesting(b) ($) | Number of Shares (#) | Value Realized on Vesting(c) ($) | Number of Shares (#) | Value Realized on Vesting(c) ($) | Number of Shares (#) | Value Realized on Vesting(d) ($) | Number of Shares (#) | Value Realized on Vesting(e) ($) | |||||||||||||||||||||||||||||||
Prochazka | 68,219 | 2,071,640 | 34,180 | 1,008,652 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Rogers | 14,502 | 440,389 | — | — | — | — | 8,000 | 227,920 | — | — | ||||||||||||||||||||||||||||||
Bridge | 17,784 | 540,056 | 7,800 | 230,178 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Carroll | 30,320 | 920,743 | 15,190 | 448,257 | — | — | — | — | 30,000 | 937,125 | ||||||||||||||||||||||||||||||
O’Brien | 11,763 | 357,213 | — | — | 4,910 | 144,894 | — | — | — | — |
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Pension benefits for our senior executive officers, the stock awards and performance share unit awards consist of the following:
| | | | Performance Share Unit Awards for the 2021 – 2023 Performance Cycle(a) | | | Stock Awards Granted February 19, 2020 That Vested February 19, 2023 | | | Stock Awards Granted July 1, 2020 That Vested July 1, 2023 | | | Stock Awards Granted July 28, 2020 That Vested February 19, 2023 | | | Stock Awards Granted September 28, 2020 That Vested September 28, 2023 | | | Stock Awards Granted February 16, 2022 That Vested December 31, 2023 | | | Stock Awards Granted February 15, 2023 That Vested December 31, 2023 | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | | | Number of Shares (#) | | | Value Realized on Vesting(b) ($) | | | Number of Shares (#) | | | Value Realized on Vesting(c) ($) | | | Number of Shares (#) | | | Value Realized on Vesting(d) ($) | | | Number of Shares (#) | | | Value Realized on Vesting(e) ($) | | | Number of Shares (#) | | | Value Realized on Vesting(f) ($) | | | Number of Shares (#) | | | Value Realized on Vesting(g) ($) | | | Number of Shares (#) | | | Value Realized on Vesting(h) ($) | | ||||||||||||||||||||||||||||||||||||||||||
| Lesar | | | | | 502,845 | | | | | | 15,432,313 | | | | | | — | | | | | | — | | | | | | 126,587 | | | | | | 3,946,983 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 400,000 | | | | | | 12,148,000 | | | | | | 200,000 | | | | | | 6,074,000 | | |
| Wells | | | | | 103,727 | | | | | | 3,183,382 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,631 | | | | | | 737,404 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Foster | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Karuturi | | | | | 60,192 | | | | | | 1,847,292 | | | | | | 1,911 | | | | | | 60,177 | | | | | | — | | | | | | — | | | | | | 4,713 | | | | | | 146,339 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Ryan | | | | | 50,532 | | | | | | 1,550,827 | | | | | | 9,262 | | | | | | 291,660 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Harkel-Rumford | | | | | 37,280 | | | | | | 1,144,123 | | | | | | 1,597 | | | | | | 50,290 | | | | | | — | | | | | | — | | | | | | 2,605 | | | | | | 80,885 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Doyle | | | | | 61,773 | | | | | | 1,895,813 | | | | | | 9,648 | | | | | | 296,676 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
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Executive Compensation Tables (continued)
January 1, 1999 (including Mr. Bridge)Doyle), benefits accrued based on a participant’s years of service, final average pay and covered compensation through December 31, 2008. Beginning January 1, 2009, final average pay formula benefits under the retirement plan were frozen as to any future accruals. The lump sum value of theage-65 annuity for all final average pay formula participants was calculated using an interest conversion rate of 4.52% as of December 31, 2008. This lump sum amount will continue to grow annually with interest, based on the30-year Treasury rate from the prior November, until commencement of the benefit. The participant’s benefit through December 31, 2008 is the greatest of (i) thethis lump sum value, (ii) the final average pay benefit and (iii) the cash balance benefit. For periods after December 31, 2008, all participants (including all our senior executive officers) are eligible for athe retirement benefit is based on a cash balance formula of five percent of base salary and short-term incentive compensation.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 64 | |
Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit ($) | Payments during 2017 ($) | ||||||||||
Cash Balance Formula(1) |
| |||||||||||||
Prochazka | Retirement Plan | 16.2 | 224,952 | — | ||||||||||
CNP Benefit Restoration Plan | 16.2 | 439,369 | — | |||||||||||
Rogers | Retirement Plan | 2.9 | 41,056 | — | ||||||||||
CNP Benefit Restoration Plan | 2.9 | 70,261 | — | |||||||||||
O’Brien | Retirement Plan | 3.6 | 54,768 | — | ||||||||||
CNP Benefit Restoration Plan | 3.6 | 72,585 | — | |||||||||||
Final Average Pay Formula(2) | ||||||||||||||
Bridge | Retirement Plan | 31.8 | 893,189 | — | ||||||||||
CNP Benefit Restoration Plan | 31.8 | 205,360 | — |
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| Name | | | Plan Name | | | Number of Years Credited Service (#) | | | Present Value of Accumulated Benefit ($) | | | Payments during 2023 ($) | | |||||||||
| Cash Balance Formula(1) | | | | | | | | | | | | | | | | | | | | | | |
| Karuturi | | | Retirement Plan | | | | | 9.4 | | | | | | 100,916 | | | | | | — | | |
| CNP Benefit Restoration Plan | | | | | 9.4 | | | | | | 113,625 | | | | | | — | | | |||
| Ryan | | | Retirement Plan | | | | | 14.1 | | | | | | 158,844 | | | | | | — | | |
| CNP Benefit Restoration Plan | | | | | 14.1 | | | | | | 111,210 | | | | | | — | | | |||
| Harkel-Rumford | | | Retirement Plan | | | | | 24.5 | | | | | | 431,966 | | | | | | — | | |
| CNP Benefit Restoration Plan | | | | | 24.5 | | | | | | 136,539 | | | | | | — | | | |||
| Final Average Pay Formula(2) | | | | | | | | | | | | | | | | | | | | | | |
| Doyle | | | Retirement Plan | | | | | 28.9 | | | | | | 388,465 | | | | | | — | | |
| CNP Benefit Restoration Plan | | | | | 28.9 | | | | | | — | | | | | | 188,973 | | |
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Executive Compensation Tables (continued)
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1.1%
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Our
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 65 | |
Our current
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Executive Compensation Tables (continued)
new participants and benefit accruals as of December 31, 2007. Effective January 1, 2008, obligations with respect to deferrals under the 1989 Deferred Compensation Plan after December 31, 2004, along with all associated earnings were transferred to and are paid from the 2005 Deferred Compensation Plan, which was adopted effective as of January 1, 2008, to replace the 1989 Deferred Compensation Plan. References to our deferred compensation plan include both our 2005 Deferred Compensation Plan, which covers amounts subject to Section 409A, as well as our 1989 Deferred Compensation Plan, which covers amounts which are exempt from Section 409A. Under the terms of our deferred compensation plan, interest accrues on deferrals at a rate adjusted annually equal to the average yield during the year of the Moody’s Long-Term Corporate Bond Index plus two percent.
