Notice of 20182020
Annual Meeting and
Proxy Statement
YOUR VOTE IS IMPORTANT
PLEASE SUBMIT YOUR PROXY PROMPTLY
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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NextEra Energy, Inc.
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Notice of 20182020
Annual Meeting and
Proxy Statement
YOUR VOTE IS IMPORTANT
PLEASE SUBMIT YOUR PROXY PROMPTLY
NextEra Energy, Inc.
700 Universe Boulevard
Juno Beach, Florida 33408-0420
Notice of Annual Meeting of Shareholders
May 24, 201821, 2020
The 20182020 Annual Meeting of Shareholders of NextEra Energy, Inc. (“NextEra Energy” or the “Company”) will be held on Thursday, May 24, 2018,21, 2020, at 8:00 a.m., MountainCentral time, at The Westin La Paloma, 3800 East SunriseHyatt Regency Hill Country, 9800 Hyatt Resort Drive, Tucson, ArizonaSan Antonio, Texas to consider and act upon the following matters:
| 1. | Election as directors of the nominees specified in the accompanying proxy statement; |
| 2. | Ratification of appointment of Deloitte & Touche LLP as NextEra Energy’s independent registered public accounting firm for |
| 3. | Approval, bynon-binding advisory vote, of NextEra Energy’s compensation of its named executive officers as disclosed in the accompanying proxy statement; |
| 4. | Two shareholder proposals, as set forth on pages |
| 5. | Such other business as may properly be brought before the annual meeting or any adjournment(s) or postponement(s) of the annual meeting. |
The proxy statement more fully describes these matters. NextEra Energy has not received notice of other matters that may properly be presented at the annual meeting.
The record date for shareholders entitled to notice of, and to vote at, the annual meeting and any adjournment(s) or postponement(s) of the annual meeting is March 26, 2018.23, 2020.
Admittance to the annual meeting will be limited to shareholders as of the record date or their duly- appointedduly-appointed proxies. For the safety of attendees, all boxes, handbags and briefcases are subject to inspection. Cameras (including cell phones with photographic capabilities), recording devices and other electronic devices are not permitted at the meeting.
NextEra Energy is pleased to deliver proxy materials electronically via the Internet.internet. Electronic delivery allows NextEra Energy to provide you with the information you need for the annual meeting, while reducing environmental impacts and costs.
Regardless of whether you expect to attend the annual meeting, please submit your proxy or voting instructions promptly so that your shares can be voted.
By order of the Board of Directors.Directors,
W. Scott Seeley
Vice President, Compliance & Corporate Secretary
Juno Beach, Florida
April 6, 20183, 2020
As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that the 2020 annual meeting may be held virtually over the internet. If we decide to hold a virtual annual meeting, we will announce the decision to do so in advance and details on how to participate will be issued by press release, posted on our website and filed with the SEC as additional proxy material.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING TO BE HELD MAY 24, 201821, 2020
This proxy statement and the NextEra Energy 20172019 annual report to shareholders are available atwww.proxyvote.com. www.proxyvote.com.
| 1 | ||||
| 2 | ||||
• Proposal 1: Election as directors of the nominees specified in this proxy statement | ||||
| 24 | ||||
Common Stock Ownership of Certain Beneficial Owners and Management | ||||
Table 3: | ||||
Appendix A: Reconciliations ofNon-GAAP to GAAP Financial Measures | A-1 | |||
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting. This proxy statement contains information related to the solicitation of proxies by the Board of Directors (the “Board”) of NextEra Energy, Inc., a Florida corporation (“NextEra Energy,” the “Company,” “we,” “us” or “our”), in connection with the 20182020 annual meeting of NextEra Energy’s shareholders and at any adjournment(s) or postponement(s) of the meeting. On or about April 3, 2020, NextEra Energy began mailing this proxy statement and a Notice of Internet Availability of Proxy Materials to shareholders.
Meeting Information
Time and Date: | 8:00 a.m., | |
Place: |
As part of our precautions regarding the coronavirus or COVID-19, we are planning for the possibility that the 2020 annual meeting may be held virtually over the internet. If we decide to hold a virtual annual meeting, we will announce the decision to do so in advance and details on how to participate will be issued by press release, posted on our website and filed with the SEC as additional proxy material. | |
Record Date: | March | |
Webcast: | The Company will provide a live audio webcast of the annual meeting from its website athttp://www.nexteraenergy.com. | |
Voting: | Shareholders as of the record date are entitled to vote. Each share of common stock, par value $.01 per share (“common stock”), is entitled to one vote for each director nominee and one vote for each of the other properly presented proposals to be voted. | |
Admission: | An admission ticket is required to enter the annual meeting. See page | |
Voting Matters and Board Recommendations
Voting Matters | Board Vote Recommendation | Page Reference | ||
Proposal 1 – Election of directors | FOR each nominee | |||
Proposal 2 – Ratification of appointment of Deloitte & Touche LLP as NextEra Energy’s independent registered public accounting firm for | FOR | |||
Proposal 3 – Advisory vote to approve NextEra Energy’s compensation of its named executive officers | FOR | |||
Proposal 4 – Shareholder Proposal | AGAINST | |||
Proposal 5 – Shareholder Proposal | AGAINST | |||
How to Vote
| By Internet – Go to the websitewww.proxyvote.com, 24 hours a day, seven days a week. You will need the control number that appears on your proxy card or on your Notice of Internet Availability of Proxy Materials (the “Notice”). | |
| By Telephone – Call1-800-690-6903, 24 hours a day, seven days a week. You will need the control number that appears on your | |
| By Mail – If you received a full paper set of materials, date and sign your proxy card exactly as your name appears on your proxy card and mail it in the enclosed, postage-paid envelope. If you received | |
| In person – At the annual meeting. | |
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Business and Governance Highlights
Business Highlights
NextEra Energy achieved Company-record adjusted earnings* of $3.2$4.062 billion, adjusted earnings per shareshare* (“EPS”) of $6.70$8.37 and a1-year total shareholder return (“TSR”) of 34%43%. NextEra Energy’s 20172019 TSR outperformed the TSR of the S&P 500 Utilities Index of 12%26% and the TSR of the S&P 500 Index of 22%32% for 2017.2019.
These significant accomplishments came as the Company continued to be a leader among the 10 largest U.S. utilities (based on market capitalization) in substantially all financial metrics. Among these largest 10 U.S. utilities, NextEra Energy ranked #1 for1-year,3-year,5-year,7-year2-,3-,5-,7- and10-year TSR and #1 for1-year,3-year,5-year,7-year3-,5-,7- and10-year adjusted EPS growth. In 2017,2019, NextEra Energy ranked #1 among U.S. and global utility companies, based on market capitalization.**
In 2018,2020, NextEra Energy was named by Fortune Magazine as the World’s Most Admired Electric & Gas Utility for the eleventh13th time in the last twelve14 years. Also in 2018,2020, NextEra Energy was named by the Ethisphere Institute as one of the World’s Most Ethical Companies for the eleventh13th time in twelvethe last 14 years.
The returns that NextEra Energy generated for its shareholders were attributable to outstanding 20172019 performance by the Company’s two principal operating businesses, Florida Power and& Light Company (“FPL”) and NextEra Energy Resources, LLC and its subsidiaries (“NextEra Energy Resources”). Highlights of this performance are described in more detail in the Compensation Discussion and& Analysis beginning on page 32.37.
Ultimately, the Company’s financial and operational performance is reflected in the increased value of its common stock. As the table on page 3339 illustrates, TSR over the three-year period from December 31, 20142016 to December 31, 20172019 was 60%119%, meaning that an investment of $100 in NextEra Energy common stock on December 31, 20142016 was worth $160.30$219.15 on December 31, 2017.2019.
The chart below compares the Company’s TSR for the1-,3-,5- and10-year periods ended December 31, 20172019 to the TSRs of the S&P 500 Electric Utilities Index, the S&P 500 Utilities Index, the Philadelphia Exchange Utility Sector Index (“UTY”) and the S&P 500. NextEra Energy outperformedall of these indices over all of the periods shown. NextEra Energy’s outperformance over all of these periods in comparison to others in its industry, and over the1-,3-,5- and10-year periods in comparison to the S&P 500, was substantial.
NextEra Energy Total Shareholder Return Through12-31-1712-31-19 vs. Various Indices(1)Indices (1)
| 1-year TSR | 3-year TSR | 5-year TSR | 10-year TSR | |||||||||||||||||||||||||||||
| 1-year TSR | 3-year TSR | 5-year TSR | 10-year TSR | |||||||||||||||||||||||||||||
NextEra Energy | 34 | % | 60 | % | 162 | % | 221 | % | 43 | % | 119 | % | 161 | % | 530 | % | ||||||||||||||||
S&P 500 Electric Utilities Index, total return | 11 | % | 21 | % | 71 | % | 63 | % | 27 | % | 47 | % | 60 | % | 182 | % | ||||||||||||||||
S&P 500 Utilities Index, total return | 12 | % | 24 | % | 81 | % | 84 | % | 26 | % | 48 | % | 63 | % | 205 | % | ||||||||||||||||
UTY, total return | 13 | % | 24 | % | 78 | % | 78 | % | 27 | % | 48 | % | 63 | % | 192 | % | ||||||||||||||||
S&P 500, total return | 22 | % | 38 | % | 108 | % | 126 | % | 32 | % | 53 | % | 74 | % | 257 | % | ||||||||||||||||
| (1) | Source: FactSet Research Systems Inc.; except UTY, source: Bloomberg |
| * |
|
| ** | Market capitalization is as of December 31, |
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Governance Highlights
| Director Independence | • • Chief Executive Officer (“CEO”) is the only management director • All members of Board committees (other than the Executive Committee) are independent directors | |
| Board Leadership | • Independent Lead Director selected by the independent directors • Lead Director has strong role and significant governance duties, including chairing • Approved the Company’s enhanced Political Engagement Policy | |
| Board Accountability | • All directors stand for election annually and the Board has adopted a resignation policy for directors who fail to receive the required vote in uncontested elections • Simple majority voting standard for all uncontested director elections • Shareholders of 20% or more of the outstanding shares may call a special meeting • No shareholder rights (“poison pill”) plan • No supermajority vote requirements in the Company’s Articles of Incorporation | |
| Board Evaluation and Effectiveness | • Annual Board and committee self-assessments • Annual independent director evaluation of the Chairman and CEO | |
| Board Refreshment & Diversity | • Balance of new and experienced directors, with tenure of current directors averaging nine years • Since 2018, added two new independent directors, including a diverse director •Added • | |
| Director Engagement | • Each director attended • Board policy limitsnon-employee director membership on other public company boards to three | |
| Clawback and Anti-Hedging Policies | • Recoupment or clawback policy to recover certain executive pay • Policy prohibiting short sales, hedging and margin accounts | |
| Share Ownership | • CEO required to hold shares equivalent to 7x base salary • All senior executives required to hold shares equivalent to 3x base salary • Directors required to hold shares equivalent to 7x the cash portion of their annual retainer | |
| Proxy Access | • Available to a shareholder, or group of up to 20 shareholders, owning 3% of the Company’s outstanding shares for at least three years • May nominate candidates for the greater of two directorships or up to 20% of the | |
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2019 Governance Highlights
The Company received a shareholder proposal at its 2019 annual meeting of shareholders (“2019 annual meeting”) requesting increased disclosure of political contributions and expenditures. That proposal received the support of approximately 48.7% of the votes cast. Following the 2019 annual meeting, the Company engaged in an extensive shareholder outreach program to better understand shareholder views on political expenditures and associated disclosures. During its outreach program, the Company ultimately engaged with 25 of its largest shareholders, representing more than 40% of the Company’s outstanding shares. In response to feedback gathered from its outreach efforts, as described in more detail below, the Company enhanced its Political Engagement Policy which governs the Company’s political contributions and expenditures. The Company also increased its disclosure of its political contributions and expenditures.
During the outreach process, shareholders expressed a primary concern of ensuring there was formalized Board oversight of the Company’s engagement in the political process. In response, the Company formalized board-level oversight of its political expenditures and disclosures and enhanced its Political Engagement Policy (available on its website1) to give specific responsibility to the Board’s Governance and Nominating Committee, composed entirely of independent directors, to review at least annually the following political activities: contributions by The NextEra Energy, Inc. Political Action Committee (“Company PAC”); contributions by the Company to political candidates and committees; the Company’s contributions to all U.S.tax-exempt organizations that are primarily engaged in political activities; and the Company’s significant trade association memberships and dues. In addition, the Company now discloses on its website trade association dues in excess of $25,000 and the portion allocable to federal lobbying activities.
Shareholders also indicated that oversight should include a review of the Company’s memberships in trade associations to ensure that the trade associations’ public policy positions or participation in political processes are appropriately aligned with the Company’s corporate strategy. As a result, the enhanced Political Engagement Policy requires an annual review of significant trade association memberships by the Company’s Vice President, Government Affairs-Federal to ensure that the Company’s trade association participation aligns with its corporate strategy. Any policy positions of these organizations that may be in conflict with the Company’s strategy and objectives will be reviewed with the Company’s Chairman and Chief Executive Officer to ensure that participation in these organizations continues to provide an overall benefit to the Company.
Also in response to shareholder feedback, the Political Engagement Policy was amended to require the Company “to publicly disclose on its website, within 180 days after the end of each calendar year, its annual Significant Trade Association Dues, its expenditures for federal and state lobbying and contributions from the Company PAC, among other pertinent information.” As a result, the Company now discloses on its website2 specific contributions by the Company PAC to federal candidates, federal committees, state candidates and state committees; Company lobbying reports submitted for state lobbying activities; federal lobbying disclosures; links to Federal Election Commission and Lobbying Disclosure Act reports; and links to over 30 state lobbying registration commissions. Although much of this information was previously publicly available, the Company website now aggregates this wide-ranging information, making it more easily accessible by shareholders.
The Company will continue its outreach during 2020 on this and other governance topics.
| 1 | http://www.investor.nexteraenergy.com/~/media/Files/N/NEE-IR/corporate-governance/political-engagement-policy/2019/NextEra%20Energy%20Political%20Engagement%20Policy%2010-2019.pdf |
| 2 | http://www.investor.nexteraenergy.com/corporate-governance/corporate-political-engagement |
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Business of the Annual Meeting
The Board is currently composed of 1214 members. One member of the Board, Hansel E. Tookes, II, has reached retirement age and the Board will be reduced to 13 members. Upon the recommendation of the Governance & Nominating Committee, the Board has nominated the 1213 incumbent members listed below for election as directors at the 20182020 annual meeting. Unless you specify otherwise, your proxy will be votedFOR the election of the listed nominees. If any nominee becomes unavailable for election, which is not currently anticipated, proxies instructing a vote for that nominee may be voted for a substitute nominee selected by the Board or, in lieu thereof, the Board may reduce the number of directors by the number of nominees unavailable for election.
The Board believes that the Board membership at its current size is appropriate because such a Board sizeit facilitates substantive discussions among Board members, provides for sufficient staffing of Board committees and allows for contributions by directors having a broad range of skills, expertise, industry knowledge and diversity of opinion. Directors serve until the next annual meeting of shareholders or until their respective successors are elected and qualified.
Board Refreshment and Diversity
Board Refreshment. The Board and the Governance & Nominating Committee engage in a continuous process of considering the mix of skills and experience needed by the Board as a whole to discharge its responsibilities. During the period from July 2012 to February 2015, five new members joined the Board, adding significantly to the skills, expertise and experience of the Board. In October 2018, the Board increased its size and the size of the Audit Committee by one member and appointed a new individual to the Board and the Audit Committee. In February 2020, the Board similarly increased its size and the size of the Finance & Investment Committee by one member and appointed a new individual to fill these vacancies.
The Company also has a director retirement policy. Generally, no person who shall havehas attained the age of 72 years by the date of election shall beis eligible for election as a director. However, the Board may, by unanimous action (excluding the affected director), extend a director’s eligibility for one or two additional years, in which event such athe director will not be eligible for subsequent election as a director if he or she haswould have attained the age of 73 or 74 by or prior to the date of the election.
Diversity. Diversity is among the factors that the Governance & Nominating Committee considers when identifying and evaluating potential Board nominees. NextEra Energy, Inc.’s Corporate Governance Principles & Guidelines (the “Governance Guidelines”) provide that, in identifying nominees for director, the Company seeks to achieve a mix of directors representing a diversity of background and experience, including diversity with respect to age, gender, race, ethnicity and specialized experience. In the Board’s annual self-evaluation, it reviews the criteria for skills, experience and diversity reflected in the Board’s membership and also reviews the Board’s process for identification, consideration, recruitment and nomination of prospective Board members.
David L. Porges, who was appointed to the Board in February 2020, is a nominee for election to the Board this year who previously has not been elected by the Company’s shareholders. Mr. Porges was identified to the Governance & Nominating Committee as an individual that the Governance & Nominating Committee might wish to consider as a potential candidate for Board service. Mr. Porges was interviewed by each of the members of the Governance & Nominating Committee and by Mr. Robo. The Governance & Nominating Committee then evaluated the qualifications, background and experience of Mr. Porges using the criteria set forth in the Governance Guidelines discussed above, noting in particular that Mr. Porges would provide expertise beneficial to the Company in the areas of operations and leadership in the energy industry as a
5
result of his experience as a senior leader of a publicly traded, integrated natural gas production and transportation business. Following the evaluation by the Governance & Nominating Committee, Mr. Porges was interviewed by the other members of the Board. The Governance & Nominating Committee then recommended Mr. Porges for appointment to the Board and the Board approved Mr. Porges’ appointment to the Board at its regularly scheduled February meeting.
Identifying and Evaluating Nominees for Directors
The Governance & Nominating Committee uses a variety of methods for identifying and evaluating nominees for director. The Governance & Nominating Committee periodically assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. Candidates may come to the attention of the Governance & Nominating Committee through current Board members, professional search firms, shareholders or other persons. Candidates are evaluated at regular or special meetings of the Governance & Nominating Committee and may be considered at any time during the year. TheWhen considering candidates for the Board, the Governance & Nominating Committee considers all nominee recommendations, including those from shareholders, in the same manner when considering candidates for the Board.manner. If any materials are provided by a shareholder in connection with the nomination of a director candidate, suchthe materials are provided to the Governance & Nominating Committee. The Governance & Nominating Committee also reviews materials
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provided by professional search firms or other parties. In evaluating nominations, the Governance & Nominating Committee seeks to achieve a diverse balance of knowledge, experience and capability.
Director Resignation Policy
Under the NextEra Energy, Inc. Amended and Restated Bylaws (the “Bylaws”), in an uncontested election, directors are elected by a majority of the votes cast. The Board has adopted a Policy on Failure of Nominee Director(s) to Receive a Majority Vote in an Uncontested Election (“Director Resignation Policy”), the effect of which is to require that, in any uncontested director election, any incumbent director who is not elected by the required vote shallmust offer to resign and the Board shallwill determine whether or not to accept the resignation within ninety90 days of the certification of the shareholder vote. The Company will report the action taken by the Board under the Director Resignation Policy in a publicly-available forum or document. The Bylaws provide that, in a contested election, director nominees are elected by a plurality of the votes cast.
Director Qualifications
The Governance Guidelines and the Governance & Nominating Committee Charter identify Board membership qualifications, including experience, skills and attributes, that are considered by the Governance & Nominating Committee in recommendingnon-employee nominees for Board membership. In addition to the membership qualifications identified in the Governance Guidelines, no person will be considered for Board membership who is an employee or director of a business in significant competition with the Company or of a major or potentially-major customer, supplier, contractor, counselor or consultant of the Company, or an executive officer of a business where a Company employee-director serves on the board of such other business’s board.business.
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The Board views itself as a cohesive whole consisting of members who together serve the interests of the Company and its shareholders. The following matrix highlights the experience, qualifications, attributes and skills of the director nominees. This high-level summary is not intended to be an exhaustive list and information regarding the experience and qualifications of each individual director nominee is set forth in the biographies which follow.
Summary of Director Qualifications and Experience
| Public Company CEO Experience | ||
| Financial Industry Experience and Leadership | Four Directors | |
| Strategy Expertise | ||
| Operations Management and Leadership | ||
| International Experience | ||
| Utility / Regulated Industry Leadership | Three Directors | |
| Political / Legislative Experience | Two Directors | |
| Energy Industry Leadership | ||
| Engineering & Construction Industry Experience | Six Directors | |
| Nuclear Operations Leadership | Two Directors | |
| Mergers & Acquisitions Experience | Seven Directors | |
| Information Technology / Cyber Experience and Leadership | Two Directors | |
| Investor Relations Management | ||
| Marketing / Sales / Customer Service Experience and Leadership | ||
| Diversity | ||
| New Business Development | Nine Directors | |
| Human Resources Development | Thirteen Directors | |
57
Sherry S. Barrat
Age:
Director Since:1998
Public Company Boards: • Arthur J. Gallagher & Company (since 2013) • Independent trustee or director of certain
| Biography Mrs. Barrat retired in 2012 as vice chairman of Northern Trust Corporation, a financial holding company headquartered in Chicago, Illinois, where she was also a member of Northern Trust’s Management Committee. Prior to being appointed as vice chairman in March 2011, Mrs. Barrat had served as president of Personal Financial Services for Northern Trust since January 2006. She served as chairman and chief executive officer of Northern Trust Bank of California, N.A.
Qualifications Mrs. Barrat has 38 years of leadership experience in financial services, including her service through July 1, 2012 as vice chairman, and her previous service as president of Personal Financial Services (one of four principal business units) | |
James L. Camaren
Age:
Director Since:2002 | Biography Mr. Camaren is a private investor. Until May 2006, he was chairman and chief executive officer of Utilities, Inc.
Qualifications Mr. Camaren has 19 years of leadership experience with a large, regulated investor-owned utility. During the years he served as chairman and chief executive officer, the utility had customer growth at a rate that exceeded the industry average and acquired and integrated over 40 utilities. In addition, Mr. Camaren has experience in managing capital expenditures, environmental compliance, regulatory affairs and investor relations. | |
68
Kenneth B. Dunn
Age:
Director Since:2010 | Biography Mr. Dunn is Emeritus Professor of Financial Economics at the David A. Tepper School of Business at Carnegie Mellon University (the “Tepper School”). He also served as Dean of the Tepper School from July 2002 to January 2011. Before his service in that position, Mr. Dunn had a16-year career managing fixed income portfolios at Miller Anderson & Sherrerd and its successor by merger, Morgan Stanley Investment Management, where he served as a managing director and asco-director of the U.S. Core Fixed Income and Mortgage teams. Since 2014, he has been a managing member of Tier Capital LLC and, since 2015, chief executive officer of its subsidiary, Traditional Mortgage Acceptance Corporation, which originates, acquires and services mortgage loans and issues Government National Mortgage Association (GNMA) mortgage-backed securities.
Qualifications Mr. Dunn has extensive experience in investment and asset and risk management gained through his16-year career at Miller Anderson & Sherrerd and its successor by merger, Morgan Stanley Investment Management. In addition, he is an expert in financial economics, having taught that subject as a professor at, and Dean of, the Tepper School. Mr. Dunn has a Ph.D. in industrial administration. | |
Naren K. Gursahaney
Age:
Director Since:2014
Public Company Boards: • The ADT Corporation (2012 – 2016) • ServiceMaster Global Holdings, Inc. (since | Biography Mr. Gursahaney is retired. He served as the president and chief executive officer, and a member of the Board of Directors, of The ADT Corporation (“ADT”), a provider of security systems and services, from September 2012 until its acquisition by affiliated funds of Apollo Global Management LLC in May 2016. Prior to ADT’s separation from Tyco International Ltd. (“Tyco”) in September 2012, Mr. Gursahaney served as president of Tyco’s ADT North American Residential business segment and was the president of Tyco Security Solutions, then a provider of electronic security to residential, commercial, industrial and governmental customers and the largest operating segment of Tyco. Mr. Gursahaney joined Tyco in 2003 as senior vice president of operational excellence. He then served as president of Tyco Engineered Products and Services and president of Tyco Flow Control. Prior to joining Tyco, Mr. Gursahaney was president and chief executive officer of GE Medical Systems Asia, where he was responsible for the company’s sales and services business in the Asia-Pacific region. During his10-year career with GE, Mr. Gursahaney held senior leadership roles in services, marketing and information management.
Qualifications Mr. Gursahaney has extensive operations, strategic planning and leadership experience in global manufacturing and services businesses serving residential, commercial, industrial and governmental customers gained as the chief executive officer of a public company providing security systems and service. He also has extensive global operations, information technology and service experience gained as the president and chief executive officer of the Asia-Pacific division of a medical diagnostic and imaging manufacturer. He has a MBA from the University of Virginia and a Bachelor of Science in Mechanical Engineering from | |
79
Kirk S. Hachigian
Age:
Director Since:2013
Public Company Boards: • JELD-WEN (since 2014) • PACCAR, Inc. (since 2008) • Allegion plc (since 2013) | Biography Mr. Hachigian
Qualifications Mr. Hachigian has extensive leadership, operations and strategic planning experience gained through his prior service as the chairman, chief executive officer and president of a global, publicly-held manufacturer of electrical equipment and tools. He also has international leadership and operations experience gained through his prior service as the president and chief executive officer of the Asia-Pacific operations of a lighting products manufacturer and in key management positions in Singapore and Mexico. In addition, Mr. Hachigian has financial and risk oversight experience developed through his prior service on the audit committee of another public company and as a prior member of the board of the Houston branch of the Federal Reserve Bank of Dallas. He has a MBA in finance from the Wharton School of Business and a bachelor’s degree in engineering from the University of California (Berkeley). | |
Toni Jennings
Age:
Director Since:2007
Public Company Boards: • Brown & Brown, Inc. (since 2007) • Mid-America Apartment Communities, Inc. (since 2016) • Post Properties, Inc. (2013 – 2016)
| Biography Ms. Jennings has served since 2007 as chairman of the board of Jack Jennings & Sons, Inc., a family-owned construction business that provides general contractor, construction manager and design builder services. She served as the Lieutenant Governor of the State of Florida from March 2003 through December 2006. Prior to serving in that role, she was a member of the Florida Senate from 1980 until 2000, serving two consecutive terms as Senate President, and a member of the Florida House of Representatives from 1976 until 1980. Ms. Jennings served on the gubernatorial transition teams for Florida Governors Rick Scott and Ron DeSantis. From 1983 until she became Lieutenant Governor, she also served as president of Jack Jennings & Sons, Inc.
Qualifications Ms. Jennings has extensive legislative and political experience, gained through service for four years as Lieutenant Governor of the State of Florida and 24 years in the Florida legislature. She also served as a member of the transition teams of Florida | |
810
Amy B. Lane
Age:
Director Since:2015
Public Company Boards: • The TJX Companies, Inc. (since 2005) • GNC Holdings, Inc. (since 2011) • Trustee of Urban Edge Properties (since 2015) | Biography Ms. Lane retired in 2002 as managing director and group leader of the global Retailing Investment Banking Group of Merrill Lynch & Co., Inc. (“Merrill Lynch”), an investment banking firm. Prior to joining Merrill Lynch in 1997, she was a managing director at Salomon Brothers, Inc., an investment banking firm, where she founded and led the retail industry investment banking unit, having joined Salomon Brothers in 1989.
Qualifications Ms. Lane has 26 years of leadership experience with financial services, capital markets, finance and accounting, capital structure, and acquisitions and divestitures in the financial services industry, as well as extensive experience in management, leadership and strategy. Ms. Lane served as a managing director and group leader of the global Retailing Investment Banking Group at Merrill Lynch from 1997 until her retirement in 2002. In that role, she led and worked on mergers and acquisitions and equity and debt transactions for a wide range of major retailers. Prior to joining Merrill Lynch, she was a managing director at Salomon Brothers, Inc., which she joined in 1989 and where she founded and led the retail industry investment banking unit. Ms. Lane has a MBA from the Wharton School of Business. | |
David L. Porges Age:62 Director Since:February 2020 | Biography Mr. Porges was anon-employee member of the board of directors of Equitrans Midstream Corporation (“Equitrans”) from November 2018 through December 2019 and was the chairman of the board of Equitrans from November 2018 to July 2019. He joined EQT Corporation (“EQT”) in 1998 as senior vice president and chief financial officer and served as EQT’s CEO from April 2010 to April 2011 and as CEO and chairman from April 2011 to February 2017. From February 2017 to March 2018, Mr. Porges served as EQT’s executive chairman and as chairman and interim CEO from March 2018 to November 2018. Qualifications Mr. Porges has more than 20 years of leadership, finance, operations and mergers and acquisitions experience gained through his prior service as CEO and chairman of a publicly held energy industry company, as well as his prior service as the chief financial officer of that energy company. Mr. Porges also has capital markets, finance and merger and acquisition experience gained through his prior service with an investment bank concentrating on the energy industry. Mr. Porges has a MBA from Stanford University. | |
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James L. Robo
Age:
Director Since:2012
Public Company Boards: • NextEra Energy Partners, LP (since 2017) • J.B. Hunt Transport Services, Inc. (since 2002, lead independent director since 2012) | Biography Mr. Robo has been chairman of the board since December 2013, and president and chief executive officer, and a director, of NextEra Energy since July 2012. He is also chairman of NextEra Energy’s subsidiary, FPL (which has no publicly-traded stock). Prior to his succession to the role of chief executive officer, he served as president and chief operating officer of NextEra Energy since 2006. Mr. Robo joined NextEra Energy as vice president of corporate development and strategy in March 2002 and became president of NextEra Energy Resources later in 2002. Mr. Robo is chairman of the board and chief executive officer of NextEra Energy Partners, LP (“NEP”), a publicly-traded limited partnership formed by the Company (and in which the Company owns an underlying approximate
Qualifications Mr. Robo, NextEra Energy’s chairman, president and chief executive officer, previously served as the Company’s vice president of corporate development and strategy, as president of NextEra Energy’s competitive energy subsidiary, NextEra Energy Resources, and as the Company’s chief operating officer. As a result of his service in his current and prior positions, Mr. Robo has extensive experience in operations, finance, strategic planning, risk management and mergers and acquisitions. He also has experience in financial and risk oversight, both through his position with the Company and his service as chairman of the audit committee of another public company, and in corporate governance, through his service as lead independent director and a member of the nominating and corporate governance committee of the board of that public company. Prior to joining NextEra Energy, Mr. Robo was president and chief executive officer of a major division of General Electric Capital Corporation, a subsidiary of General Electric Company (“GE”). He also served as chairman and CEO of GE Mexico and was a member of the GE corporate development team. Prior to joining GE, he was vice president of Strategic Planning Associates, a management consulting firm. Mr. Robo has a |
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Rudy E. Schupp
Age:
Director Since:2005
| Biography Mr. Schupp is retired. He served as president of Valley National Bancorp and chief banking officer of Valley National Bank until his retirement in January 2018. He previously served as president—Florida Division of Valley National Bank from November 2014 until January 2017 and as president and chief executive officer, and a director, of 1st United Bank, a banking corporation headquartered in Boca Raton, Florida, and chief executive officer and a director of its publicly-held parent company, 1st United Bancorp, Inc., frommid-2003 until its sale to Valley National in November 2014. He was the chairman, president and chief executive officer of Republic Security Bank headquartered in West Palm Beach, Florida from 1984 until March 2001, and the chairman, president and chief executive officer of its parent company, Republic Security Financial Corporation (“RSFC”), from 1985 until March 2001, when RSFC was acquired by Wachovia Corporation. Following the acquisition, he served as Chairman of Florida Banking of Wachovia Bank, N.A. until December 2001. From March 2002 until March 2003, Mr. Schupp served as managing director of Ryan Beck & Co., an investment banking and brokerage company. He served as a director of the Federal Reserve Bank of Atlanta from January 2007 to December 2014.
Qualifications Mr. Schupp has 34 years of leadership experience as a chief executive officer of both public and private banking organizations and has experience in reviewing the financial statements of complex businesses, | |
John L. Skolds
Age:
Director Since:2012
| Biography Mr. Skolds is retired. He served as executive vice president of Exelon Corporation, an energy service provider (“Exelon”), and president of Exelon Energy Delivery from December 2003 until his retirement in September 2007. He also served as president of Exelon Generation from March 2005 to September 2007. From March 2002 to December 2003, Mr. Skolds served as senior vice president of Exelon and president and chief nuclear officer of Exelon Nuclear. Mr. Skolds was a director of Constellation Energy Group from 2007 until its merger with Exelon in March 2012.
Qualifications Mr. Skolds has extensive leadership experience in the operation and management of nuclear power generation facilities and utilities and in financial and strategic planning. He retired as executive vice president of Exelon, a utility services holding company, and president of Exelon Energy Delivery and Exelon Generation. Earlier in his career, Mr. Skolds worked at SCANA Corporation, an energy-based holding company, in a number of capacities, including president and chief operating officer of South Carolina Electric and Gas. Mr. Skolds also served on the boards of the Institute for Nuclear Power Operations and the Nuclear Energy Institute. Mr. Skolds is a graduate of the United States Naval Academy and spent over five years in the Navy where, among other duties, he operated nuclear submarines. Mr. Skolds also holds a MBA from the University of South Carolina. | |
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William H. Swanson
Age:
Director Since:2009
Public Company Boards: • The TJX Companies, Inc. (2015 – 2016)
| Biography Mr. Swanson is the retired chairman of the board and chief executive officer of Raytheon Company (“Raytheon”), a technology and innovation leader specializing in defense, security and civil markets throughout the world. He was Raytheon’s chief executive officer from July 2003 to March 2014 and served as chairman of the board from January 2004 until his retirement in September 2014. Before assuming those positions, he served as president of Raytheon from July 2002 to May 2004, as executive vice president of Raytheon and president of its Electronic Systems division from January 2000 to July 2002, and as executive vice president of Raytheon and chairman and chief executive officer of Raytheon Systems Company from January 1998 to January 2000. Mr. Swanson joined Raytheon in 1972 and held a wide range of leadership positions with the company.
Qualifications Mr. Swanson has 42 years of leadership experience at Raytheon, a complex public company with international operations. Mr. Swanson served 10 years as Raytheon’s chairman of the board and 10 years as its chief executive officer. He has extensive experience in strategic planning, operations and management, global business operations and complex technologies. He holds a bachelor’s degree in industrial engineering from California Polytechnic State University. | |
Age:
Director Since:
| Biography Mr.
Qualifications Mr. | |
Unless you specify otherwise in your voting instructions, your proxy will be votedFORelection of each of the nominees.
The Board unanimously recommends a voteFOR the election of all nominees
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Proposal 2: Ratification of appointment of Deloitte & Touche LLP as NextEra Energy’s independent registered public accounting firm for 20182020
The Audit Committee appoints the Company’s independent registered public accounting firm. It has appointed Deloitte & Touche LLP (“Deloitte & Touche”) as the independent registered public accounting firm for the fiscal year ending December 31, 2018. In order2020 to ensure continuing auditor independence,audit the Audit Committee periodically considers whether there should be a regular rotationaccounts of the independent registered public accounting firm. Further, in conjunction withCompany and its subsidiaries, as well as to provide its opinion on the mandated rotationeffectiveness of the auditing firm’s lead engagement partner, the Audit Committee is directly involved in the selection of Deloitte & Touche’s new lead engagement partner.Company’s internal control over financial reporting. The members of the Audit Committee and the Board believe that the continued retention of Deloitte & Touche as the company’sCompany’s independent registered public accounting firm is in the best interests of the Company and its shareholders.
Although ratification is not required, the Board is submitting the selection of Deloitte & Touche to shareholders as a matter of good corporate practice. If the shareholders do not ratify the appointment, the appointment will be reconsidered by the Audit Committee, although the Audit Committee may nonetheless decide to retaincontinue the retention of Deloitte & Touche as NextEra Energy’s independent registered public accounting firm.firm for 2020. Even if the appointment is ratified, the Audit Committee in its discretion may terminate the service of Deloitte & Touche at any time during the year if it determines that the appointment of a different independent registered public accounting firm would be in the best interests of NextEra Energy and its shareholders. Additional information on audit-related matters may be found beginning on page 2934 of this proxy statement.
Representatives of Deloitte & Touche are expected to be present at the annual meeting and will have an opportunity to make a statement and respond to appropriate questions from shareholders at the meeting.
Unless you specify otherwise in your voting instructions, your proxy will be votedFORratification of appointment of Deloitte & Touche as NextEra Energy’s independent registered public accounting firm for 2018.2020.
The Board unanimously recommends a voteFOR ratification of appointment of Deloitte & TouchTouche LLP as NextEra Energy’s independent registered public accounting firm for 20182020
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Proposal 3: Approval, bynon-binding advisory vote, of NextEra Energy’s compensation of its named executive officers as disclosed in this proxy statement
The Company is asking shareholders to cast an advisory vote on the compensation of the Company’s named executive officers (“NEOs”), which is commonly called a“say-on-pay” vote, pursuant to section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Although this vote is not binding, it will provide information to the Compensation Committee regarding investor sentiment about the Company’s executive compensation philosophy, policies and practices, which the Compensation Committee will be able to consider when making future determinations regarding NEO compensation. The Company plans to give shareholders the opportunity to cast an advisory vote on this matter annually. Following the vote on this proposal, the next opportunity will occur in connection with the Company’s 20192021 annual meeting.
The Company asks shareholders to approve this proposal by approving the followingnon-binding resolution: “RESOLVED, that the shareholders of NextEra Energy, Inc. approve, on an advisory basis, the compensation paid to the Company’s NEOs, as disclosed in this proxy statement for the 20182020 annual meeting of shareholders, including theCompensation Discussion & Analysis section, the compensation tables and the accompanying narrative discussion.discussion, pursuant to the compensation disclosure rules of the Securities and Exchange Commission (Item 402 of Regulation S-K).”
The fundamental objective of NextEra Energy’s executive compensation program is to motivate and reward actions that will increase shareholder value, particularly over the longer term. The Compensation Committee believes the Company’s executive compensation program reflects a strongpay-for-performance philosophy and is well-aligned with the short-term and long-term interests of shareholders and other important Company stakeholders, including customers and employees. A significant portion of each NEO’s total compensation opportunity is performance-based and carries both upside and downside potential.
TheExecutive Compensation section of thethis proxy statement, beginning on page 32,37, provides a detailed discussion of the Company’s compensation program for its NEOs. The discussion reflects that NextEra Energy’s compensation program has been achievingachieves its objective.objectives. For example, the chart below compares the Company’s TSR for the1-,3-,5- and10-year periods ended December 31, 20172019 to the TSRs of the S&P 500 Electric Utilities Index, the S&P 500 Utilities Index, the UTY and the S&P 500. NextEra Energy outperformedall of these indices over all of the periods shown. NextEra Energy’s outperformance over all of these periods in comparison to others in its industry, and over the1-, 3-,5-,3-,5- and10-year periods in comparison to the S&P 500, was substantial.
NextEra Energy Total Shareholder Return Through12-31-1712-31-19 vs. Various Indices(1)
1-year TSR
| 3-year TSR
| 5-year TSR
| 10-year TSR
| |||||||||||||||||||||||||||||||||
| 1-year TSR | 3-year TSR | 5-year TSR | 10-year TSR | |||||||||||||||||||||||||||||||||
NextEra Energy | 34 | % | 60 | % | 162 | % | 221 | % | 43 | % | 119 | % | 161 | % | 530 | % | ||||||||||||||||||||
S&P 500 Electric Utilities Index, total return | 11 | % | 21 | % | 71 | % | 63 | % | 27 | % | 47 | % | 60 | % | 182 | % | ||||||||||||||||||||
S&P 500 Utilities Index, total return | 12 | % | 24 | % | 81 | % | 84 | % | 26 | % | 48 | % | 63 | % | 205 | % | ||||||||||||||||||||
UTY, total return | 13 | % | 24 | % | 78 | % | 78 | % | 27 | % | 48 | % | 63 | % | 192 | % | ||||||||||||||||||||
S&P 500, total return | 22 | % | 38 | % | 108 | % | 126 | % | 32 | % | 53 | % | 74 | % | 257 | % | ||||||||||||||||||||
| (1) | Source: FactSet Research Systems Inc.; except UTY, source: Bloomberg |
Unless you specify otherwise in your voting instructions, your proxy will be votedFORapproval, bynon-binding advisory vote, of NextEra Energy’s compensation of its NEOs as disclosed in this proxy statement.
The Board unanimously recommends a voteFOR approval, bynon-binding advisory vote, of NextEra Energy’s compensation of its named executive officers as disclosed in this proxy statement
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In accordance with Securities and Exchange Commission (“SEC”) regulations, the text of thethis shareholder proposalsproposal and supporting statementsstatement appear exactly as received by the Company. The shareholder proposalsproposal may contain assertions about the Company or other matters that the Company believes are incorrect, but the Company has not attempted to refute any of those assertions. All statements contained in the shareholder proposal and supporting statement are the sole responsibility of the proponent. The Company disclaims responsibility for the content of the proposal and the supporting statement.
The Company will provide the name, address and share ownership information of the proponent of Proposal 4 promptly upon receipt by the Corporate Secretary of an oral or written request for that information.
Proposal 4—Political Contributions Disclosure
Resolved, that the shareholders of NextEra Energy, Inc. (“NextEra” or “Company”) hereby request that the Company provide a report, updated semiannually, to disclose the Company’s:
| 1. | Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to: (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or: (b) influence the general public, or any segment thereof, with respect to an election or referendum. |
| 2. | Monetary andnon-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including: |
| a. | The identity of the recipient as well as the amount paid to each; and |
| b. | The title(s) of the person(s) in the Company responsible for decision-making. |
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
Supporting Statement
Long-term shareholders of NextEra support transparency and accountability in corporate electoral spending. This includes any activity under the Internal Revenue Code considered intervention in a political campaign, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.
Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which declared: “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
Publicly available records show NextEra has contributed at least $11,870,000 in corporate funds since the 2010 election cycle (CQMoneyLine: http://moneyline.cq.com; National Institute on Money in State Politics: http://www.followthemoney.org).
However, relying on publicly available data cannot provide a complete picture of the Company’s electoral spending. For example, the Company’s payments to trade associations – payments that may be used for election-related activities – are undisclosed and unknown. This proposal asks the Company to disclose all of its electoral spending, including payments to trade associations and othertax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies, including Edison International, Dominion Resources Inc., and Sempra Energy, which present this information on their public websites.
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The Company’s Board and shareholders need comprehensive disclosure to fully evaluate the use and potential risk of corporate assets in elections.
THEREFORE, we urge your support for this critical governance reform.
Political Contributions Disclosure—Proposal 4
The Board unanimously recommends a voteAGAINST the foregoing proposal for the following reasons:
The Board believes that adopting the shareholder proposal (the “Proposal”) would not be in the best interests of the Company or its shareholders.
The Company’s political engagement significantly benefits its shareholders and customers.
The Company’s active political engagement strategy helps support constructive political and regulatory environments throughout the U.S. and creates long-term shareholder value. In Florida, a constructive regulatory environment is a key foundation to the Company’s regulated utility strategy of further improving itsbest-in-class customer value proposition through smart capital investments that also benefit shareholders. This strategy has resulted in Florida Power & Light Company (“FPL”) delivering a customer bill that is approximately 30% below the national average and among the lowest in the nation, while providing industry leading reliability. In addition to saving customers more than $10 billion in fuel costs since 2001, FPL’s investments into highly efficient generation have reduced FPL’s CO2 emissions rate by more than 35% since 2001, resulting in an emissions profile that is more than 30% below the national average. At NextEra Energy Resources, local, state and federal regulations govern every aspect of the Company’s renewable energy development business. Successful political engagement has supported the Company in becoming the world’s leading generator of energy from the wind and the sun. Without the Company’s active political engagement, it is likely that overall renewable development within the U.S. would have been significantly lower than current levels. The Company believes that without active political engagement it would be less successful in advancing these corporate strategies and, as a result, reduce long-term shareholder value creation.
In response to shareholder feedback, in October 2019, the Company implemented the Proposal’s key objectives.
The Company received a substantially identical shareholder proposal at its 2019 annual meeting of shareholders (“2019 annual meeting”). That proposal received the support of approximately 48.7% of the votes cast. As discussed above in theGovernance Highlights section at page 4, following the Company’s 2019 annual meeting, the Company engaged in an extensive shareholder outreach program to better understand shareholder views on political expenditures and associated disclosures. During its outreach program, the Company sought to engage with the Company’s top 50 shareholders, representing more than 52% of the Company’s outstanding shares. The Company ultimately engaged with 25 of these shareholders, representing more than 40% of the Company’s outstanding shares. In response to feedback gathered from its outreach efforts, as described in more detail below, the Company enhanced its Political Engagement Policy (the “Policy”), which governs the Company’s political contributions and expenditures. The Company also increased its disclosure of its political contributions and expenditures. As a result of these enhancements, the Company has implemented the key objectives of the Proposal. As stated in the Proponent’s supporting statement, the Proposal seeks greater transparency and accountability with respect to the Company’s political expenditures. The enhancements described below deliver greater transparency and accountability with respect to the Company’s political expenditures and, on several topics, provide disclosure above that requested by the Proposal. The Company believes that any additional disclosure or processes would not add significant value, would not be a prudent use of Company resources and would also be detrimental to the best interests of the Company and its shareholders.
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The Company’s Political Engagement Policy has been enhanced to provide formal oversight of political expenditures by the Governance & Nominating Committee of the Board.
During the outreach process, shareholders expressed a primary concern of ensuring that there was formalized Board oversight of the Company’s engagement in the political process. In response, the Company formalized board-level oversight of the Company’s political expenditures and disclosures. The Company enhanced its Policy (available on its website3), giving specific responsibility to the Board’s Governance and Nominating Committee, composed entirely of independent directors, to review at least annually the following political activities: contributions by The NextEra Energy, Inc. Political Action Committee (“Company PAC”); contributions by the Company to candidates and committees; the Company’s contributions to all U.S.tax-exempt organizations that are primarily engaged in political activities; and the Company’s significant trade association memberships and dues.
Trade Association membership information is now provided on the Company’s website and the Company conducts an annual review of trade association memberships to ensure overall alignment with Company strategy.
The Company now discloses on its website trade association dues in excess of $25,000 and the portion allocable to federal lobbying activities. Certain shareholders also indicated that oversight should include a review of the Company’s memberships in trade associations to ensure that the trade associations’ public policy positions or participation in political processes are appropriately aligned with the Company’s corporate strategy. The enhanced Policy requires an annual review of significant trade association memberships by the Company’s Vice President, Government Affairs-Federal to ensure that trade association participation aligns with the Company’s strategy. Any policy positions that may be in conflict with the Company’s strategy and objectives will be reviewed with the Chairman and Chief Executive Officer of the Company to ensure that participation in these organizations continues to provide an overall benefit to the Company.
Extensive disclosure of political engagement activities has been added to the Company’s website.
Also in response to shareholder feedback, the Policy was amended to require the Company “to publicly disclose on its website, within 180 days after the end of each calendar year, its annual Significant Trade Association Dues, its expenditures for federal and state lobbying and contributions from the Company PAC, among other pertinent information.” As a result, the Company now discloses on its website4 specific contributions by the Company PAC to federal candidates, federal committees, state candidates and state committees; Company lobbying reports submitted for state lobbying activities; federal lobbying disclosures; links to Federal Election Commission and Lobbying Disclosure Act reports; and links to over 30 state lobbying registration commissions. Although publication of much of this information was previously publicly available, the Company website now aggregates this wide-ranging information, making it more easily accessible and viewable by shareholders. The additional disclosure goes above and beyond that requested by the Proposal.
The Company’s political expenditures are regulated by state and U.S. federal laws.
The Company maintains a rigorous compliance process to ensure that its political activities are lawful, properly disclosed and aligned with its Code of Business Conduct & Ethics. Political expenditures also are subject to comprehensive regulation by federal, state and local governments with detailed disclosure requirements, including requirements to file reports with appropriate state and federal agencies on lobbying-related activities and expenditures. The Company is committed to compliance with all these requirements.
| 3 | http://www.investor.nexteraenergy.com/~/media/Files/N/NEE-IR/corporate-governance/political-engagement-policy/2019/NextEra%20Energy%20Political%20Engagement%20Policy%2010-2019.pdf |
| 4 | http://www.investor.nexteraenergy.com/corporate-governance/corporate-political-engagement |
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Additional detailed disclosure of political expenditures or too frequent disclosure could hinder the Company’s ability to pursue its business and strategic objectives.
Subjecting the Company to additional disclosure requirements could hinder its ability to pursue its business and strategic objectives. The development cycle for clean and renewable energy projects takes many years. Additional or more frequent disclosure would clearly indicate to competitors and opponents of energy projects where and what kind of projects the Company intends to develop and operate. This could prevent or greatly hinder the Company’s development and operating goals and objectives and, consequently, be detrimental to shareholders.
In considering and approving the enhanced Policy, the Governance & Nominating Committee balanced shareholder feedback on political expenditure disclosure with the Company’s need to effectively pursue its strategic objectives. The Company believes that the enhanced Policy approved by the Governance & Nominating Committee in October 2019 strikes an appropriate balance between the shareholder feedback discussed above and the Company’s ability to maintain its effectiveness as a participant in political processes at the local, state and federal levels.
The Company believes that its responsible participation in the political process and its associated prudent expenditures are in the best interests of the Company, its shareholders and its customers.
Unless you specify otherwise in your voting instructions, your proxy will be votedAGAINST proposal 4.
For the above reasons, the Board unanimously recommends a voteAGAINST this proposal
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In accordance with Securities and Exchange Commission (“SEC”) regulations, the text of this shareholder proposal and supporting statement appear exactly as received by the Company. The shareholder proposal may contain assertions about the Company or other matters that the Company believes are incorrect, but the Company has not attempted to refute all of those assertions. All statements contained in the shareholder proposalsproposal and supporting statementsstatement are the sole responsibility of the proponents.proponent. The Company disclaims responsibility for the content of the proposalsproposal and the supporting statements.statement.
Myra Young, 9295 Yorkship Court, Elk Grove, California, who represented that she held 100 sharesThe Company will provide the name, address and share ownership information of the Company’s common stock asproponent of Proposal 5 promptly upon receipt by the date this proposal was submitted, has given the Company noticeCorporate Secretary of an oral or written request for that her representative, John Chevedden, intends to present this proposal at the annual meeting.information.
Proposal 4—5—Right to Act by Written Consent
Resolved, NextEra Energy Inc. (NEE)(“NEE” or “Company”) shareholders request that our board of directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consent is to be consistent with applicable law and consistent with giving shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholderlaw, including the ability to initiate any topic for written consent consistent with applicable law.
Supporting Statement: Statement
Shareholder rights to act by written consent and to call a special meetingmeetings are twooften complimentary ways to bring an important matterurgent matters to the attention of both management and shareholders outside the annual meeting cycle. This is important because there could be
Many boards and investors assume a false equivalency between rights of written consent and special meetings. However, any shareholder, regardless how many (or few) shares she owns, can seek to solicit written consents on a proposal.
By contrast, calling a special meeting may require a15-monthstwo-step between annual meetings.
process. A shareholder right to act by written consentwho does not own the minimum shares required must first obtain the support of other shareholders. Once that meeting is one method to equalize our restricted provisions forcalled, the shareholder must distribute proxies asking shareholders to call avote on the proposal to be presented at the special meeting. For instance it takesThistwo-step process can take more time and expense than theone-step process of soliciting written consents, especially at our Company, which allows only investors with 20% of shareholders at our companyoutstanding shares to call a special meeting, wheninstead of 10%, as allowed by many companies allow 10%companies.
Blackrock’s proxy voting guidelines for 2019 include the following:
In exceptional circumstances and with sufficiently broad support, shareholders should have the opportunity to raise issues of substantial importance without having to wait for management to schedule a meeting. We therefore believe that shareholders should have the right to do so.solicit votes by written consent provided that: 1) there are reasonable requirements to initiate the consent solicitation process (in order to avoid the waste of corporate resources in addressing narrowly supported interests); and 2) shareholders receive a minimum of 50% of outstanding shares to effectuate the action by written consent.
This proposal topic won majority shareholder support at 13 major companies in a single year. This included 67% support at both Allstate and Sprint. Last year theThe topic won majority votes recently at Western Union, Ryder System,Kansas City Southern, Flowserve, JetBlue, United Rentals, Capital One Financial, Cigna, Applied Materials, Nuance Communications, Netflix, Newell Brands, Gillead Sciences, L3 Technologies, Eastern Chemical Company, and BorgWarner Inc.HP.
HundredsOur Company should join the hundreds of major companies that enable shareholders to act by written consent, including 64% of the S&P 500 and 55% of the S&P 1500.consent.
Increase Shareholder Value
Vote for Right to Act by Written Consent—Proposal 45
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The Board unanimously recommends a voteAGAINST the foregoing proposal for the following reasons:
The Board believes that adopting the shareholder proposal would not be in the best interests of the Company or its shareholders.
NextEra Energy provides opportunities for shareholders to participate in proposed actions through annual meetings and special meetings.
Under the Company’s Bylaws, shareholders may present items for consideration at an annual or special meeting of shareholders. Shareholders may propose items for business at the Company’s annual meeting by following the procedures set forth in the Company’s governing documents. Shareholders owning at least
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20% of the Company’s common stock may call a special meeting in between annual meetings. Shareholder meetings allow all shareholders to consider, discuss and vote on pending shareholder actions. Additionally, shareholder meetings provide that accurate and complete information about the proposed action is widely distributed in a proxy statement before the meeting, which promotes a well-informed discussion and consideration of the merits of the proposed action.
NextEra Energy also provides shareholders the opportunity to nominate directors through proxy access.
The Company recently amended its Bylaws to permit, on specified terms, a shareholder, or a group of up to 20 shareholders, owning continuously for at least three years shares of NextEra Energy representing an aggregate of at least 3% of the Company’s outstanding common shares to nominate and include in the Company’s proxy materials director nominees for up to 20% of the current membership of the Board or two directorships, whichever is greater. This provides yet another way for shareholders to participate in the governance of the Company.
Action by written consent is not an effective means for shareholders to express their views.
Action by written consent permits a small group of shareholders with no fiduciary duties to other shareholders to initiate action with no prior notice either to other shareholders or to the Company. This prevents all shareholders from having an opportunity to deliberate in an open and transparent manner and to consider arguments for and against any action, including the Company’s position. Additionally, proponents of an action by written consent do not need to satisfy any holding requirements with respect to the Company’s common stock. This would allow shareholders engaging in short-term speculation to potentially determine the outcome of any particular issue. Such shareholders may not act in the interests of longer-termlong-term holders of the Company’s common stock.
NextEra Energy actively engages with shareholders in order to provide an open and constructive forum for dialogue.
The Company’s shareholder engagement efforts allow the Company to better understand our shareholder’sshareholders’ priorities and perspectives and enable the Company to effectively address the issues that matter most to its shareholders. The Company values the input and insights of its shareholders and is committed to continued engagement. In 20172019 alone, the Company held more than 400 meetings or calls with 350more than 370 different institutional investors.
NextEra Energy has an established process by which shareholders may communicate with the Board.
In addition to annual and special meetings, shareholders have other avenues for raising important matters with the Board. The Company has procedures in place that provide its shareholders with the opportunity to communicate directly with members of the Board, including the independent Lead Director, as described in this proxy statement.
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NextEra Energy has strong corporate governance practices in place.
In addition to providing for shareholders’ right to call special meetings, the Company has an annually-elected Board, a majority voting standard for election of directors in uncontested elections, an independent Lead Director and proxy access bylaw provisions as described above. The Company’s governance practices are more fully described inGovernance Highlights of this proxy statement.
Unless you specify otherwise in your voting instructions, your proxy will be votedAGAINST proposal 4.
For the above reasons, the Board unanimously recommends a voteAGAINST this proposal
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The Comptroller of the State of New York, Thomas P. DiNapoli, 59 Maiden Lane, 30th Floor, New York, NY 10038, is the trustee of the New York State Common Retirement Fund (the “Fund”) and has given the Company notice that he intends to present this proposal at the annual meeting on behalf of the Fund. The Fund represented that it held a total of 1,410,600 shares of common stock as of the date the proposal was submitted.
Proposal 5—Political Contributions Disclosure
Resolved, that the shareholders of NextEra Energy Inc. (“NextEra” or “Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:
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The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
Supporting Statement
As long-term shareholders of NextEra, we support transparency and accountability in corporate political spending. This includes any activity considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.
Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010Citizens United decision: “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
Publicly available records show NextEra has contributed at least $12.5 million in corporate funds since the 2010 election cycle. (CQ:http://moneyline.cq.com and National Institute on Money in State Politics:http://www.followthemoney.org)
However, relying on publicly available data does not provide a complete picture of the Company’s political spending. For example, the Company’s payments to trade associations that may be used for election-related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its political spending, including payments to trade associations and othertax-exempt organizations, which may be used for political purposes. This would bring our Company in line with a growing number of leading companies, including PG&E Corporation and Southern Company, which present this information on their websites.
The Company’s Board and its shareholders need comprehensive disclosure to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.
Political Contributions Disclosure—Proposal 5
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The Board unanimously recommends a voteAGAINST the foregoing proposal for the following reasons:
The Board believes that adopting the shareholder proposal would not be in the best interests of the Company or its shareholders.
The very same proposal from the same proponent was defeated by the Company’s shareholders at the 2015, 2016 and 2017 annual meetings of shareholders.
The same proposal was presented on behalf of the Fund at the Company’s 2015, 2016 and 2017 annual meetings of shareholders and the Company’s shareholders rejected this proposal with 60.4%, 57.3% and 58.8%, respectively, of votes cast voting against the proposal.
NextEra Energy recently updated its website to provide additional information related to political contributions.
The Company updated its website to place filed lobbying reports directly on the Company’s website. As a result, much of the information requested in the shareholder proposal is now available directly on the Company’s website. The Company also added additional navigation links to provide easier access to the political contributions policy and information.
NextEra Energy needs to be an effective participant in the legislative and regulatory process.
The Company is closely regulated and subject to legislation that can impact the Company’s operations and profitability. The Board believes that it is in the best interests of the Company’s shareholders for NextEra Energy to be an effective participant in the political process. Laws and policies enacted and adopted by federal, state and local authorities can have a significant impact on the Company and its customers, employees and shareholders. NextEra Energy’s active participation in political processes and public policy discussions is appropriate to ensure that public officials are informed about key issues that affect the Company’s interests and those of its customers, employees and shareholders and of the communities the Company serves.
NextEra Energy already has a Political Contributions Policy and its political contributions are regulated by the government.
NextEra Energy maintains a rigorous compliance process to ensure that the Company’s political activities are lawful, properly disclosed and aligned with its Code of Business Conduct & Ethics. Political contributions are also subject to comprehensive regulation by federal, state and local governments with detailed disclosure requirements, including requirements to file reports with appropriate state and federal agencies on lobbying-related activities and expenditures. NextEra Energy is committed to compliance with all such applicable laws.
The proposal is unnecessary and duplicative because NextEra Energy’s political contributions are already subject to extensive disclosure requirements.
NextEra Energy’s publicly available Political Contributions Policy discloses the process for and the titles of the individuals responsible for authorizing contributions pursuant to this policy. NextEra Energy already reports corporate lobbying-related activities and expenditures as required to appropriate federal, state and local agencies. Information about the Political Contributions Policy and NextEra Energy’s political action committee (“PAC”) contributions and current lobbying activities can be found on the Company’s website athttp://www.investor.nexteraenergy.com/corporate-governance/political-engagement-policy and in reports filed with various state and federal agencies, which are also available through links on the Company’s website.
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Adopting the proposal would not be the best use of NextEra Energy’s resources because adequate disclosure already exists.
Since disclosure of the Company’s policies and procedures regarding lobbying activities, business associations and PAC contributions are already readily available to the public and Company shareholders, the Company believes that the additional reports requested in the proposal could result in an unnecessary and unproductive use of the Company’s resources.
Additional disclosure requirements could hinder the Company’s ability to pursue its business and strategic objectives.
Subjecting the Company to additional disclosure requirements could hinder the Company’s ability to pursue its business and strategic objectives. Such additional disclosure would make it easier for competitors and others to discern the Company’s public policy and political strategies and implement strategies opposed to the Company’s public policy goals, which could prevent the achievement of such goals and negatively affect the Company, its operations and results. NextEra Energy believes that its responsible participation in the political process and its prudent expenditures in connection with such participation are in the best interests of the Company, its shareholders and its customers.
Unless you specify otherwise in your voting instructions, your proxy will be votedAGAINST proposal 5.
For the above reasons, the Board unanimously recommends a voteAGAINST this proposal
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Information About NextEra Energy and Management
Section 16(a) Beneficial Ownership Reporting Compliance
The Company’s directors and executive officers are required to file initial reports of ownership and reports of changes of their beneficial ownership of NextEra Energy common stock with the SEC pursuant to Section 16(a) of the Exchange Act. Based solely upon a review of these filings and written representations from the directors and executive officers that no other reports were required of them, the Company believes that all required filings were timely made in 2017.2019.
The Company’s Security Trading Policy
The Company’s Security Trading Policy (the “Trading Policy”) applies to Directors and officers of the Company and prohibits hedging transactions with respect to securities of the Company. The Trading Policy provides in relevant part as follows: “Additional Prohibited Transactions. The Company considers it improper and inappropriate for any Company insider to engage in short-term or speculative transactions in the Company’s securities. It therefore is the Company’s policy that insiders may not engage in any of the following transactions: …Hedging Transactions. Certain forms of hedging or monetization transactions with respect to the Company’s securities, such as prepaid variable forwards, equity swaps and collars, allow an insider to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the insider to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the insider may no longer have the same objectives as the Company’s other shareholders. Therefore, these transactions are prohibited under this Policy….”
Common Stock Ownership of Certain Beneficial Owners and Management
The following table shows the beneficial ownership of NextEra Energy common stock as of December 31, 20172019 by the only persons known by the Company to own beneficially more than 5% of the outstanding shares of the Company’s common stock based on 471,436,476489,432,876 shares outstanding as of March 26, 2018.23, 2020.
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | Amount and Nature of Beneficial Ownership | Percent of Class | |||||||||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055(1) | 38,285,470(1) | 8.12 | % | ||||||||||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355(2) | 35,521,481(2) | 7.53 | % | ||||||||||||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355(1) | 45,282,270(1) | 9.25% | |||||||||||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055(2) | 40,313,416(2) | 8.24% | |||||||||||||||
State Street Corporation State Street Financial Center One Lincoln Street Boston, MA 02111(3) | 23,822,078(3) | 5.05 | % | 26,728,768(3) | 5.46% | ||||||||||||
| (1) | This information has been derived from a statement on Schedule 13G/A of The Vanguard Group, filed with the SEC on February 10, 2020. As of December 31, 2019, The Vanguard Group, an investment adviser, reported that it had sole dispositive power with respect to 44,340,288 shares reported as beneficially owned; shared dispositive power with respect to 941,982 shares reported as beneficially owned; sole voting power as to 847,161 shares reported as beneficially owned; and shared voting power as to 264,542 shares reported as beneficially owned. |
| (2) | This information has been derived from a statement on Schedule 13G/A of BlackRock, Inc., filed with the SEC on February |
|
| (3) | This information has been derived from a statement on Schedule 13G of State Street Corporation, filed with the SEC on February 14, |
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The table below shows the number of shares of NextEra Energy common stock beneficially owned as of March 26, 201823, 2020 by each of NextEra Energy’s directors (all of whom are nominees for director) and NEOs and by all directors and executive officers as a group. As of March 26, 2018,23, 2020, all directors and executive officers as a group beneficially owned less than 1% of NextEra Energy common stock. No shares are pledged as security.
| Common Stock Beneficially Owned | Phantom/Deferred Shares(4) | Common Stock Beneficially Owned
| Phantom/Deferred
| |||||||||||||||||||||||||||||
| Name | Shares Owned(1) | Shares Which May Be Acquired Within 60 Days(2) | Total Shares Beneficially Owned(3) | Shares Owned(1)
| Shares Which May Be
| Total Shares
| ||||||||||||||||||||||||||
Sherry S. Barrat | 29,901 | 2,586 | 32,487 | 14,319 | 26,729 | 2,716 | 29,445 | 15,043 | ||||||||||||||||||||||||
James L. Camaren | 32,800 | 0 | 32,800 | 7,025 | 36,330 | 0 | 36,330 | 7,380 | ||||||||||||||||||||||||
Kenneth B. Dunn | 16,460 | 0 | 16,460 | 0 | 17,990 | 0 | 17,990 | 0 | ||||||||||||||||||||||||
Naren K. Gursahaney | 3,780 | 2,570 | 6,350 | 0 | 5,310 | 2,570 | 7,880 | 0 | ||||||||||||||||||||||||
Kirk S. Hachigian | 6,560 | 0 | 6,560 | 0 | 8,090 | 0 | 8,090 | 0 | ||||||||||||||||||||||||
Toni Jennings | 20,100 | 0 | 20,100 | 0 | 21,630 | 0 | 21,630 | 0 | ||||||||||||||||||||||||
John W. Ketchum | 27,266 | 20,690 | 47,956 | 2,290 | 21,698 | 67,300 | 88,998 | 3,243 | ||||||||||||||||||||||||
Rebecca J. Kujawa | 10,166 | 4,676 | 14,842 | 484 | ||||||||||||||||||||||||||||
Amy B. Lane | 4,401 | 2,387 | 6,787 | 0 | 4,399 | 4,067 | 8,466 | 0 | ||||||||||||||||||||||||
Manoochehr K. Nazar | 117,078 | 175,327 | 292,405 | 9,938 | ||||||||||||||||||||||||||||
Armando Pimentel, Jr. | 85,263 | 196,930 | 282,193 | 8,156 | ||||||||||||||||||||||||||||
Manoochehr K. Nazar(5) | 114,160 | 211,205 | 325,365 | 11,466 | ||||||||||||||||||||||||||||
Armando Pimentel(6) | 74,150 | 223,235 | 297,385 | 0 | ||||||||||||||||||||||||||||
David L. Porges | 7,035 | 623 | 7,658 | 0 | ||||||||||||||||||||||||||||
James L. Robo | 425,097 | (5) | 734,180 | 1,159,277 | (5) | 143,861 | 310,874 | (7) | 701,412 | 1,012,286 | 375,975 | |||||||||||||||||||||
Rudy E. Schupp | 23,100 | (6) | 0 | 23,100 | (6) | 0 | 15,030 | (8) | 0 | 15,030 | 0 | |||||||||||||||||||||
Charles E. Sieving | 44,238 | 38,365 | 82,603 | 5,978 | ||||||||||||||||||||||||||||
Eric E. Silagy | 40,497 | 92,912 | 133,409 | 5,047 | 48,146 | 134,526 | 182,672 | 6,424 | ||||||||||||||||||||||||
John L. Skolds | 9,334 | 0 | 9,334 | 0 | 10,690 | 0 | 10,690 | 0 | ||||||||||||||||||||||||
William H. Swanson | 26,220 | 0 | 26,220 | 0 | 27,750 | 0 | 27,750 | 0 | ||||||||||||||||||||||||
Hansel E. Tookes, II | 1,801 | 22,100 | 23,901 | 0 | ||||||||||||||||||||||||||||
All directors and executive officers as a group (23 persons) | 1,125,645 | 1,465,905 | 2,591,550 | 208,706 | ||||||||||||||||||||||||||||
Darryl L. Wilson | 2,003 | 0 | 2,003 | 228 | ||||||||||||||||||||||||||||
All directors and executive officers as a group (25 persons) | 799,985 | 1,134,508 | 1,934,493 | 428,563 | ||||||||||||||||||||||||||||
| (1) | Includes shares of restricted stock (performance-based for executive officers) for Messrs. Ketchum |
| (2) | Includes, for executive officers, shares which may be acquired as of or within 60 days after March |
| (3) | Represents the total number of shares listed under the columns “Shares Owned” and “Shares Which May Be Acquired Within 60 Days.” Under SEC rules, beneficial ownership as of any date includes any shares as to which a person, directly or indirectly, has or shares voting power or dispositive power and also any shares as to which a person has the right to acquire such voting or dispositive power as of or within 60 days after such date through the exercise of any stock option or other right. |
| (4) | Includes phantom shares under the FPL Group, Inc. Supplemental Executive Retirement Plan, amended and restated effective April 1, 1997 (the “Frozen SERP”), and the NextEra Energy, Inc. (f/k/a FPL Group, Inc.) Supplemental Executive Retirement Plan, amended and restated effective January 1, 2005 (the “Restated SERP”). The Frozen SERP and the Restated SERP are collectively referred to as the “SERP.” Also includes, for Mr. Robo, |
| (5) | Mr. Nazar is no longer a Section 16 officer as of January 1, 2020 and, therefore, is not included in the group total. |
| (6) | Mr. Pimentel retired as President and CEO of NextEra Energy Resources in March 2019 and, therefore, is not included in the group total. |
| (7) | Includes |
Includes 200 shares owned by Mr. Schupp’s spouse, as to which Mr. Schupp disclaims beneficial ownership. |
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Corporate Governance and Board Matters
Corporate Governance Principles & Guidelines/Code of Ethics
The Board has adopted the Governance Guidelines that set forth expectations for directors, director independence standards, board committee structure and functions and other policies for the Company’s governance. NextEra Energy has adopted a Code of Business Conduct & Ethics applicable to all representatives of NextEra Energy and its subsidiaries, including directors, officers and employees, as well as a Code of Ethics for Senior Executive and Financial Officers (“Senior Code”), which applies to certain senior executive officers. These documents are available on the Company’s website atwww.investor.nexteraenergy.com/corporate-governance. Any amendments or waivers of the Senior Code will be disclosed at this website address.