•
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | |
66 |
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Executive Compensation Tables (continued)
Name | Plan Name | Executive Contributions in 2017(1) ($) | Registrant Contributions in 2017(1) ($) | Aggregate Earnings in 2017(2) ($) | Aggregate Withdrawals/ Distributions(3) ($) | Aggregate Balance at December 31, 2017 ($) | ||||||||||||||||
Prochazka | 2005 Deferred Compensation Plan | 100,000 | — | 10,289 | (80,851 | ) | 180,663 | |||||||||||||||
CNP Savings Restoration Plan | — | 126,020 | 120,219 | — | 716,542 | |||||||||||||||||
1991 Savings Restoration Plan | — | — | 4,853 | — | 28,924 | |||||||||||||||||
Rogers | 2005 Deferred Compensation Plan | 180,000 | — | 21,440 | — | 376,468 | ||||||||||||||||
CNP Savings Restoration Plan | — | 33,300 | 13,627 | — | 79,049 | |||||||||||||||||
Bridge | CNP Savings Restoration Plan | — | 39,150 | 27,079 | — | 246,880 | ||||||||||||||||
Carroll | 1989 Deferred Compensation Plan | — | — | 36,831 | — | 646,715 | ||||||||||||||||
2005 Deferred Compensation Plan | 125,000 | — | 43,602 | (18,658 | ) | 744,688 | ||||||||||||||||
O’Brien | CNP Savings Restoration Plan | — | 33,450 | 19,435 | — | 111,586 |
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| Name | | | Plan Name | | | Executive Contributions in 2023 ($) | | | Registrant Contributions in 2023(1) ($) | | | Aggregate Earnings in 2023(2) ($) | | | Aggregate Withdrawals/ Distributions ($) | | | Aggregate Balance at December 31, 2023(3) ($) | | |||||||||||||||
| Lesar | | | CNP Savings Restoration Plan | | | | | — | | | | | | 411,347 | | | | | | 265,635 | | | | | | — | | | | | | 1,306,525 | | |
| Wells | | | CNP Savings Restoration Plan | | | | | — | | | | | | 134,919 | | | | | | 51,734 | | | | | | — | | | | | | 349,910 | | |
| Foster | | | CNP Savings Restoration Plan | | | | | — | | | | | | 9,312 | | | | | | 1,399 | | | | | | — | | | | | | 10,710 | | |
| Karuturi | | | CNP Savings Restoration Plan | | | | | — | | | | | | 62,117 | | | | | | 37,019 | | | | | | — | | | | | | 230,332 | | |
| Ryan | | | 2005 Deferred Compensation Plan | | | | | — | | | | | | — | | | | | | 1,004 | | | | | | — | | | | | | 14,548 | | |
| CNP Savings Restoration Plan | | | | | — | | | | | | 54,411 | | | | | | 42,288 | | | | | | — | | | | | | 249,377 | | | |||
| Harkel-Rumford | | | CNP Savings Restoration Plan | | | | | — | | | | | | 36,193 | | | | | | 17,500 | | | | | | — | | | | | | 156,057 | | |
| 1991 Savings Restoration Plan | | | | | — | | | | | | — | | | | | | 665 | | | | | | — | | | | | | 5,928 | | | |||
| Doyle | | | 2005 Deferred Compensation Plan | | | | | — | | | | | | — | | | | | | (34,586) | | | | | | (511,009) | | | | | | — | | |
| CNP Savings Restoration Plan | | | | | — | | | | | | — | | | | | | 5,024 | | | | | | (230,805) | | | | | | — | | |
The plan was amended and restated effective May 1, 2017 to provide that awards granted under the long-term incentive plan on or after such date are not subject to the plan and are instead governed by the long-term incentive plan and the applicable award agreements.
•
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Executive Compensation Tables (continued)
the members of our Board on the effective date of the plan, and successors designated as provided in the agreement, cease to constitute a majority of the Board;
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 67 | |
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Executive Compensation Tables (continued)
the short-term incentive plan. In addition, three years of service for Mr. Prochazka and two years of service for Messrs. Rogers and Bridge and for Ms. O’Brien will be added for benefit purposescash balance formula under the retirement plan, and such additional benefit will be paid in the same time and manner that the officer’s benefit under the benefit restoration plan is paid. The plan provides a similar benefit for officers who are not eligible to participate in the retirement plan. Messrs. Wells and Lesar will be entitled to a benefit equal to three additional years (or two additional years for Mr. Wells prior to his appointment as Chief Executive Officer), and Mr. Foster will be entitled to a benefit equal to two additional years, of employer nonelective contributions under the savings plan, and such additional benefit will be paid in the same time and manner that the officer’s benefit under the savings restoration plan is paid. In addition, the plan provides for welfare benefits for a period of two years, career transition placement services and the reimbursement of legal fees incurred related to the severance. For awards granted before May 1, 2017, if an award agreement for performance shares granted under our long-term incentive plan does not provide for any early payment upon a change in control, then the plan provides for full vesting of performance shares under our long-term incentive plan if there is a covered termination. However, if the terms of the award are more favorable than those of the plan, the more favorable change in control terms under the award agreements will apply rather than the terms of the plan withWith respect to such awards. Under the amended and restated plan, awards granted under the long-term incentive plan, on or after May 1, 2017such awards are not subject to the plan and are governed by the long-term incentive plan and applicable award agreements.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 68 | |
For stock awards granted beginning February 2018, “double trigger” vesting applies, and vesting is accelerated upon a change in control only if the award is not continued, assumed, or substituted or a covered termination of employment occurs. A covered termination of employment occurs for purposes of awards under the long-term incentive plan if the officer’s employment is terminated within two years after the completion of a transaction that
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Executive Compensation Tables (continued)
effects a change in control for reasons other than death, disability (as defined in our long-term disability plan), involuntary termination for cause (as defined in the award agreement), or resignation of the officer unless such resignation is due to “good reason” that is not cured within the cure period set forth in the award agreement. “Good reason” for this purpose is defined in substantially the same manner as such term is defined in the change in control plan.
Performance Shares. For performance shares The buy-out award granted before February 2018,to Mr. Foster do not provide for accelerated vesting upon a change in control (without regard to whetherbut provide for accelerated vesting upon death, disability, termination of employment without cause (as defined in the officer’s employment is terminated), we would be required to settle rights relating to unvestedaward agreement).
Options
| EXECUTIVE | | | BASE PAY MULTIPLIER | | | MAXIMUM CASH SEVERANCE PAYMENT UNDER EXECUTIVE SEVERANCE GUIDELINES(1) | | |||
| Chief Executive Officer | | | | | 2x | | | | Two (2) times annual base salary plus target short- term incentive award | |
| Non-CEO Named Executive Officer | | | | | 1.5x | | | | One and a half (1.5) times annual base salary plus target short-term incentive award | |
cash severance payment, as described above.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 69 | |
Type of Payment | Prochazka | Rogers | Bridge | Carroll | O’Brien | |||||||||||||||
Severance amount | $ | 7,642,000 | $ | 1,987,000 | $ | 1,822,000 | $ | 1,360,000 | $ | 1,653,000 | ||||||||||
Short-term Incentive Plan(1) | 1,338,000 | 419,000 | 384,000 | — | 323,000 | |||||||||||||||
Long-term Incentive Plan:(2) | ||||||||||||||||||||
Performance shares | 10,963,000 | 2,425,000 | 1,966,000 | 4,913,000 | 1,765,000 | |||||||||||||||
Stock awards | 4,658,000 | 1,031,000 | 955,000 | 2,088,000 | 750,000 | |||||||||||||||
Benefit restoration plan(3) | 467,000 | 110,000 | 182,000 | — | 93,000 | |||||||||||||||
Health and welfare benefits | 42,000 | 12,000 | 27,000 | — | 24,000 | |||||||||||||||
Outplacement | 4,000 | 4,000 | 4,000 | 4,000 | 4,000 | |||||||||||||||
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Total benefit and payment | $ | 25,114,000 | $ | 5,988,000 | $ | 5,340,000 | $ | 8,365,000 | $ | 4,612,000 | ||||||||||
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| Type of Payment | | | Lesar | | | Wells | | | Foster | | | Karuturi | | | Ryan | | | Harkel- Rumford | | ||||||||||||||||||
| Severance amount | | | | $ | 11,475,000 | | | | | $ | 4,214,000 | | | | | $ | 2,520,000 | | | | | $ | 2,520,000 | | | | | $ | 1,734,000 | | | | | $ | 1,564,000 | | |
| Retention amount(1) | | | | $ | 338,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Short-term Incentive Plan(2) | | | | $ | 2,325,000 | | | | | $ | 1,127,000 | | | | | $ | 560,000 | | | | | $ | 560,000 | | | | | $ | 357,000 | | | | | $ | 322,000 | | |
| Long-term Incentive Plan:(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Share Units (Unvested) | | | | $ | 14,585,000 | | | | | $ | 4,417,000 | | | | | $ | 1,312,000 | | | | | $ | 2,298,000 | | | | | $ | 1,887,000 | | | | | $ | 1,254,000 | | |
| Performance Share Units (Vested)(4) | | | | $ | 8,573,000 | | | | | $ | 1,769,000 | | | | | | — | | | | | $ | 1,026,000 | | | | | $ | 862,000 | | | | | $ | 636,000 | | |
| Stock awards (Unvested) | | | | $ | 7,719,000 | | | | | $ | 2,062,000 | | | | | $ | 4,160,000 | | | | | $ | 1,108,000 | | | | | $ | 914,000 | | | | | $ | 630,000 | | |
| Stock awards (Vested) | | | | $ | 17,884,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Benefit restoration plan(5) | | | | | — | | | | | | — | | | | | | — | | | | | $ | 301,000 | | | | | $ | 258,000 | | | | | $ | 216,000 | | |
| Savings restoration plan(6) | | | | $ | 441,000 | | | | | $ | 110,000 | | | | | $ | 26,000 | | | | | | — | | | | | | — | | | | | | — | | |
| Health and welfare benefits | | | | $ | 24,000 | | | | | $ | 25,000 | | | | | $ | 26,000 | | | | | $ | 39,000 | | | | | $ | 20,000 | | | | | $ | 25,000 | | |
| Outplacement | | | | $ | 8,000 | | | | | $ | 8,000 | | | | | $ | 8,000 | | | | | $ | 8,000 | | | | | $ | 8,000 | | | | | $ | 8,000 | | |
| Total benefit and payment | | | | $ | 63,372,000 | | | | | $ | 13,732,000 | | | | | $ | 8,612,000 | | | | | $ | 7,860,000 | | | | | $ | 6,040,000 | | | | | $ | 4,655,000 | | |
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Executive Compensation Tables (continued)
Type of Payment | Prochazka | Rogers | Bridge | Carroll | O’Brien | |||||||||||||||
Short-term incentive plan(1) | $ | — | $ | — | $ | 384,000 | $ | — | $ | — | ||||||||||
Long-term incentive plan:(2) | ||||||||||||||||||||
Performance shares | — | — | 1,522,000 | 3,158,000 | — | |||||||||||||||
Stock awards | — | — | 612,000 | 1,264,000 | — | |||||||||||||||
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Total | $ | — | $ | — | $ | 2,518,000 | $ | 4,422,000 | $ | — | ||||||||||
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CenterPoint Energy, | | | 70 | |
| Type of Payment | | | Lesar | | | Wells | | | Foster | | | Karuturi | | | Ryan | | | Harkel- Rumford | | ||||||||||||||||||
| Retention amount(1) | | | | $ | 338,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Short-term Incentive Plan(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 322,000 | | |
| Long-term Incentive Plan:(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Share Units (Unvested) | | | | $ | 7,217,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 603,000 | | |
| Performance Share Units (Vested)(4) | | | | $ | 8,573,000 | | | | | $ | 1,769,000 | | | | | | — | | | | | $ | 1,026,000 | | | | | $ | 862,000 | | | | | $ | 636,000 | | |
| Stock Awards (Unvested) | | | | $ | 4,934,000 | | | | | | — | | | | | $ | 3,725,000 | | | | | | — | | | | | | — | | | | | $ | 386,000 | | |
| Stock Awards (Vested) | | | | $ | 17,884,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Total | | | | $ | 38,946,000 | | | | | $ | 1,769,000 | | | | | $ | 3,725,000 | | | | | $ | 1,026,000 | | | | | $ | 862,000 | | | | | $ | 1,947,000 | | |
Type of Payment | Prochazka | Rogers | Bridge | Carroll | O’Brien | |||||||||||||||
Short-term Incentive Plan(1) | $ | 1,328,000 | $ | 416,000 | $ | 384,000 | $ | — | $ | 320,000 | ||||||||||
Long-term Incentive Plan:(2) | ||||||||||||||||||||
Performance Shares | 6,974,000 | 1,524,000 | 1,522,000 | 3,158,000 | 1,134,000 | |||||||||||||||
Stock Awards | 2,746,000 | 599,000 | 601,000 | 1,242,000 | 446,000 | |||||||||||||||
Executive life insurance plan(3) | — | — | — | 180,000 | — | |||||||||||||||
Basic life insurance(3) | 50,000 | 50,000 | 50,000 | — | 50,000 | |||||||||||||||
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Total | $ | 11,098,000 | $ | 2,589,000 | $ | 2,557,000 | $ | 4,580,000 | $ | 1,950,000 | ||||||||||
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| Type of Payment | | | Lesar | | | Wells | | | Foster | | | Karuturi | | | Ryan | | | Harkel- Rumford | | ||||||||||||||||||
| Retention amount(1) | | | | $ | 338,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Short-term Incentive Plan(2) | | | | $ | 2,325,000 | | | | | $ | 1,127,000 | | | | | $ | 560,000 | | | | | $ | 560,000 | | | | | $ | 357,000 | | | | | $ | 322,000 | | |
| Long-term Incentive Plan(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Share Units (Unvested) | | | | $ | 14,585,000 | | | | | $ | 4,417,000 | | | | | $ | 1,312,000 | | | | | $ | 2,298,000 | | | | | $ | 1,887,000 | | | | | $ | 1,254,000 | | |
| Performance Share Units (Vested)(4) | | | | $ | 8,573,000 | | | | | $ | 1,769,000 | | | | | | — | | | | | $ | 1,026,000 | | | | | $ | 862,000 | | | | | $ | 636,000 | | |
| Stock Awards (Unvested) | | | | $ | 7,719,000 | | | | | $ | 2,062,000 | | | | | $ | 4,160,000 | | | | | $ | 1,108,000 | | | | | $ | 914,000 | | | | | $ | 630,000 | | |
| Stock Awards (Vested) | | | | $ | 17,884,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Executive life insurance plan | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic life insurance(5) | | | | $ | 50,000 | | | | | $ | 50,000 | | | | | $ | 50,000 | | | | | $ | 50,000 | | | | | $ | 50,000 | | | | | $ | 50,000 | | |
| Total | | | | $ | 51,474,000 | | | | | $ | 9,425,000 | | | | | $ | 6,082,000 | | | | | $ | 5,042,000 | | | | | $ | 4,070,000 | | | | | $ | 2,892,000 | | |
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 71 | |
|
Executive Compensation Tables (continued)
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Type of Payment | Prochazka | Rogers | Bridge | Carroll | O’Brien | |||||||||||||||
Short-term Incentive Plan(1) | $ | 1,328,000 | $ | 416,000 | $ | 384,000 | $ | — | $ | 320,000 | ||||||||||
Long-term Incentive Plan:(2) | ||||||||||||||||||||
Performance Shares | 6,974,000 | 1,524,000 | 1,522,000 | 3,158,000 | 1,134,000 | |||||||||||||||
Stock Awards | 2,796,000 | 610,000 | 612,000 | 1,264,000 | 454,000 | |||||||||||||||
Long-term Disability Per Month(3) | 20,000 | 20,000 | 20,000 | — | 20,000 | |||||||||||||||
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Total | $ | 11,118,000 | $ | 2,570,000 | $ | 2,538,000 | $ | 4,422,000 | $ | 1,928,000 | ||||||||||
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| Type of Payment | | | Lesar | | | Wells | | | Foster | | | Karuturi | | | Ryan | | | Harkel- Rumford | | ||||||||||||||||||
| Retention amount(1) | | | | $ | 338,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Short-term Incentive Plan(2) | | | | $ | 2,325,000 | | | | | $ | 1,127,000 | | | | | $ | 560,000 | | | | | $ | 560,000 | | | | | $ | 357,000 | | | | | $ | 322,000 | | |
| Long-term Incentive Plan(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Share Units (Unvested) | | | | $ | 14,585,000 | | | | | $ | 4,417,000 | | | | | $ | 1,312,000 | | | | | $ | 2,298,000 | | | | | $ | 1,887,000 | | | | | $ | 1,254,000 | | |
| Performance Share Units (Vested)(4) | | | | $ | 8,573,000 | | | | | $ | 1,769,000 | | | | | | — | | | | | $ | 1,026,000 | | | | | $ | 862,000 | | | | | $ | 636,000 | | |
| Stock Awards (Unvested) | | | | $ | 7,719,000 | | | | | $ | 2,062,000 | | | | | $ | 4,160,000 | | | | | $ | 1,108,000 | | | | | $ | 914,000 | | | | | $ | 630,000 | | |
| Stock Awards (Vested) | | | | $ | 17,884,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Long-term Disability Per Month(5) | | | | $ | 20,000 | | | | | $ | 20,000 | | | | | $ | 20,000 | | | | | $ | 20,000 | | | | | $ | 20,000 | | | | | $ | 19,000 | | |
| Total | | | | $ | 51,444,000 | | | | | $ | 9,395,000 | | | | | $ | 6,052,000 | | | | | $ | 5,012,000 | | | | | $ | 4,040,000 | | | | | $ | 2,861,000 | | |
|
Executive Compensation Tables (continued)
control plan described under “Potential Payments upon Change in Control or Termination”), the grantor trust must be fully funded, within 30 days following the change in control, with an amount equal to the entire benefit to which
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 72 | |
| Cumulative total shareholder return (TSR) | | | | Net income | | | | Adjusted EPS (company-selected financial performance measure) | |
| | | | PEO Pay(1) | | | Non-PEO NEOs Pay(2) | | | Value of Initial Fixed $100 Investment Based on: | | | Other Performance Measures | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | Summary Compensation Table Total | | | Compensation “Actually Paid”(3) | | | Average Summary Compensation Table Total Compensation | | | Average Compensation “Actually Paid”(3) | | | Total Shareholder Return (TSR)(4) | | | “Peer Group” Total Shareholder Return (TSR)(4) | | | Net Income(5) ($ in millions) | | | Company- Selected Measure- Adjusted EPS(6) | | ||||||||||||||||||||||||||||||||||||||||||||||||
| Year | | | Lesar | | | Somerhalder | | | Prochazka | | | Lesar | | | Somerhalder | | | Prochazka | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | | | | $ | 16,204,475 | | | | | | | | | | | | | | | | | $ | 24,939,494 | | | | | | | | | | | | | | | | | $ | 4,304,023 | | | | | $ | 4,780,554 | | | | | $ | 117.0 | | | | | $ | 97.5 | | | | | $ | 867 | | | | | $ | 1.50 | | |