The Board conducts an annual review regarding the independence from the Company’s management of each of its members and, in addition, assesses the independence of any new member at the time that the new member is considered for appointment or nomination for election to the Board. In assessing independence, the Board considers all relevant facts and circumstances and the standards established by the New York Stock Exchange (“NYSE”) and also set forth or referred to in the Governance Guidelines. The NYSE standards and the Governance Guidelines require that NextEra Energy hashave a majority of independent directors and provide that the Board must affirmatively determine that each director has no material relationship with the Company in order to determine that the director is independent. Material relationships for this purpose may include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among others.
Based on its review, the Board determined that Sherry S. Barrat, James L. Camaren, Kenneth B. Dunn, Naren K. Gursahaney, Kirk S. Hachigian, Toni Jennings, Amy B. Lane, David L. Porges, Rudy E. Schupp, John L. Skolds, William H. Swanson, and Hansel E. Tookes, II,Darryl L. Wilson, constituting all 1112non-employee directors, are independent under the NYSE standards and the Governance Guidelines.
In determining that Mr. Schupp is independent, the Board considered that a NextEra Energy subsidiary has employed Mr. Schupp’s son since June 2011 innon-executive business roles, for total compensation in 20172019 of approximately $156,000. In determining that Mr. Gursahaney is independent, the Board considered that, in 2017, a NextEra Energy subsidiary purchased electrical transformers, through transactions determined by competitive bids, from a manufacturer in which Mr. Gursahaney’ssister-in-law is an owner and in which Mr. Gursahaney has no interest of any nature.$190,000.
The Board believes that the decision as to who should serve as chairman and as CEO,chief executive officer (“CEO”) and whether the offices should be combined or separate, is properly the responsibility of the Board to be exercised from time to time in appropriate consideration of the Company’s then-existing characteristics or circumstances. In view of the Company’s operating record, including its role as a national leader in renewable energy generation, and the operational and financial opportunities and challenges faced by the Company, the Board’s judgment is that the functioning of the Board is generally best served by maintaining a structure of having one individual serve as both chairman and CEO. The Board believes that having a single person acting in the capacities of chairman and CEO promotes unified leadership and direction for the Board and executive management and allows for a single, clear focus for the chain of command to execute the Company’s strategic initiatives and business plans and to address its challenges. However, in certain circumstances, such as the transition from one CEO to another, the Board believes that it may be appropriate for the roles of the CEO and the chairman to be separated.
The Board has an independent Lead Director selected by and from the independent directors (with strong consideration given to present and past committee chairs). The Lead Director serves atwo-year term
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commencing on the date of the Company’s annual meeting of shareholders. Unless the independent directors determine otherwise due to particular circumstances, no director will serve as the Lead Director for more than onetwo-year term on a consecutive basis. In 2016,Rudy E. Schupp currently serves as the Lead
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Director, having been appointed in May 2018. The independent directors selected Sherry S. Barratwill appoint a successor to serveMr. Schupp as the Lead Director untilat the 2018 annual meeting of shareholders. At a meeting of the Board held in connection withimmediately following the 20182020 annual meeting of shareholders, the independent directors will choose a Lead Director from among those independent directors elected at the annual meeting, so that at all times an independent Lead Director will be serving on the Board.meeting.
The Lead Director has the following duties and authorities:
act, on anon-exclusive basis, as liaison between the independent directors and the chairman;
approve the Board agenda and information sent to the Board;
preside at Board meetings in the absence of the chairman and to chair executive sessions of thenon-management directors;
approve meeting schedules to assure that there is sufficient time for discussion of all agenda items;
call executive sessions of the independent directors;
if requested by major shareholders, be available, when appropriate, for consultation and direct communication consistent with the Company’s policies regarding communications with shareholders;
communicate Board member feedback to the CEO; and
have such other duties as may from time to time be assigned by the Board.
The Board believes that having an independent Lead Director, regular Board and committee executive sessions, a substantial majority of independent directors and the corporate governance structures and processes described in this proxy statement allow the Board to maintain effective oversight of management.
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The Board discharges its risk oversight responsibilities primarily through its committees. The Board exercises its role in risk oversight in a variety of ways, including the following:
| Audit Committee | • Oversees the integrity of the Company’s financial statements, the independent auditor’s qualifications and independence, the performance of the Company’s internal audit function and the Company’s accounting and financial reporting processes
• Oversees compliance with legal and regulatory requirements
• Discusses with management the Company’s policies with respect to risk assessment and risk management
• Reviews and discusses the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures
• Ensures that risks identified from time to time as major risks are reviewed by the Board or a Board committee | |
| Finance & Investment Committee | • Reviews and monitors the Company’s financing plans
• Reviews and makes recommendations regarding the Company’s dividend policy
• Reviews risk management activities and exposures related to the Company’s energy trading and marketing operations
• Reviews the Company’s major insurance lines
• Oversees the risks associated with financing strategy, financial policies and the use of financial instruments, including derivatives | |
| Nuclear Committee | • Reviews the safety, reliability and quality of nuclear operations
• Reviews reports issued by external oversight groups
• Reviews the Company’s long-term strategies and plans related to its nuclear operations | |
| Compensation Committee | • Oversees compensation-related risks, including annually reviewing management’s assessment of risks related to employee compensation programs
• Oversees | |
NextEra Energy’s CEO, as the Company’s chief risk officer, together with other members of the Company’s senior management team, oversees the execution and monitoring of the Company’s risk management policies and procedures. NextEra Energy’s management maintains a number of risk oversight committees that assess operational and financial risks throughout the Company. NextEra Energy also has a Corporate Risk Management Committee, composed of senior executives, that assesses the Company’s strategic risks and the strategies employed to mitigate those risks. The Board committees discussed above meet periodically with the Company’s senior management team to review the Company’s risk management practices and key findings.
Each year the Board engages in a self-evaluation process which is conducted by the Governance & Nominating Committee. Members of the Board are surveyed to assess the effectiveness of the Board’s membership and oversight processes and to solicit input from members of the Board for improvements to the
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the Board’s functions. With the input of the Governance & Nominating Committee, recommendations from Board members are incorporated into Board processes and Board agenda topics. This annual self-evaluation process ensures that the Board periodically considers improvements to Board processes and procedures.
Director Meetings and Attendance
The Board and its committees meet on a regular schedule and also hold special meetings from time to time. Executive sessions of the independent directors are scheduled in the agenda for each regularly-scheduled Board meeting. The Board met six times in 2017.2019. Each director attended at least 75%more than 94% of the total number of Board meetings and meetings of the committees on which he or she served during 2017.2019. Absent circumstances that cause a director to be unable to attend the Board meeting held in conjunction with the annual shareholders’ meeting, Board members are required to attend the annual shareholders’ meeting. All 12 ofThe thirteen directors in office at the directorstime attended the 20172019 annual meeting of shareholders.
The standing committees of the Board are the Audit Committee, the Compensation Committee, the Governance & Nominating Committee, the Finance & Investment Committee, the Nuclear Committee and the Executive Committee. The committees regularly report their activities and actions to the full Board, generally at the Board meeting next following the committee meeting. Executive sessions are held after each regularly-scheduled committee meeting (other than quarterly earnings review meetings of the Audit Committee) and are chaired by the committee chairs. Each of the committees operates under a charter approved by the Board and each committee (other than the Executive Committee) conducts an annual self-evaluation of its performance. Current copies of the charters of the committees are available on the Company’s website atwww.investor.nexteraenergy.com/corporate-governance.The current membership and primary functions of the committees are described below.
| Audit Committee | |||||||||
Members: | Primary Responsibilities: | Meetings in | |||||||
William H. Swanson (Chair)
Naren K. Gursahaney Toni Jennings John L. Skolds Darryl L. Wilson •
• | • Appoints the Company’s independent registered public accounting firm and approves all permitted services to be performed by the firm
• Reviews the independent registered public accounting firm’s qualifications, performance and independence
• Approves the engagement of any other registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services
• Assists the Board in overseeing the integrity of the financial statements and compliance with legal and regulatory requirements
• Assists the Board in overseeing the performance of the Company’s internal audit function, the accounting and financial reporting processes of the Company and audits of the Company’s financial statements
• Establishes procedures for the receipt, retention and treatment of complaints and concerns received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission of concerns regarding questionable accounting or auditing matters | Eight | |||||||
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| Compensation Committee | ||||||
Members:
Kirk S. Hachigian (Chair)
James L. Camaren Amy B. Lane
Hansel E. Tookes, II
• | Primary Responsibilities:
• Reviews and approves corporate goals and objectives relevant to the compensation of the CEO and the other executive officers
• Evaluates the performance of the CEO in light of those goals and objectives, approves the compensation of the CEO and the other executive officers, approves any compensation-related agreements for the CEO and the other executive officers and makes recommendations to the Board with respect to thenon-employee directors’ compensation
• Oversees the preparation of theCompensation Discussion & Analysissection of this proxy statement and approves the Compensation Committee Report
• Reviews the results of the Company’s shareholder advisory vote on the compensation of
• Retains, and assesses the independence of, any outside compensation consultants engaged to assist in the evaluation of executive compensation | Meetings in
| ||||
| Governance & Nominating Committee | ||||||
Members:
James L. Camaren Naren K. Gursahaney Kirk S. Hachigian Toni Jennings
• | Primary Responsibilities:
• Reviews the size and composition of the Board, identifies and evaluates potential nominees for election to the Board and recommends candidates for all directorships to be elected by shareholders or appointed by the Board
• Reviews the Governance Guidelines, the Related Person Transactions Policy and the content of the Code of Business Conduct & Ethics and the Senior Code and recommends any proposed changes to the Board
• Oversees the evaluation of the Board
• Makes recommendations to the Board regarding the business of the annual meeting of shareholders, as well as with respect to shareholder proposals that may be considered at the annual meeting | Meetings in Four | ||||
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| Finance & Investment Committee | ||||||
Members:
Kenneth B. Dunn
William H. Swanson Hansel E. Tookes, II • | Primary Responsibilities:
• Reviews and monitors the Company’s financing plans
• Reviews and makes recommendations to the Board regarding the Company’s dividend policy
• Reviews the Company’s risk management activities and exposures related to its energy trading and marketing operations
• Reviews certain proposed capital expenditures
• Reviews the performance of the Company’s pension, nuclear decommissioning and other investment funds | Meetings in
| ||||
| Nuclear Committee | ||||||
Members:
John L. Skolds (Chair)
• | Primary Responsibilities:
• Meets with senior members of the Company’s nuclear division
• Reviews the operation of the Company’s nuclear division and makes reports and recommendations to the Board with respect to such matters
• Reviews, among other matters, the safety, reliability and quality of the Company’s nuclear operations and the Company’s long-term strategies and plans for its nuclear operations | Meetings in Four | ||||
| Executive Committee | ||||||
Members:
James L. Robo (Chair)
Kirk S. Hachigian Amy B. Lane Rudy E. Schupp William H. Swanson
| Primary Responsibilities:
• Provides an efficient means of considering such matters and taking such actions as may require the attention of the Board or the exercise of the Board’s powers or authorities when the Board is not in session | Meetings in None | ||||
Consideration of Director Nominees
Proxy Access Shareholder Nominees
The Company’s recently amended Bylaws permit a shareholder, or a group of up to 20 shareholders, owning continuously for at least three years shares of NextEra Energy representing an aggregate of at least 3% of the Company’s outstanding shares to nominate and include in the Company’s proxy materials director nominees for up to 20% of the current membership of the Board or two directorships, whichever is greater, provided that the shareholdershareholder(s) and nominee satisfy the requirements in the Bylaws. Notice of proxy access director nominees for the 20192021 annual meeting of shareholders should be addressed to the Corporate Secretary, NextEra Energy, Inc., P.O. Box 14000, 700 Universe Boulevard, Juno Beach, Florida 33408-0420 and must be received no earlier than November 7, 20183, 2020 and no later than the close of business on December 7, 2018.3, 2020. A copy of the Bylaws containing the complete proxy access requirements is available on NextEra Energy’s website atwww.investor.nexteraenergy.com/corporate-governance.corporate-governance.
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Other Shareholder Nominees
The policy of the Governance & Nominating Committee is to consider properly submitted shareholder nominations of candidates for membership on the Board. Shareholder nominations are reviewed in the same manner as candidates identified by or recommended to the Governance & Nominating Committee. Any shareholder nominations proposed for consideration by the Governance & Nominating Committee should include the nominee’s name and qualifications for Board membership, should include all information that the Company’s Bylaws require for director nominations and should be addressed to the Corporate Secretary, NextEra Energy, Inc., P.O. Box 14000, 700 Universe Boulevard, Juno Beach, Florida 33408-0420. A copy of the Bylaws is available on NextEra Energy’s website atwww.investor.nexteraenergy.com/corporate-governance.corporate-governance. In order for nominations to be timely under the advance notice requirements of the Bylaws for the 20192021 annual meeting, they must be received byno earlier than January 21, 2021 and no later than February 23, 2019.20, 2021.
The Board has established procedures by which shareholders and other interested parties may communicate with the Board, any Board committee, the Lead Director and any one or more of the other directors. Such parties may write to one or more of the directors, care of the General Counsel, NextEra Energy, Inc., P.O. Box 14000, 700 Universe Boulevard, Juno Beach, Florida 33408-0420, or send ane-mail to:boardofdirectors@nexteraenergy.com. They may also contact any member of the Audit Committee with a concern under the Company’s Code of Business Conduct & Ethics by calling561-694-4644.
The Board has instructed the General Counsel to assist the Board in reviewing all written communications to the Board, any Board committee or any director as follows:
Complaints or similar communications regarding accounting, internal accounting controls or auditing matters will be handled in accordance with the NextEra Energy, Inc. and Subsidiaries Procedures for Receipt, Retention and Treatment of Complaints and Concerns Regarding Accounting, Internal Accounting Controls or Auditing Matters.
All other legitimate communications related to the duties and responsibilities of the Board or any committee will be promptly forwarded by the General Counsel to the applicable directors, including, as appropriate under the circumstances, to the chairman of the board, the Lead Director and/or the appropriate committee chair.
All other shareholder, customer, vendor, employee and other complaints, concerns and communications will be handled by management with Board involvement as advisable with respect to those matters that management reasonably concludes to be significant.
Communications that are of a personal nature or not related to the duties and responsibilities of the Board, are unduly hostile, threatening, illegal or similarly inappropriate or unsuitable, are conclusory or vague in nature, or are surveys, junk mail, resumes, service or product inquiries or complaints, or business solicitations or advertisements, generally will not be forwarded to any director unless the director otherwise requests or the General Counsel determines otherwise.
NextEra Energy will disclose the following matters, if such matters should occur, on its website atwww.investor.nexteraenergy.com/corporate-governance.
any contributions by NextEra Energy to tax exempt organizations of which a director of the Company serves as an executive officer exceeding the greater of $1,000,000 or 2% of the organization’s revenues in any single fiscal year during the past three fiscal years; and
any Board determination that service by a member of the Company’s Audit Committee on the audit committees of more than three public companies does not impair the ability of that individual to serve effectively on the Company’s Audit Committee.
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Transactions with Related Persons
In 2007, the Board adopted a Related Person Transactions Policy (the “Policy”) for the review and approval of Related Person Transactions by the Governance & Nominating Committee. Transactions or aand series of transactions exceeding $120,000 in any fiscal year involving the Company and in which any Related Person has a direct or indirect material interest are governed by the Policy. Related Persons under the Policy are executive officers, directors and nominees for director of NextEra Energy, any beneficial owner of more than 5% of any class of NextEra Energy’s voting securities and any immediate family member of any of the foregoing persons.
In considering whether to approve a Related Person Transaction, the Governance & Nominating Committee (or its Chair, to whom authority has been delegated under certain circumstances) considers such factors as it (or the Chair) deems appropriate, which may include: (1) the Related Person’s relationship to NextEra Energy and interest in the transaction; (2) the material facts of the proposed Related Person Transaction, including the proposed value of such transaction or, in the case of indebtedness, the principal amount that would be involved; (3) the benefits to NextEra Energy and its shareholders of the Related Person Transaction; and (4) an assessment of whether the Related Person Transaction is on terms that are comparable to the terms that would be available to an unrelated third party.
The Policy provides for standing approval for certain categories of Related Person Transactions without the need for specific approval by the Governance & Nominating Committee. These categories include (1) certain transactions with other companies where the Related Person’s only relationship is as an employee (other than an executive officer), partner or principal, if the aggregate amount involved does not exceed the greater of $1,000,000 or 2% of the other company’s gross annual revenues in its most recently-completed fiscal year and (2) charitable contributions, grants or endowments by NextEra Energy to charitable organizations, foundations or universities with which a Related Person’s only relationship is as an employee (other than an executive officer) or a trustee, if the aggregate amount involved does not exceed the lesser of $500,000 or 2% of the charitable organization’s total annual receipts in its most recently completed fiscal year.
During 2017,2019, three providers of investment management and administrative services to the Company were also beneficial owners of more than 5% of NextEra Energy’s outstanding common stock. The nature and value of services provided by these 5% shareholders and their affiliates are described below:
BlackRock provided investment management services to the NextEra Energy, Inc. Employee Pension Plan and the Employee Retirement Savings Plan, money market fund management services to NextEra Energy subsidiaries and investment services to the decommissioning trust funds for NextEra Energy’sthe Duane Arnold and Point Beach nuclear plants; it received fees of approximately $876,000$621,200 for such services in 2017;2019;
State Street provided investment management and administrative services to the Company’s Employee Pension Plan and Employee Retirement Savings Plan and investment services to the decommissioning trust funds for NextEra Energy’s Florida Power & Light,Port St. Lucie, Turkey Point, Duane Arnold, Point Beach and Seabrook nuclear plants; it received fees of approximately $1,053,000$1,019,000 for such services in 2017;2019; and
Vanguard provided investment management and administrative services to the Company’s Employee Retirement Savings Plan and received fees of approximately $1,188,000$1,280,000 for such services in 2017.2019.
NextEra Energy believes that the terms of the services described above are comparable to the terms that would be available to an unrelated third party under the same or similar circumstances.
During 2017,2019, the adult son of Mr. Rudy E. Schupp was employed by a subsidiary of NextEra Energy as a Project Manager.Director. His total compensation for 20172019 was approximately $156,000,$190,000, and he was eligible for company benefits available to all other employees in a similar position. This transaction was reviewed
During 2019, a NextEra Energy subsidiary purchased approximately $6.5 million of electrical transformers and approvedrelated equipment, through transactions determined by the Governance & Nominating Committeecompetitive bids, from a manufacturer in accordance with the Policy.which Mr. Gursahaney’ssister-in-law is an owner and in which Mr. Gursahaney has no interest of any nature.
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The Audit Committee submits the following report for 2017:2019:
In accordance with the written Audit Committee Charter, the Audit Committee assists the Board of Directors (“Board”) in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting practices of the Company. During 2017,2019, the Audit Committee met eight times, including four meetings where, among other things, the Audit Committee discussed the interim financial information contained in each quarterly earnings announcement with the chief financial officer, the chief accounting officer and the independent registered public accounting firm prior to public release.
In discharging its oversight responsibility as to the audit process, the Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm the firm’s independence. The Audit Committee has reviewed any relationships that may affect the objectivity and independence of the independent registered public accounting firm and has satisfied itself as to the firm’s independence. The Audit Committee also discussed with management, the internal auditors and the independent registered public accounting firm the quality and adequacy of the Company’s internal controls and the internal audit function’s organization, responsibilities, resources and staffing. The Audit Committee reviewed with both the independent registered public accounting firm and the internal auditors their audit plans, audit scope and identification of audit risks.
The Audit Committee discussed and reviewed with the independent registered public accounting firm all communications required by generally accepted auditing standards, including those required to be discussed by PCAOB Auditing Standard No. 1301, “Communications with Audit Committees,” and discussed and reviewed the results of the firm’s audit of the financial statements. The Audit Committee also discussed the results of the internal audit examinations.
The Audit Committee reviewed and discussed the audited financial statements of the Company for the year ended December 31, 20172019 with management and the independent registered public accounting firm. Management has the responsibility for the preparation of the Company’s financial statements and the independent registered public accounting firm has the responsibility for the audit of those statements.
Based on the above-mentioned review and discussions with management and the independent registered public accounting firm, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form10-K for the year ended December 31, 2017,2019, for filing with the Securities and Exchange Commission.
In addition, and in accordance with the Audit Committee Charter, the Audit Committee reviewed and discussed with management and the independent registered public accounting firm management’s internal control report, management’s assessment of the internal control structure and procedures of the Company for financial reporting and the independent registered public accounting firm’s opinion on the effectiveness of the Company’s internal control over financial reporting, all as required to be included in the Company’s Annual Report on Form10-K for the year ended December 31, 2017.2019.
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As specified in the Audit Committee Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with generally accepted accounting principles. These are the responsibilities of the Company’s independent registered public accounting firm and management. In discharging its duties, the Audit Committee has relied on (1) management’s representations to us that the financial statements prepared by
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management have been prepared with integrity and objectivity and in conformity with generally accepted accounting principles and (2) the report of the independent registered public accounting firm with respect to such financial statements.
Respectfully submitted,
William H. Swanson, Chair
Sherry S. BarratKenneth B. Dunn
Naren K. Gursahaney
Toni Jennings
John L. Skolds
Darryl L. Wilson
Fees Paid to Deloitte & Touche
The following table presents fees billed for professional services rendered by Deloitte & Touche, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates, for the fiscal years ended December 31, 20172019 and 2016.2018.
| 2017 | 2016 | |||||||
Audit Fees(1) | $ | 6,932,000 | $ | 6,556,000 | ||||
Audit-Related Fees(2)(3) | 6,743,000 | 7,715,000 | ||||||
Tax Fees(4) | 135,000 | 206,000 | (2) | |||||
All Other Fees(5) | 52,000 | 31,000 | ||||||
Total Fees(2) | $ | 13,862,000 | $ | 14,508,000 | ||||
2019
| 2018
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Audit Fees(1)
| $
| 6,553,000
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Audit-Related Fees(2)
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| 4,337,000
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| 2,638,000
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Tax Fees(3)
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| 2,943,000
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| 433,000
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All Other Fees(4)
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| 97,000
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| 25,000
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Total Fees
| $
| 13,930,000
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| 9,588,000
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| (1) | Audit Fees consist of fees billed for professional services rendered for the audit of NextEra Energy’s and FPL’s annual consolidated financial statements for the fiscal year, the reviews of the financial statements included in NextEra Energy’s and FPL’s Quarterly Reports on Form10-Q filed during the fiscal year and the audit of the effectiveness of internal control over financial reporting, comfort letters |
| (2) |
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Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of NextEra Energy’s and FPL’s consolidated financial statements and are not reported under “Audit Fees.” These fees primarily related to audits of subsidiary financial statements, consultations on transactions, and attestation |
Tax Fees consist of fees billed for professional services rendered for tax compliance and tax advice and planning. In |
All Other Fees consist of fees for products and services other than the services reported under the other named categories. In |
Policy on Audit CommitteePre-Approval of Audit andNon-Audit Services of Independent Registered Public Accounting Firm
In accordance with the requirements of Sarbanes-Oxley, the Audit Committee Charter and the Audit Committee’spre-approval policy for services provided by the independent registered public accounting firm, all services performed by Deloitte & Touche are approved in advance by the Audit Committee. Audit
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and audit-related services specifically identified in an appendix to thepre-approval policy for which the fee is expected to be $250,000 or less arepre-approved by the Audit Committee each year. Thispre-approval allows management to obtain the specified audit and audit-related services on anas-needed basis during
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the year, provided any such services are reviewed with the Audit Committee at its next regularly scheduled meeting. Any audit or audit-related service for which the fee is expected to exceed $250,000, or that involves a service not listed on thepre-approval list, must be specifically approved by the Audit Committee prior to commencement of such service. In addition, the Audit Committee approves all services other than audit and audit-related services performed by Deloitte & Touche in advance of the commencement of such work. The Audit Committee has delegated to the Chair of the Audit Committee the right to approve audit, audit-related, tax and other services, within certain limitations, between meetings of the Audit Committee, provided any such decision is presented to the Audit Committee at its next regularly scheduled meeting. At each Audit Committee meeting (other than meetings held solely to review earnings materials), the Audit Committee reviews a schedule of services and the estimated fees for those services for which Deloitte & Touche has been engaged since the prior Audit Committee meeting under existingpre-approvalspre-approvals. In 2019 and the estimated fees for those services. In 2017 and 2016,2018, no services provided to NextEra Energy or FPL by Deloitte & Touche were approved by the Audit Committee after services were rendered pursuant to Rule2-01(c)(7)(i)(C) of the SEC’s RegulationS-X (which provides a waiver of the otherwise applicablepre-approval requirement under certain conditions).
The Audit Committee has determined that thenon-audit services provided by Deloitte & Touche during 20172019 and 20162018 were compatible with maintaining that firm’s independence.
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This compensation discussionCompensation Discussion and analysisAnalysis explains our 20172019 executive compensation program for the NEOs. The executive compensation program for the Company’s NEOs also generally applies to the Company’s other executive officers. Please read this discussion and analysis together with the tables and related narrative about executive compensation which follow.
Executive SummaryHighlights
2017 Company Performance and CEOExecution on Strategic Imperatives Aligned with Compensation
NextEra Energy has a strongpay for performance philosophy that contributed to very positive 2017robust 2019 results. NextEra Energy achieved Company-record adjusted earnings* of $3.2$4.062 billion, adjusted EPS* of $6.70$8.37 and a1-year TSR of 34%43%. NextEra Energy’s 20172019 TSR outperformed the TSR of the S&P 500 Utilities Index of 12%26% and the TSR of the S&P 500 Index of 22%32% for 2017.2019.
These significant accomplishments came as the Company continued to be a leader among the 10ten largest U.S. utilities (based on market capitalization) in substantially all financial metrics. Among these largest 10ten U.S. utilities, NextEra Energy ranked #1 for1-year,3-year,5-year,7-year2-,3-,5-,7- and10-year TSR and #1 for1-year,3-year,5-year,7-year3-,5-,7- and10-year adjusted EPS growth. In 2017,2019, NextEra Energy ranked #1 among U.S. and global utility companies, based on market capitalization.**
Ten Largest U.S. Utilities Based on Market Cap – NextEra ranks:
In 2018,2020, NextEra Energy was named by Fortune Magazine as the World’s Most Admired Electric & Gas Utility for the elevenththirteenth time in the last twelvefourteen years. Also in 2018,2020, NextEra Energy was named by the Ethisphere Institute as one of the World’s Most Ethical Companies for the elevenththirteenth time in twelvefourteen years.
The returns that NextEra Energy generated for its shareholders were attributable to outstanding 2017 performance by the Company’s two principal operating businesses, FPL and NextEra Energy Resources. Some of the Company’s many operational and financial achievements in 2017 include:
FPL:
achieved best-ever performance in minutes of service unavailability per customer and best-ever average number of momentary interruptions per customer;
among the lowest typical residential customer bill in Florida and customer bills that are about 25% below the national average;
deliveredbest-in-class performance inper-customer operations & maintenance expense andtop-decile overall fossil fleet generation availability of 90.9%;
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achievedtop-decile business customer satisfaction score.
NextEra Energy Resources:
originated 3,332 megawatts of renewables, anall-time record for the Company and the industry;
continued market leadership in North American wind generation, with approximately 1,700 megawatts of new wind projects added and 700 megawatts of wind repowering projects added to its backlog;
| * | This measure is not a financial measure calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”). See Appendix A to this proxy statement for a reconciliation of thisnon-GAAP financial measure to the most directly comparable GAAP financial measure. |
| ** | Market capitalization is as of December 31, |
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delivered strongThe returns that NextEra Energy generated for its shareholders were attributable to outstanding 2019 performance in solar development, adding 1,163 megawatts of solar development, includingby the largest combined solarCompany’s two principal operating businesses, FPL and storage facility in the U.S. announced to date;
continued successful executionNextEra Energy Resources. Some of the Company’s gas pipeline project construction program;many operational and financial achievements in 2019 include:
achieved
| Florida Power & Light | NextEra Energy Resources | |||
Achieved best-ever performance in minutes of service unavailability per customer and best-ever performance in frequency of interruptions and momentaries | Originated 7,647 megawatts of renewable contracts, anall-time record for the Company and the industry | |||
Among the lowest typical residential bills in Florida and customer bills that are nearly 30% below the latest national average | Delivered strong performance in wind development, with approximately 1,959 megawatts of new wind projects added and 1,145 megawatts of wind repowering projects added to its contracted backlog | |||
Deliveredbest-in-class performance inper-customer operations & maintenance (“O&M”) expense andtop-decile overall fossil fleet generation availability of 92.2% | Delivered strong performance in solar development, adding 3,361 contracted megawatts of solar development and won 18% of market share of 2019 U.S. signed solar power purchase agreements | |||
Ranked 2nd by JD Power in the 2019 Electric Utility Residential Customer Satisfaction Study, South Region: Large Segment | Largest player in the U.S. in grid-scale battery storage | |||
Achievedtop-decile business and residential customer satisfaction scores | Achievedtop-decile overall equivalent forced outage rate (“EFOR”) of 2.12% | |||
Additionally, effective January 1, 2019, the Company acquired Gulf Power Company, a rate-regulated electric utility serving approximately 470,000 customers in eight counties throughout northwest Florida. Gulf Power earnings contributed an additional $0.37 per share to Company earnings on a GAAP basis in 2019 and $0.41 per share on an adjusted basis. In its first year of 1.78%ownership of Gulf Power, the Company reduced its O&M costs by approximately 20%.
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Ultimately, the Company’s financial and operational performance is reflected in the increased value of its common stock. As the following table illustrates, TSR over the three-year period from December 31, 20142016 to December 31, 20172019 was 60%119%, meaning that an investment of $100 in NextEra Energy common stock on December 31, 20142016 was worth $160.30$219.15 on December 31, 2017.2019. The CEO’s total direct compensation over the same period was well-aligned with TSR.
While ourOur executive compensation program is designed to tie compensation to performance, with some performance metrics on which our CEO’s compensation is based are intentionally designed to result in value creation over an extended period of time as opposed toand others on an annual basis. As a result, CEO compensation may not precisely parallel TSR in any given period. CEO compensation may lag corporate performance in certain years and it may outpace corporate performance in other years. Although absolute alignment between pay and performance in each year may not be achieved and, in any event, may not be appropriate, the Compensation Committee believes that, over time, the Company’s executive compensation program rewards superior performance, provides a disincentive for performance that falls short of expectations and closely aligns executive compensation with shareholder returns.
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Compensation Elements Designed to Align with Our Strategy Our |
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The table below highlights the fundamental elements of our executive compensation program thatis designed to attract, retain, motivate, reward and develop high-quality, high-performing executive leadership whose talent and expertise enable the Company to create long-term and superior shareholder value relative to our peers.
As discussed in more detail below, NEO direct compensation has three principal elements: base salary, annual incentive awards and equity compensation.
The Compensation Committee believes fulfillsthese core elements fulfill the corefundamental objective of our compensation program.program to create superior shareholder value. As described below, our compensation program comprises several key practices that are designed to align executive and shareholder interests.
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Key Practices of Our Compensation Program Align Executive and Shareholder Interests
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•Each NEO’s
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•Our basic principle underlying the linkage between performance (both financial and operational) and executive compensation is that performance superior to our competition and peers will result in above-target compensation, while performance that is
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Compensation Committee Role and Processes; Role of External Consultant
The Compensation Committee plans its agendasResponding to ensure a thorough and thoughtful decision process. Typically, information regarding strategic decisions with respect to the NEOs is presented at one meeting to the Compensation Committee, which makes its decision at a subsequent meeting. This allows time forfollow-up questions from Compensation Committee members in advance of the final decision.
During 2017, the Compensation Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”), an independent executive compensation consulting firm which performed no other services for NextEra Energy or its affiliates, to provide advice and counsel to the Compensation Committee from time to time. FW Cook is sometimes referred to as the “Compensation Consultant.”
In 2017, the Compensation Consultant participated in all Compensation Committee meetings. In accordance with its engagement letter, during the 2017 executive compensation cycle, FW Cook provided the Compensation Committee and the Company with analyses and advice on topics such as pay competitiveness and executive compensation program plan design. FW Cook also benchmarked and discussed with the Compensation Committee its recommendation with respect tonon-employee director compensation. The Compensation Consultant also monitored current and emerging market trends and reported to the Compensation Committee on such trends and their impact on Company compensation practices. In 2017, the Compensation Committee also assessed the independence of FW Cook in accordance with SEC rules and concluded that the Compensation Consultant’s work for the Compensation Committee did not raise any conflicts of interest.
The Compensation Committee had an executive session at the end of each of its 2017 meetings, during which no executive officers were present. During the appropriate executive sessions, the Compensation Committee evaluated the performance of the chairman and CEO, discussed and approved the compensation of the chairman and CEO, met with the Compensation Consultant and discussed and considered such other matters as it deemed appropriate.
2017Our Shareholders – 2019Say-On-Pay Vote and Shareholder Outreach
In 2017,2019, we held our seventhninth annual advisory vote to approve NEO compensation, commonly known as“say-on-pay.” In 2017,2019, we sought to engage with shareholders who, in the aggregate, represented a significant percentage of our outstanding shares, and held discussions with those who agreed to our request for engagement. Those shareholdersOur engagement efforts are discussed in more detail on pages 4 and 22.
Shareholders were generally supportive of our executive compensation
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program and of our overall corporate governance practices. Prior to making determinations about 20172020 NEO total compensation opportunities, the Compensation Committee reviewed the results of the 20172019say-on-pay vote, noting that 95.9%93.6% of those voting had voted “FOR” the Company’s compensation of its NEOs. The Committee considered this vote to be supportive of the Company’s executive compensation program.