| 2022 | | | | $ | 13,943,974 | | | | | | | | | | | | | | | | | $ | 29,628,764 | | | | | | | | | | | | | | | | | $ | 2,551,102 | | | | | $ | 4,418,767 | | | | | $ | 119.5 | | | | | $ | 111.2 | | | | | $ | 1,008 | | | | | $ | 1.38 | | |
| 2021 | | | | $ | 37,809,810 | | | | | | | | | | | | | | | | | $ | 52,998,434 | | | | | | | | | | | | | | | | | $ | 8,318,875 | | | | | $ | 10,539,727 | | | | | $ | 108.7 | | | | | $ | 113.9 | | | | | $ | 1,391 | | | | | $ | 1.27 | | |
| 2020 | | | | $ | 11,946,295 | | | | | | 3,075,656 | | | | | | 6,656,290 | | | | | $ | 13,546,218 | | | | | $ | 3,066,727 | | | | | $ | 5,704,640 | | | | | $ | 2,812,497 | | | | | $ | 2,201,357 | | | | | $ | 82.1 | | | | | $ | 99.4 | | | | | $ | (949) | | | | | $ | 1.17 | | |
| Actually Paid Adjustments | | | 2023 | | |||||||||
| PEO | | | Average Non-PEO NEOs | | |||||||||
| Summary Compensation Table (SCT) Total | | | | $ | 16,204,475 | | | | | $ | 4,304,023 | | |
| Deduction for Amounts Reported under the Stock Awards and Options Awards columns in the SCT | | | | $ | (9,900,034) | | | | | $ | (2,325,001) | | |
| Deduction for Amounts Reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column in the SCT | | | | | — | | | | | $ | (18,649) | | |
| Increase for Service Cost and Prior Service Cost for Pension Plans | | | | | — | | | | | $ | 22,661 | | |
| Increase for Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | | | | $ | 11,939,585 | | | | | $ | 2,604,465 | | |
| Increase for Fair Value of Awards Granted During Year that Vest During Year | | | | $ | 5,714,000 | | | | | | — | | |
| Increase for Dividends Paid on Unvested Shares/Share Units & Stock Options | | | | $ | 922,748 | | | | | $ | 129,270 | | |
| Increase/Deduction for Change in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vest During Year | | | | $ | (419,558) | | | | | $ | 7,364 | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 73 | |
| Actually Paid Adjustments | | | 2023 | | |||||||||
| PEO | | | Average Non-PEO NEOs | | |||||||||
| Increase/Deduction for Change in Fair Value from Prior Year-End to Current Year-End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End | | | | $ | 478,279 | | | | | $ | 56,420 | | |
| Deduction of Fair Value of Prior Year Awards Forfeited During the Year | | | | | — | | | | | | — | | |
| Total Compensation Actually Paid | | | | $ | 24,939,494 | | | | | $ | 4,780,554 | | |
| Actually Paid Adjustments | | | 2022 | | |||||||||
| PEO | | | Average Non-PEO NEOs | | |||||||||
| Summary Compensation Table (SCT) Total | | | | $ | 13,943,974 | | | | | $ | 2,551,102 | | |
| Deduction for Amounts Reported under the Stock Awards and Options Awards columns in the SCT | | | | $ | (8,481,240) | | | | | $ | (1,336,621) | | |
| Deduction for Amounts Reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column in the SCT | | | | | — | | | | | $ | 31,373 | | |
| Increase for Service Cost and Prior Service Cost for Pension Plans | | | | | — | | | | | $ | 15,906 | | |
| Increase for Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | | | | $ | 12,542,520 | | | | | $ | 1,976,680 | | |
| Increase for Fair Value of Awards Granted During Year that Vest During Year | | | | | — | | | | | | — | | |
| Increase for Dividends Paid on Unvested Shares/Share Units & Stock Options | | | | $ | 1,550,496 | | | | | $ | 127,670 | | |
| Increase/Deduction for Change in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vest During Year | | | | $ | 5,034,164 | | | | | $ | 523,494 | | |
| Increase/Deduction for Change in Fair Value from Prior Year-End to Current Year-End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End | | | | $ | 5,038,851 | | | | | $ | 529,165 | | |
| Deduction of Fair Value of Prior Year Awards Forfeited During the Year | | | | | — | | | | | | — | | |
| Total Compensation Actually Paid | | | | $ | 29,628,764 | | | | | $ | 4,418,767 | | |
| Actually Paid Adjustments | | | 2021 | | |||||||||
| PEO | | | Average Non-PEO NEOs | | |||||||||
| Summary Compensation Table (SCT) Total | | | | $ | 37,809,810 | | | | | $ | 8,318,875 | | |
| Deduction for Amounts Reported under the Stock Awards and Options Awards columns in the SCT | | | | $ | (33,359,999) | | | | | $ | (1,563,500) | | |
| Deduction for Amounts Reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column in the SCT | | | | | — | | | | | $ | (31,811) | | |
| Increase for Service Cost and Prior Service Cost for Pension Plans | | | | | — | | | | | $ | 16,623 | | |
| Increase for Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | | | | $ | 41,286,596 | | | | | $ | 2,575,657 | | |
| Increase for Fair Value of Awards Granted During Year that Vest During Year | | | | | — | | | | | | — | | |
| Increase for Dividends Paid on Unvested Shares/Share Units & Stock Options | | | | $ | 1,063,262 | | | | | $ | 143,224 | | |
| Increase/Deduction for Change in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vest During Year | | | | $ | 53,451 | | | | | $ | 173,972 | | |
| Increase/Deduction for Change in Fair Value from Prior Year-End to Current Year-End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End | | | | $ | 6,145,315 | | | | | $ | 968,869 | | |
| Deduction of Fair Value of Prior Year Awards Forfeited During the Year | | | | | — | | | | | $ | (62,183) | | |
| Total Compensation Actually Paid | | | | $ | 52,998,434 | | | | | $ | 10,539,727 | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 74 | |
| Actually Paid Adjustments | | | 2020 | | |||||||||||||||||||||
| PEO | | | Average Non- PEO NEOs | | |||||||||||||||||||||
| Lesar | | | Somerhalder | | | Prochazka | | ||||||||||||||||||
| Summary Compensation Table (SCT) Total | | | | $ | 11,946,295 | | | | | $ | 3,075,656 | | | | | $ | 6,656,290 | | | | | $ | 2,812,497 | | |
| Deduction for Amounts Reported under the Stock Awards and Options Awards columns in the SCT | | | | $ | (8,169,996) | | | | | $ | (2,272,619) | | | | | | — | | | | | $ | (1,608,708) | | |
| Deduction for Amounts Reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column in the SCT | | | | | — | | | | | $ | (8,929) | | | | | $ | 1,008,367 | | | | | $ | (59,849) | | |
| Increase for Service Cost and Prior Service Cost for Pension Plans | | | | | — | | | | | | — | | | | | $ | 140,749 | | | | | $ | 14,403 | | |
| Increase for Fair Value of Awards Granted During Year that Remain Unvested as of Year-End | | | | $ | 9,382,862 | | | | | | — | | | | | | — | | | | | $ | 1,305,346 | | |
| Increase for Fair Value of Awards Granted During Year that Vest During Year | | | | $ | 149,996 | | | | | $ | 2,272,619 | | | | | | — | | | | | $ | 71,428 | | |
| Increase for Dividends Paid on Unvested Shares/Share Units & Stock Options | | | | $ | 237,061 | | | | | | — | | | | | $ | 528,003 | | | | | $ | 79,014 | | |
| Increase/Deduction for Change in Fair Value from Prior Year-End to Vesting Date of Awards Granted Prior to Year that Vest During Year | | | | | — | | | | | | — | | | | | $ | (777,086) | | | | | $ | (82,302) | | |
| Increase/Deduction for Change in Fair Value from Prior Year-End to Current Year-End of Awards Granted Prior to Year that were Outstanding and Unvested as of Year-End | | | | | — | | | | | | — | | | | | $ | (1,283,285) | | | | | $ | (117,485) | | |
| Deduction of Fair Value of Prior Year Awards Forfeited During the Year | | | | | — | | | | | | — | | | | | $ | (568,399) | | | | | $ | (212,986) | | |
| Total Compensation Actually Paid | | | | $ | 13,546,218 | | | | | $ | 3,066,727 | | | | | $ | 5,704,640 | | | | | $ | 2,201,357 | | |
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 75 | |
Officer for 2023.
•
1.
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | 76 | |
•
After identifying There has been no change in the median employee’s circumstances that we reasonably believe would result in a significant change in our pay ratio.
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 77 | |
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Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans | ||||||||||
Equity compensation plans approved by security holders(1) | 3,977,411 | (2) | $ | — | 6,450,712 | (3) | ||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Totals | 3,977,411 | $ | — | 6,450,712 |
| | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted average exercise price of outstanding options, warrants and rights | | | Number of securities remaining available for future issuance under equity compensation plans | | |||||||||
| Equity compensation plans approved by security holders(1) | | | | | 7,086,019(2) | | | | | $ | — | | | | | | 14,473,188(3) | | |
| Equity compensation plans not approved by security holders | | | | | — | | | | | | — | | | | | | — | | |
| Totals | | | | | 7,086,019 | | | | | $ | — | | | | | | 14,473,188 | | |
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CenterPoint Energy, Inc. 2024 Proxy Statement |
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| 78 | |||
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Peter S. Wareing, Chairman
Scott J. McLean
John Chair
Wendy Montoya Cloonan
Raquelle W. Somerhalder II
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 79 | |
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2024.