How We Made 2017 Compensation Decisions
General
The Compensation Committee used its business judgment to set each NEO’s target total direct compensation opportunity for 2017 and each compensation element. The Compensation Committee based its determination on its integrated assessment of a series of factors, including competitive alternatives, individual and team contribution and performance, corporate performance, complexity and importance of role and responsibilities, position tenure, leadership and growth potential and the relationship of the NEO’s pay to the pay of NextEra Energy’s other executive officers. There are no material differences among NEOs with respect to the application of NextEra Energy’s compensation policies or the way in which total compensation opportunity is determined.
Resources
The Compensation Committee primarily used the following resources to aid in its determination of the 2017 target total direct compensation opportunity for each NEO.
Market Comparisons/Peer Group
When establishing each NEO’s target total direct compensation opportunity for 2017, the Compensation Committee considered the competitive market for comparable executives and compensation opportunities provided by comparable companies. Competition for executive talent primarily affects the aggregate level of the target total direct compensation opportunity available to the NEOs. The Compensation Committee believes that it is critical to the Company’s long-term performance to offer its executive officers compensation opportunities broadly commensurate with their competitive alternatives. The Company obtained market comparison information for all NEOs from publicly-available peer group information. The Company’s peer group is composed of a set of companies from the energy services industry and a set of companies from general industry. These companies were selected by the Compensation Committee with input from executive officers (including the CEO) and the Compensation Consultant. The Compensation Committee believes that the use of companies both from the energy services industry and from general industry was appropriate because the Company’s executive officers come both from within and from outside the Company’s industry. NEOs were recruited from within and outside the Company’s industry and the Compensation Committee believes that their opportunities for alternative employment are not limited to other energy or utility companies.
For 2017, the Compensation Committee conducted a review of the then-existing 2016 peer group based on the following criteria:
Criteria for Energy Services Industry Companies
publicly-traded companies with a strong United States domestic presence
classified with a Standard Industrial Classification (“SIC”) code similar to the Company’s SIC code
annual revenue greater than $1 billion
a potential source of executive talent
included in an executive compensation survey database provided by a third party
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Criteria for General Industry CompaniesOur Commitment to Best Practices
publicly-traded companies with a strong United States domestic presence
member of the Fortune 500
| What We Do | What We Do Not Do | |||||
 | Tie pay to performance and a substantial majority of NEO pay is not guaranteed; 92% of the CEO’s actual direct 2019 compensation was performance-based |
| No CEO employment agreement | |||
 | Use industry benchmarks when setting operational goals and when reviewing actual performance and generally target top-decile or top-quartile performance as compared to our industry on operational measures where benchmark data is available rather than performance against arbitrary goals |
| No taxgross-ups of NEO perquisites | |||
| Mitigate undue risk, including using a clawback policy, stock ownership and retention requirements and multiple performance metrics. The Compensation Committee performs a comprehensive risk assessment of incentive compensation plans each year |
| No excise taxgross-up provisions in change in control agreements entered into since 2009 | |||
| Have robust stock ownership guidelines which all NEOs exceed |
| No repricing of underwater stock options | |||
| Require executive officers to hold performance-based restricted stock for two years after vesting |
| No share recycling under equity compensation plan | |||
| Have a minimum full vesting period for stock options and performance-based restricted stock, generally three years |
| No hedging of company securities by NEOs or directors permitted under securities trading policy | |||
| Utilize an independent compensation consultant |
| No pledging of company securities | |||
| Engage in shareholder outreach and regularly assess the executive compensation program against shareholder input, emerging trends and other factors |
| No guaranteed annual or multi-year bonuses | |||
| NEOs are required to enter into Rule10b5-1 plans with minimum waiting periods to transact trades in company securities | |||||
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considered highly reputable and highly regarded for operational excellence, product/service leadership or customer experience2019 Named Executive Officer Compensation
sustained revenues between 50% and 200% of the Company’s revenuesNamed Executive Officers
fewer than 150,000 employees
heavily industrialized, highly regulated or a producer of consumer staples
operate in industries which may be potential sources of executive talent
no unusual executive pay arrangements
included in an executiveThe table below provides our NEOs during 2019 whose compensation survey database provided by a third party
contribute to diversity of industry representationis described in this segment of the peer group
All energy services industry companies included in the Company’s 2016 peer group met these criteria and were retained by the Compensation Committee for the 2017 peer group and no additional companies were added to this group. The Compensation Committee determined that three general industry companies, Alcoa, Inc., Murphy Oil Corporation and SunTrust Banks, Inc., were outliers due to business transactions or the size of the companies. The Compensation Committee replaced Alcoa, Inc., Murphy Oil Corporation and SunTrust Banks, Inc. with 3M Company, Honeywell International, Inc. and MarshDiscussion & McLennan, which are in industries in which the Company competes for talent and aligned more appropriately with the Company’s business in terms of market capitalization and scope. Thus, the executive compensation programs of the following companies were reviewed as market comparators for 2017:Analysis.
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Although the Compensation Committee did not target specific total compensation levels relative to industry peers (aso-called “percentile” approach), it generally reviewed peer company data at the 50th percentile for the general industry companies and the 75th percentile for the energy services industry companies. The Compensation Committee believes these levels were appropriate because:
the Company’s practice is to make a relatively high portion of each NEO’s compensation performance-based as compared to its peers;
the Company’s operations are more complex, more diverse and of a greater size than those of substantially all of its energy services industry peer companies; and
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John W. Ketchum1 | President and CEO of | ||
Eric E. Silagy | President and | ||
Manoochehr K. Nazar2 | President, Nuclear Division of NextEra Energy and FPL | ||
Charles E. Sieving | Executive Vice President and General Counsel of NextEra Energy and Executive Vice President of FPL | ||
Armando Pimentel, Jr.1 | Former President and CEO of NextEra Energy Resources | ||
| (1) | Armando Pimentel, Jr. retired from the Company effective March 1, 2019. John W. Ketchum served as Executive Vice President, Finance and Chief Financial Officer until his appointment effective March 1, 2019 to President and CEO |
2017 NEO Pay
| (2) | Manoochehr K. Nazar served as President, Nuclear Division and Chief Nuclear Officer until his appointment as President, Nuclear Division effective May 23, 2019. As previously announced, Manoochehr K. Nazar will retire from the Company in April 2020. |
Our Target Pay Mix is Majority Performance Based
NextEra Energy has three fundamental elements of total direct compensation: base salary, annual incentive awards and equity compensation. The Compensation Committee believes that a significant portion of each NEO’s total direct compensation opportunity should be performance-based, reflecting both upside and downside potential. When determining the proportion of total compensation thatof each compensation element constituted in 2017,2019, the Compensation Committee reviewed current market practices and industry trends, taking into consideration the Company’s preference for emphasizing performance-based compensation andde-emphasizing fixed compensation.
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In determining performance-based compensation, the Compensation Committee sought to focus the efforts of the NEOs on a balance of short-term, intermediate-term and long-term goals. In addition, the Compensation Committee considered the NEOs’ perception of the relative values of the various elements of compensation and sought input from the CEO and the Compensation Consultant.
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As illustrated in the following charts, 90% of the CEO’s 2017 target total direct compensation opportunity, and 77% of the other NEOs’ 2017 target total direct compensation opportunities, were performance-based and not guaranteed.
20172019 Base Salary
CEO: For 2017,2019, Mr. Robo’s base salary was increased by 3.8%3.6% to $1,350,000$1,450,000, primarily reflecting the Company’s superior operating results in 2016,2018, the nature and responsibilities of Mr. Robo’s position, his expertise and performance, the competitiveness of his current pay in relation to his corresponding peer groupgroups and the business judgment of the Compensation Committee.
Other NEOs: salaries increased between 5% and 10%, with the exceptions of Mrs. Kujawa who received a 45% increase in connection with her promotion to Executive Vice President, Finance and Chief Financial Officer and Mr. Ketchum’sKetchum who received a 20% increase in connection with his promotion to President, NextEra Energy Resources. Mr. Silagy’s base salary in 20172019 of $650,000$1,154,100 represented a 13.1%10% increase, Mr. Nazar’s base salary in 20172019 of $904,800$997,500 represented a 3.5%5% increase, Mr. Sieving’s base salary of $1,002,400 represented a 10% increase and Mr. Pimentel’s base salary in 2017 of $897,000$1,074,900 represented a 7.0% increase and Mr. Silagy’s base salary in 2017 of $860,000 represented a 8.0% increase, all of which7% increase. Salary increases were based on the nature and responsibilities of theireach NEO’s respective positions, theirposition, expertise and performance, the competitivenesscompetiveness of each NEO’s current pay in relation to histheir corresponding peer group and the recommendations of the CEO.
41
20172019 Annual Performance-Based Incentive Compensation
Description of the2019 Annual Incentive Plan for 2017Description
Annual Incentive Plan goals are established to incentivize superior performance relative to industry peers and apeers. A majority of these goals are based on industry benchmarks. Payoutsbenchmarks and payouts under the Annual Incentive Plan are generally based on Company performance in the relevant period as compared to the benchmarks.period.
44
Prior to the beginning of 2017,2019, the Compensation Committee established financial and operational performance goals under the Annual Incentive Plan in the following categories:
Type of | How We Established and Used the | |
Financial | • The financial metrics are based on enduring standards indicative of sustained performance—adjusted EPS growth and adjusted ROE—as compared to the financial performance over theten-year period ended on December 31,
• Higher ratings indicate corporate financial performance superior to industry median and lower ratings indicate corporate financial performance which lags industry median.
| |
Operational | • Operational goals and payout scales are established in advance of the year using available industry benchmarks insofar as possible.
• If an industry benchmark is not available, the applicable goal generally is set at a level representing an improvement or a stretch as compared to prior performance.
• As a general principle, the Compensation Committee seeks to set operational performance goals at levels that represent excellent performance, superior to the results of typical companies in our industry, and that require significant effort on the part of the executive team to achieve.
• Performance on certain compliance-related goals is scored as either “met” or “not met,” while performance against other goals is judged on a sliding scale in comparison to | |
20172019 Financial Performance Matrix
The financial performance matrix approved by the Compensation Committee for 2017,2019, which is illustrated below, compares the Company’s 20172019 adjusted EPS growth and adjusted ROE to the average of the actual annual EPS growth and ROE of the companies included in the S&P 500 Utilities Index during the
42
ten-year period from January 1, 20082010 to December 31, 20172019 (estimated for 20172019 using actual results for the first three quarters and analysts’ estimates for the fourth quarter).*
The Compensation Committee believes that these financial metrics are “enduring standards”standards,” because they are objective, require the Company to demonstrate improvement, are aligned with how shareholder value is created and encourage management to include stretch goals as part of the annual budget-setting process. The financial performance matrix is designed to provide relatively greater rewards if the Company
45
outperforms others in its industry on the indexed measures and relatively lower rewards if it does not. The Compensation Committee based the matrix on adjusted earnings because it believes that adjusted earnings provide a more meaningful representation of the Company’s fundamental earning power than net income calculated in accordance with GAAP. Therefore, the Compensation Committee believes that using adjusted earnings better aligns the NEOs’ motivations with the Company’s strategy and with shareholders’ long-term interests. In addition, the Compensation Committee believes that the use of adjusted earnings for this purpose is consistent with the way in which the Company communicates its earnings to analysts and investors.
The numbers in the following matrix set forth the range of possible ratings for corporate financial performance. A rating of “1” indicates overall corporate financial performance at the industry median, while higher ratings indicate corporate financial performance superior to the industry median, and lower ratings indicate corporate financial performance which lags the industry median.
It is important to recognize that the adjusted ROE and adjusted EPS growth amounts set forth in the illustration below are not generated arbitrarily by the Company, but reflect actual industry performance on these measures for theten-year period ended December 31, 2017,2019, and that the Company’s executive compensation is based, with respect to adjusted ROE and adjusted EPS growth, on the performance delivered by the Companyrelative to industry performance.
| * | Adjusted EPS and adjusted ROE are not financial measurements calculated in accordance with GAAP. Adjusted earnings, as defined by NextEra Energy for purposes of the Annual Incentive Plan, are the Company’s consolidated net income, as reported in the audited annual financial statements as determined in accordance with GAAP, excluding the effects of: (1) changes in themark-to-market value ofnon-qualifying hedges; (2) other than temporary impairments on investments; (3) extraordinary items;(4) non-recurring charges or gains (e.g., restructuring charges and material litigation losses); (5) discontinued operations; (6) regulatory and/or legislative changes and/or changes in accounting principles; (7) labor union disruptions; and (8) acts of God such as hurricanes, which is used, among other reasons, to provide industry comparability. Adjusted ROE, as defined by NextEra Energy, is equal to the Company’s adjusted earnings divided by average common shareholders’ equity, adjusted to provide industry comparability, expressed as a percentage. Adjusted EPS, as defined by NextEra Energy, are equal to the Company’s adjusted earnings divided by weighted average diluted shares outstanding. |
43
20172019 Operational Goals
The Compensation Committee’s philosophy with respect to both setting and paying out incentives based on operational goals is that the goals be set and the actual award payouts are driven by Companybe earned based on quantifiable performance relative to industry benchmarks, rather than performance against arbitrary goals. Operational goals and payout scales are primarily established based on industry benchmarks and Company performance when meaningful benchmarks are available.performance. As noted previously, delivered performance superior to our industry will generally result in above-target compensation, while performance that is not superiorinferior to our industry will generally result in below-target compensation.
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In that context, FPL’s typical performance goals based on industry benchmarks are generally equal to or better than the top quartiletop-quartile performers in its industry and NextEra Energy Resources targets based on earnings growth and profitability goals that are well above utility industry norms (in both cases based on internal reviews of publicly-available information and information provided by consultants and industry associations). The following tables set forth for 2017, the 2019 operational performance goals and the actual performance achieved against those goals.
Florida Power & Light Company:
| Indicator | Goal | Actual | Weight | Goal
| Actual
| Weight
| ||||||||||
Operations & maintenance costs (plan-adjusted)(1) | td,300 million(1) | td,310 million(1) | 40 | % |
td,230 million(1) |
td,189 million(1) | 45% | |||||||||
Capital expenditures (plan-adjusted)(1) | $5,250 million(1) | $5,153 million(1) |
$5,927 million(1)
|
$5,848 million(1)
| ||||||||||||
Fossil generation availability(2) | top decile performance | exceeded top decile performance | 30 | % |
top decile performance |
exceeded top decile performance
| 30% | |||||||||
Nuclear industry composite performance index(3) | aggressive goal | beat goal |
aggressive goal |
missed goal
| ||||||||||||
Service reliability—service unavailability (minutes) | Approaching top decile (59.0 minutes) | best ever (60.0 minutes) |
better than top decile (58.0 minutes)
|
best ever (54.8 minutes) | ||||||||||||
Service reliability—average frequency of customer interruptions | 0.79 interruptions per customer per year (average) | 0.76—best ever |
0.69 interruptions per customer per year (average)
|
0.65—best ever | ||||||||||||
Service reliability—average number of momentary interruptions per customer | 8.5 momentary interruptions per customer per year | 6.5—best-ever performance and exceeded top decile performance |
6.3 momentary interruptions per customer per year
|
5.1—best-ever performance and top decile performance
| ||||||||||||
Employee safety—OSHA recordables(4)/200,000 hours | top decile 0.62 | 0.59—beat goal and exceeded top decile performance | 30 | % |
top decile performance (0.44) |
0.79 | 25% | |||||||||
Significant environmental violations | 0 | 0 |
0
|
0
| ||||||||||||
Customer satisfaction—residential value surveys | aggressive goal | beat goal |
aggressive goal
|
beat goal
| ||||||||||||
Customer satisfaction—business value surveys | aggressive goal | beat goal |
aggressive goal
|
beat goal
| ||||||||||||
Performance under FERC and NERC reliability standards(5) | no significant violations | no significant violations |
no significant violations |
partially met goal | ||||||||||||
4447
NextEra Energy Resources:
| Indicator | Goal | Actual | Weight |
Goal
|
Actual
|
Weight
| ||||||||||
Earnings (plan-adjusted)(1) | td,243 million(1) | td,230 million(1) | 47 | % |
td,670 million(1)
|
td,632 million(1)
| 52% | |||||||||
Return on equity | 13.1% | 13.0% |
14.5%
|
14.5%
| ||||||||||||
Meet budgeted cost goals | td,784 million | td,762 million |
td,990 million
|
td,967 million
| ||||||||||||
NEP EBITDA | $925 million | beat goal | ||||||||||||||
NEP Cash Available for Distribution | $325 million | achieved goal |
$445 million
|
beat goal
| 52% | |||||||||||
Employee safety—OSHA recordables(4)/200,000 hours | 0.59 | 0.39—beat goal and exceeded top decile performance | 22 | % |
0.44—top decile
|
0.21—beat goal and exceeded top decile performance
| ||||||||||
Significant environmental violations | 0 | 0 |
0
|
0
| ||||||||||||
Nuclear industry composite performance index(3) | aggressive goal | beat goal and exceeded top decile performance |
aggressive goal
|
beat goal and exceeded top decile performance
| 18% | |||||||||||
Equivalent forced outage rate(6) | top decile performance | beat goal and exceeded top decile |
aggressive goal
|
beat goal and exceeded top decile
| ||||||||||||
Performance under FERC and NERC reliability standards(5) | no significant violations | no significant violations | ||||||||||||||
Execute on schedule and on budget approved North American wind projects | 1,004 MW | beat goal | 31 | % |
2,587 MW |
partially met goal | | 30% | | |||||||
Execute on schedule and on budget approved North American solar projects | 143 MW | beat goal |
380 MW |
beat goal | ||||||||||||
New development or acquisition opportunities in wind, solar, gas infrastructure, or transmission | aggressive goal | beat goal | ||||||||||||||
Maintain construction of Sabal Trail, Mountain Valley Pipeline (MVP) and Florida Southeast Connection (FSEC) on schedule and on budget | on schedule and on budget | goal largely met | ||||||||||||||
New development or acquisition opportunities in wind, solar, gas infrastructure or transmission
|
aggressive goal
|
beat goal
| ||||||||||||||
Maintain construction of Mountain Valley Pipeline (MVP) on schedule and on budget
|
on schedule and on budget
|
missed goal
| | 30% | | |||||||||||
Pre-tax income contribution from all asset optimization, marketing and trading activities, full requirements and retail | aggressive goal | beat goal | 31 | % |
aggressive goal
|
beat goal
| ||||||||||
| (1) | Certain of the financial performance indicators used in the Annual Incentive Plan are calculated in a manner consistent with NextEra Energy’s planning and budgeting process and how management reviews its performance relative to that plan, and are not, or do not relate directly to, financial measures calculated in accordance with GAAP. For information about the Company’s results of operations for |
| (2) | “Fossil generation availability” measures the amount of time during a given period that a power generating unit is available to produce power. |
| (3) | The “nuclear industry composite performance index” referenced is the Institute of Nuclear Power Operations, or INPO, index. INPO indicates that it promotes the highest levels of safety and reliability in the operation of commercial nuclear power plants by establishing performance objectives, criteria and guidelines for the nuclear power industry and conducting regular detailed evaluations of all nuclear power plants in North America. The INPO index is an18-month rolling average of a nuclear plant’s, and a company’s nuclear fleet’s, performance against operating performance measures. |
| (4) | “OSHA” is the United States Occupational Safety and Health Administration. An OSHA recordable injury is an occupational injury or illness that requires medical treatment more than simple first aid and must be reported under OSHA regulations. |
45
| (5) | “FERC” is the Federal Energy Regulatory Commission and “NERC” is the North American Electric Reliability Corporation. |
| (6) | The “equivalent forced outage rate” is computed as the hours of unit failure (unplanned outage hours and equivalent unplannedde-rated hours) given as a percentage of the total hours of the availability of an electricity generating unit. |
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After the end of 2017,2019, the Executive Compensation Review Board (“review board”), whose members were Messrs. Ketchum, Pimentel, Robo and Silagy and Mrs. Kujawa and the most senior human resources officer, assessed: (1) whether the operational performance goals had been achieved, exceeded or missed and, to the extent exceeded or missed, by what margin such goals had been exceeded or missed (as set forth in the tables above); (2) the degree of difficulty of achieving each goal; and (3) the Company’s performance with respect to each goal as compared to thepre-established payout scale based on top decile, top quartile,top-decile, top-quartile, median andsub-median performance on the same measure (industry-based where benchmark data was available), and arrived at an aggregate determination for the Company’s 20172019 performance as compared to the goals. This assessment determined that the Company had achieved superior performance in 2017.2019. The determination of the review board was then presented to the Compensation Committee, which had ultimate authority to accept or modify all or any part of the determination. For 2017,2019, the Compensation Committee reviewed and discussed the review board’s recommendations and the conclusions on which they were based, and determined to accept those recommendations.
20172019 Annual Incentive Awards for the NEOs
Each NEO’s 20172019 annual incentive compensation was determined based on a rating (“NextEra Energy performance rating”) derived by combining the Company’s financial performance as measured by the financial performance matrix (weighted 50%) and the Company’s operational performance as compared to the operational performance goals (weighted 50%). The NextEra Energy performance rating for 2017,2019, determined in this manner, was 1.83.1.79.
The NextEra Energy performance rating may be adjusted for each NEO by the Compensation Committee based on individual performance under circumstances in which the Compensation Committee determines that the formulaic calculation of the performance rating without adjustment would otherwise result in the payment of an inappropriate incentive. The Compensation Committee generally uses this aspect of the executive compensation program on a conservative basis, as it believes that the formula for calculating the NextEra Energy performance rating ordinarily should result in appropriate incentive payments. The individual performance adjustment, when used, historically has most often ranged between +/- 10%±10%.
The Compensation Committee determined the individual performance factors in 20172019 based on recommendations from the CEO (for all of the NEOs other than himself). For each NEO other than the CEO, the 20172019 individual performance factor was based primarily upon the Company’s exceptional performance as described in theExecutive Summary, above, as well as (for each NEO other than the CEO) the NEO’s performance relative to a set of objectives agreed upon with the CEO at the beginning of the year. For the CEO, the Compensation Committee determined the individual performance factor. The Compensation Committee determined Mr. Robo’s 20172019 individual performance factor based on the Compensation Committee’s assessment of his performance and the Company’s overall 20172019 performance as described in theExecutive Summary.
The following illustrates the determination of the 20172019 annual incentive for each NEO:
annual incentive = (NextEra Energy performance rating x individual performance factor) x target annual incentive
4649
In years where the Company’s performance is above or substantially above the performance of its peers as evidenced by industry benchmarks, as it was in 2017,2019, the Company expects that annual incentive awards will be paid to the NEOs at a rate exceeding the target rate. For 2017,2019, the NEOs’ annual incentive awards were as follows:
| Named Executive Officer | 2017 Target Annual Incentive | 2017 Annual Incentive Award | ||||||||||||||
Named Executive Officer(1)
|
2019 Target Annual Incentive
|
2019 Annual Incentive Award
| ||||||||||||||
James L. Robo | $ | 2,160,000 | $ | 4,320,000 |
| $2,320,000
|
|
| $4,570,400
|
| ||||||
Rebecca J. Kujawa
|
| $ 370,300
|
|
| $ 729,500
|
| ||||||||||
John W. Ketchum | $ | 455,000 | $ | 873,600 |
| $ 688,660
|
|
| $1,356,700
|
| ||||||
Armando Pimentel, Jr. | $ | 627,900 | $ | 1,205,600 | ||||||||||||
Eric E. Silagy
|
| $ 807,870
|
|
| $1,591,500
|
| ||||||||||
Manoochehr K. Nazar | $ | 633,360 | $ | 1,266,700 |
| $ 698,250
|
|
| $1,375,600
|
| ||||||
Eric E. Silagy | $ | 602,000 | $ | 1,204,000 | ||||||||||||
Charles E. Sieving
|
| $ 601,440
|
|
| $1,172,800
|
| ||||||||||
| (1) | Armando Pimentel, Jr. retired and did not receive a 2019 annual incentive award. |
The amounts set forth above for the NEOs’ 20172019 annual incentive awards also are also set forth in the“Non-Equity Incentive Plan Compensation” column (column (g)) inTable 1a: 20172019 Summary Compensation Table.
20172019 Long-Term Performance-Based Equity Compensation
Equity Compensation Mix
What We Granted | Why We Granted It | |
Performance shares | Directly focus NEOs on the multi-year sustained achievement of challenging TSR, financial and operational goals, because the number of shares ultimately earned depends upon the Company’s and the NEO’s performance over a three-year performance
| |
Performance-based restricted stock | Includes a performance goal; affected by all stock price changes, so value to NEOs affected by both increases and decreases in the Company’s stock
| |
Performance-based restricted NEP common units | Includes a performance goal; affected by all common unit price changes, so value to NEOs affected by both increases and decreases in NEP’s common unit price. | |
Stock options | Reward the NEOs only if the Company’s stock price increases and remains above the stock price on the date of
| |
50
In determining the appropriate mix of equity compensation components, the Compensation Committee primarily considers the following factors:
the mix of these components at competitor and peer companies and emerging market trends;
the retention value of each element and other values important to the Company, including, for example, the tax and accounting consequences of each type of award;
the advice of the Compensation Consultant; and
the perceived value to the NEO of each element.
As shown below, the Compensation Committee continued its practice of granting NEOs equity-based compensation which is composed of a substantially greater percentage of performance share awards, since our shareholders indicated throughduring our shareholder outreach that they most highly value the longer-term performance features of performance shares. After the Compensation Committee determined the
47
appropriate mix of equity compensation components, the target award level for each equity-based element was expressed as a percentage of each NEO’s target total direct compensation opportunity. The target dollar value for each component was converted to a number of shares of equivalent value (estimated present value for stock options and performance shares).
20172019 Mix of Equity Compensation Awards for the NEOs
In 2017,2019, the Compensation Committee granted the following mix of equity-based compensation to the NEOs:
Mix of Equity Compensation Awards(1)
| ||||||||||||||||||||||||||||||||
| Mix of Equity Compensation Awards(1) | ||||||||||||||||||||||||||||||||
| Named Executive Officer | Performance Shares | Options | Performance- Based Restricted Stock | Performance
| Options
| Performance-
| Performance-
| |||||||||||||||||||||||||
James L. Robo | 65 | % | 25 | % | 10 | % |
| 65%
|
|
| 25%
|
|
| 3%
|
|
| 7%
|
| ||||||||||||||
Rebecca J. Kujawa
|
| 60%
|
|
| 20%
|
|
| 13%
|
|
| 7%
|
| ||||||||||||||||||||
John W. Ketchum | 60 | % | 20 | % | 20 | % |
| 60%
|
|
| 20%
|
|
| 13%
|
|
| 7%
|
| ||||||||||||||
Eric E. Silagy
|
|
60%
|
|
|
20%
|
|
|
20%
|
|
|
—
|
| ||||||||||||||||||||
Manoochehr K. Nazar | 60 | % | 20 | % | 20 | % |
| 60%
|
|
| 20%
|
|
| 20%
|
|
| —
|
| ||||||||||||||
Charles E. Sieving
|
|
60%
|
|
|
20%
|
|
|
13%
|
|
|
7%
|
| ||||||||||||||||||||
Armando Pimentel, Jr. | 60 | % | 20 | % | 20 | % |
| 60%
|
|
| 20%
|
|
| 13%
|
|
| 7%
|
| ||||||||||||||
Eric E. Silagy | 60 | % | 20 | % | 20 | % | ||||||||||||||||||||||||||
| (1) | Calculation of mix percentages based on the grant date present value of each grant as a percentage of each NEO’s total equity-based compensation. |
Performance Share Awards Granted in 20172019 for the Performance Period Ending December 31, 20192021
For the performance share awards granted in 20172019 for the performance period beginning January 1, 20172019 and ending December 31, 2019,2021, the Compensation Committee continued to use the performance measures adopted in 20132018 to ensure thatalignment in award design with TSR plan design trends and enable strong pay for performance alignment. The 2019 performance share awards have3-year adjusted ROE and EPS growth and operational measures as performance measures. Consistent with prior years, the link between executive pay and TSR is embedded explicitly in the design of the Company’s executive compensation program. Additionally, the Compensation Committee implementedawards also have an individual performance factor ranging from +/- 20%±20%, which is applicable only to 65% of the performance share award determined based on financial and operational performance measures to enable the Compensation Committee to adjust payouts based on their assessment of the NEO’s individual performance. The goals used to measure long-term performance for purposes of the NEOs’ performance
51
share awards are different both in terms of the objectives and time-frames than the goals used to measure short-term performance under the Company’s Annual Incentive Plan. The measures, and their relative weights, are set forth below:
Performance Measure | Weight | |
3-year TSR relative to | award payout | |
3-year adjusted ROE and adjusted EPS growth (determined using a financial matrix similar to the one set forth on page | ||
Operational measures: • 3-year average employee safety—OSHA recordables/200,000 hours • Nuclear industry composite performance index (combined for FPL and NextEra Energy Resources nuclear facilities) • 3-year average equivalent forced outage rate (fossil and renewable generation) • FPL3-year average service reliability—service unavailability (minutes) | 5% each | |
During the performance period, performance shares are not issued, the NEO may not sell or transfer the NEO’s contingent right to receive performance shares and dividends are not paid.
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Payout of Performance Share Awards Granted in 2017 for the Performance Period Ended December 31, 20172019
Each NEO was granted a target number of performance shares in 20152017 for a three-year performance period beginning January 1, 20152017 and endedending on December 31, 2017.2019. The Compensation Committee views the payout of this grant after the end of the performance period as part of each NEO’s20152017compensation, while the performance shares granted in 20172019 for the performance period ending on December 31, 20192021 are considered to be part of each NEO’s20172019 compensation, even though the shares will not be issued, if at all, until February 2020.2022.
At the end of the performance period for the performance share awards granted in 2015,2017, each NEO’s performance share award payout, other than Mr. Ketchum’sMrs. Kujawa’s payout, was determined in accordance with measures and weights described in the table above underPerformance Share Awards Granted in 2017 for the Performance Period Ending December 31, 2019.as set forth below:
Performance Measure | Weight | |
3-year TSR relative to the companies in the S&P 500 Utilities Index | 35% | |
3-year adjusted return on equity and adjusted EPS growth (determined using a financial matrix similar to the one set forth on page 46) | 52% | |
Operational measures: • 3-year average employee safety—OSHA recordables/200,000 hours • Nuclear industry composite performance index (combined for FPL and NextEra Energy Resources nuclear facilities) • 3-year average equivalent forced outage rate (fossil and renewable generation) • FPL3-year average service reliability—service unavailability (minutes) | 3.25% each | |
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The 20152017 performance share award overall rating, determined in this manner, was 2.00, as shown below.
| Performance Measure(1) | Weight | Result | Payout��as a % of Target | Weight
| Result
| Payout as a %
| |||||||||||||||||||||
Adjusted EPS Growth and Adjusted ROE | 52 | % | 2.00 | 200 | % |
| 52
| %
|
| 2.00
|
|
| 200
| %
| |||||||||||||
Operational Measures | 13 | % | 1.97 | 197 | % |
| 13
| %
|
| 1.91
|
|
| 191
| %
| |||||||||||||
Relative TSR | 35 | % | 2.00 | 2.00 | % |
| 35
| %
|
| 2.00
|
|
| 200
| %
| |||||||||||||
Overall Rating | 2.00 | 200 | % |
| 1.99
|
|
| 199
| %
| ||||||||||||||||||
Overall Rating (after applying individual performance factors)(1)
|
| 2.00
|
|
| 200
| %
| |||||||||||||||||||||
| (1) |
|
Applying the overall rating results to the target performance shares resulted in the following performance share award payouts for each of the NEOs:
| Named Executive Officer | Target Performance Shares for Performance Period 1/1/15-12/31/17 | Performance Shares Earned |
Target Performance Shares
| Performance Shares Earned
| ||||||||||||||
James L. Robo | 52,710 | 105,420 |
| 55,660
|
|
| 111,320
|
| ||||||||||
John W. Ketchum(1) | 4,525 | 8,280 | ||||||||||||||||
Rebecca J. Kujawa(1)
|
| 918
|
|
| 1,679
|
| ||||||||||||
John W. Ketchum
|
| 8,564
|
|
| 17,128
|
| ||||||||||||
Eric E. Silagy
|
| 11,733
|
|
| 23,466
|
| ||||||||||||
Manoochehr K. Nazar
|
| 10,995
|
|
| 21,990
|
| ||||||||||||
Charles E. Sieving
|
| 7,509
|
|
| 15,018
|
| ||||||||||||
Armando Pimentel, Jr. | 9,484 | 18,968 |
| 13,743
|
|
| 27,486
|
| ||||||||||
Manoochehr K. Nazar | 10,058 | 20,116 | ||||||||||||||||
Eric E. Silagy | 5,892 | 11,784 | ||||||||||||||||
| (1) |
|
SeeTable 2: 20172019 Grants of Plan-Based Awards for information about the performance shares awarded to the NEOs in 20172019 andTable 4: 20172019 Option Exercises and Stock Vestedfor additional information about the performance shares issued for the three-year performance period which began on January 1, 20152017 and ended on December 31, 2017.2019.
49
Performance-Based Restricted Stock Granted in 20172019
The performance objective for performance-based restricted stock was increased substantially in 2013, from adjusted earnings of $500 million tois adjusted earnings of $1.2 billion. Therefore, theThe shares of performance-based restricted stock granted in 2017, which would otherwise vest ratably in 2018, 2019 and 2020, will not vest unless and until the Compensation Committee certifies that NextEra Energy’s adjusted earnings for each of 2018, 2019, 2020 and 2020,2021, respectively, equal or exceed $1.2 billion.
Because the Compensation Committee intends for the grant date present value of performance-based restricted stock awards to equal the fair market value of an equivalent number of shares of the Company’s common stock absent the performance and vesting conditions, dividends are paid on performance-based restricted stock awards as and when dividends are paid on the common stock. However, any dividends paid on performance-based restricted stock awards that do not vestmustbe repaid within 30 days following forfeiture of the award.
SeeTable 2: 20172019 Grants of Plan-Based Awards for information about the performance-based restricted stock awarded to the NEOs in 20172019 and the description following that table for information about the material terms and conditions applicable to those performance-based restricted stock awards.