Michael P. Johnson
Janiece M. Longoria
John W. Somerhalder II
| CenterPoint Energy, Inc. 2024 Proxy Statement | | | |
80 |
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Year Ended December 31, | ||||||||
2017 | 2016 | |||||||
Integrated audit of financial statements and internal control over financial reporting(1) | $ | 4,502,000 | $ | 4,182,600 | ||||
Audit-related fees(2) | 684,020 | 736,207 | ||||||
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Total audit and audit-related fees | 5,186,020 | 4,918,807 | ||||||
Tax fees | — | — | ||||||
All other fees(3) | 100,000 | 45,000 | ||||||
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Total fees | $ | 5,286,020 | $ | 4,963,807 | ||||
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| | | | Year Ended December 31, | | |||||||||
| | | | 2023 | | | 2022 | | ||||||
| Integrated audit of financial statements and internal control over financial reporting(1) | | | | $ | 5,778,500 | | | | | $ | 5,600,000 | | |
| Audit-related fees(2) | | | | | 1,634,000 | | | | | | 1,117,000 | | |
| Total audit and audit-related fees | | | | | 7,412,500 | | | | | | 6,717,000 | | |
| Tax fees | | | | | — | | | | | | — | | |
| All other fees(3) | | | | | 2,051 | | | | | | 2,051 | | |
| Total fees | | | | $ | 7,414,551 | | | | | $ | 6,719,051 | | |
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 81 | |
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The Board of Directors recommends a vote FOR the ratification of the appointment of Deloitte & Touche LLP as our independent auditors for 2018.
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The Board of Directors recommends a vote FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. |
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CenterPoint Energy, Inc. 2024 Proxy Statement | | | 82 | |
• Pay for Performance. The guiding principle of our compensation philosophy is that the interests of executives and shareholders should be aligned and that pay should be based on performance. |
Target Compensation Mix as of December 31, 2023 (consisting of base salary, short-term incentives and long-term incentives) * Graphic represents compensation mix for 2023 for Mr. Lesar, who served as Chief Executive Officer in 2023, and a similar compensation mix is anticipated for Mr. Wells in 2024. ** The graphic represents the average size of each component as a percentage of each named executive officer’s (other than the Chief Executive Officer’s) target total direct compensation opportunities (approved by the Compensation Committee in 2023).
• Market-Based Compensation Targets. We generally target the middle of the market (25th – 75th percentiles) for each major element of compensation for our named executive officers. To help ensure market-based levels of compensation, we measure the major elements of compensation annually for a job against available data for similar positions in our peer companies. In establishing individual incentive targets and awards, the Compensation Committee considers the data provided by its consultant, the level and nature of the executive’s responsibility, the executive’s experience and the Committee’s own qualitative assessment of the executive’s performance. • No Employment Agreements. We do not maintain executive employment agreements with any of our named executive officers, and our named executive officers are not entitled to guaranteed cash severance payments upon a termination of employment except pursuant to our change in control plan. • Change in Control Plan. Our Board of Directors approved a change in control plan, as amended and restated, effective May 1, 2017, which was further amended effective as of March 1, 2021 and January 1, 2022, that applies to all of our named executive officers. The plan contains a “double trigger” term and does not provide for any excise tax gross-up payments. Our change in control plan does not provide for excise tax gross up payments. • Stock Ownership Guidelines. We maintain executive stock ownership guidelines applicable to certain of our officers, including our named executive officers, to appropriately align the interests of our officers with our shareholders’ interests for CenterPoint Energy common stock. Our guidelines provide that our Chief Executive Officer should own CenterPoint Energy common stock having a market value of five times base salary, our executive vice presidents should own CenterPoint Energy common stock having a market value of three times their respective base salaries and our senior vice presidents should own CenterPoint Energy common stock having a market value of two times their respective base salaries. • Hedging Policy. As part of our Insider Trading Policy, our directors and officers are prohibited, and our non-officer employees are strongly discouraged, from hedging the risk of ownership of our common stock by purchasing, selling or writing options on our common stock or engaging in certain other types of transactions. Prohibited hedging or monetization transactions include a number of possible mechanisms, including the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. • Recovery and Recoupment Policies. We have implemented an Executive Officer Recovery Policy in compliance with the NYSE listing standards issued in accordance with the Dodd Frank Act of 2010 that provides for the recovery of incentive-based compensation from executive officers in the event of an accounting restatement due to material noncompliance with any financial reporting requirement under securities laws, regardless of the executive officer’s culpability. We also maintain a separate policy for the recoupment of incentive compensation from any officer, regardless of culpability, in the event of an accounting restatement where the restatement would have resulted in a lower amount of incentive compensation and for the recoupment of any compensation from any employee who is found to have engaged in wrongdoing in connection with corporate criminal misconduct. • 100% Independent Compensation
Committee. The Compensation Committee consists entirely of independent directors. • Independent Compensation Consultant. The Compensation Committee retains an independent consultant to provide advice on executive compensation matters. • Executive Severance Guidelines. The Compensation Committee has adopted executive severance guidelines that set forth appropriate limits on any severance payments to our named executive officers. The guidelines do not entitle any executive officer to a severance payment. The discussion under “Compensation Discussion and Analysis” describes our executive compensation program and the related decisions made by the Compensation Committee in more detail. We encourage you to read this discussion, as well as the Summary Compensation Table and other related compensation tables and narrative discussion under “Executive Compensation Tables,” which provides detailed information regarding the compensation of our named executive officers. In accordance with Section 14A of the Exchange Act and the related rules of the RESOLVED, that the shareholders of CenterPoint Energy, Inc. (the “Company”) hereby approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in the proxy statement for the Company’s Approval of the foregoing resolution requires the affirmative vote of a majority of the shares of common stock entitled to vote and voted for or against this item. Abstentions and brokernon-votes will not affect the outcome of the vote on this item. As an advisory vote, this proposal is not binding upon CenterPoint Energy or the Board of Directors. The final decision on the compensation and benefits of our named executive officers and on whether and how to address the results of the vote remains with the Board of Directors and the Compensation Committee. However, the Board of Directors values the opinions expressed by
our shareholders, and the Compensation Committee will consider the outcome of the vote when making future compensation decisions for our named executive officers. The Company currently expects to hold the next shareholder advisory vote on executive compensation at the Company’s 2025 annual meeting of shareholders.