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Performance-Based Restricted NEP Common Units Granted in 2019
In February 2019, as part of the Compensation Committee’s setting of 2019 long-term performance-based incentive compensation for the NEOs, the Compensation Committee expressed its preference that a portion of the long-term performance-based incentive compensation to be awarded to the NEOs who also are officers of NEP be granted in the form of NEP performance-based restricted common units (“NEP Awards”). The Compensation Committee concluded that the proposed NEP Awards would further align the incentive compensation of these NEOs to activities that promote the growth of long-term value for shareholders of the Company. After considering this and other factors, the Board of Directors of NEP (the “NEP Board”) in February 2019 approved grants of NEP Awards to those Company NEOs who also are officers of NEP, as well as to other officers and employees of the Company or its affiliates who are responsible for significant NEP activities.
The NEP Awards received by the NEOs did not increase the NEOs’ overall incentive compensation opportunity, but instead replaced on adollar-for-dollar basis approximately 7% of the aggregate grant date value of the portion of their long-term performance-based awards in 2019 that otherwise would have been issued in the form of performance-based restricted stock of the Company. The performance objective for NEP Awards is adjusted EBITDA of $400 million. Therefore, the NEP Awards granted in 2019 will not vest unless and until the NEP Board certifies that NEP’s adjusted EBITDA for 2019, 2020 and 2021, respectively, equals or exceeds $400 million.
The NEP Awards were made pursuant to the NextEra Energy Partners, LP 2014 Long Term Incentive Plan (“NEP 2014 LTIP”). NEP will be reimbursed by the Company for the grant date fair value of all NEP Awards granted to employees and officers of the Company or its affiliates.
SeeTable 2: 2019 Grants of Plan-Based Awards for information about the performance-based restricted NEP common units awarded to the NEOs in 2019 and the description following that table for information about the material terms and conditions applicable to those performance-based restricted common units.
Non-Qualified Stock Option Awards in 20172019
The Compensation Committee grantsnon-qualified stock options, rather than incentive stock options, primarily because the tax treatment ofnon-qualified stock options is more favorable to the Company than the treatment of incentive stock options. The 2011 LTIP prohibits repricing of awarded options without shareholder approval. SeeTable 2: 20172019 Grants of Plan-Based Awardsfor information about the stock options granted to the NEOs in 20172019 and the description following that table for further information about the material terms and conditions applicable to stock options.
Equity Grant Practices
Equity awards are granted by the Compensation Committee to the NEOs each year inmid-February, which is a date that is normally set two years in advance. The Compensation Committee believes that granting equity in this way is appropriate because the Company typically releasesyear-end earnings in late January, so all relevant information should be available to the market on the grant date. Equity awards may also be made to new executive officers upon hire or promotion, generally coincident with the date of hire or promotion or the Compensation Committee meeting next following the date of hire or promotion. The Compensation Committee does not seek to time equity grants to take advantage of information, either positive or negative, about the Company which has not been publicly disseminated. The exercise price of options granted is equal to the closing market price of NextEra Energy’s common stock on the effective date of grant.
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How We Make Compensation Decisions
Additional 2017 Compensation ElementsCommittee Role and Processes; Role of External Consultant
BenefitsThe Compensation Committee plans its agendas to ensure a thorough and thoughtful decision process. Typically, information regarding strategic decisions with respect to the NEOs is presented at one meeting to the Compensation Committee, which makes its decision at a subsequent meeting. This allows time forfollow-up questions from Compensation Committee members in advance of the final decision.
The Compensation Committee had an executive session at the end of each of its 2019 meetings, during which no executive officers were present. During the appropriate executive sessions, the Compensation Committee evaluated the performance of the chairman and CEO, discussed and approved the compensation of the chairman and CEO, met with the Compensation Consultant and discussed and considered such other matters as it deemed appropriate.
During 2019, the Compensation Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”), an independent executive compensation consulting firm which performed no other services for NextEra Energy providesor its affiliates, to provide advice and counsel to the Compensation Committee fromtime-to-time. FW Cook is sometimes referred to as the “Compensation Consultant.”
In 2019, the Compensation Consultant participated in all Compensation Committee meetings. In accordance with its engagement letter, during the 2019 executive compensation cycle, FW Cook provided the Compensation Committee and the Company with analyses and advice on topics such as pay competitiveness and executive compensation program plan design. FW Cook also benchmarked and discussed with the Compensation Committee its recommendation with respect tonon-employee director compensation. The Compensation Consultant also monitored current and emerging market trends and reported to the Compensation Committee on such trends and their impact on the Company compensation practices. In 2019, the Compensation Committee also assessed the independence of FW Cook in accordance with SEC rules and concluded that the Compensation Consultant’s work for the Compensation Committee did not raise any conflicts of interest.
Compensation Resources
The Compensation Committee used its business judgment to set each NEO’s target total direct compensation opportunity for 2019 and each compensation element. The Compensation Committee based its determination on its integrated assessment of a series of factors, including competitive alternatives, individual and team contribution and performance, corporate performance, complexity and importance of role and responsibilities, experience, leadership and growth potential and the relationship of the NEO’s pay to the pay of NextEra Energy’s other executive officers. There are no material differences among NEOs with respect to the application of NextEra Energy’s compensation policies or the way in which total compensation opportunity is determined.
The Compensation Committee primarily used the following resources to aid in its determination of the 2019 target total direct compensation opportunity for each NEO.
Market Comparisons/Peer Group
When establishing each NEO’s target total direct compensation opportunity for 2019, the Compensation Committee considered the competitive market for comparable executives and compensation opportunities provided by comparable companies. Competition for executive talent primarily affects the aggregate level of the target total direct compensation opportunity available to the NEOs.
The Compensation Committee believes that it is critical to the Company’s long-term performance to offer its executive officers compensation opportunities broadly commensurate with their competitive alternatives. The Company obtained market comparison information for all NEOs from publicly-available peer group information. The Company’s peer group is composed of a comprehensive benefits program which includes healthset of companies from the energy services
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industry and welfare, life insurance and other personal benefits. For programs to which employees contribute premiums, executive officers pay the same premiums as other similarly-situated exempt employees. Retirement and other post-employment benefits are discussed underPost-Employment Compensation.a set of companies from general industry. These benefits are an integral part of the total compensation package for NEOs, and the aggregate value is included in the information reviewedcompanies were selected by the Compensation Committee annually to ensure the reasonableness and appropriateness of total rewards. In addition, NextEra Energy believes that the intrinsic value placed on personal benefits by the NEOs is generally greater than the incremental cost of those benefits to the Company.
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Personal Benefits
NextEra Energy provides itswith input from executive officers with personal benefits which, in many cases, improve efficiency by allowing(including the executive officers to focus on their critical job responsibilities and/or increasingCEO) and the hours they can devote to work. Some of these benefits also serve to better secure the safety of the executive officers and their families. The Compensation Committee and its Compensation Consultant periodically review the personal benefits offered by the Company to ensure that the program is competitive and producing the desired results.Consultant. The Compensation Committee believes that the benefitsuse of companies both from the Company derivesenergy services industry and from these personal benefits more than offsetgeneral industry was appropriate because the Company’s executive officers come both from within and from outside the Company’s industry. NEOs were recruited from within and outside the Company’s industry and the Compensation Committee believes that their incremental costopportunities for alternative employment are not limited to other energy or utility companies.
For 2019, the Company.
See footnote 2 toTable 1b: 2017 Supplemental All Other Compensation for Committee conducted a descriptionreview of the personal benefits provided to the NEOs for 2017.
Use of Company-Owned Aircraft
Company aircraft are available to the NEOs, as well as other employees and directors, for business travel, which includes, in the judgment of the Governance & Nominating Committee, travel by NEOs to Company-approved outside board meetings and travel in connection with physical examinations. Among other advantages, business use of the aircraft by executives maximizes time efficiencies, provides a confidential environment for business discussions and enhances security.
NextEra Energy permits limitednon-business use of Company aircraft by NEOs when that use does not interfere with the use of Company aircraft for business purposes.Non-business use is generally discouraged, however, and must be approved in advance by the CEO. NEOs must pay the Company for theirnon-business usethen-existing 2018 peer group based on the rate prescribed by the IRS for valuingnon-commercial flights. A NEO traveling on Company aircraft for business purposes may, with the approval of the CEO, be accompanied by the NEO’s guests, spouse and/or other family members. In this circumstance, there is essentially no incremental cost to the Company associated with transporting the additional passengers. Unless the travel is important to carrying out the business responsibilities of the NEO, however, the Company generally requires payment by the NEO for these passengers based on the rates described above. Allnon-business use of Company aircraft is reported to and reviewed by the Governance & Nominating Committee annually. In 2017, the NEOs’ use of Company aircraft fornon-business purposes represented approximately 120 passenger flight hours and for travel to Company-approved outside board meetings and annual physical examinations represented an additional approximately 42 passenger flight hours. Company aircraft were used for a total of approximately 3,895 passenger flight hours in the aggregate in 2017.
Policy on Tax Reimbursements on Executive Perquisites
In accordance with the NextEra Energy, Inc. Policy on Tax Reimbursements on Executive Perquisites, the Company does not provide tax reimbursements on perquisites to the NEOs. In circumstances where the Compensation Committee deems such an action appropriate, the Company may provide tax reimbursements to executives as part of a plan, policy or arrangement applicable to a broad base of management employees of the Company, such as a relocation or expatriate tax equalization policy.following criteria:
| Selection Criteria | ||||
| Energy Services Industry | General Industry | |||
• Publicly-traded companies with a strong United States domestic presence • Classified with a Standard Industrial Classification (“SIC”) code similar to the Company’s SIC code • Annual revenue greater than $5 billion • A potential source of executive talent • Included in an executive compensation survey database provided by a third party | • Publicly-traded companies with a strong United States domestic presence • In the S&P 500 • Considered highly reputable and highly regarded for operational excellence, product/service leadership or customer experience • Sustained revenues typically between 50% and 250% of the Company’s revenues • Consistently high performing • Heavily industrialized, highly regulated or a producer of consumer staples • Operate in industries which may be potential sources of executive talent • No unusual executive pay arrangements • Included in an executive compensation survey database provided by a third party • Contribute to diversity of industry representation in this segment of the peer group | |||
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Other Important Compensation Practices and Policies
2018 Compensation Plan Design Changes
Performance Share Awards
Effective beginningAll energy services industry companies included in 2018, the Committee implemented changes to the NEOs’ performance share awards in order to better align the award design with TSR plan design trends and enable stronger pay for performance alignment. A summary of the changes are as follows:
replace the relative TSR performance measure of 35% with a relative TSR performance modifier of ±20% to the performance share award payout;
change the TSRCompany’s 2018 peer group to the top 10 power companiesmet these criteria and were retained by market cap, a subset of the S&P 500 Utilities index;
change the weighting of the financial and operating measures; and
adjust the start and end date measurement periods used to calculate TSR to a 20-trading day trailing average.
Performance-Based Restricted NEP Common Units
In February 2018, as part of the Compensation Committee’s setting of 2018 long-term performance-based incentive compensation for the NEOs, the Compensation Committee expressed its preference that a portion offor the long-term performance-based incentive compensation2019 peer group and no additional companies were added to be awarded to the NEOs who are also officers of NEP be granted in the form of performance-based restricted common units of NEP (“NEP Awards”).this group. The Compensation Committee concludeddetermined that four general industry companies, Fluor Corporation, Hess Corporation, Principal Financial Group, Inc. and Xerox Corporation were outliers due to business transactions or the proposed NEP Awards would further align the incentive compensation of these NEOs to activities that promote the growth of long-term value for shareholders of NextEra Energy. After considering this and other factors, the Board of Directors of NEP (the “NEP Board”) in February 2018 approved grants of NEP Awards to those Company NEOs who are also officers of NEP, as well as to other officers and employeessize of the companies. The Compensation Committee replaced these four companies with Danaher Corporation, Halliburton Company, or its affiliates whoNorthrop Grumman and Thermo Fisher Scientific, Inc., which are responsiblein industries in which the Company competes for significant NEP activities.talent and the Compensation
The NEP Awards received by Company NEOs did not increaseCommittee believes are more appropriately aligned with the NEOs’ overall incentiveCompany’s business in terms of market capitalization and scope. Thus, the executive compensation opportunity, but instead replaced on a dollar-for-dollar basis approximately 7%programs of the aggregate grant date value of the portion of their long-term performance-based awards in 2018 that otherwise would have been issued in the form of performance-based restricted stock of the Company. The performance objectivefollowing companies were reviewed as market comparators for NEP Awards is adjusted EBITDA of $400 million. Therefore, the NEP Awards granted in 2018, which would otherwise vest ratably in 2019, 2020 and 2021, will not vest unless and until the NEP Board certifies that NEP’s adjusted EBITDA for 2019, 2020 and 2021, respectively, equals or exceeds $400 million.
The NEP Awards were made pursuant to the NextEra Energy Partners, LP 2014 Long Term Incentive Plan. NEP will be reimbursed by the Company for the grant date fair value of all NEP Awards granted to employees and officers of the Company or its affiliates. The table that follows provides information about the NEP Awards made to the NEOs in 2018:2019:
| Named Executive Officer | 2018 NEP Performance-Based Restricted Common Units | 2018 NEP Grant Value | ||||||
James L. Robo | 18,329 | $ | 735,000 | |||||
John W. Ketchum | 3,576 | $ | 143,400 | |||||
Armando Pimentel, Jr. | 5,099 | $ | 204,500 | |||||
Manoochehr K. Nazar(1) | 0 | $ | 0 | |||||
Eric E. Silagy(1) | 0 | $ | 0 | |||||
Energy Services Industry(n=14) | General Industry(n=21) | |
American Electric Power Company, Inc. | 3M Company | |
Consolidated Edison, Inc. | Air Products and Chemicals, Inc. | |
Dominion Energy, Inc. | Anadarko Petroleum Corporation | |
Duke Energy Corporation | CIGNA Corporation | |
Edison International | Colgate-Palmolive Company | |
Entergy Corporation | Danaher Corporation | |
Exelon Corporation | Devon Energy Corporation | |
FirstEnergy Corp. | DowDuPont Inc.(1) | |
PG&E Corporation | Eaton Corporation | |
PPL Corporation | Emerson Electric Co. | |
Public Service Enterprise Group Incorporated | General Dynamics Corporation | |
Sempra Energy | Halliburton Company | |
The Southern Company | Honeywell International, Inc. | |
Xcel Energy Inc. | Kellogg Company | |
Marsh & McLennan | ||
Northrop Grumman | ||
Schlumberger Limited | ||
Texas Instruments Incorporated | ||
Thermo Fisher Scientific, Inc. | ||
Union Pacific Corporation | ||
Waste Management, Inc. | ||
| (1) |
|
Although the Compensation Committee did not target specific total compensation levels relative to industry peers (aso-called “percentile” approach), it generally reviewed peer company data at the 50th percentile for the general industry companies and the 75th percentile for the energy services industry companies. The Compensation Committee believes these levels were appropriate because:
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the Company’s practice is to make a relatively high portion of each NEO’s compensation performance-based as compared to its peers;
the Company’s operations are more complex, more diverse and of a greater size than those of substantially all of its energy services industry peer companies;
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| • | the Company’s 2018 market capitalization and assets were above the 75th percentile of its general industry peer companies and its energy services industry peer companies; and |
| • | the Company’s 2018 market capitalization was over 30% greater than the 2nd largest energy services industry peer company’s market capitalization. |
Other Resources
| What We Use | How We Use It | |||
“Tally sheets” and “walk-away charts” | Provides a check to ensure that the Compensation Committee sees the full value of all elements of the NEOs’ annual compensation, both as opportunity and as actually realized, and sees the actual results of its compensation decisions in the various situations under which employment may terminate | |||
Reviews by the CEO | Prior to the beginning of the year, the Compensation Committee solicits performance reviews of the other NEOs and executive officers from the CEO for use as an additional input to the Compensation Committee’s determination of target total direct compensation opportunity and, after the end of the year, whether or not to use their discretion to adjust annual incentive compensation amounts determined using the formula discussed above | |||
Other Practices and Policies Related to Compensation
Stock Ownership and Retention Policies
The Company believes it is important for executive officers to accumulate a significant amount of NextEra Energy common stock to align officers’ interests with those of the Company’s shareholders. NextEra Energy’s NEOs (and all other executives)officers) are subject to a stock ownership policy and a stock retention policy. The Company believes these policies strongly reinforce NextEra Energy’s executive compensation philosophy and objectives. At the same time, the Company recognizes that the accumulation of a large, undiversified position in NextEra Energy common stock can at some point create undesired incentives, and it permits its officers some degree of diversification once the target level of holdings is reached.
Under the stock ownership policy, officers are expected, within three years after appointment to office, to own NextEra Energy common stock with a value equal to a multiple of their base salaries. Shares of NextEra Energy common stock and share units held in NextEra Energy’s employee benefit plans and deferred compensation plan are credited toward meeting this requirement. Unvested shares of performance-based restricted stock count, while shares subject to unpaid performance share awards and unexercised options do not count, toward the calculation of required holdings. The current multiples are as follows:
Chief Executive Officer | 7x base salary rate | |
Senior Executive Officers | ||
| 3x base salary rate | |
Other Officers | 1x base salary rate | |
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As of December 31, 2017,2019, all NEOs owned common stock in excess of their requirements.
Under the stock retention policy, until such time as the requirements of the stock ownership policy are met, NextEra Energy expects executive officers to retain (and not sell) a number of shares equal to at leasttwo-thirds of shares acquired through equity compensation awards (cumulatively, from the date of appointment as an executive officer). In addition, in accordance with an amendment to the stock retention policy effective in March 2012, all of the NEOs (among other executive officers) must retainall shares of performance-based restricted stock which vest after March 16, 2012 for a minimum of 24 months after vesting (net of shares withheld for, or used to pay, taxes).
Officers who fail to comply with the retention policy may not be eligible for future equity-based compensation awards for atwo-year period. The CEO may approve the modification or reduction of the minimum retention requirements (other than for himself) to address the special needs of a particular officer, although to date there have been no such modifications or reductions.
Clawback Provisions
In 2012, the Board adoptedThe Company has an incentive compensation recoupment, or “clawback,” policy which provides for recoupment of incentive compensation granted after the date the policy was adopted from current and former executive officers in the event of the occurrence of either of the following triggering events:
| (1) | a decision by the Audit Committee that recoupment is appropriate in connection with an accounting restatement of the Company’s previously-published financial statements caused by what the Audit Committee deems to be materialnon-compliance by the Company with any financial reporting requirement under the federal securities laws (“Financial Statement Triggering Event”); or |
| (2) | a decision by the Compensation Committee that one or more performance metrics used for determining previously paid incentive compensation was incorrectly calculated and, if calculated correctly, would have resulted in a lower payment to one or more executive officers (“Performance Triggering Event”). |
If a triggering event occurs, the Company will (to the extent permitted by applicable law) recoup from any current or former executive officer any incentive compensation paid or granted during the three-year period preceding the triggering event that was in excess of the amount that would have been paid or granted after giving effect,
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as applicable, to the accounting restatement that resulted from the Financial Statement Triggering Event or to what would have been the correct calculation of the performance metric(s) used in determining that a Performance Triggering Event had occurred. The incentive compensation to be recouped will be in an amount and form determined in the judgment of the Board. In addition, the 2011 LTIP provides that any award granted under the 2011 LTIP will be subject to mandatory repayment by the grantee to the extent that events occur that require such mandatory repayment under (a) any Company “clawback” or recoupment policy that is adopted to comply with the requirements of any applicable law, rule or regulation, or otherwise (such as the policy described above) or (b) any law, rule or regulation which imposes mandatory recoupment upon the occurrence of such events.
Post-EmploymentAnti-Hedging Policy
The Company’s Security Trading Policy (the “Trading Policy”), which applies to all Directors, executive officers and employees, prohibits hedging transactions with respect to securities of the Company. The Company considers it improper and inappropriate for any Company insider to engage in short-term or speculative transactions in the Company’s securities. Transactions in options, puts, calls or other derivative securities are prohibited. Additionally, certain forms of hedging transactions with respect to the Company’s securities, such as prepaid variable forwards, equity swaps and collars, are prohibited. These transactions allow an insider to continue to own covered securities without the full risks and rewards of ownership and the insider may no longer have the same objectives as the Company’s other shareholders. Therefore, these transactions are prohibited under the Trading Policy.
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Risk Oversight
The Compensation Committee oversees compensation-related risks, including annually reviewing management’s assessment of risks related to employee compensation programs. In February 2020, the Compensation Committee reviewed management’s analysis of the Company’s compensation program risks and mitigation of those risks, as well as the Company’s ongoing compensation risk management process. The Committee reviewed, among other matters, the Board’s overall role in the oversight of the Company’s risk, the Compensation Committee’s role in the oversight of compensation-related risks, the relationship of certain risks to the Company’s compensation programs and policies and the compensation risk-related risk mitigation practices and controls which the Company has in place.
GeneralAdditional 2019 Compensation Elements
Benefits
NextEra Energy provides its executive officers with a comprehensive benefits program which includes health and welfare, life insurance and other personal benefits. For programs to which employees contribute premiums, executive officers pay the same premiums as other similarly-situated exempt employees. Retirement and other post-employment benefits are discussed underPost-Employment Compensation. These benefits are an integral part of the total compensation package for NEOs, and the aggregate value is included in the information reviewed by the Compensation Committee annually to ensure the reasonableness and appropriateness of total rewards. In addition, NextEra Energy believes that the intrinsic value placed on personal benefits by the NEOs is generally greater than the incremental cost of those benefits to the Company.
Personal Benefits
NextEra Energy provides its executive officers with personal benefits which, in many cases, improve efficiency by allowing the executive officers to focus on their critical job responsibilities and/or increasing the hours they can devote to work. Some of these benefits also serve to better secure the safety of the executive officers and their families. The Compensation Committee and its Compensation Consultant periodically review the personal benefits offered by the Company to ensure that the program is competitive and producing the desired results. The Compensation Committee believes that the benefits the Company derives from these personal benefits more than offset their incremental cost to the Company.
See footnote 2 toTable 1b: 2019 Supplemental All Other Compensation for a description of the personal benefits provided to the NEOs for 2019.
Use of Company-Owned Aircraft
Company aircraft are available to the NEOs, as well as other employees and directors, for business travel, which includes, in the judgment of the Governance & Nominating Committee, travel by NEOs to Company-approved outside board meetings and travel in connection with physical examinations. Among other advantages, business use of the aircraft by executives maximizes time efficiencies, provides a confidential environment for business discussions and enhances security.
NextEra Energy permits limitednon-business use of Company aircraft by NEOs when that use does not interfere with the use of Company aircraft for business purposes.Non-business use is generally discouraged, however, and must be approved in advance by the CEO. NEOs must pay the Company for theirnon-business use based on the rate prescribed by the IRS for valuingnon-commercial flights. A NEO traveling on Company aircraft for business purposes may, with the approval of the CEO, be accompanied by the NEO’s guests, spouse and/or other family members. In this circumstance, there is essentially no incremental cost to the Company associated with transporting the additional passengers. Unless the travel is important to carrying out the business responsibilities of the NEO, however, the Company generally requires payment by the NEO for these passengers based on the rates described above. Allnon-business
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use of Company aircraft is reported to and reviewed by the Governance & Nominating Committee annually. In 2019, the NEOs’ use of Company aircraft fornon-business purposes represented approximately 178 passenger flight hours and for travel to Company-approved outside board meetings and annual physical examinations represented an additional approximately 29 passenger flight hours. Company aircraft were used for a total of approximately 4,110 passenger flight hours in the aggregate in 2019.
Policy on Tax Reimbursements on Executive Perquisites
In accordance with the NextEra Energy, Inc. Policy on Tax Reimbursements on Executive Perquisites, the Company does not provide tax reimbursements on perquisites to the NEOs. In circumstances where the Compensation Committee deems such an action appropriate, the Company may provide tax reimbursements to executives as part of a plan, policy or arrangement applicable to a broad base of management employees of the Company, such as a relocation or expatriate tax equalization policy.
Post-Employment Compensation
NextEra Energy expects continued and consistent high levels of individual performance from all executive officers as a condition of continued employment. The Company has in the past terminated the employment of executive officers who were unable to sustain the expected levels of performance, and it is prepared to do so in the future should that become necessary. All of the NEOs, including the CEO, are “employees at will.”
Set forth below is a description of the agreements and programs that may provide for compensation should thea NEO’s employment with the Company terminate under specified circumstances.
Severance Plan
The NextEra Energy, Inc. Executive Severance Benefit Plan (the “Severance Plan”) provides for the payment of severance benefits to the NEOs and to certain other senior executives if their employment with the Company is involuntarily terminated in specified circumstances. The purpose of the Severance Plan which was adopted by the Compensation Committee in February 2013, is to retain the covered senior executives and encourage dedication to their duties by ensuring the equitable treatment of those who may experience an involuntary termination, as defined in the Severance Plan. The Severance Plan provides severance benefits following involuntary termination in exchange for entry by the executive into a release of claims against the Company and an agreement to adhere to certainnon-competition and related covenants protective of the Company and its affiliates. Following a covered involuntary termination and the execution of the release and other agreement, the executive would receive a cash payment equal to two times the executive’s annual base salary plus two times the executive’s target annual incentive compensation for the year of termination, payable in two equal annual installments. In addition, the executive’s outstanding equity and equity-based awards would vest pro rata, and become payable at the end of any applicable performance periods, subject to the attainment by the Company of the specified performance objectives. The executive also would receive certain ancillary benefits, including outplacement assistance or payment in an amount equal to the value of the outplacement assistance. Amounts payable under the Severance Plan are subject to a cap specified in the Severance Plan.
The Company may amend or terminate the Severance Plan, in full or in part, at any time, but if an amendment or termination would affect the rights of an executive, the executive must agree in writing to the amendment or termination. The Severance Plan does not provide for the payment of severance benefits upon terminations governed by the terms of the Retention Agreements described below.
Change in Control
Each of the NEOs is a party to an executive retention employment agreement (“Retention Agreement”) with the Company. The Compensation Committee has concluded that the Retention Agreements are desirable in order to align NEO and shareholder interests under some unusual conditions, as well as useful and, in some cases, necessary to attract and retain senior executive talent.
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In connection with a change in control of the Company, it can be important to secure the dedicated attention of executive officers whose personal positions are at risk and who have other opportunities readily available to them. By establishing compensation and benefits payable under various merger and acquisition scenarios, change in control agreements enable the NEOs to set aside personal financial and career objectives and focus on maximizing shareholder value. These agreements also help the officer to maintain an objective and neutral perspective in analyzing opportunities that may arise. Furthermore, they ensure continuity of the leadership team at a time when business continuity is of paramount concern. Without the Retention Agreements, the Company would have a greater risk of losing key executives in times of uncertainty.
Retention Agreements entered into since 2009 do not include excise taxgross-ups. The material terms of the Retention Agreements are described underPotential Payments Upon Termination or Change in Control on page 70.81.
Retirement Programs
Employee Pension Plan and 401(k) Plan
NextEra Energy maintains two retirement plans which qualify for favorable tax treatment under the Internal Revenue Code (“Code”): anon-contributory defined benefit pension plan and a defined contribution 401(k) plan. These plans are available to substantially all NextEra Energy employees. Each of the NEOs participates in both plans. The pension plan is more fully described followingTable 5: Pension Benefits.
Supplemental Executive Retirement Plan (“SERP”)
Current tax laws place various limits on the benefits payable undertax-qualified retirement plans, such as NextEra Energy’s defined benefit pension plan and 401(k) plan, including a limit on the amount of annual compensation that can be taken into account when applying the plans’ benefit formulas. Therefore, the retirement incomes provided to the NEOs by the qualified plans generally constitute a smaller percentage of final pay than is typically the case for other Company employees. In order to make up for this and maintain the market-competitiveness of NextEra Energy’s executive retirement benefits, NextEra Energy maintains an unfunded,non-qualified SERP for its executive officers, including the NEOs. For the NEOs, compensation included under the SERP is annual base salary plus the actual annual cash incentive award, as opposed to the compensation included under the qualified plans, which is annual base salary only. NextEra Energy believes it is appropriate to include annual cash incentive awards for purposes of determining retirement plan benefits (both defined benefit pension and 401(k)) for the NEOs in order to ensure that the NEOs can replace in retirement a proportion of total compensation similar to that replaced by other employees participating in the Company’s defined benefit pension and 401(k) plans, bearing in mind that base salary alone constitutes a relatively smaller percentage of a NEO’s total compensation.
For additional information about the defined benefit plan benefit formulas under the SERP, seeTable 5: Pension Benefits and accompanying descriptions.
Deferred Compensation Plan
NextEra Energy sponsors anon-qualified, unfunded Deferred Compensation Plan, which allows eligible highly compensated employees, including the NEOs, voluntarily and at their own risk to elect to defer certain forms of compensation prior to the compensation being earned and vested. NextEra Energy makes this opportunity available to its highly compensated employees as a financial planning tool and an additional method to save for retirement. Deferrals by executive officers generally result in the Company deferring its obligation to make cash payments or issue shares of its common stock to those executive officers.
The Compensation Committee does not view the Deferred Compensation Plan as providing executives with additional compensation. Participants in the Deferred Compensation Plan are general creditors of the Company and the deferral of the payment obligation provides a financial advantage to the Company. Mr. Nazar elected to defer 50% of his base salary in 2017.For additional information about the Deferred Compensation Plan, seeTable 6: Nonqualified Deferred Compensation and accompanying descriptions.
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Tax Considerations
The Compensation Committee carefully considers the tax impact of the Company’s compensation programs on NextEra Energy as well as on the NEOs. However, the Compensation Committee believes that decisions regarding executive compensation should be primarily based on whether they result in positive long-term value for the Company’s shareholders and other important stakeholders. For example,In light of the Compensation Committee has consideredrepeal of the impact of tax provisions such as sectionperformance-based compensation exception to Section 162(m) of the Code, the Compensation Committee expects compensation granted or paid in structuring NextEra Energy’s executive compensation program2019 and to the extent reasonably possible in light of its compensation goals and objectives, the compensation paid to the NEOs has been structured with the expectation that itfuture tax years will qualify as qualified performance-based compensationnot be fully deductible by the Company for federal income tax purposes under section 162(m) of the Code to the extent such section is applicable. Under the Tax Cuts and Jobs Act of 2017, effective for the Company’s taxable year beginning January 1, 2018, the exception for performance-based compensation will no longer be available, subject to transition relief for certain grandfathered arrangements in effect as of November 2, 2017. However, in light of the competitive nature of the market for executive talent,purposes. While the Compensation Committee believes that shareholder interests are best served if it is more important to ensure that the NEOs remain focused on building shareholder value than to use a particularretains discretion and flexibility in awarding compensation, practice or structure solely to ensure tax deductibility. Therefore,even though some compensation awards may result in some cases thenon-deductible compensation paid to NEOs is nondeductible, including in 2017, for example, a portion of Mr. Robo’s base salary, the value of certain of Mr. Robo’s personal benefits and the dividends accruing on his unvested performance-based restricted stock, whichexpenses, the Compensation Committee believes is appropriate, immaterialintends to the Company as a financial matter and consistent with the Company’s overallmaintain strongpay-for-performance alignment of executive compensation design and philosophy.arrangements notwithstanding loss of deductibility due to repeal of the exemption for performance-based compensation.
The Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis required by applicable SEC rules which precedes this Report and, based on its review and that discussion, the Compensation Committee recommended to the Board that the Compensation Discussion & Analysis set forth above be included in the Company’s proxy statement for the 20182020 annual meeting of shareholders.
Respectfully submitted,
Kirk S. Hachigian, Chair
Kenneth B. DunnSherry S. Barrat
James L. Camaren
Amy B. Lane
Rudy E. Schupp
Hansel E. Tookes, II
5663
When reviewing the narrative, tables and footnotes which follow, note that, in order to meet the goals and objectives of NextEra Energy’s executive compensation program as described inCompensation Discussion & Analysis, the Compensation Committee primarily focuses on, and values, each NEO’s total compensation opportunity at the beginning of the relevant performance periods. Since many elements of total compensation are variable, based on performance and are not paid to the NEO for one, two or three years (and in some instances longer) after the compensation opportunity is first determined, the amounts reported in some of the tables in this proxy statement may reflect compensation decisions made prior to 20172019 and in some cases reflect amounts different from the amounts that may ultimately be paid.
Table 1a: 20172019 Summary Compensation Table
The following table provides certain information about the compensation paid to, or accrued on behalf of, the NEOs in 2017.2019. It is important to keep in mind the following when reviewing the table:
The amounts shown in the “Stock Awards” and the “Option Awards” columns are based on the aggregate grant date fair value of awards computed under applicable accounting rules for all equity compensation awards.
The “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column reflects the actuarially-determined change in the present value of the pension benefit payable to each NEO in the applicable year. These changes in present value are not related to any compensation decision on the part of the Compensation Committee.