ITEM 4: Shareholder Proposal Relating to Setting Additional Interim and Long-Term Scope 3 Emissions Goals This proposal was submitted by As You Sow on behalf of Warren Wilson College. We will promptly provide the information furnished by the shareholder proponent regarding its address and share ownership upon a shareholder’s oral or written request to the Corporate Secretary at 1111 Louisiana St., Houston, Texas 77002 or (713) 207-6500. WHEREAS: Energy utilities play a critical role in the net zero transition. Electricity generation accounts for 25% of U.S. greenhouse gas (GHG) emissions, and natural gas distribution accounts for 14%.1 The International Energy Agency’s 2023 Net Zero Scenario is clear in calling for net zero emissions from power generation in advanced economies by 2035 and a 40% reduction of emissions from the building sector by 2030.2 To reach these targets, power utilities must mitigate emissions from their entire value chains, including those associated with upstream production of gas, downstream burning of gas by customers, and purchased power from the grid. The Climate Action 100+ initiative, a coalition with $68 trillion in assets, issued a Net Zero Benchmark requiring companies to set net zero and interim emission reduction targets inclusive of all relevant Scope 3 emissions.3 Similarly, the Science Based Targets initiative, the globally recognized target verification program, also requires that net zero targets include relevant Scope 3 emissions.4 CenterPoint discloses Scope 3 emissions from customers’ downstream use of sold products.5 It has committed to reducing these emissions by 20-30% by 2035.6 It fails, however, to disclose upstream product emissions, which can add between 16 to 65% to a company’s natural gas combustion emissions.7 Moreover, its Scope 3 goal is misaligned with a 1.5 degree Celsius (1.5°C) trajectory. With regard to target-setting, CenterPoint has committed to Net Zero by 2035 for its operational emissions.8 But this net zero target fails to include any Scope 3 emissions. By contrast, peer utilities are accounting for value chain emissions in their reduction targets. NRG has committed to set a net zero target through the Science Based Targets initiative, requiring inclusion of Scope 3 emissions. Sempra, Duke, and Dominion set net zero targets covering full Scope 3 value chain emissions, while Xcel and CMS have expanded their net zero targets to include customer use of natural gas. By setting 1.5°C-aligned targets inclusive of its entire value chain, CenterPoint can enhance its reputation by solidifying its climate leadership, mitigate its climate-related transition and physical risks, and capitalize on the value-creating opportunities of the net-zero economy. BE IT RESOLVED: Shareholders request CenterPoint adopt interim and long-term reduction targets across its full range of value chain emissions in alignment with the Paris Agreement’s 1.5°C goal requiring Net Zero emissions by 2050. SUPPORTING STATEMENT: Proponents suggest, at management’s discretion, the Company: • Disclose all relevant Scope 3 emissions categories, including upstream product emissions; • Provide a timeline for setting a 1.5°C-aligned Net Zero by 2050 GHG reduction target, and 1.5°C-aligned interim targets; 1 https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions; https://www.ceres.org/sites/default/files/reports/2023-09/Decarbonizing%20U.S.%20Gas%20Distribution%20An%20Investor%20Guide.pdf, p. 4 2 https://iea.blob.core.windows.net/assets/13dab083-08c3-4dfd-a887- 42a3ebe533bc/NetZeroRoadmap_AGlobalPathwaytoKeepthe1.5CGoalinReach-2023Update.pdf, p. 63, 79 3 https://www.climateaction100.org/wp-content/uploads/2023/10/CA100-Benchmark-2.0-Disclosure-Framework- Methodology-Confidential-October-2023.pdf 4 https://sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf 5 https://sustainability.centerpointenergy.com/esg-data-center/#emissions 6 https://sustainability.centerpointenergy.com/net-zero/ 7 https://iopscience.iop.org/article/10.1088/1748-9326/abef33 8 https://sustainability.centerpointenergy.com/net-zero/
• Provide an enterprise-wide climate transition plan to achieve net zero emissions for its full value chain emissions; • Consider approaches used by advisory groups such as the Science Based Targets initiative; and • Annually report progress towards meeting value chain emission reduction targets. Board of Directors Response THE BOARD OF DIRECTORS OPPOSES THIS SHAREHOLDER PROPOSAL AND RECOMMENDS A VOTE AGAINST IT FOR THE REASONS SET FORTH BELOW: The Board has carefully considered this proposal and for the reasons identified below believes that approval of the proposed resolution is not in the best interest of the Company or its shareholders: • We recognize the importance of addressing climate change and aggressively pursuing GHG emission reductions, and our Board is actively involved in overseeing our efforts. • We are acting responsibly in setting and pursuing our Scope 1, 2 and 3 emission goals. • We believe that the expansion of our Scope 3 emissions goals requested by this proposal is not appropriate or supported by appropriate third-party standards at this time. • SEC announced its new carbon emissions disclosure rules in March 2024, which eliminated the proposed requirements to provide disclosure of Scope 3 emissions; Company resources are focused on addressing new requirements. • Third-party standards for reporting accurate measurements that capture full breadth of Scope 3 emissions still in development. • Company believes robust diligence and governance are prerequisites to establishing new long-term and interim goals. CenterPoint Energy Recognizes the Importance of Reducing GHG Emissions At CenterPoint Energy, we recognize climate change is one of the defining public policy issues of our time. That’s why we continue to work towards significantly reducing our carbon emissions while seeking to provide safer, more reliable and affordable services to our customers. In addition, we recognize the importance to shareholders of regular reporting on the progress we are making towards reducing our carbon emissions and achieving our net zero and carbon emission reduction goals. In response, the Company has undertaken to provide clear and transparent disclosure of these items through our sustainability website, www.sustainability.centerpointenergy.com, and other voluntary reporting. The Board is actively involved in overseeing and guiding our work in this area. The Governance, Environmental and Sustainability Committee is charged with oversight responsibility of the Company’s environmental matters, including those matters related to climate change, as well as assessing its sustainability strategy and initiatives, including the pathways and progress towards achievement of the Company’s net zero and carbon emissions reduction goals. The Governance, Environmental and Sustainability Committee, the Board or both receive quarterly reports from representatives of the Company’s sustainability group regarding the Company’s environmental and sustainability activities and risks, including risks related to climate change and to the achievement of the Company’s net zero and carbon emissions reduction goals, among others. In addition, as addressed in the CD&A, beginning in 2022, the Compensation Committee incorporated a carbon emissions reduction performance goal into senior executives’ long term incentive awards, having a 5% weight, to incentivize and track the Company’s progress towards it net zero and Scope 3 carbon emissions reduction goals. CenterPoint Energy Already Discloses Certain Scope 1, 2 and 3 Emissions and Has Set Appropriate Emission Reduction Goals CenterPoint Energy currently reports certain Scope 1, 2 and 3 emissions on its sustainability website in accordance with its reporting of emissions to the United States Environmental Protection Agency. In addition, in September 2021, CenterPoint Energy was one of the first combined electric and natural gas utility with generation operations to announce its net zero goals for Scope 1 and certain Scope 2 GHG emissions by 2035, nearly 15 years ahead of certain of its peers’ average goals. Further, we agree that measuring Scope 3 emissions is an important tool to address climate change, which is why we were one of the first utilities to have incorporated certain Scope 3 reduction targets across its utility footprint as described below. In this regard, CenterPoint Energy strives to reduce its Scope 3 emissions and help its residential and commercial customers reduce GHG emissions attributable to their end use of natural gas by 20-30% by 2035 from a 2021 baseline. This Scope 3 goal is comparable to emission reductions for both our Scope 1 and 2 net zero goals, as customer end use of natural gas represents a significant component of our Scope 3 emissions. These goals span across CenterPoint Energy’s electric, natural gas, and generation businesses, as well as across its multi-state footprint. We developed these goals after careful review of our business strategy, operations, and extensive modeling to identify goals that had identifiable pathways of achievement and, for our Scope 1 and 2 emissions goals, are aligned with the Paris Agreement. The
importance of developing these actionable pathways prior to the announcement of these goals can be seen in the steps the Company has taken since announcement to further these goals. With respect to our Scope 3 goals, CenterPoint Energy has focused on actionable steps, including partnering with customers to offer affordable conservation and energy-efficiency programs, continuing to develop alternative fuel programs, collaborating with our suppliers to lower their methane emissions and piloting and supporting innovation. The Company is currently conducting commercial carbon capture and sequestration pilots, hydrogen pilots and energy efficiency conservation improvement programs while also planning to utilize renewable natural gas and other offsets. In addition, the Company intends to continue to align its reporting of Scope 1, 2 and 3 emissions with current regulatory and legislative requirements, and intends to seek to provide additional disclosures as such data becomes appropriately verifiable or estimable. The Expansion of Scope 3 Goals Requested by This Proposal Is Not Appropriate at This Time Before the Company could implement the shareholder’s proposal and announce an expansion of its Scope 3 carbon emission reduction goals, including setting interim and expanding long-term goals, appropriate governance necessitates expansive data gathering and a similar review of updated modeling and the development of identifiable pathways to goal achievement. These processes require a significant amount of time, resources and due diligence and the Company believes it is not appropriate to establish new interim emission reduction goals or expand the Company’s long-term emission reduction goals at this time. Disclosure of new or expanded interim and long-term carbon emissions reduction goals without completion of these important internal processes would not be appropriate and would not represent good governance by the Board. Further, the processes and methodologies for calculating Scope 3 emissions (and validating interim and long-term goals in respect thereof) are currently not as well established as for Scope 1 and Scope 2 emissions. Indeed, the Science-Based Targets initiative (SBTi) has stated that it cannot presently validate targets for certain natural gas activities because specific methods and guidance have not yet been published.9 Moreover, Climate Action 100+, also referred to in the proposal, states that: “Many publicly listed electric utilities also sell other forms of energy including natural gas, heat and electricity supplied by third parties… However it is not currently possible to directly benchmark these activities using the sectoral decarbonisation approach.”10 Thus, in overseeing the Company’s determination of what Scope 3 emissions are appropriate for the Company’s interim and long-term goal-setting, the Board considered that the standards to ensure accurate measurements that capture the full breadth of Scope 3 emissions are still in development, and not yet ripe for full incorporation into the Company’s emissions reduction goals, which is the position taken by the SEC when it removed the Scope 3 reporting requirements from its new rulemaking.11 Further, in March 2024, the SEC announced its final climate-related disclosure rules, which eliminated the proposed requirement to provide Scope 3 emissions disclosures. As with many public companies, compliance with the SEC’s final climate-related disclosure rules on the prescribed timeline will require a significant amount of the Company’s resources, and the Board believes that trying to comply with both the SEC’s new climate-related disclosure requirements and the shareholder-proposed framework, which requires certain additional disclosures from the Company beyond those required under the SEC’s new disclosure rules, would unnecessarily strain the Company’s resources with little additional climate reporting benefits. Therefore, the Board believes that adopting a new, additional and more burdensome voluntary reporting framework is untimely and that the best use of the Company’s resources will be to focus on addressing the final SEC climate-related disclosure requirements. In conclusion, the Company continues to make progress towards achieving its emissions reduction goals. For example, we are executing on our generation transition plan in Indiana, including plans to close our coal power plants, including the retirement of the Company’s A.B. Brown coal-fired units 1 & 2 in 2023, and increasing our portfolio of renewables, and are executing on our 10-year capital plan, which includes investment to modernize and harden our infrastructure. However, the Board believes it currently is not the right time for the Company to implement new interim and expand its long-term Scope 3 emission goals in light of the newly finalized SEC climate disclosure rules, the need to conduct the prerequisite lengthy and time consuming due diligence process that will be necessary to confirm that such disclosures are reliable and the goals have identified pathways of achievement, and the absence of clear standards for reporting by companies with operations such as the Company. CenterPoint Energy continues to utilize a systematic, deliberative and disciplined approach to reducing its emissions by focusing on those sources it has determined yield the most value. We believe this approach will enable the Company to update its emission reduction targets with the appropriate scientific rigor once better third-party guidance is available.