Table 1a: 20172019 Summary Compensation Table
| Name and Principal Position(a) | Year (b) | Salary ($)(c) | Bonus ($)(d) | Stock Awards(3)(4)(5) ($)(e) | Option Awards(3) ($)(f) | Non-Equity Incentive Plan Compen- sation(6) ($)(g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (7)(8) ($)(h) | All Other Compen- sation(7)(9) ($)(i) | Total ($)(j) | Year (b) | Salary ($)(c) | Bonus ($)(d) | Stock Awards(4)(5)(6) ($)(e) | Option Awards(4)(7) ($)(f) | Non-Equity Incentive Plan Compen- sation(8) ($)(g) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (9)(10) ($)(h) | All Other Compen- sation(9)(11) ($)(i) | Total ($)(j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
James L. Robo | 2017 | $ | 1,350,000 | $ | 0 | $ | 9,607,113 | $ | 2,437,497 | $ | 4,320,000 | $ | 754,433 | $ | 342,650 | $ | 18,811,693 | 2019 | $ | 1,450,000 | $ | 0 | $ | 11,744,534 | $ | 2,825,000 | $ | 4,570,400 | $ | 906,719 | $ | 380,944 | $ | 21,877,597 | ||||||||||||||||||||||||||||||||||||||
Chairman, President and CEO | 2016 | 1,300,000 | 0 | 9,629,404 | 1,156,993 | 3,732,300 | 672,321 | 267,753 | 16,758,771 | 2018 | 1,400,000 | 0 | 11,611,417 | 2,624,993 | 4,480,000 | 854,722 | 387,610 | 21,358,742 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | 1,250,000 | 0 | 8,822,818 | 1,072,493 | 3,275,000 | 588,331 | 263,297 | 15,271,939 | 2017 | 1,350,000 | 0 | 9,607,113 | 2,437,497 | 4,320,000 | 754,433 | 342,650 | 18,811,693 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Ketchum | 2017 | 650,000 | 0 | 1,653,209 | 325,089 | 873,600 | 185,793 | 107,847 | 3,795,538 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rebecca J. Kujawa |
|
2019 |
|
|
529,000 |
|
|
0 |
|
|
1,496,724 |
|
|
280,600 |
|
|
729,500 |
|
|
110,820 |
|
|
66,153 |
|
|
3,212,797 |
| |||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President, | 2016 | 575,000 | 0 | 1,107,531 | 213,193 | 752,700 | 153,193 | 94,812 | 2,896,429 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Armando Pimentel, Jr. | 2017 | 897,000 | 0 | 2,652,861 | 521,600 | 1,205,600 | 320,145 | 143,860 | 5,741,066 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President and CEO | 2016 | 838,100 | 0 | 2,140,778 | 412,198 | 1,120,500 | 294,735 | 127,667 | 4,933,978 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | 790,700 | 0 | 1,738,904 | 338,498 | 1,046,100 | 279,245 | 130,371 | 4,323,818 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manoochehr K. Nazar | 2017 | 904,800 | 0 | 2,122,451 | 417,296 | 1,266,700 | 330,084 | 146,425 | 5,187,756 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
President, Nuclear Division and Chief Nuclear | 2016 | 874,200 | 0 | 1,938,471 | 373,290 | 1,168,800 | 303,519 | 142,154 | 4,800,434 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | 840,600 | 0 | 1,844,175 | 358,887 | 1,059,200 | 297,961 | 137,279 | 4,538,102 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Ketchum |
|
2019 |
|
|
983,800 |
|
|
0 |
|
|
2,839,220 |
|
|
532,200 |
|
|
1,356,700 |
|
|
278,554 |
|
|
160,341 |
|
|
6,150,815 |
| |||||||||||||||||||||||||||||||||||||||||||||
President and CEO of NextEra | 2018 | 819,000 | 0 | 2,311,181 | 409,591 | 1,089,300 | 226,055 | 122,942 | 4,978,069 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 650,000 | 0 | 1,653,209 | 325,089 | 873,600 | 185,793 | 107,847 | 3,795,538 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric E. Silagy | 2017 | 860,000 | 0 | 2,264,864 | 445,293 | 1,204,000 | 273,590 | 173,490 | 5,221,237 |
|
2019 |
|
|
1,154,100 |
|
|
0 |
|
|
3,668,772 |
|
|
687,700 |
|
|
1,591,500 |
|
|
368,555 |
|
|
175,873 |
|
|
7,646,500 |
| ||||||||||||||||||||||||||||||||||||
President and CEO of FPL | 2016 | 796,100 | 0 | 1,575,382 | 303,289 | 1,114,500 | 234,353 | 122,547 | 4,146,171 | 2018 | 1,049,200 | 0 | 3,065,463 | 543,287 | 1,461,500 | 315,204 | 166,656 | 6,601,310 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2015 | 723,700 | 0 | 1,103,342 | 210,293 | 911,900 | 203,585 | 128,547 | 3,281,367 | 2017 | 860,000 | 0 | 2,264,864 | 445,293 | 1,204,000 | 273,590 | 173,490 | 5,221,237 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manoochehr K. Nazar |
|
2019 |
|
|
997,500 |
|
|
0 |
|
|
2,454,867 |
|
|
460,100 |
|
|
1,375,600 |
|
|
382,497 |
|
|
158,775 |
|
|
5,829,339 |
| |||||||||||||||||||||||||||||||||||||||||||||
President, Nuclear Division of NextEra Energy | 2018 | 950,000 | 0 | 2,472,314 | 438,200 | 1,330,000 | 357,796 | 159,229 | 5,707,539 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 904,800 | 0 | 2,122,451 | 417,296 | 1,266,700 | 330,084 | 146,425 | 5,187,756 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charles E. Sieving |
|
2019 |
|
|
1,002,400 |
|
|
0 |
|
|
1,789,598 |
|
|
335,500 |
|
|
1,172,800 |
|
|
295,814 |
|
|
138,999 |
|
|
4,735,111 |
| |||||||||||||||||||||||||||||||||||||||||||||
Executive Vice President and | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Armando Pimentel, Jr. |
|
2019 |
|
|
205,089 |
|
|
0 |
|
|
5,841,140 |
|
|
951,697 |
|
|
0 |
| | 23,254 | |
|
101,042 |
|
|
7,122,222 |
| |||||||||||||||||||||||||||||||||||||||||||||
Former President and | 2018 | 1,004,600 | 0 | 3,296,321 | 584,188 | 1,272,800 | 353,407 | 153,133 | 6,664,449 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2017 | 897,000 | 0 | 2,652,861 | 521,600 | 1,205,600 | 320,145 | 143,860 | 5,741,066 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | In |
64
$21,877,597. As permitted by SEC rules, we are using the same median employee in our pay ratio calculation for 2019 as we used for 2018. We believe that there have not been any changes in our employee population or employee compensation arrangements since 2018 that would significantly impact our pay ratio for 2019. We previously identified our median employee for 2018 from our employee population as of December 31, |
57
compensation measure used to identify the median employee |
| (2) | Effective March 1, 2019, Mr. Pimentel retired, Mr. Ketchum was appointed president and CEO of NextEra Energy Resources and Mrs. Kujawa was appointed executive vice president, finance and chief financial officer. Mr. Ketchum previously served as executive vice president, finance and chief financial officer of NextEra Energy and FPL. Mrs. Kujawa and Mr. Sieving became |
| (3) | Mr. Pimentel retired from the Company on March 1, 2019. The salary shown for 2019 includes the amount earned by Mr. Pimentel in 2019, when his annual base salary rate was $1,074,900. |
| (4) | The amounts shown represent the aggregate grant date fair value of equity-based compensation awards granted during the relevant year, valued in accordance with applicable accounting rules, without reduction for estimated forfeitures. See Note 11 |
Includes performance-based restricted stock and performance share awards valued based on the probable outcome of the performance conditions as of the grant |
| Description | Market | Volatility | Yield | Interest Rate | Expected Life | Fair Value |
Market |
Volatility |
Yield |
Interest Rate |
Expected Life |
Fair Value | ||||||||||||||||||||||||||||||
For the 2/14/2019 grant: |
|
$182.61 |
|
15.76% |
|
2.93 |
% |
2.47% |
2.88 yr. |
|
$171.80 |
| ||||||||||||||||||||||||||||||
For the 2/15/2018 grant: |
|
$154.43 |
|
16.26% |
|
3.05 |
% |
2.37% |
2.87 yr. |
|
$154.64 |
| ||||||||||||||||||||||||||||||
For the 2/17/2017 grant: | $ | 126.86 | 17.64 | % | 3.16 | % | 1.44 | % | 2.87 yr. | $ | 147.07 |
|
$126.86 |
|
17.64% |
|
3.16 |
% |
1.44% |
2.87 yr. |
|
$147.07 |
| |||||||||||||||||||
For the 2/12/2016 grant: | $ | 111.67 | 17.15 | % | 3.16 | % | 0.87 | % | 2.88 yr. | $ | 126.65 | |||||||||||||||||||||||||||||||
For the 2/13/2015 grant: | $ | 103.62 | 14.81 | % | 3.11 | % | 0.99 | % | 2.88 yr. | $ | 113.34 | |||||||||||||||||||||||||||||||
For Mr. Pimentel, actual grant date fair value of stock awards granted in 2019 was $555,521. The additional amount shown in this column, $5,285,619, represents the incremental fair value of 2017, 2018 and 2019 stock awards, as required under applicable accounting guidance, in connection with Mr. Pimentel’s retirement meeting the conditions for continued full vesting under his equity award agreements. |
| (6) | The maximum payout of performance shares granted in |
Representsnon-qualified stock options. For Mr. Pimentel, actual grant date fair value of option awards granted in 2019 was $104,200. The additional amount shown for Mr. Pimentel in this column, $847,497, represents the incremental fair value of 2017, 2018 and 2019 option awards, as required under applicable accounting guidance, in connection with Mr. Pimentel’s retirement meeting the conditions for accelerated vesting under his option award agreements. |
| (8) | Includes the amount earned by each NEO, as applicable, with respect to |
65
NextEra Energy maintains both defined benefit and defined contribution retirement plans (as described inCompensation Discussion & Analysis—Post-Employment Compensation—Retirement |
All amounts in this column reflect theone-year change in the |
Additional information about the amounts for |
The following table (Table 1b) provides additional information for 20172019 regarding column (i) ofTable 1a: 20172019 Summary Compensation Table.
Table 1b: 20172019 Supplemental All Other Compensation
| Name | Total From Summary Compensation Table ($) | Contributions to Defined Contribution Plans(1) ($) | Perquisites and Other Personal Benefits(2) ($) |
Total From |
Contributions |
Perquisites | |||||||||||||||||||||
James L. Robo | $ | 342,650 | $ | 241,364 | $ | 101,286 |
|
$380,944 |
|
|
$281,620 |
|
|
$99,324 |
| ||||||||||||
Rebecca J. Kujawa |
|
66,153 |
|
|
40,776 |
|
|
25,377 |
| ||||||||||||||||||
John W. Ketchum | 107,847 | 66,456 | 41,391 |
|
160,341 |
|
|
98,292 |
|
|
62,049 |
| |||||||||||||||
Eric E. Silagy |
|
175,873 |
|
|
124,126 |
|
|
51,747 |
| ||||||||||||||||||
Manoochehr K. Nazar |
|
158,775 |
|
|
110,504 |
|
|
48,271 |
| ||||||||||||||||||
Charles E. Sieving |
|
138,999 |
|
|
96,862 |
|
|
42,137 |
| ||||||||||||||||||
Armando Pimentel, Jr. | 143,860 | 95,777 | 48,083 |
|
101,042 |
|
|
81,393 |
|
|
19,649 |
| |||||||||||||||
Manoochehr K. Nazar | 146,425 | 98,468 | 47,957 | ||||||||||||||||||||||||
Eric E. Silagy | 173,490 | 93,730 | 79,760 | ||||||||||||||||||||||||
58
| (1) | NextEra Energy maintains both defined benefit and defined contribution retirement plans. Amounts attributable to the defined benefit plans are reported inTable 1a: |
| (2) | This column includes the aggregate incremental cost to NextEra Energy of providing personal benefits to the NEOs. For each NEO, the personal benefits reported for |
66
Table 2: 20172019 Grants of Plan-Based Awards
The following table provides information about the cash and equity incentive compensation awarded to the NEOs in 2017.2019. It is important to keep in mind the following when reviewing the table:
| • | Columns (c), (d) and (e) below set forth the range of possible payouts established under the Annual Incentive Plan for |
The number of shares listed under “Estimated Future Payouts Under Equity Incentive Plan Awards” (columns (g) and (h)) represent 20172019 grants of performance shares, performance-based restricted stock and performance-based restricted stock,NEP common units, the material terms of which are described below this table.
The number of shares listed under “All Other Option Awards: Number of Securities Underlying Options” (column (j)) and the exercise price set forth under “Exercise or Base Price of Option Awards” (column (k)) represent the number and exercise price of 20172019 grants ofnon-qualified stock options, the material terms of which are described below this table.
In the column headed “Grant Date Fair Value of Stock and Option Awards” (column (l)), the top number is the grant date fair value of the performance share award, the next number is the grant date fair value of the performance-based restricted stock award, and the third number is the grant date fair value of the stock options granted.granted and the fourth number is the grant date fair value of NEP performance-based restricted common units, as applicable. For Mr. Pimentel, the awards marked with footnote (5) in column (l) of the table includes the remeasured fair value of certain awards under applicable accounting rules, where the first three numbers represent the remeasured value of performance share awards, the next three numbers represent the remeasured value of performance-based restricted stock awards, the next two numbers represent the remeasured value of NEP performance-based restricted common units and the last three numbers represent the remeasured value of stock options.
5967
Table 2: 20172019 Grants of Plan-Based Awards
Grant | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#) (i) | All Other Option Awards: Number of Securities Underlying Options(3) (#) (j) | Exercise or Base Price of Option Awards ($/Sh) (k) | Grant Date Fair Value of Stock and Option Awards($)(4) (l) | Grant | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#) (i) | All Other Option Awards: Number of Securities Underlying Options(3) (#) (j) | Exercise or Base Price of Option Awards ($/Sh) (k) | Grant Date Fair Value of Stock and Option Awards($)(4)(5) (l) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name(a) | Thre- shold ($) (c) | Target ($) (d) | Maximum ($) (e) | Thre- shold | Target (#) (g) | Maximum (#) (h) | Thre- shold ($) (c) | Target ($) (d) | Maximum ($) (e) | Thre- shold | Target (#) (g) | Maximum (#) (h) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James L. Robo | — | $ | 0 | $ | 2,160,000 | $ | 4,320,000 | — | — | — | — | — | — | — |
|
— |
|
|
$0 |
|
$ |
2,320,000 |
|
$ |
4,640,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
44,132 |
|
|
88,264 |
|
$ |
10,614,629 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
1,856 |
|
|
1,856 |
|
|
338,924 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
141,250 |
|
$ |
182.61 |
|
|
2,825,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/19/2019 |
|
|
0 |
|
|
18,572 |
|
|
18,572 |
|
|
790,981 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rebecca J. Kujawa |
|
— |
|
|
0 |
|
|
370,300 |
|
|
740,600 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
5,057 |
|
|
10,114 |
|
|
1,216,310 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
998 |
|
|
998 |
|
|
182,245 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
14,030 |
|
|
182.61 |
|
|
280,600 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 55,660 | 111,320 | $ | 8,632,194 | (5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 7,685 | 7,685 | $ | 974,919 |
|
2/19/2019 |
|
|
0 |
|
|
2,305 |
|
|
2,305 |
|
|
98,170 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 183,962 | $ | 126.86 | $ | 2,437,497 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Ketchum | — | 0 | 455,000 | 910,000 | — | — | — | — | — | — | — |
|
— |
|
|
0 |
|
|
688,660 |
|
|
1,377,320 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| ||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 8,564 | 17,128 | 1,328,194 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 2,562 | 2,562 | 325,015 |
|
2/14/2019 |
|
|
0 |
|
|
9,592 |
|
|
19,184 |
|
|
2,307,068 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 24,535 | 126.86 | 325,089 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Armando Pimentel, Jr. | — | 0 | 627,900 | 1,255,800 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
1,894 |
|
|
1,894 |
|
|
345,863 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
26,610 |
|
|
182.61 |
|
|
532,200 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/19/2019 |
|
|
0 |
|
|
4,374 |
|
|
4,374 |
|
|
186,289 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric E. Silagy |
|
— |
|
|
0 |
|
|
807,870 |
|
|
1,615,740 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
12,395 |
|
|
24,790 |
|
|
2,981,245 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
3,765 |
|
|
3,765 |
|
|
687,527 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 13,743 | 27,486 | 2,131,340 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 4,111 | 4,111 | 521,521 |
|
2/14/2019 |
|
|
34,385 |
|
|
182.61 |
|
|
687,700 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 39,366 | 126.86 | 521,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manoochehr K. Nazar | — | 0 | 633,360 | 1,266,720 | — | — | — | — | — | — | — |
|
— |
|
|
0 |
|
|
698,250 |
|
|
1,396,500 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| ||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 10,995 | 21,990 | 1,705,209 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 3,289 | 3,289 | 417,242 |
|
2/14/2019 |
|
|
0 |
|
|
8,294 |
|
|
16,588 |
|
|
1,994,873 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 31,494 | 126.86 | 417,296 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric E. Silagy | — | 0 | 602,000 | 1,204,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 11,733 | 23,466 | 1,819,586 | (5) |
|
2/14/2019 |
|
|
0 |
|
|
2,519 |
|
|
2,519 |
|
|
459,995 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 0 | 3,510 | 3,510 | 445,278 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/17/2017 | 33,607 | 126.86 | 445,293 |
|
2/14/2019 |
|
|
23,005 |
|
|
182.61 |
|
|
460,100 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charles E. Sieving |
|
— |
|
|
0 |
|
|
601,440 |
|
|
1,202,880 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
6,046 |
|
|
12,092 |
|
|
1,454,184 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
1,194 |
|
|
1,194 |
|
|
218,036 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
16,775 |
|
|
182.61 |
|
|
335,500 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/19/2019 |
|
|
0 |
|
|
2,756 |
|
|
2,756 |
|
|
117,378 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Armando Pimentel, Jr. |
|
— |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
1,877 |
|
|
3,754 |
|
|
464,069 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
0 |
|
|
370 |
|
|
370 |
|
|
69,608 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/14/2019 |
|
|
5,210 |
|
|
182.61 |
|
|
121,549 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
2/19/2019 |
|
|
0 |
|
|
857 |
|
|
857 |
|
|
36,491 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
13,743 |
|
|
27,486 |
|
|
1,901,994 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
12,528 |
|
|
25,056 |
|
|
2,501,051 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
1,877 |
|
|
3,754 |
|
|
437,548 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
1,370 |
|
|
1,370 |
|
|
83,307 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
1,638 |
|
|
1,638 |
|
|
175,365 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
370 |
|
|
370 |
|
|
68,108 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
3,400 |
|
|
3,400 |
|
|
82,268 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
857 |
|
|
857 |
|
|
35,977 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
13,122 |
|
|
126.86 |
|
|
263,269 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
21,576 |
|
|
154.43 |
|
|
463,318 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
— |
|
|
5,210 |
|
|
182.61 |
|
|
120,910 |
(5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | Non-Equity Incentive Plan awards are paid under the Annual Incentive Plan, the material terms of which are described inCompensation Discussion & Analysis. For |
68
| (2) |
|
| (3) | Non-qualified stock options were granted under the 2011 LTIP in |
| (4) | The amounts shown are the value of the equity-based compensation grants as of the |
| (5) |
|
60
Additional Disclosure Related to 20172019 Summary Compensation Table and 20172019 Grants of Plan-Based Awards Table
Material Terms of Performance Shares Granted to NEOs in 20172019
three yearthree-year performance period;
paid in shares of NextEra Energy common stock, based primarily on Company performance for the three-year performance period as compared to specified financial and operational objectives andwith a ±20 relative TSR relative tomodifier based on performance of the top ten power companies inby market capitalization at the S&P 500 Utilities Index,end of a3-year period, capped at 200% of target;
dividends are not paid or accrued during the performance period;
may vest in full or in part upon the occurrence of certain events, such as a change in control, death, disability or some retirements;
forfeited if employment terminates prior to the end of the performance period in all other instances (subject to the terms of Retention Agreements and the Severance Plan); and
award agreement includesnon-solicitation andnon-competition provisions.
Material Terms of Performance-Based Restricted Stock Granted to NEOs in 20172019
if corporate performance objective of adjusted earnings of $1.2 billion is met as of the end of the preceding year, performance-based restricted stock vestsone-third per year for three years for each year the corporate performance objective is met, beginning approximately one year from date of grant;
if corporate performance objective of adjusted earnings of $1.2 billion is not met in any year, performance-based restricted stock scheduled to vest in that year is forfeited;
dividends are paid on performance-based restricted stock as and when declared by the Company, but are subject to repayment by NEO if awards are forfeited prior to vesting;
NEOs have the right to vote their shares of performance-based restricted stock;
69
may vest in full or in part prior to or on normal vesting date and, in some circumstances, without regard to satisfaction of performance objective, upon the occurrence of certain events, such as a change in control, death, disability or some retirements;
forfeited if employment terminates prior to vesting in all other instances (subject to terms of Retention Agreements and the Severance Plan); and
award agreement includesnon-solicitation andnon-competition provisions.
Material Terms of Performance-Based Restricted NEP Common Units Granted to NEOs in 2019
if the NEP performance objective of adjusted EBITDA of $400 million is met as of the end of the preceding year, performance-based restricted NEP common units vestone-third per year for three years for each year the NEP performance objective is met, beginning approximately one year from date of grant;
if the NEP performance objective of adjusted EBTIDA of $400 million is not met in any year, performance-based restricted NEP common units scheduled to vest in that year are forfeited;
distributions are paid on performance-based restricted NEP common units as and when declared by NEP, but are subject to repayment by NEO if awards are forfeited prior to vesting;
NEOs have the right to vote their performance-based restricted NEP common units;
may vest in full or in part prior to or on normal vesting date and, in some circumstances, without regard to satisfaction of performance objective, upon the occurrence of certain events, such as a change in control, death, disability or some retirements;
forfeited if employment terminates prior to vesting in all other instances (subject to terms of Retention Agreements and the Severance Plan); and
award agreement includesnon-solicitation andnon-competition provisions.
Material Terms of Stock Options Granted to NEOs in 20172019
vest and become exercisableone-third per year for three years, beginning approximately one year from date of grant;
exercise price equal to closing price of NextEra Energy common stock on date of grant (February 17, 2017)14, 2019);
generally expire ten years from date of grant;
may vest in full or in part prior to normal vesting date upon the occurrence of some events, such as a change in control, death, disability or some retirements;
forfeited if employment terminated prior to vesting in all other instances (subject to terms of Retention Agreements and the Severance Plan); and
award agreement includesnon-solicitation andnon-competition provisions.
61
Determination of Amount Payable Under Annual Incentive Plan to NEOs
SeeCompensation Discussion & Analysis for a description of the criteria used to determine the amount payable to each NEO under the Annual Incentive Plan(Non-Equity Incentive Plan Compensation).
70
Salary and Bonus as a Proportion of 20172019 Total Compensation
No discretionary bonuses were paid to NEOs in 2017.2019. The salaries, as set forth in column (c) ofTable 1a: 20172019 Summary Compensation Table, of each of the NEOs, excluding Mr. Pimentel who retired in March 2019, as a proportion of 20172019 total compensation were as follows:
Mr. Robo—8%
Mrs. Kujawa—20%
Mr. Ketchum—20%
Mr. Silagy—19%
Mr. Pimentel—17%Nazar—21%
Mr. Nazar—19%
Mr. Silagy—18%Sieving—26%
These proportions are consistent with the Company’s philosophy of paying NEOs a higher percentage of performance-based compensation and a lower percentage of fixed compensation.
Table 3: 20172019 Outstanding Equity Awards at Fiscal Year End
The following table provides information about equity incentive awards granted to the NEOs in 20172019 and in prior years. It is important to keep in mind the following when reviewing the table:
The number of shares listed in column (i), “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested,” includes both performance shares, at maximum payout level (in accordance with applicable SEC rules), prior to the expiration of the performance period, and performance-based restricted stock and NEP common units prior to the satisfaction of the performance and time criteria required for vesting. The number of shares listed in column (g), “Number of Shares or Units of Stock That Have Not Vested,” includes a deferred retirement award issued to Mr. Robo in 2012 in connection with his initial appointment as CEO.
As required by SEC rules, the amounts listed in column (j), “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested,” represent the value of performance-based restricted stock and NEP common units and performance share awards at maximum payout levels. These amounts were not realized by the NEOs during 2017,2019, and the value of awards which vest at a later date is likely to be different from the amount listed, based on, among other factors, the performance of the Company and the price of the Company’s common stock.
6271
Table 3: 20172019 Outstanding Equity Awards at Fiscal Year End
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Number of Securities Underlying Unexercised Options(#) Exercisable(1) (b) | Number of Securities Underlying Unexercised Options(#) Unexer- cisable(1) (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options(#) (d) | Option Exercise Price($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested(2) (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested($)(3) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(#)(4) (i) | Equity Plan Awards: Market or | Number of Securities Underlying Unexercised Options(#) Exercisable(1) (b) | Number of Securities Underlying Unexercised Options(#) Unexer- cisable(1) (c) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options(#) (d) | Option Exercise Price($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested(2) (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested($)(3) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(#)(4) (i) | Equity Plan Awards: Market or | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
James L. Robo | 81,489 | 0 | 0 | 50.91 | 2/13/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 111,864 | 0 | 0 | 45.57 | 2/12/2020 | 101,937 | 0 | 0 | 60.22 | 2/17/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 89,074 | 0 | 0 | 54.59 | 2/18/2021 | 82,931 | 0 | 0 | 72.50 | 2/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 101,937 | 0 | 0 | 60.22 | 2/17/2022 | 58,922 | 0 | 0 | 93.27 | 2/14/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 82,931 | 0 | 0 | 72.50 | 2/15/2023 | 78,744 | 0 | 0 | 103.62 | 2/13/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 58,922 | 0 | 0 | 93.27 | 2/14/2024 | 101,848 | 0 | 0 | 111.67 | 2/12/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 52,496 | 26,248 | 0 | 103.62 | 2/13/2025 | 122,641 | 61,321 | 0 | 126.86 | 2/17/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 33,950 | 67,898 | 0 | 111.67 | 2/12/2026 | 48,477 | 96,952 | 0 | 154.43 | 2/15/2028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
James L. Robo | 0 | 183,962 | 0 | 126.86 | 2/17/2027 | 0 | 141,250 | 0 | 182.61 | 2/14/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 22,800 | $ | 3,561,132 | 247,316 | (5) | $ | 38,628,286 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 23,964 | $ | 5,803,122 | 222,402 | (5) | $ | 48,021,476 | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 14,030 | 0 | 182.61 | 2/14/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 17,647 | (6) | $ | 3,785,788 | (6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John W. Ketchum | 6,255 | 12,512 | 0 | 111.67 | 2/12/2026 | 18,767 | 0 | 0 | 111.67 | 2/12/2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 24,535 | 126.86 | 2/17/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 34,361 | (6) | $ | 5,366,844 | (6) | 16,357 | 8,178 | 0 | 126.86 | 2/17/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Armando Pimentel, Jr. | 35,347 | 0 | 0 | 54.59 | 2/18/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 42,008 | 0 | 0 | 60.22 | 2/17/2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 34,620 | 0 | 0 | 72.50 | 2/15/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 22,790 | 0 | 0 | 93.27 | 2/14/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 16,569 | 8,284 | 0 | 103.62 | 2/13/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 12,095 | 24,190 | 0 | 111.67 | 2/12/2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 39,366 | 0 | 126.86 | 2/17/2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 7,564 | 15,128 | 0 | 154.43 | 2/15/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 26,610 | 0 | 182.61 | 2/14/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 47,406 | (7) | $ | 10,199,128 | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric E. Silagy | 15,620 | 0 | 0 | 72.50 | 2/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 11,634 | 0 | 0 | 93.27 | 2/14/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 15,440 | 0 | 0 | 103.62 | 2/13/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 26,698 | 0 | 0 | 111.67 | 2/12/2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 22,405 | 11,202 | 0 | 126.86 | 2/17/2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10,033 | 20,066 | 0 | 154.43 | 2/15/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 34,385 | 0 | 182.61 | 2/14/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 55,371 | (8) | $ | 13,408,641 | (8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 59,087 | (7) | $ | 9,228,799 | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manoochehr K. Nazar | 13,890 | 0 | 0 | 50.91 | 2/13/2019 | 15,790 | 0 | 0 | 54.59 | 2/18/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 19,925 | 0 | 0 | 45.57 | 2/12/2020 | 18,076 | 0 | 0 | 60.22 | 2/17/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 15,790 | 0 | 0 | 54.59 | 2/18/2021 | 38,149 | 0 | 0 | 72.50 | 2/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 18,076 | 0 | 0 | 60.22 | 2/17/2022 | 24,632 | 0 | 0 | 93.27 | 2/14/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 38,149 | 0 | 0 | 72.50 | 2/15/2023 | 26,350 | 0 | 0 | 103.62 | 2/13/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 24,632 | 0 | 0 | 93.27 | 2/14/2024 | 32,860 | 0 | 0 | 111.67 | 2/12/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 17,567 | 8,783 | 0 | 103.62 | 2/13/2025 | 20,996 | 10,498 | 0 | 126.86 | 2/17/2027 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10,954 | 21,906 | 0 | 111.67 | 2/12/2026 | 8,093 | 16,184 | 0 | 154.43 | 2/15/2028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 31,494 | 0 | 126.86 | 2/17/2027 | 0 | 23,005 | 0 | 182.61 | 2/14/2029 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 50,447 | (8) | $ | 7,879,317 | (8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric E. Silagy | 21,216 | 0 | 0 | 60.22 | 2/17/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 15,620 | 0 | 0 | 72.50 | 2/15/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 11,634 | 0 | 0 | 93.27 | 2/14/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10,293 | 5,147 | 0 | 103.62 | 2/13/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8,900 | 17,798 | 0 | 111.67 | 2/12/2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 33,607 | 0 | 126.86 | 2/17/2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 47,076 | (9) | $ | 7,352,800 | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 40,887 | (9) | $ | 9,901,196 | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charles E. Sieving | 21,910 | 0 | 0 | 111.67 | 2/12/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 14,339 | 7,170 | 0 | 126.86 | 2/17/2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5,633 | 11,264 | 0 | 154.43 | 2/15/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 16,775 | 0 | 182.61 | 2/14/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 32,497 | (10) | $ | 7,010,993 | (10) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Armando Pimentel, Jr. | 42,008 | 0 | 0 | 60.22 | 2/17/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 34,620 | 0 | 0 | 72.50 | 2/15/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 22,790 | 0 | 0 | 93.27 | 2/14/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 24,853 | 0 | 0 | 103.62 | 2/13/2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 36,285 | 0 | 0 | 111.67 | 2/12/2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 26,244 | 13,122 | 0 | 126.86 | 2/17/2027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 10,789 | 21,576 | 0 | 154.43 | 2/15/2028 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 5,210 | 0 | 182.61 | 2/14/2029 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | — | 36,445 | (11) | $ | 8,018,777 | (11) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6372
| (1) | All stock options arenon-qualified. All options listed as exercisable at December 31, |
| Name | Grant Date | Vest Date | No. Options | ||||||||||||||||||
James L. Robo | 2/ | 2/15/ | |||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/ | 2/15/ | ||||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/ | 2/15/ | ||||||||||||||||||||
| 2/ | 2/15/ | |||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/ | 2/15/ | |||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/ | 2/15/ | ||||||||||||||||||||
| 2/15/2021 | 7,564 | ||||||||||||||||||||
| 2/17/2017 | 2/15/2020 | 8,178 | |||||||||||||||||||
Eric E. Silagy | 2/14/2019 | 2/15/2020 | 11,461 | ||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| |||||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/15/2018 | 2/15/2020 | 10,033 | |||||||||||||||||||
| 2/15/2021 | 10,033 | ||||||||||||||||||||
| 2/17/2017 | 2/15/2020 | 11,202 | |||||||||||||||||||
Manoochehr K. Nazar | 2/14/2019 | 2/15/2020 | 7,669 | ||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/ | 2/15/ | ||||||||||||||||||||
| 2/15/2021 | 8,092 | ||||||||||||||||||||
| 2/17/2017 | 2/15/ | |||||||||||||||||||
Charles E. Sieving | 2/14/2019 | 2/15/2020 | 5,591 | ||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/ | 2/15/ | ||||||||||||||||||||
| 2/15/2021 | 5,632 | ||||||||||||||||||||
| 2/17/2017 | 2/15/2020 | 7,170 | |||||||||||||||||||
Armando Pimentel, Jr. | 2/14/2019 | 2/15/2020 | 1,736 | ||||||||||||||||||
| 2/15/ | |||||||||||||||||||||
| 2/15/2022 | 1,737 | ||||||||||||||||||||
| 2/ | 2/15/ | ||||||||||||||||||||
| 2/15/2021 | 10,788 | ||||||||||||||||||||
| 2/17/2017 | 2/15/2020 | 13,122 | |||||||||||||||||||
| (2) | Mr. Robo was granted 47,893 shares in 2006 as a deferred retirement award. Of such grants, 50% of Mr. Robo’s shares (28,181 shares, including reinvested dividends) vested on 3/15/2011, and the remainder vested on 3/15/2016. Mr. Robo was also granted 38,231 shares in 2012 as a deferred retirement award. Of those shares, 50% (22,510 shares, including reinvested dividends) vested on 7/1/2017 and the remainder will vest on 7/1/2022. Receipt of the shares will continue to be deferred following vesting in most circumstances. Shares representing the Company’s obligation to Mr. Robo related to the award granted in 2006 are held in a grantor (rabbi) trust. Dividends are reinvested. In |
| (3) | Market value of the unvested deferred retirement awards, performance shares and performance-based restricted stock is based on the closing price of NextEra Energy common stock on December |
| (4) | Performance shares generally vest on the last day of the applicable performance period, with payouts determined by the Compensation Committee at its first regular meeting after the end of the year. Because the end of the performance period for the performance shares granted to each of the NEOs in |
6473
| (5) | Mr. Robo’s outstanding performance shares at maximum payout level totaled |
| Award Type | Grant Date | Vest Date | No. Shares | ||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 618 | ||||||||||||
2/15/ | 619 | ||||||||||||||
2/15/ | 619 | ||||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 680 | ||||||||||||
2/15/ | 680 | ||||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 2,562 | ||||||||||||
The amount shown also includes 30,792 shares of performance-based restricted NEP common units with a market value of $1,621,199 which vest, subject to the satisfaction of applicable performance criteria, as follows:
| Award Type | Grant Date | Vest Date | No. Shares | |||||||||
performance-based restricted NEP common units | 2/19/2019 | 2/15/2020 | 6,190 | |||||||||
2/15/2021 | 6,191 | |||||||||||
2/15/2022 | 6,191 | |||||||||||
performance-based restricted NEP common units | 2/20/2018 | 2/15/2020 | 6,110 | |||||||||
2/15/2021 | 6,110 | |||||||||||
| (6) |
|
| Award Type | Grant Date | Vest Date | No. Shares | ||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 332 | ||||||||||||
2/15/ | 333 | ||||||||||||||
2/15/ | 333 | ||||||||||||||
performance-based restricted stock | 2/15/2018 | 2/15/2020 | 213 | ||||||||||||
2/15/2021 | 213 | ||||||||||||||
| 2/ | 2/15/ | ||||||||||||||
performance-based restricted stock | 2/17/2017 | 2/15/2020 | 274 | ||||||||||||
The amount shown also includes 2,573 shares of performance-based restricted NEP common units with a market value of $135,468 which vest, subject to the satisfaction of applicable performance criteria, as follows:
| Award Type | Grant Date | Vest Date | No. Shares | ||||||||||
performance-based restricted NEP common units | 2/19/2019 | 2/15/2020 | 769 | ||||||||||
2/15/2021 | 768 | ||||||||||||
2/15/ | 768 | ||||||||||||
performance-based restricted NEP common units | 2/20/2018 | 2/15/2020 | 134 | ||||||||||
2/15/2021 | 134 | ||||||||||||
74
| (7) | Mr. |
| Award Type | Grant Date | Vest Date | No. Shares | ||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 632 | ||||||||||||
2/15/ | 631 | ||||||||||||||
2/15/ | 631 | ||||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 574 | ||||||||||||
2/15/2021 | 574 | ||||||||||||||
performance-based restricted stock | 2/17/2017 | 2/15/2020 | 854 | ||||||||||||
The amount shown also includes 6,758 shares of performance-based restricted NEP common units with a market value of $355,809 which vest, subject to the satisfaction of applicable performance criteria, as follows:
| Grant Date | No. Shares | ||||||||||||
performance-based restricted NEP common units | 2/19/2019 | 2/15/2020 | 1,458 | ||||||||||
2/15/2021 | 1,458 | ||||||||||||
2/15/ | 1,458 | ||||||||||||
performance-based restricted NEP common units | 2/20/2018 | 2/15/2020 | 1,192 | ||||||||||
2/15/2021 | 1,192 | ||||||||||||
| (8) | Mr. |
| Award Type | Grant Date | Vest Date | No. Shares | ||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 1,255 | ||||||||||||
2/15/ | 1,255 | ||||||||||||||
2/15/ | 1,255 | ||||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 1,173 | ||||||||||||
2/15/ | 1,173 | ||||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 1,170 | ||||||||||||
65
| (9) | Mr. |
| Award Type | Grant Date | Vest Date | No. Shares | ||||||||||||
performance-based restricted stock | 2/ | 2/15/2020 | 839 | ||||||||||||
2/15/ | 840 | ||||||||||||||
2/15/2022 | 840 | ||||||||||||||
performance-based restricted stock | 2/15/2018 | 2/15/2020 | 946 | ||||||||||||
2/15/2021 | 946 | ||||||||||||||
performance-based restricted stock | 2/17/2017 | 2/15/2020 | 1,096 | ||||||||||||
75
| (10) | Mr. Sieving’s outstanding performance shares at maximum payout level totaled 32,497 shares with a market value on December 31, 2019 of $7,010,993. Of such shares, 6,538 performance shares at target were granted on February 15, 2018 (performance period beginning 1/1/2018 and ending 12/31/2020) and 6,046 performance shares were granted on February 14, 2019 (performance period beginning 1/1/2019 and ending 12/31/2021). The amount shown also includes 2,799 shares of performance-based restricted stock with a market value of $677,806 which vest, subject to the satisfaction of applicable performance criteria, as follows: |
| Award Type | Grant Date | Vest Date | No. Shares | |||||||||
performance-based restricted stock | 2/14/2019 | 2/15/2020 | 398 | |||||||||
2/15/2021 | 398 | |||||||||||
2/15/2022 | 398 | |||||||||||
performance-based restricted stock | 2/15/2018 | 2/15/2020 | 428 | |||||||||
2/15/2021 | 428 | |||||||||||
performance-based restricted stock | 2/17/2017 | 2/15/2020 | 749 | |||||||||
The amount shown also includes 4,530 shares of performance-based restricted NEP common units with a market value of $238,505 which vest, subject to the satisfaction of applicable performance criteria, as follows:
| Award Type | Grant Date | Vest Date | No. Shares | |||||||||
performance-based restricted NEP common units | 2/19/2019 | 2/15/2020 | 919 | |||||||||
2/15/2021 | 919 | |||||||||||
2/15/2022 | 918 | |||||||||||
performance-based restricted NEP common units | 2/20/2018 | 2/15/2020 | 887 | |||||||||
2/15/2021 | 887 | |||||||||||
| (11) | Mr. Pimentel’s outstanding performance shares at maximum payout level totaled 36,445 shares with a market value on December 31, 2019 of $8,018,777. Of such shares, 12,528 performance shares at target were granted on February 15, 2018 (performance period beginning 1/1/2018 and ending 12/31/2020) and 1,877 performance shares were granted on February 14, 2019 (performance period beginning 1/1/2019 and ending 12/31/2021). The amount shown also includes 3,378 shares of performance-based restricted stock with a market value of $818,016 which vest, subject to the satisfaction of applicable performance criteria, as follows: |
| Award Type | Grant Date | Vest Date | No. Shares | |||||||||
performance-based restricted stock | 2/14/2019 | 2/15/2020 | 124 | |||||||||
2/15/2021 | 123 | |||||||||||
2/15/2022 | 123 | |||||||||||
performance-based restricted stock | 2/15/2018 | 2/15/2020 | 819 | |||||||||
| 2/15/ | ||||||||||||
performance-based restricted stock | 2/ | 2/15/ | ||||||||||
The amount shown also includes 4,257 shares of performance-based restricted NEP common units with a market value of $224,131 which vest, subject to the satisfaction of applicable performance criteria, as follows:
| Award Type | Grant Date | Vest Date | No. Shares | |||||||||
performance-based restricted NEP common units | 2/19/2019 | 2/15/2019 | 285 | |||||||||
| 2/15/2020 | 286 | |||||||||||
| 2/15/ | ||||||||||||
performance-based restricted | 2/ | 2/15/ | ||||||||||
| 2/15/2021 | 1,700 | |||||||||||
76
Table 4: 20172019 Option Exercises and Stock Vested
The following table provides information about the NEOs’ stock awards which vested in 2017.2019. It is important to keep in mind the following when reviewing the table:
The “Number of Shares Acquired on Vesting” (column (d)) represents performance shares granted in 20152017 for the performance period which ended in 2017,2019, as well as performance-based restricted stock vesting in 20172019 from grants made in prior years. For Mr. Robo, these shares also represent the vesting of 50% of a deferred retirement award granted in 2012. The Compensation Committee looks at the value of these grants as of the date of grant, rather than as of the date of vesting, when making compensation determinations.
The “Value Realized on Vesting” (column (e)) represents the aggregate payout value of the vested performance shares and vested performance-based restricted stock and, for Mr. Robo, vested shares underlying the deferred retirement award described above.stock.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
| Name(a) | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | Number of Shares Acquired on Vesting(2)(#) (d) | Value Realized on Vesting(2)($) (e) | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise ($) (c) | Number of Shares Acquired on Vesting(2)(#) (d) | Value Realized on Vesting(2)($) (e) | ||||||||||||||||||||||||
James L. Robo | 52,320 | $ | 3,755,859 | (1) | 148,394 | $ | 22,030,400 |
| 200,938 |
|
| $29,788,112 | (1) |
| 127,843 |
|
| $32,842,095 |
| |||||||||||||
Rebecca J. Kujawa |
| 0 |
|
| 0 |
|
| 2,583 |
|
| 610,073 |
| ||||||||||||||||||||
John W. Ketchum | 0 | 0 | 11,237 | 1,653,805 |
| 0 |
|
| 0 |
|
| 20,788 |
|
| 5,223,228 |
| ||||||||||||||||
Eric E. Silagy |
| 4,216 |
|
| 696,568 | (1) |
| 27,285 |
|
| 7,167,028 |
| ||||||||||||||||||||
Manoochehr K. Nazar |
| 19,925 |
|
| 2,875,178 | (1) |
| 25,849 |
|
| 6,767,795 |
| ||||||||||||||||||||
Charles E. Sieving |
| 16,446 |
|
| 1,586,389 | (1) |
| 18,293 |
|
| 4,584,414 |
| ||||||||||||||||||||
Armando Pimentel, Jr. | 42,372 | 4,740,745 | (1) | 24,613 | 3,645,353 |
| 0 |
|
| 0 |
|
| 33,383 |
|
| 8,412,528 |
| |||||||||||||||
Manoochehr K. Nazar | 0 | 0 | 25,830 | 3,831,392 | ||||||||||||||||||||||||||||
Eric E. Silagy | 0 | 0 | 15,390 | 2,277,260 | ||||||||||||||||||||||||||||
| (1) | The aggregate dollar amount realized upon the exercise of stock options is calculated based on the difference between the market price of the Company’s common stock upon exercise and the exercise price of the stock options. |
| (2) | Includes: for Mr. Robo, |
6677
The table and description below provide information about the NEOs’ pension benefits. It is important to keep in mind that the “Present Value of Accumulated Benefit” (column (d)) listed for the SERP includes the present value of such benefits in the defined benefit portion of the SERP only, and that disclosure of information related to the defined contribution portion of the SERP can be found in the next table,Table 6: Nonqualified Deferred Compensation.
Name (a) | Plan Name (b) | Number of Years Credited Service (#) (c) | Present Value of Accumulated Benefit ($) (d) | Payments During Last Fiscal Year ($) (e) | Plan Name (b) | Number of Years Credited Service (#) (c) | Present Value of Accumulated Benefit ($) (d) | Payments During Last Fiscal Year ($) (e) | ||||||||||||||||||||||||
James L. Robo(2) | NextEra Energy, Inc. Employee Pension Plan | 16 | $ | 277,384 | $ | 0 |
|
NextEra Energy, Inc. Employee Pension Plan |
|
|
18 |
|
$ |
332,790 |
|
|
$ 0 |
| ||||||||||||||
| SERP(1) | 16 | 4,355,606 | 0 |
|
SERP(1) |
|
|
18 |
|
|
6,061,641 |
|
|
0 |
| |||||||||||||||||
John W. Ketchum (2) | NextEra Energy, Inc. Employee Pension Plan | 15 | 246,918 | 0 | ||||||||||||||||||||||||||||
Rebecca J. Kujawa(2) |
|
NextEra Energy, Inc. Employee Pension Plan |
|
|
13 |
|
|
191,189 |
|
|
0 |
| ||||||||||||||||||||
| SERP(1) | 15 | 428,382 | 0 |
|
SERP(1) |
|
|
13 |
|
|
146,227 |
|
|
0 |
| |||||||||||||||||
Armando Pimentel, Jr.(2) | NextEra Energy, Inc. Employee Pension Plan | 10 | 155,961 | 0 | ||||||||||||||||||||||||||||
John W. Ketchum(2) |
|
NextEra Energy, Inc. Employee Pension Plan |
|
|
17 |
|
|
299,838 |
|
|
0 |
| ||||||||||||||||||||
|
SERP(1) |
|
|
17 |
|
|
880,072 |
|
|
0 |
| |||||||||||||||||||||
Eric E. Silagy(2) |
|
NextEra Energy, Inc. Employee Pension Plan |
|
|
17 |
|
|
305,869 |
|
|
0 |
| ||||||||||||||||||||
| SERP(1) | 10 | 2,231,740 | 0 |
|
SERP(1) |
|
|
17 |
|
|
1,669,089 |
|
|
0 |
| |||||||||||||||||
Manoochehr K. Nazar(2) | NextEra Energy, Inc. Employee Pension Plan | 10 | 162,353 | 0 |
|
NextEra Energy, Inc. Employee Pension Plan |
|
|
12 |
|
|
208,373 |
|
|
0 |
| ||||||||||||||||
| SERP(1) | 10 | 2,319,559 | 0 |
|
SERP(1) |
|
|
12 |
|
|
3,013,833 |
|
|
0 |
| |||||||||||||||||
Eric E. Silagy(2) | NextEra Energy, Inc. Employee Pension Plan | 15 | 252,494 | 0 | ||||||||||||||||||||||||||||
Charles E. Sieving(2) |
|
NextEra Energy, Inc. Employee Pension Plan |
|
|
11 |
|
|
183,314 |
|
|
0 |
| ||||||||||||||||||||
| SERP(1) | 15 | 1,038,705 | 0 |
|
SERP(1) |
|
|
11 |
|
|
1,590,924 |
|
|
0 |
| |||||||||||||||||
Armando Pimentel, Jr.(3) |
|
NextEra Energy, Inc. Employee Pension Plan |
|
|
11 |
|
|
201,459 |
|
|
0 |
| ||||||||||||||||||||
|
SERP(1) |
|
|
11 |
|
|
0 |
|
|
2,821,667 |
| |||||||||||||||||||||
| (1) | NextEra Energy’s nonqualified SERP provides both defined benefit and defined contribution benefits. SeeAdditional Disclosure Related to Pension Benefits Table,below. The defined benefit portion of the SERP is shown in this table, while amounts attributable to the defined contribution portion of the SERP are included inTable 1a: |
| (2) | For Mrs. Kujawa and Messrs. Robo, Ketchum, |
| (3) | In connection with his retirement, Mr. Pimentel received a lump sum payment of $2,821,667 on October 1, 2019 under the SERP. |
Additional Disclosure Related to Pension Benefits Table
NextEra Energy maintains twonon-contributory defined benefit retirement plans: atax-qualified employee pension plan and anon-qualified SERP.
Employee Pension Plan
NextEra Energy’stax-qualified employee pension plan is a cash balance plan in which credits to each active, full-time employee’s account are determined as a percentage of his or her monthly covered earnings, with “basic crediting” of 4.5% until the fifth anniversary of employment and 6% thereafter. Covered earnings for each NEO are limited to base salary and do not include annual incentive compensation, long-term incentive compensation or any other compensation included inTable 1a: 20172019 Summary Compensation Table. Each employee’s cash balance account is also credited quarterly with interest at an annual rate that
78
is equal to the average rates of interest paid onone-year Treasury Constant Maturities for the month of August of the preceding calendar year.* The interest crediting rate is subject to a 3% minimum for account balances earned after 2014 and a 4% minimum for account balances earned prior to 2015 and to a 14% maximum. For 2017,2019, the interest crediting rate was 4% for account balances earned prior to 2015 and 3% for account balances earned after 2014. Benefits under the cash balance formula are not reduced for employer contributions to Social Security or other offset amounts.
|
67
Under the qualified employee pension plan, benefits are cliff-vested after three full years of service and employees may become fully vested if they are participants in the qualified plan at a time when the Company decides to transfer a portion of pension plan assets to fund retiree medical benefits. All NEOs are fully vested. All vested participants are eligible for lump sum payment of benefits following termination of employment, and certain annuity forms of payment also are also available to all employees, including the NEOs.
SERP
For the reasons described inCompensation Discussion & Analysis, NextEra Energy maintains an unfunded SERP for its executive officers, including the NEOs. The SERP’s defined benefit formula for NEOs provides two times the normal cash balance crediting rate of the qualified employee pension plan (“double basic credits”). The normal cash balance crediting rate is 4.5% of base salary prior to five years of service and 6% of base salary thereafter. Double the basic crediting rate is therefore 9% and 12% of base salary, respectively. Benefits for all NEOs are calculated in this manner. In order to offset the benefits that Mr. Nazar forfeited from his prior employer in order to accept the Company’s offer of employment, Mr. Nazar received an opening SERP cash balance account balance of $300,000. Similarly, in order to offset the significant benefits that Mr. Pimentel forfeited from his prior employer in order to accept the Company’s offer of employment, Mr. Pimentel received an opening SERP cash balance account balance of $150,000, and an additional $150,000 on each of his first and second anniversaries with the Company.
SERP benefits are cliff-vested after five full years of service and all NEOs were fully vested as of December 31, 2017.2019. All vested participants are eligible for lump sum payment of benefits following termination of employment (subject to timing restrictions imposed by section 409A of the Code), or may elect certain annuity forms of payment.
Table 6: Nonqualified Deferred Compensation
The table and description below provide information about the NEOs’ nonqualified deferred compensation. It is important to keep in mind the following when reviewing the table:
The amounts shown under the heading “Aggregate Earnings in Last FY” (column (d)) represent earnings in the Deferred Compensation Plan, in the defined contribution portion of the SERP and, for Mr. Robo, on the vested portion of deferred retirement awards under the LTIP.
The amounts shown under the heading “Aggregate Balance at Last FYE” (column (f)) represent balances in the Deferred Compensation Plan and in the defined contribution portion of the SERP and, for Mr. Robo, the vested balance of deferred retirement awards.
| Name(a) | Executive Contributions in Last FY(1)($) (b) | Registrant Contributions in Last FY(2)($) (c) | Aggregate Earnings in Last FY(3)($) (d) | Aggregate Withdrawals/ Distributions($) (e) | Aggregate Balance at Last FYE(4)($) (f) | |||||||||||||||
James L. Robo | $ | 3,154,326 | $ | 228,539 | $ | 4,259,949 | $ | 0 | $ | 18,781,161 | ||||||||||
John W. Ketchum | 0 | 53,735 | 83,880 | 0 | 357,613 | |||||||||||||||
Armando Pimentel, Jr. | 0 | 82,952 | 312,678 | 0 | 1,273,950 | |||||||||||||||
Manoochehr K. Nazar | 1,504,320 | 85,643 | 900,963 | 0 | 6,942,424 | |||||||||||||||
Eric E. Silagy | 0 | 80,905 | 189,720 | 0 | 788,321 | |||||||||||||||
79
Name(a)
| Executive
| Registrant
| Aggregate
| Aggregate
| Aggregate
| |||||||||||||||
James L. Robo
|
$
|
30,665,320
|
|
$
|
268,320
|
|
$
|
9,202,600
|
|
$
|
0
|
|
$
|
61,868,509
|
| |||||
Rebecca J. Kujawa
|
|
0
|
|
|
27,476
|
|
|
30,648
|
|
|
0
|
|
|
117,195
|
| |||||
John W. Ketchum
|
| 0
|
|
| 84,992
|
|
| 220,194
|
|
| 0
|
|
| 785,233
|
| |||||
Eric E. Silagy
|
|
0
|
|
|
110,826
|
|
|
444,880
|
|
|
0
|
|
|
1,555,668
|
| |||||
Manoochehr K. Nazar
|
|
1,695,750
|
|
|
97,204
|
|
|
905,454
|
|
|
0
|
|
|
12,404,901
|
| |||||
Charles E. Sieving
|
|
0
|
|
|
83,562
|
|
|
416,896
|
|
|
0
|
|
|
1,447,626
|
| |||||
Armando Pimentel, Jr.
|
|
0
|
|
|
78,835
|
|
|
564,212
|
|
|
2,195,115
|
|
|
0
|
| |||||
| (1) | The Deferred Compensation Plan permits deferral of salary (up to 100%), annual incentive (up to 100%) and performance shares (up to 100%). Mr. Nazar elected to defer 50% of his base salary and 90% of his annual incentive paid in |
68
amount is the value of the |
| (2) | The SERP includes a defined contribution component which provides a match on NEOs’ base and annual incentive earnings above the IRS limit, which was |
| (3) | Earnings include the sum of each participant’s annual earnings (which includes, among other things, stock price appreciation on stock-based deferred compensation) in the Deferred Compensation Plan and in the defined contribution portion of the SERP and, for Mr. Robo, on deferred retirement awards. For Mr. Nazar, earnings include Deferred Compensation Plan earnings of |
| (4) | In October 2019, Mr. Pimentel received a lump sum distribution of $2,195,115 from the defined contribution component of the SERP. |
| (5) | Deferred Compensation Plan accounts include fully vested and earned compensation plus earnings. The Company views deferred compensation as a vehicle for retirement planning rather than as a means of providing additional compensation. As of December 31, |
80
Additional Disclosure Related to Nonqualified Deferred Compensation Table
Cash deferral elections under the Deferred Compensation Plan must be made prior to the period in which the cash is earned and can range, in whole percentages, from 1% to 100% of a participant’s base salary and/or annual incentive award. Equity deferral elections must be made by December 31 of the year preceding the beginning of the applicable performance period, and participants electing to defer performance shares may defer all or a portion of the payout amount. Deferred Compensation Plan earnings are not guaranteed by the Company.
The Company’s contributions to the SERP for each NEO also are also considered deferred compensation. The contributions and earnings inTable 6: Nonqualified Deferred Compensation include those from the nonqualified defined contribution portion of the SERP. Distributions are in the form of lump sum payments, which may be subject to asix-month delay following termination of employment in compliance with Code sectionSection 409A.
Earnings in 20172019 from previous deferrals of cash compensation came from phantom investments in the investment vehicles, which mirror the funds available to participants in the Company’s 401(k) plan and include mutual funds, index funds and similar investment alternatives offered to participants under the Company’s 401(k) plan. The Company does not provide a guaranteed rate of return on these funds.
69
For the reasons discussed inCompensation Discussion & Analysis, NextEra Energy has entered into the Retention Agreements, which commit the Company to make payments to NEOs under special circumstances. Generally, these are changes in corporate control of the Company and termination of the NEO’s employment.
In accordance with SEC instructions, these quantitative disclosures assume that a change in control took place on December 31, 2017.2019. In fact, no change in control of the Company occurred on that date and no NEO’s employment terminated on that date. If such an event were to occur in the future, actual payments would likely be different from those presented here based on various factors, including the NextEra Energy common stock price at such time.
Consistent with SEC instructions, the amounts shown in the tables that follow exclude obligations due from the Company to the NEO following a triggering event for: (1) any earned but unpaid base salary, annual incentive compensation and long-term incentive compensation through the date of termination; (2) vested benefits under the Company’s employee pension and 401(k) plans and all other benefit plans in accordance with their terms and conditions; (3) accrued vacation pay; (4) reimbursement of reasonable business expenses incurred prior to the date of termination; and (5) any other compensation or benefits to which the NEO may be entitled under and in accordance with the Company’s generally applicablenon-discriminatory plans or employee benefit programs, including the retiree medical plan. Furthermore, all payments shown in the tables exclude the obligations of the Company to the NEO for vested benefits under the SERP, the Deferred Compensation Plan and the vested portions of Mr. Robo’s deferred retirement awards. SeeTable 5: Pension Benefits andTable 6: Nonqualified Deferred Compensation for the values of accumulated SERP and Deferred Compensation Plan benefits, and Mr. Robo’s vested deferred retirement awards, at December 31, 2017.2019. Mr. Pimentel is not included in these tables as he was no longer an employee of the Company as of December 31, 2019.
81
Potential Payments Under Retention Agreements
Each NEO is a party to a Retention Agreement with the Company. These agreements are all substantially equivalent and generally provide for certain protections and benefits to the NEO in the event of a change in control of the Company in exchange for the NEO’s continued full-time commitment to the interests of the Company during a transition period of three years following a change in control (two years in the case of Mr. Nazar). The NEOs also undertake confidentiality commitments requiring them to hold in a fiduciary capacity all secret or confidential information relating to the Company and, under most circumstances, not to divulge any such information either during or after the period of employment.
Each Retention Agreement provides for a mutual commitment to the NEO’s continued employment for a period of three years (two years in the case of Mr. Nazar) following a change in control of the Company. If a change in control occurs, the NEO generally will receive an accelerated payout or vesting of previously granted equity-based awards that the NEO would otherwise have received in the normal course of business had the change in control not occurred and had the NEO’s employment continued over the remaining vesting periods. This immediate payment of equity awards is not limited to the NEOs, but generally will also occur for all officers and employees who hold such equity awards.
Tables 7aand 7b and the accompanying discussion of the Retention Agreements set forth the details of the estimated payments that would have been made to the NEOs (on December 31, 20172019 and December 31, 2018,2020, respectively) had a change in control actually occurred at the close of business on December 31, 2017,2019, assuming each of the NEOs continued in employment throughout 2018.2020.
70
Table 7a: Potential Compensation to Named Executives Upon Change in Control
James L.
| Rebecca J. Kujawa
| John W.
| Eric E. Silagy
| Manoochehr K.
| Charles E.
| |||||||||||||||||||||||||||||||||||||||
| James L. Robo | John W. Ketchum | Armando Pimentel, Jr. | Manoochehr K. Nazar | Eric E. Silagy | ||||||||||||||||||||||||||||||||||||||||
Long-Term Incentive Awards: | ||||||||||||||||||||||||||||||||||||||||||||
1st 50% of Performance Share Awards(1) | $ | 16,012,040 | $ | 1,926,580 | $ | 3,591,650 | $ | 3,024,240 | $ | 2,910,370 |
| $21,600,520
|
|
| $1,217,440
|
|
| $4,160,690
|
|
| $5,590,060
|
|
| $4,112,460
|
|
| $2,925,450
|
| ||||||||||||||||
Restricted Stock Awards(2) | 4,560,120 | 938,230 | 1,546,750 | 1,375,880 | 1,193,600 | |||||||||||||||||||||||||||||||||||||||
Restricted Stock and NEP Common Unit Awards(2)
|
| 3,020,400
|
|
| 575,440
|
|
| 1,299,260
|
|
| 1,763,170
|
|
| 1,333,580
|
|
| 916,310
|
| ||||||||||||||||||||||||||
Stock Option Awards(3) | 9,798,280 | 1,276,650 | 2,667,030 | 2,360,700 | 2,048,640 |
| 23,987,350
|
|
| 835,490
|
|
| 3,854,730
|
|
| 5,099,610
|
|
| 4,000,190
|
|
| 2,813,840
|
| |||||||||||||||||||||
Total: | $ | 30,370,440 | $ | 4,141,460 | $ | 7,805,430 | $ | 6,760,820 | $ | 6,152,610 |
| $48,608,270
|
|
| $2,628,370
|
|
| $9,314,680
|
|
| $12,452,840
|
|
| $9,446,230
|
|
| $6,655,600
|
| ||||||||||||||||
| (1) | Upon a change in control, 50% of all outstanding performance share awards vest and are payable at the greater of target or the average of the actual performance factors used to determine payout of performance share awards which vested over the three years prior to the year in which the change in control occurred. Amounts shown are based on a closing NextEra Energy common stock price on December |
| (2) | Upon a change in control, all outstanding performance-based restricted stock and NEP common unit awards vest. Amounts shown are based on a closing NextEra Energy common stock price on December |
| (3) | Upon a change in control, all outstanding stock option awards vest. Amounts shown reflect thein-the-money values of accelerated stock options based on the difference between the option exercise price and the closing NextEra Energy common stock price on December |
82
Table 7b: Potential Compensation to Named Executives atOne-Year Anniversary of Change in Control(1)
| James L. Robo | John W. Ketchum | Armando Pimentel, Jr. | Manoochehr K. Nazar | Eric E. Silagy | ||||||||||||||||
2nd 50% of Performance Share Awards(2) | $ | 16,012,040 | $ | 1,926,310 | $ | 3,591,070 | $ | 3,023,950 | $ | 2,910,070 | ||||||||||
James L.
| Rebecca J.
| John W. Ketchum | Eric E. Silagy
| Manoochehr K.
| Charles E.
| |||||||||||||||||||
2nd 50% of Performance Share Awards(2)
|
| $21,600,520
|
|
| $1,217,020
|
|
| $4,160,690
|
|
| $5,589,600
|
|
| $4,112,460
|
|
| $2,925,450
|
| ||||||
| (1) | All amounts in the table assume the same |
| (2) | Each NEO is entitled to receive the remaining 50% of |
The amounts shown inTables 7a and7b represent the accelerated payment of compensation that the NEOs would otherwise have received over time absent a change in control, assuming continued employment. The employment protection amounts represent additional payments and are intended both to compensate the NEO for the lost opportunity of continued employment and to encourage the new leadership of thepost-change-in-control entity to evaluate carefully the desirability of terminating the NEO’s employment as opposed to seeking an appropriate role for the NEO in the new entity.
The Retention Agreements are designed to provide the NEOs with economic value in the event of termination equivalent to three years’ (two years’ in the case of Mr. Nazar) worth of foregone base salary,
71
annual incentive compensation and incremental retirement contributions. In addition, if termination by the Company for reasons other than death, disability or cause, or by the NEO for good reason, were to occur prior to the first anniversary of the change in control, the acceleration of the then-outstanding performance shares, as shown inTable 7b, would also occur. Because of this intent, the Retention Agreements in effect as of December 31, 20172019 for Messrs. Robo and PimentelSieving provide for the additional payment by the Company of any excise tax imposed by section 4999 of the Code. However, if the total value of all payments due (calculated as required under section 280G of the Code) does not exceed 110% of the “safe harbor amount” under section 280G, or 2.99 times the NEO’s five-year averageW-2 earnings, then nogross-up payment will be made to the NEO and the amounts payable under the Retention Agreement will be reduced to the “safe harbor amount.” In accordance with the Company’s Excise TaxGross-Up Policy, which generally precludes the inclusion of excise taxgross-up provisions in Retention Agreements entered into, or materially modified, after December 2009, Mrs. Kujawa’s and Messrs. Ketchum’s, Nazar’sSilagy’s and Silagy’sNazar’s Retention Agreements do not include excise taxgross-up provisions. The NEO remains responsible for normal federal, state and local tax liability on the underlying economic value transferred.
If a change in control had occurred on December 31, 20172019 and if any or all of Messrs. Robo’s, Ketchum’s, Pimentel’s, Nazar’s or Silagy’s employmentthe NEOs had been terminated on that date, the Company estimates that the amounts shown inTable 8 would have become payable, in addition to the payments set forth above inTable 7a: Potential Compensation to Named Executives Upon Change in Control and inTable 7b: Potential Compensation to Named Executives atOne-Year Anniversary of Change in Control.
83
Table 8: Potential Post-Employment Compensation to Named Executives Upon Termination
Without Cause or for Good Reason Following Change in Control(1)
James L.
| Rebecca J.
| John W.
| Eric E. Silagy
| Manoochehr K.
| Charles E.
| |||||||||||||||||||||||||||||||||||||||
| James L. Robo | John W. Ketchum | Armando Pimentel, Jr. | Manoochehr K. Nazar | Eric E. Silagy | ||||||||||||||||||||||||||||||||||||||||
Cash Severance(2) | $ | 14,539,500 | $ | 4,153,500 | $ | 6,323,850 | $ | 4,216,370 | $ | 6,063,000 | $
| 17,791,500
|
| $
| 2,967,690
|
| $
| 6,876,760
|
|
| $8,309,520
|
| $
| 4,748,100
|
| $
| 6,254,980
|
| ||||||||||||||||
Deferred Retirement Awards(3) | 2,848,910 | 0 | 0 | 0 | 0 |
| 5,805,060
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
| |||||||||||||||||||||
Incremental Increase in Nonqualified SERP(4) | 3,423,160 | 919,400 | 1,585,980 | 1,007,890 | 1,425,400 |
| 4,370,710
|
|
| 515,940
|
|
| 1,577,720
|
|
| 1,919,040
|
|
| 1,193,360
|
|
| 1,091,300
|
| |||||||||||||||||||||
Continued Participation in Active Employee Welfare Benefits(5) | 246,740 | 88,330 | 146,390 | 91,700 | 126,220 |
| 244,900
|
|
| 71,720
|
|
| 125,610
|
|
| 171,040
|
|
| 70,450
|
|
| 106,410
|
| |||||||||||||||||||||
Continued Participation in Certain Perquisites Programs(6) | 163,680 | 158,970 | 164,700 | 118,970 | 166,570 |
| 159,630
|
|
| 152,400
|
|
| 151,780
|
|
| 169,090
|
|
| 110,410
|
|
| 150,000
|
| |||||||||||||||||||||
Certain Limited Outplacement and Relocation Allowances(7) | 53,500 | 53,500 | 53,500 | 53,500 | 53,500 |
| 48,750
|
|
| 48,750
|
|
| 48,750
|
|
| 48,750
|
|
| 48,750
|
|
| 48,750
|
| |||||||||||||||||||||
Code Section 280GGross-up(8) | 20,548,750 | 0 | 5,983,110 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||
Code Section 280GGross-up (Cutback)(8) |
| (4,199,448
| )
|
| 0
|
|
| 0
|
|
| 0
|
|
| (691,164
| )
|
| (67,907
| )
| ||||||||||||||||||||||||||
Total: | $ | 41,824,240 | $ | 5,373,700 | $ | 14,257,530 | $ | 5,488,430 | $ | 7,834,690 | $
| 24,221,102
|
| $
| 3,756,500
|
| $
| 8,780,620
|
|
| $10,617,440
|
| $
| 5,479,906
|
| $
| 7,583,533
|
| ||||||||||||||||
| (1) | Amounts shown in the table are due to the NEO under such circumstances in addition to the amounts shown inTable 7a: Potential Compensation to Named Executives Upon Change in Control andTable 7b: Potential Compensation to Named Executives atOne-Year Anniversary of Change in Control.Cause and good reason are defined in footnote 2 toTable 7b. |
| (2) | The amount shown represents the value of a cash lump sum payment due within 45 days of termination (subject to the requirements of section 409A of the Code) equal to three times (two in the case of Mr. Nazar) the sum of the NEO’s annual base salary plus his annual incentive. The annual incentive is equal to the higher of target annual incentive in the year of termination or the average percentage of the NEO’s annual incentive divided by his base salary for each of the three years prior to the year in which the change in control occurred. Since all annual incentive compensation for |
| (3) | Under Mr. Robo’s deferred retirement award, if Mr. Robo was discharged without cause or resigned for good reason upon or after a change in control, then a portion of his outstanding unvested deferred retirement award (including reinvested dividends) would vest according to the schedule contained in the award agreement. If such termination had occurred on December 31, |
| (4) | The amount shown represents the value of a cash lump sum payment due within 45 days of termination (subject to the requirements of Code section 409A) equal to the incremental increase in value of the NEO’s nonqualified SERP benefits under |
72
the defined benefit and defined contribution formulas if the NEO had continued employment for three years (or, for Mr. Nazar, two years) from the date of termination, and assuming the NEO received the annual compensation increases required under the Retention Agreement for the three-year ortwo-year employment period. |
| (5) | The Retention Agreements provide for continued coverage under all employee benefit plans for three years (two in the case of Mr. Nazar). |
| (6) | The Retention Agreements provide for continued participation in certain other benefits and perquisites for three years (two in the case of Mr. Nazar). Amounts shown include: social club memberships; participation in the executive vehicle |
| (7) | Includes an aggregate cost per NEO of |
84
| (8) |
|
Each Retention Agreement provides that a change in control occurs upon any of the following events:
| (1) | the acquisition by any individual, entity or group of 20% or more of either NextEra Energy’s common stock or the combined voting power of NextEra Energy, other than directly from NextEra Energy or pursuant to a merger or other business combination which does not itself constitute a change in control; |
| (2) | the incumbent directors of NextEra Energy ceasing, for any reason, to constitute a majority of the Board, unless each director who was not an incumbent director was elected, or nominated for election, by a majority of the incumbent directors and directors subsequently so elected or appointed (excluding those elected as a result of an actual or threatened election contest or other solicitation of proxies); |
| (3) | there is consummated a merger, sale of assets, reorganization or other business combination of NextEra Energy or any subsidiary with respect to which (a) the voting securities of NextEra Energy outstanding immediately prior to the transaction do not, immediately following the transaction, represent more than 55% (60% for Mr. Robo) of the common stock and the voting power of all voting securities of the resulting ultimate parent entity or (b) members of the Board constitute less than a majority of the members of the board of directors of the resulting ultimate parent entity; or |
| (4) | the shareholders approve the liquidation or dissolution of NextEra Energy. |
In addition, the Retention Agreements extend the NEOs’ protection to certain potential change in control situations, which are:
| (1) | the announcement of an intention to take or consider taking actions which, if consummated or approved by shareholders, would constitute a change in control; or |
73
| (2) | the acquisition by any individual, entity or group of 15% or more of either NextEra Energy’s common stock or the combined voting power of NextEra Energy, other than directly from NextEra Energy or pursuant to a merger or other business combination which does not itself constitute a change in control. |
No accelerated or incremental payments are triggered by a potential change in control, but the NEO is protected for a three-year(two-year in the case of Mr. Nazar) employment period. In addition, if an agreement is entered into providing for the merger, sale of assets, reorganization or other business combination of NextEra Energy as set forth above, and such merger, sale of assets, reorganization or other business combination is approved by the shareholders of NextEra Energy but thereafter does not become effective, Mr. Robo will be entitled to a cash retention payment in an amount equal toone-half of the sum of his then-current annual base salary plus his annual incentive compensation under the Annual Incentive Plan, payable within 30 days after termination of the transaction.