9 See, e.g., SBTi Criteria and Recommendations, Version 5.1 (April 2023), https://sciencebasedtargets.org/resources/files/SBTi-criteria.pdf. 10 Climate Action 100+, Global Sector Strategies: Investor Interventions to Accelerate Net Zero Electric Utilities (October 2021), p. 19. 11 The Securities and Exchange Commission, The Enhancement and Standardization of Climate-Related Disclosures for Investors (2024), Release Nos. 33-11275; 34-99678; File No. S7-10-22, p. 256-257, https://www.sec.gov/files/rules/final/2024/33-11275.pdf.
General Information Frequently Asked Questions About Voting On what am I voting?
Who may vote? Holders of our common stock recorded in our stock register at the close of business on March 1, 2024 may vote at the meeting. As of that date, there were 633,031,514 shares of our common stock outstanding. How many votes do I have? You have one vote for each share of our common stock you owned as of the record date for the meeting. How do I vote? Your vote is important. You may vote in person at the meeting or by proxy. We recommend you vote by proxy even if you plan to attend the meeting. You may always change your vote at the meeting if you are a holder of record or have a proxy from the record holder. Giving us your proxy means that you authorize us to vote your shares of our common stock at the meeting in the manner you indicated on your proxy card. You may also provide your proxy using the Internet or telephone procedures described on the proxy card. You may vote for or against each director nominee under Item 1 (election of directors) and the proposals under Item 2 (ratification of appointment of the independent registered public accounting firm), Item 3 (advisory vote on executive compensation), and Item 4 (shareholder proposal relating to setting additional interim and long-term Scope 3 emissions goals), or you may abstain from voting on these items. If you give us your proxy but do not specify how to vote, we will vote your shares of our common stock in accordance with the Board’s recommendations. What are the Board’s recommendations? The Board’s recommendations are set forth together with the description of each item in this proxy statement. In summary, the Board and, with respect to the ratification of the appointment of the independent registered public accounting firm, the Audit Committee, recommends a vote as follows: • FOR the election of the eleven nominees named in this proxy statement as directors; • FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024; • FOR the approval, on an advisory basis, of the compensation paid to our named executive officers as disclosed in this proxy • AGAINST a shareholder proposal relating to setting additional interim and long-term Scope 3 emissions goals.
If any other matters properly come before the meeting, we will vote the shares of common stock for which we received a proxy in accordance with our best judgment and discretion. What if I change my mind after I have voted? You may revoke your proxy before it is voted by: • submitting a new proxy card with a later date; • voting in person at the meeting; or • giving written notice to Mr. Vincent A. Mercaldi, Corporate Secretary, at CenterPoint Energy’s address shown above. Will my shares be voted if I do not provide my proxy? It depends on whether you hold your shares of our common stock in your own name or in the name of a bank or brokerage firm. If you hold your shares of our common stock directly in your own name, they will not be voted unless you provide a proxy or vote in person at the meeting. Brokerage firms generally have the authority to vote their customers’ unvoted shares of common stock on certain “routine” matters as determined by the NYSE. If your shares of our common stock are held in the name of a broker, bank or other nominee, such nominee can vote your shares for or against the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024 if you do not timely provide your proxy because this matter is considered “routine” under the applicable rules. However, no other items are considered “routine” and may not be voted on by your nominee without your instruction. For all items other than ratification of the appointment of our independent registered public accounting firm, brokers holding shares of our common stock must vote according to specific instructions they receive from the beneficial owners of those shares because the NYSE precludes brokers from exercising voting discretion on certain proposals without specific instructions from the beneficial owner as to how to vote. Brokers cannot vote on Item 1 (election of directors), Item 3 (advisory vote on executive compensation), or Item 4 (shareholder proposal relating to setting additional interim and long-term Scope 3 emissions goals) without instructions from the beneficial owners. If you do not instruct your broker how to vote with respect to Item 1, Item 3, or Item 4, your broker will not vote for you with respect to those items. Do I need a ticket to attend the meeting? To be admitted to the meeting, you must provide proof of ownership of our common stock and proof of identification. If you plan to attend the meeting and your shares of common stock are held by banks, brokers, stock plans or other holders of record (in “street name”), you will need to provide proof of ownership. Examples of proof of ownership include a recent brokerage statement or letter from your broker or bank. All holders of our common stock will be required to present valid picture identification, such as a driver’s license, before being admitted to the meeting. What constitutes a quorum? To carry on the business of the meeting, we must have a quorum. This means at least a majority of the shares of our common stock outstanding as of the record date must be represented at the meeting, either by proxy or in person. Shares of our common stock owned by CenterPoint Energy are not voted and do not count for this purpose. Abstentions and proxies submitted by brokers that do not indicate a vote because they do not have discretionary authority and have not received instructions as to how to vote on a proposal (so-called “broker non-votes”) will be considered as present for quorum purposes. What vote is required to approve each of the proposals? Under our Bylaws, directors are elected by a majority of the votes cast at the meeting. Under our Bylaws, this means that the number of votes cast “for” a director must exceed the number of votes cast “against” that director. Abstentions and broker non-votes will not affect the outcome of the vote. For additional information on the election of directors, see “Item 1: Election of Directors—Majority Voting in Director Elections.” Each of the ratification of the appointment of independent registered public accounting firm in Item 2 and the approval of the resolution included in Item 3 regarding the advisory vote on executive compensation requires the affirmative vote of a majority of the shares of our common stock entitled to vote on the matter and voted for or against the item. The resolution included in Item 4 (shareholder proposal relating to setting additional interim and long-term Scope 3 emissions goals) requires the affirmative vote of a majority of the shares of common stock entitled to vote on the matter and represented in person or by proxy. Broker non-votes will not affect the outcome of the vote on this item and abstentions will have the same effect as a vote against this item.
Who conducts the proxy solicitation and how much will it cost? We began mailing this proxy statement and the accompanying proxy card to shareholders on or about March 15, Directors, offices and other employees will not receive additional compensation for these services. Other Matters The Board of Directors does not intend to bring any other matters before the meeting and has not been informed that any other matters are to be properly presented to the meeting by others. If other business is properly raised, your proxy card authorizes the people named as proxies to vote as they think best. Shareholder Proposals for
Pursuant to
Director Nominations for
For director nominations by eligible shareholders to be included in our proxy materials pursuant to the “proxy access” provisions of our Bylaws for the 2025 annual meeting, see “Item 1—Election of Directors—
Directors—Director Nomination Process (Bylaw Requirements for Director Nominations)” for further information. Householding of Annual Meeting Materials In accordance with notices previously sent to many shareholders who hold their shares through a bank, broker or other holder of record (street-name shareholders) and share a single address, only one annual report to shareholders and proxy statement is being delivered to that address unless contrary instructions from any shareholder at that address were received. This practice, known as “householding,” is intended to reduce our printing and postage costs. However, any such street-name shareholder residing at the same address who wishes to receive a separate copy of this proxy statement or the accompanying annual report to shareholders may request a copy by contacting the bank, broker or other holder of record or by contacting us by telephone at(713) 207-3060 or(800) 231-6406. Street-name shareholders who are currently receiving householded materials may revoke their consent, and street-name shareholders who are not currently receiving householded materials may request householding of our future materials, by contacting Broadridge Financial Services, Inc., either by calling toll free at(866) 540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. If you revoke your consent you will be removed from the “householding” program within 30 days of Broadridge’s receipt of your revocation, and each shareholder at your address will receive individual copies of our future materials. Annual Report to Shareholders The Annual Report to Shareholders, which includes a copy of our annual report onForm 10-K containing our consolidated financial statements for the fiscal year ended December 31,
Cautionary Note Regarding Forward-Looking Information and Net Zero Disclaimer This Proxy Statement contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, including statements regarding our net zero and carbon emissions reduction goals, and our generation transition plan. You can
generally identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should,” “target,” “will” and other similar words. These forward-looking statements are subject to various factors that could cause the Company’s actual results to differ materially from the results anticipated in these statements. These factors include, but are not limited to, those discussed in the “Risk Factors,” “Cautionary Statements Regarding Forward-Looking Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Certain Factors Affecting Future Earnings” sections of the Net Zero Disclaimer Our Scope 1 emissions estimates are calculated from emissions that directly come from our operations. Our Scope 2 emissions estimates are calculated from emissions that indirectly come from our energy usage, but because Texas is in an unregulated market, our Scope 2 estimates do not take into account Texas electric transmission and distribution assets in the line loss calculation and exclude emissions related to purchased power between 2024E-2026E. Our Scope 3 emissions estimates are based on the total natural gas supply delivered to residential and commercial customers as reported in the U.S. Energy Information Administration (EIA) Form EIA-176 reports and do not take into account the emissions of transport customers and emissions related to upstream extraction. While we believe that we have a clear path towards achieving our net zero emissions (Scope 1 and Scope 2) by 2035 goals, our analysis and path forward required us to make a number of assumptions. These goals and underlying assumptions involve risks and uncertainties and are not guarantees. Should one or more of our underlying assumptions prove incorrect, our actual results and ability to achieve net zero emissions by 2035 could differ materially from our expectations. Certain of the assumptions that could impact our ability to meet our net zero emissions goals include, but are not limited to: emission levels, service territory size and capacity needs remaining in line with Company expectations; regulatory approval of Indiana Electric’s generation transition plan; impacts of future environmental regulations or legislation; impacts of future carbon pricing regulation or legislation, including a future carbon tax; price, availability and regulation of carbon offsets; price of fuel, such as natural gas; cost of energy generation technologies, such as wind and solar, natural gas and storage solutions; adoption of alternative energy by the public, including adoption of electric vehicles; rate of technology innovation with regards to alternative energy resources; our ability to implement our modernization plans for our pipelines and facilities; the ability to complete and implement generation alternatives to Indiana Electric’s coal generation and retirement dates of Indiana Electric’s coal facilities by 2035; the ability to construct and/or permit new natural gas pipelines; the ability to procure resources needed to build at a reasonable cost, the lack of or scarcity of resources and labor, the lack of any project cancellations, construction delays or overruns and the ability to appropriately estimate costs of new generation; impact of any supply chain disruptions; changes in applicable standards or methodologies; and enhancement of energy efficiencies.
March 15,
Appendix A Reconciliation of non-GAAP Financial Measures to GAAP This Proxy Statement contains Adjusted EPS, which is not determined to be in accordance with generally accepted accounting principles in the United States of America (GAAP). Management uses this non-GAAP financial measure for, among other things, determining performance-based compensation and financial planning. Management believes that presenting this non-GAAP financial measure enhances an investor’s understanding of the Company’s overall financial performance by providing them with an additional meaningful and relevant comparison of current and anticipated future results across periods. The adjustments made in this non-GAAP financial measure exclude items that management believes do not most accurately reflect the company’s fundamental business performance. These excluded items are reflected in the reconciliation tables below. Non-GAAP financial measures should not be considered as an alternative to the Company’s reported results prepared in accordance with GAAP. This non-GAAP financial measure also may be different than non-GAAP financial measures used by other companies. Reconciliation of Adjusted EPS to nearest GAAP Metric Adjusted EPS includes net income from the company’s Electric and Natural Gas segments, as well as after-tax Corporate and Other operating income and an allocation of corporate overhead based upon Electric’s and Natural Gas’s relative earnings contribution. Corporate overhead consists primarily of interest expense, preferred stock dividend requirements, and other items directly attributable to the parent along with the associated income taxes. It is also adjusted for certain factors to reflect what we consider to be our fundamental business performance. Please see below for the adjustments to Adjusted EPS in 2023, 2022, 2021 and 2020. Beginning in 2022, CenterPoint Energy no longer separates utility and midstream operations and reports on a consolidated Adjusted EPS basis. Reconciliations of Consolidated income (loss) available to common shareholders and diluted earnings (loss) per share (GAAP) to non-GAAP income and non-GAAP diluted earnings per share:
(1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS. (2) Taxes are computed based on the impact removing such item would have on tax expense. Taxes related to the operating results of Energy Systems Group, as well as cash taxes payable and other tax impacts related to the sale of Energy Systems Group, are excluded from non-GAAP EPS. (3) Comprised of common stock of AT&T Inc., Charter Communications, Inc., and Warner Bros. Discovery, Inc. (4) Includes $4.4 million of pre-tax operating loss related to Energy Systems Group, a divested non-regulated business, as well as the $13 million loss on sale and approximately $2 million of other indirect related transaction costs associated with the divestiture.
(1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS. (2) Taxes are computed based on the impact removing such item would have on tax expense. (3) Comprised of common stock of AT&T Inc., Charter Communications, Inc., and Warner Bros. Discovery, Inc. (4) Includes earnings and expenses related to ownership and disposal of Energy Transfer LP units, a corresponding amount of debt related to the units and an allocation of associated corporate overhead. Includes costs associated with early extinguishment of $600 million debt at CenterPoint Energy, Inc. of approximately $35 million, net of taxes. (5) Includes a settlement charge of $35 million, net of tax, related to CenterPoint Energy pension plan’s purchase of a group annuity contract in December 2022 to transfer benefit obligations of CenterPoint Energy’s previously divested businesses to an insurance company.
(1) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS. EPS figures for Utility Operations, Corporate and Other and Discontinued Operations are non-GAAP financial measures. (2) Taxes are computed based on the impact removing such item would have on tax expense. (3) Comprised of common stock of AT&T Inc. and Charter Communications, Inc. (4) Includes gain from remeasurement of state deferred taxes, costs to achieve the sales and costs associated with the early extinguishment of debt. (5) Comprised of Energy Transfer LP common and Series G preferred units. (6) Includes impacts associated with the Vectren merger and the sales of Infrastructure Services (CIS) and Mobile Energy Solutions (MES). (7) The Corporate and Other allocation includes after tax Corporate and Other operating income, earnings from the Midstream preferred distributions net of an associated amount of debt, and an allocation of corporate overhead based upon Utility’s and Midstream’s relative earnings contribution. Corporate overhead consists primarily of interest expense, preferred stock dividend requirements, and other items directly attributable to the parent along with the associated income taxes.
(1) Energy Services segment (2) Infrastructure Services segment (3) Quarterly diluted EPS on both a GAAP and non-GAAP basis are based on the weighted average number of shares of common stock outstanding during the quarter, and the sum of the quarters may not equal year-to-date diluted EPS. EPS figures for Utility Operations, Corporate and Other, and Discontinued Operations are non-GAAP financial measures. (4) Taxes are computed based on the impact removing such item would have on tax expense (5) Comprised of common stock of AT&T Inc. and Charter Communications, Inc. (6) The Corporate and Other allocation includes after tax Corporate and Other operating income, earnings from the Midstream preferred distributions net of an associated amount of debt, and an allocation of corporate overhead based upon Utility’s and Midstream’s relative earnings contribution. Corporate overhead consists primarily of interest expense, preferred stock dividend requirements, and other items directly attributable to the parent along with the associated income taxes. (7) Results related to Energy Services and Infrastructure Services discontinued operations are excluded from the company’s non-GAAP results
BROADRIDGE CORPORATE ISSUER
proxy card in hand when you call
ADMISSION TICKETCENTERPOINT ENERGY, INC.2024 ANNUAL MEETING OF SHAREHOLDERSFriday, April 26, 20249:00 a.m. Central TimeAuditorium1111 Louisiana StreetHouston, Texas 77002This admission ticket admits only the named shareholder.Note: If you plan on attending the Annual Meeting in person, please bring, in addition to this Admission Ticket, valid picture identification. The use of video or still photography at the Annual Meeting is not permitted. For the safety of attendees, all bags, packages and briefcases are subject to inspection. Your compliance is appreciated.Important Notice Regarding the Availability of Proxy
The Notice and Proxy Statement and Annual Report are available at
BROADRIDGE CORPORATE ISSUER
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DETACH AND RETURN THIS PORTION ONLYSignature [PLEASE SIGN WITHIN BOX] DateV34881-P05179CENTERPOINT ENERGY, INC.Sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such.For Against AbstainFor Against AbstainFor Against Abstain1. Election of DirectorsNominees:2. Ratify the appointment of Deloitte & Touche LLP as theindependent registered public accounting firm for 2024.4. Shareholder proposal relating to setting additional interimand long-term Scope 3 emissions goals.3. Approve the advisory resolution on executive compensation.The Board of Directors recommends you vote FOR thefollowing:The Board of Directors recommends you vote FOR thefollowing proposals:The Board of Directors recommends you vote AGAINSTthe following proposal:1f. Thaddeus J. Malik1g. Theodore F. Pound1j. Barry T. Smitherman1h. Ricky A. Raven1i. Phillip R. Smith1k. Jason P. Wells1a. Wendy Montoya Cloonan1b. Earl M. Cummings1e. Raquelle W. Lewis1d. Christopher H. Franklin1c. Barbara J Important Notice Regarding the Availability of Proxy
CENTERPOINT ENERGY,
hereby appoints The Northern Trust Company to vote as designated on the reverse side, all shares of common stock held by the undersigned at the Annual Meeting of Shareholders of CenterPoint Energy, Inc. to be held on
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