85
Potential Payments Under the Severance Plan
The Severance Plan provides for the payment of severance benefits to the NEOs and to certain other senior executives if their employment is involuntarily terminated other than for Cause, defined below (and other than in a termination governed by the terms of the Retention Agreements). SeeCompensation Discussion & Analysis for a discussion of the purpose of the Severance Plan.
The Severance Plan provides severance benefits following involuntary termination other than for Cause in exchange for entry into a release of claims against the Company and an agreement (the“Non-Competition Agreement”) to adhere to certainnon-competition and related covenants protective of the Company. Following a covered involuntary termination and the execution of the release and theNon-Competition Agreement, the NEO would receive a cash payment equal to two times his annual base salary plus two times his target annual incentive compensation for the year of termination, payable in two equal annual installments. In addition, the NEO’s outstanding equity and equity-based awards would vest pro rata, and become payable at the end of any applicable performance periods, subject to the attainment by the Company of the specified performance objectives. The NEO also would receive certain ancillary benefits, including outplacement assistance or payment in an amount equal to the value of the outplacement assistance. Amounts payable under the Severance Plan are subject to a cap equal to six times the average of the NEO’s last three years’ base salary plus annual incentive.
If the employment of Mrs. Kujawa or Messrs. Robo, Ketchum, Pimentel,Silagy, Nazar or Silagy,Sieving, or any of them, had been involuntarily terminated on December 31, 20172019 in circumstances triggering the Company’s obligations under the Severance Plan, the Company estimates that the amounts shown inTable 9 below would have become payable.
74
Table 9: Potential Post-Employment Compensation Upon Termination Qualifying for Payments
Under the Severance Plan
James
| Rebecca J.
| John W.
| Eric
| Manoochehr
| Charles E.
| |||||||||||||||||||||||||||||||||||||||
James L. Robo | John W. Ketchum | Armando Pimentel, Jr. | Manoochehr K. Nazar | Eric E. Silagy | ||||||||||||||||||||||||||||||||||||||||
Cash Severance(1) | $ | 7,020,000 | $ | 2,210,000 | $ | 3,049,800 | $ | 3,076,320 | $ | 2,924,000 | $
| 7,540,000
|
| $
| 1,798,600
|
| $
| 3,344,920
|
| $
| 3,923,940
|
| $
| 3,391,500
|
| $
| 3,207,680
|
| ||||||||||||||||
Long-Term Incentive Awards: | ||||||||||||||||||||||||||||||||||||||||||||
Performance Share Awards(2) | 8,452,850 | 1,029,450 | 1,843,670 | 1,594,230 | 1,440,850 |
| 11,417,360
|
|
| 539,530
|
|
| 2,187,920
|
|
| 2,875,890
|
|
| 2,182,350
|
|
| 1,540,380
|
| |||||||||||||||||||||
Restricted Stock Awards(3) | 3,462,890 | 670,840 | 1,098,020 | 999,300 | 828,590 |
| 2,111,920
|
|
| 592,160
|
|
| 879,720
|
|
| 1,201,600
|
|
| 937,160
|
|
| 639,190
|
| |||||||||||||||||||||
Stock Option Awards(4) | 6,560,180 | 818,820 | 1,930,200 | 1,696,860 | 1,403,780 |
| 17,906,560
|
|
| 446,390
|
|
| 2,785,710
|
|
| 3,705,220
|
|
| 2,999,710
|
|
| 2,096,860
|
| |||||||||||||||||||||
Deferred Retirement Awards(5) | 2,004,540 | 0 | 0 | 0 | 0 |
| 4,394,960
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
| |||||||||||||||||||||
Certain Limited Outplacement and Other Perquisites(6) | 35,000 | 35,000 | 35,000 | 35,000 | 35,000 |
| 35,000
|
|
| 35,000
|
|
| 35,000
|
|
| 35,000
|
|
| 35,000
|
|
| 35,000
|
| |||||||||||||||||||||
Cutback Under Plan Benefit Cap(7) | (429,800 | ) | 0 | 0 | 0 | 0 |
| 10,241,200
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
| ||||||||||||||||||||
Total: | $ | 27,105,660 | $ | 4,764,110 | $ | 7,956,690 | $ | 7,401,710 | $ | 6,632,220 | $
| 33,164,600
|
| $
| 3,411,680
|
| $
| 9,233,270
|
| $
| 11,741,650
|
| $
| 9,545,720
|
| $
| 7,519,110
|
| ||||||||||||||||
| (1) | The amount shown represents the value of a cash lump sum payment equal to two times the sum of the NEO’s annual base salary plus his target annual incentive in effect on December 31, |
| (2) | Upon a qualifying involuntary termination, a pro rata portion of outstanding performance share awards would continue to vest and would be paid based on the Company’s actual level of achievement of the performance objectives at the conclusion of the performance period. Amounts shown include the value of the performance shares awarded for the three-year performance periods ending December 31, |
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| (3) | Upon a qualifying involuntary termination, a pro rata portion of outstanding performance-based restricted stock and common unit awards would continue to vest, subject to the attainment of the applicable performance objective. Amounts shown assume the attainment of the performance objective and are based on the closing NextEra Energy common stock price on December |
| (4) | Upon a qualifying involuntary termination, outstanding stock option awards would vest on a pro rata basis. Amounts shown reflect thein-the-money values of the stock options that would vest based on the difference between the option exercise price and the closing NextEra Energy common stock price on December |
| (5) | Upon a qualifying involuntary termination, the outstanding unvested deferred retirement award granted to Mr. Robo would vest on a pro rata basis. Amounts shown are based on the closing NextEra Energy common stock price on December |
| (6) | Includes a maximum cost per NEO of $25,000 for providing outplacement services, plus the cost of financial planning, legal or accounting services. |
| (7) | The total value of severance paid to each NEO is subject to a cap equal to six times the average of such NEO’s last three years’ base salary plus annual incentive. Based on a qualifying involuntary termination on December 31, |
Under the Severance Plan, an involuntary termination is defined as any of the following:
| (1) | the participant’s termination by the Company or an affiliate without Cause (as described further below) and other than as a result of death or disability; or |
| (2) | the participant’s resignation after the occurrence of one or more of the following without the participant’s consent: |
| (i) | the Company’s material breach of a material provision of the Severance Plan or the Company’s or an affiliate’s material breach of a material provision of any other agreement between the participant and the Company or such affiliate; |
| (ii) | a relocation of participant’s principal place of employment by more than 90 miles; or |
75
| (iii) | a material, adverse change in the participant’s title, authority, duties or responsibilities with the Company or an affiliate, or any reduction in the participant’s annual base salary or annual target cash incentive opportunity. |
Cause is generally defined under the Severance Plan as any of the following:
| (1) | repeated violations by the participant of the participant’s obligations to the Company or an affiliate that are willful and deliberate, which are committed in bad faith or without reasonable belief that the violations are in the Company’s or an affiliate’s best interests and that are not remedied within a reasonable period of time after the participant’s receipt of written notice; or |
| (2) | the participant’s conviction of a felony. |
The NEOs are required to comply with certain protective covenants, includingtwo-yearnon-compete andnon-solicitation provisions, in order to receive payments under the Severance Plan. Any severance payments would be subject to repayment and/or forfeiture if any of the protective covenants are violated.
Other Potential Post-Employment Payments to NEOs
Potential Payments Under Equity Award Agreements
The award agreements for each long term equity incentive award (except Mr. Robo’s deferred retirement award, the terms of which are described below) outstanding during 20172019 contain provisions which govern treatment of the award in the event of the NEO’s termination of employment due to death, disability, retirement at or after age 6555 (“normal retirement”), or retirement after age 50 meeting terms and conditions set by, and acceptable to, the Compensation Committee (an “approved early retirement”). Under the terms of the equity award agreements (other than the deferred retirement awards), each outstanding unvested equity award vests on a pro rata basis for service through the date of death or disability or normal retirement (for
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(for performance share, stock option, performance-based restricted stock and performance-based restricted stockNEP common unit awards based on days of service completed during the vesting period). The pro rata portion of each stock option, performance-based restricted stock and performance-based restricted stockNEP common unit award is vested upon death or disability. In the case of normal retirement, stock option awards vest upon retirement and performance-based restricted stock and NEP common units generally vestsvest upon itstheir normal vesting date following satisfaction of applicable performance criteria. The pro rata portion of each performance share award is paid after the end of the performance period, subject to satisfaction of applicable performance criteria. SeeTable 3: 20172019 Outstanding Equity Awards at Fiscal Year End for information for each NEO as of December 31, 20172019 about outstanding unvested equity awards which would vest as determined in the manner set forth above upon death, disability or normal retirement.
If a NEO was eligible for, and retired in accordance with, an approved early retirement, all outstanding and unvested equity awards (except the deferred retirement awards, as described below) would vest in full, and would be paid out either on the vesting schedule set forth in each award agreement or upon retirement, generally subject to satisfaction of applicable performance criteria.
The value of the prorated outstanding long-term incentive awards at December 31, 20172019 for each of the NEOs would have been approximately: Mr. Robo, $22,631,110;$37,073,520; Mrs. Kujawa, $1,745,290; Mr. Ketchum, $3,009,340;$6,979,560; Mr. Pimentel, $5,730,410;Silagy, $9,325,400; Mr. Nazar, $5,137,950;$7,333,880; and Mr. Silagy, $4,434,090.Sieving, $5,086,270. As of December 31, 2017,2019, each of Messrs. Robo, Pimentel,Silagy and Nazar and Silagy were of an age which would have made them eligible for consideration by the Compensation Committee for an approved early retirement. If the Compensation Committee had approved an early retirement for any of Messrs. Robo, Pimentel,Silagy or Nazar or Silagy on that date (which the Compensation Committee did not do), the value on December 31, 20172019 of the outstanding long-term incentive awards that would have continued to vest on their original terms (performance shares and performance-based restricted stock)stock and NEP common units) or vested (options) would have been approximately: Mr. Robo, $31,392,490;$49,508,290; Mr. Pimentel, $8,054,810;Silagy, $12,685,510; and Mr. Nazar $6,988,290; and Mr. Silagy, $6,321,840.$9,617,570.
The award agreement governing Mr. Robo’s deferred retirement award provides for partial accelerated vesting of the stock and accrued dividends upon death or disability, according to a schedule contained in
76
the award agreement, but the award agreement does not provide for accelerated vesting upon retirement. If Mr. Robo had terminated employment on December 31, 20172019 due to death or disability, 60%80% of his total deferred retirement award granted in 2012 would have vested. The value of the unvested shares vesting solely due to death or disability would have been approximately $712,380.$3,483,230. This amount is based on the closing price of the Company’s common stock on December 29, 201731, 2019 of $156.19.$242.16. All equity award agreements (including the agreements governing deferred retirement awards) includenon-solicitation andnon-competition provisions (effective during employment and for atwo-year period after termination), as well asnon-disparagement provisions. The terms of these protective covenants survive the termination of the award agreement and termination of employment.
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20172019 Compensation ofNon-Employee Directors
Name (a) | Fees Earned or Paid in Cash(1) ($) (b) | Stock Awards(2) ($) (c) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation(3)(4) ($) (g) | Total ($) (h) | Fees Earned
| Stock
| Option
| Non-Equity
| Change in
| All Other
| Total
| |||||||||||||||||||||||||||||||||||||||||||||||||
Sherry S. Barrat | $ | 149,000 | $ | 145,889 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 294,889 |
| $132,000
|
|
| $166,175
|
|
| $0
|
|
| $0
|
|
| $0
|
|
| $0
|
|
| $298,175
|
| ||||||||||||||||||||||||||||
James L. Camaren | 118,000 | 145,889 | 0 | 0 | 0 | 0 | 263,889 |
| 128,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 294,175
|
| |||||||||||||||||||||||||||||||||||
Kenneth B. Dunn | 120,000 | 145,889 | 0 | 0 | 0 | 0 | 265,889 |
| 140,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 10,000
|
|
| 316,175
|
| |||||||||||||||||||||||||||||||||||
Naren K. Gursahaney | 126,000 | 145,889 | 0 | 0 | 0 | 0 | 271,889 |
| 136,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 302,175
|
| |||||||||||||||||||||||||||||||||||
Kirk S. Hachigian | 131,000 | 145,889 | 0 | 0 | 0 | 0 | 276,889 |
| 148,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 314,175
|
| |||||||||||||||||||||||||||||||||||
Toni Jennings | 126,000 | 145,889 | 0 | 0 | 0 | 0 | 271,889 |
| 136,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 10,000
|
|
| 312,175
|
| |||||||||||||||||||||||||||||||||||
Amy B. Lane | 120,000 | 145,889 | 0 | 0 | 0 | 0 | 265,889 |
| 147,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 313,175
|
| |||||||||||||||||||||||||||||||||||
Rudy E. Schupp | 120,000 | 145,889 | 0 | 0 | 0 | 0 | 265,889 |
| 160,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 326,175
|
| |||||||||||||||||||||||||||||||||||
John L. Skolds | 141,000 | 145,889 | 0 | 0 | 0 | 10,000 | 296,889 |
| 156,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 322,175
|
| |||||||||||||||||||||||||||||||||||
William H. Swanson | 146,000 | 145,889 | 0 | 0 | 0 | 10,000 | 301,889 |
| 165,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 20,000
|
|
| 351,175
|
| |||||||||||||||||||||||||||||||||||
Hansel E. Tookes, II | 135,000 | 145,889 | 0 | 0 | 0 | 0 | 280,889 |
| 132,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 298,175
|
| |||||||||||||||||||||||||||||||||||
Darryl L. Wilson
|
| 126,000
|
|
| 166,175
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 0
|
|
| 292,175
|
| ||||||||||||||||||||||||||||||||||||||||||
| (1) | In |
| (2) | Non-employee directors of NextEra Energy received shares of NextEra Energy common stock in an amount determined by dividing |
As of December 31, |
In accordance with applicable SEC rules, perquisites and personal benefits with an aggregate value of less than $10,000 are omitted. |
Includes matching contributions to educational institutions on behalf of each of Messrs. |
Additional Information About Director Compensation
NextEra Energy directors who are salaried employees of NextEra Energy or any of its subsidiaries do not receive any additional compensation for serving as a director or committee member. Mr. Robo is the only such director currently serving on the Board. Effective January 1, 2018,2020,non-employee directors of NextEra Energy received an annual cash retainer of $90,000$105,000 plus a number of shares of NextEra Energy common stock determined by dividing $160,000$170,000 by the closing price of NextEra Energy common stock on the grant date, rounded up to the nearest ten shares. The grant date for the annual retainers paid for 20182020 was February 15, 2018,13, 2020, at which time thenon-employee directors of NextEra Energy were each granted 1,040620 shares of NextEra Energy common stock. These shares are generally not transferable until the director meets the Company’s stock ownership guidelines. When joining the Board, newly-electednon-employee
7889
directors are awarded a grant of NextEra Energy common stock that is approximately equal to the annual common stock retainer awarded to existingnon-employee directors, prorated based on the new Director’s date of election to the Board. These shares are not transferable until the director meets the Company’s stock ownership guidelines.
Non-employee Board committee chairpersons receive an additional annual retainer of $20,000$25,000 for chairing the Audit Committee, $20,000 for chairing the Compensation and Nuclear Committees and $15,000 for chairing the other committees. The Lead Director receives an annual retainer of $30,000, except that a Lead Director who also serves as a Chair of any Board committee is only entitled to receive a single annual retainer in an amount equal to the Lead Director annual retainer. A fee of $2,000 is paid tonon-employee directors for each Board and committee meeting attended, whether in person or by telephone. Directors may defer all or a portion of their cash compensation and all or a portion of their equity compensation in the Deferred Compensation Plan and may participate in the Company’s matching gift program, which matches gifts to educational institutions up to a maximum of $10,000 per donor per year. Board members may travel on Company aircraft while on Company business and in limited circumstances fornon-business reasons if the Company would incur little, if any, incremental cost, space is available and the aircraft is in use for another authorized purpose. Board members may be accompanied by their immediate family members if space is available. Travel expenses to attend Board or committee meetings or while on Board business are reimbursed.
Director Stock Ownership Policy
Pursuant to the Governance Guidelines, to more closely align the interests of directors and shareholders, directors are required to own NextEra Energy common stock in an amount equal to seven times the annual cash retainer within five years after their initial election to the Board. All directors other than Mr. Wilson, who joined the Board in October 2018, currently meet this stock ownership guideline. Mr. Wilson has until October 2023 to meet the requirement. SeeCommon Stock Ownership of Certain Beneficial Owners and Management for information about director ownership of NextEra Energy common stock as of March 26, 2018.23, 2020.
7990
Questions and Answers About the Annual Meeting
Why did I only receive a Notice of Internet Availability of Proxy Materials directing me to the Internet instead of the proxy statement and annual report?
Under SEC rules, NextEra Energy is furnishing proxy materials to many of its shareholders on the Internet,internet, rather than mailing paper copies of the materials to each shareholder.
On or about April 6, 2018,3, 2020, NextEra Energy mailed to many of its shareholders of record a Notice containing instructions on how to access and review the proxy materials, including the proxy statement and annual report to shareholders, on the Internet.internet. The Notice also instructs shareholders on how to access their proxy card to be able to submit their proxies on the Internet.internet. Brokerage firms and other nominees who hold NextEra Energy shares on behalf of beneficial owners will be sending their own similar Notice. Other shareholders, in accordance with their prior requests, have received ane-mail notification of how to access the proxy materials and submit their proxies on the Internet.internet. On or about April 6, 2018,3, 2020, NextEra Energy also began mailing a full set of proxy materials to certain shareholders, including shareholders who have previously requested a paper copy of the proxy materials.
Internet distribution of the proxy materials is designed to expedite receipt by shareholders, lower the cost of the annual meeting and conserve natural resources. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice. If you have previously elected to receive NextEra Energy’s proxy materials electronically, you will continue to receive the materials viae-mail unless you elect otherwise.
How do I access the proxy materials if I received a Notice of Internet Availability of Proxy Materials?
The Notice provides instructions regarding how to view NextEra Energy’s proxy materials for the 20182020 annual meeting on the Internet.internet. As explained in greater detail in the Notice, to view the proxy materials and submit your proxy, you will need to follow the instructions in your Notice and have available your16-digit Controlcontrol number(s) contained in your Notice.
How do I request paper copies of the proxy materials?
Whether you hold NextEra Energy shares through a brokerage firm, bank or other nominee (in “street name”), or hold NextEra Energy shares directly in your name, as a shareholder of record, through NextEra Energy’s transfer agent, Computershare Trust Company, N.A. (“Computershare”), as a shareholder of record, you may request paper copies of the 20182020 annual meeting proxy materials by following the instructions listed atwww.proxyvote.com, by telephoning800-579-1639 or by sending ane-mail tosendmaterial@proxyvote.com.
What is the purpose of the annual meeting?
At the annual meeting, shareholders will act upon the matters identified in the accompanying notice of annual meeting of shareholders. These matters include the election as directors of the nominees specified in this proxy statement, ratification of appointment of Deloitte & Touche LLP as NextEra Energy’s independent registered public accounting firm for 2018,2020, approval, bynon-binding advisory vote, of NextEra Energy’s compensation of its NEOs as disclosed in this proxy statement and, if properly presented at the meeting, consideration of two shareholder proposals.
Who may attend the annual meeting?
Subject to space availability, all shareholders as of the record date, or their duly appointed proxies, may attend the annual meeting. Since seating is limited, admission to the meeting will be on a first-come, first-
80
servedfirst-served basis. Registration and seating will begin at 7:30 a.m., MountainCentral time. If you plan to attend, please note that you will be askedrequired to present valid picture identification, such as a driver’s license or passport. Invited representatives of the media and financial community may also attend the annual meeting.
91
You will need proof of ownership of NextEra Energy common stock on the record date to attend the annual meeting:
If you hold shares directly in your name as a shareholder of record or if you are a participant in NextEra Energy’s Employee Retirement Savings Plan:
If you received the Notice and you plan to attend the annual meeting, you may request an admission ticket by calling NextEra Energy Shareholder Services at800-222-4511.
If you received the proxy materials by mail, an admission ticket is attached to your proxy/confidential voting instruction card. If you plan to attend the annual meeting, please submit your proxy but keep the admission ticket and bring it with you to the annual meeting.
If your shares are held in “street name,” you will need to bring proof that you were the beneficial owner of those “street name” shares of NextEra Energy common stock as of the record date, such as a legal proxy or a copy of a bank or brokerage statement, and check in at the registration desk at the annual meeting.
For the safety of attendees, all boxes, handbags and briefcases are subject to inspection. Cameras (including cell phones with photographic capabilities), recording devices and other electronic devices are not permitted at the annual meeting.
Will the annual meeting be webcast?
The annual meeting will be webcast (audio, listen only) on May 24, 2018.21, 2020. If you do not attend the annual meeting, you are invited to visitwww.nexteraenergy.comat 8:00 a.m., MountainCentral time, on Thursday, May 24, 201821, 2020 to access the webcast of the annual meeting. You will not be able to vote your shares via the webcast. A replay of the webcast also will be available on NextEra Energy’s website for 90 days after the annual meeting.
Who is entitled to vote at the annual meeting?
Only NextEra Energy shareholders at the close of business on March 26, 2018,23, 2020, the record date for the annual meeting, are entitled to receive notice of, and to vote at, the annual meeting. If you were a shareholder on that date, you will be entitled to vote all of the NextEra Energy shares that you held on that date at the annual meeting or any adjournment or postponement of the annual meeting.
What are the voting rights of the holders of the Company’s common stock?
Each outstanding share of NextEra Energy common stock par value $.01 per share (“common stock”), will be entitled to one vote on each matter properly brought before the annual meeting.
What constitutes a quorum?
The presence at the annual meeting, in person or by proxy, of the holders of a majority of the shares outstanding as of the record date will constitute a quorum, permitting the business of the meeting to be conducted.
In determining the presence of a quorum at the annual meeting, abstentions in person, proxies received but marked as abstentions as to any or all matters to be voted on that permit abstentions and proxies received with brokernon-votes on some but not all matters to be voted on will be counted as present.
81
What is a broker“non-vote”?
A broker“non-vote” occurs when a broker, bank or other holder of record that holds shares for a beneficial owner (“broker”) does not vote on a particular proposal because the broker has not received voting instructions from the beneficial owner and does not have discretionary voting power for that particular proposal. Brokers may vote on ratification of the appointment of NextEra Energy’s independent registered public accounting firm even if they have not received voting instructions from the beneficial owners whose
92
shares they hold. However, brokers may not vote on any of the other matters submitted to shareholders at the 20182020 annual meeting, including the election of directors, advisory vote on approval of executive compensation or on any of the shareholder proposals, unless they have received voting instructions from the beneficial owner.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
If your shares are registered directly in your name with NextEra Energy’s transfer agent, Computershare, you are considered, with respect to those shares, the “shareholder of record.” The Notice or, for some shareholders of record, a full set of the proxy materials has been sent directly to you by or on behalf of NextEra Energy.
If your shares are held in “street name,” you are considered the “beneficial owner” of the shares. The Notice or, for some beneficial owners, a full set of the proxy materials has been forwarded to you by or on behalf of your broker, who is considered, with respect to those shares, the shareholder of record.
How do I submit my proxy or voting instructions?
On the Internet or by telephone or, if you received the proxy materials by mail, also by mail
| • | On the Internet—You may submit your proxy or voting instructions on the |
| • | By Telephone—You may submit your proxy or voting instructions by telephone by calling the toll-free telephone number(800-690-6903) found on your proxy/confidential voting instruction card or in your |
| • | By Mail—If you received the proxy materials by mail, you may submit your proxy by mail by marking the enclosed proxy/confidential voting instruction card, dating, |
Please see the Notice, your proxy/confidential voting instruction card or the information your broker provided to you for more information on your options. NextEra Energy’s proxy tabulator, Broadridge Investor Communications Solutions, Inc. (“Broadridge”), must receive any proxy/confidential voting instruction card that will not be delivered in person at the annual meeting, or any vote on the Internetinternet or by telephone, no later than 11:59 p.m., Eastern time, on Wednesday, May 23, 2018.20, 2020.
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If you are a shareholder of record and you return your signed proxy/confidential voting instruction card or submit your proxy on the Internetinternet or by telephone, but do not indicate your voting preferences, the persons named as proxies in the proxy/confidential voting instruction card will vote the shares represented by that proxy as recommended by the Board on all proposals.
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In person at the annual meeting
All shareholders may vote in person at the annual meeting. However, if you are a beneficial owner of shares, you must obtain a legal proxy from your broker and present it to the inspector of election with your ballot to be able to vote in person at the annual meeting. See the response toWho may attend the annual meeting? for additional information on how to attend the annual meeting.
Your vote is important. You can save us the expense of a second mailing and further solicitation of proxies by submitting your proxy or voting instructions promptly.
May I change my vote after I submit my proxy or voting instructions on the Internet or by telephone or after I return my proxy/confidential voting instruction card or voting instructions?
Yes. If you are a shareholder of record, you may revoke your proxy before it is exercised by:
providing written notice of the revocation to the Corporate Secretary of the Company at the Company’s offices at P.O. Box 14000, 700 Universe Blvd., Juno Beach, Florida 33408-0420;
making timely delivery of later-dated voting instructions on the Internetinternet or by telephone or, if you received the proxy materials by mail, also by making timely delivery of a valid, later-dated proxy/confidential voting instruction card; or
voting by ballot at the annual meeting, although please note that attendance at the meeting will not by itself revoke a previously granted proxy.
You may change your proxy by using any one of these methods regardless of the method you previously used to submit your proxy. If you are a beneficial owner of shares, you may submit new voting instructions by contacting your broker. You may also vote in person at the annual meeting if you obtain a legal proxy as described in the answer to the previous question. All shares for which proxies have been properly submitted and not revoked will be voted at the annual meeting.
How do I vote my Employee Retirement Savings Plan (401(k)) shares?
If you participate in the NextEra Energy, Inc. Employee Retirement Savings Plan (the “plan”), you may give voting instructions to Fidelity Management Trust Company, as trustee of the plan (“Trustee”). If you are anon-bargaining NextEra Energy employee, or a bargaining unit employee outside the state of Florida, you may give your voting instructions to the Trustee by following the instructions you received in ane-mail from NEXTERA ENERGY, INC. [id@ProxyVote.com] sent to your worke-mail address (unless you opted to receive a paper copy of the proxy materials). If you are a FPL bargaining unit employee in Florida, or a participant in the plan who is not a current employee of NextEra Energy or its subsidiaries or if you opted out ofe-mail delivery, you may give your voting instructions to the Trustee on the Internetinternet or by telephone by following the instructions on your proxy/confidential voting instruction card, or you may give your voting instructions to the Trustee by mail by completing and returning the proxy/confidential voting instruction card accompanying this proxy statement.
Your instructions will tell the Trustee how to vote the number of shares of NextEra Energy common stock in the plan reflecting your proportionate interest in the NextEra Energy Stock Fund and the NextEra Energy Leveraged ESOP Fund. You have this right because the plan deems you to be a “named fiduciary” of the shares of common stock allocated to your account for voting purposes. Your instructions will also determine the vote of a proportionate number of shares of common stock in the NextEra Energy Leveraged
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ESOP Fund which are not yet allocated to participants. If you do not give the Trustee voting instructions, the number of shares reflecting your proportionate interest in the NextEra Energy Stock Fund and the NextEra Energy Leveraged ESOP Fund will be voted by the Trustee in the same manner as it votes proportionate interests for which it receives voting instructions and your proportionate share of the unallocated NextEra Energy Leveraged ESOP Fund shares will be voted by the Trustee in the same manner as it votes unallocated shares for which instructions are received. The Trustee will vote your shares in accordance with your duly executed instructions received by 1:00 a.m.11:59 p.m., Eastern time, on Tuesday,Monday, May 22, 2018.18, 2020.
You may also revoke previously given voting instructions by 1:00 a.m.11:59 p.m., Eastern time, on Tuesday,Monday, May 22, 2018,18, 2020, by filing written notice of revocation with the Trustee or by giving new voting instructions in any of the
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ways described above. The Trustee will follow the last timely voting instructions which it receives from you. Your voting instructions will be kept confidential by the Trustee.
What is “householding” and how does it affect me?
NextEra Energy has adopted a procedure approved by the SEC called “householding.” Under this procedure, shareholders of record who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one package containing individual copies of the Notice or proxy materials in paper form for each shareholder of record at the address. This procedure will reduce the volume of duplicate materials shareholders receive, conserve natural resources and reduce NextEra Energy’s postage costs. Shareholders who participate in householding and to whom a full set of proxy materials has been mailed will continue to receive separate proxy cards.
If you are a shareholder of record and are eligible for householding, but you and other shareholders of record with whom you share an address currently receive multiple packages containing copies of the Notice or proxy materials in paper form, or if you hold shares in more than one account, and in either case you wish to receive only a single package for your household in the future, please contact Computershare in writing at Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078 or by calling888-218-4392. You may contact Computershare at the same mailing address or telephone number if you wish to revoke your consent to future householding mailings.
If your household receives only a single package containing a copy of the Notice or the proxy materials, and you wish to receive a separate copy for each shareholder of record, please contact Broadridge toll-free at800-542-1061,866-540-7095, or write to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717, and separate copies will be provided promptly.
Beneficial owners may request information about householding from their banks, brokers or other holders of record.
What vote is required to approve the matters proposed?
A nominee for director will be elected to the Board if the votes cast for such nominee’s election by shareholders present in person or represented by proxy at the meeting and entitled to vote on the matter exceed the votes cast by such shareholders against such nominee’s election. SeeDirector Resignation Policy the director resignation policy described inProposal 1 for information about NextEra Energy’s policy if a nominee for director fails to receive the required vote. All other voting items will be approved if the votes cast favoring the action exceed the votes cast opposing the action. Discretionary voting by brokers is only permitted for the ratification of the appointment of Deloitte and& Touche LLP as NextEra Energy’s independent registered public accounting firm for 2018.2020. Brokernon-votes orand abstentions will not affect the outcome or be counted as a vote cast in favor or against any of the other voting items presented.
Unless you give other instructions, the persons named as proxies will vote in accordance with the recommendations of the Board. The Board’s recommendations are set forth together with the description of each proposal in this proxy statement.
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Who pays for the solicitation of proxies?
NextEra Energy is soliciting proxies and it will bear the expense of solicitation. Proxies will be solicited principally by mail and by electronic media, although directors, officers and employees of NextEra Energy or its subsidiaries may solicit proxies personally, by telephone or by electronic means, but without compensation other than their regular compensation. NextEra Energy has retained D.F. King & Co., Inc. to assist it in the solicitation of proxies, for which D.F. King & Co., Inc. will be paid a fee of $12,500 plus reimbursement ofout-of-pocket expenses. NextEra Energy will reimburse custodians, nominees and other persons for theirout-of-pocket expenses in sending the Notice and/or proxy materials to beneficial owners.
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Could other matters be decided at the annual meeting?
At the date of printing of this proxy statement, the Board did not know of any matters to be submitted for action at the annual meeting other than those referred to in this proxy statement and does not intend to bring before the meeting any matter other than the proposals described in this proxy statement. If, however, other matters are properly brought before the annual meeting, or any adjourned or postponed meeting, your proxies include discretionary authority on the part of the individuals appointed to vote your shares or act on those matters according to their discretion, including voting to adjourn or postpone the annual meeting one or more times to solicit additional proxies with respect to any proposal or for any other reason.
How can I submit a shareholder proposal for the 20192021 annual meeting of shareholders?
Proposals on matters appropriate for shareholder consideration consistent with Rule14a-8 under the Exchange Act submitted by shareholders for inclusion in the proxy statement and form of proxy for the 20192021 annual meeting of shareholders must be received by the Corporate Secretary at the Company’s principal executive offices not later than December 7, 2019.4, 2020. The submission of such proposals by shareholders is subject to regulation by the SEC pursuant to Rule14a-8.
Under the Bylaws, a shareholder proposal submitted for consideration at the 20192021 annual meeting of shareholders, butnot for inclusion in NextEra Energy’s proxy statement and form of proxy, must be received by the Corporate Secretary no earlier than January 24, 201921, 2021 and no later than February 23, 2019.20, 2021. Proposals received before January 24, 201921, 2021 or after February 23, 201920, 2021 will be considered untimely and not properly presented. Notice of such proposals must contain the information specified in the Bylaws, available atwww.investor.nexteraenergy.com/corporate-governance. These advance notice, informational and other provisions are in addition to, and separate from, the requirements that a shareholder must meet in order to have a proposal included in NextEra Energy’s proxy statement and form of proxy under SEC regulations.
Shareholder proposals shouldmust be sent to the attention of the Corporate Secretary by mail (U.S. certified mail in the case of proposals required to comply with the advance notice provisions of the Bylaws), by personal delivery to NextEra Energy, Inc., P.O. Box 14000, 700 Universe Boulevard, Juno Beach, Florida 33408-0420 or by facsimile to561-691-7702.
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In the Company’s filings with the SEC, information is sometimes “incorporated by reference.” This means that the Company is referring you to information that has previously been filed with the SEC and the information should be considered as part of the particular filing. As provided under SEC rules, the “Audit Committee Report” and the “Compensation Committee Report” contained in this proxy statement will not be deemed to be “soliciting material” or “filed” with the SEC, except to the extent that the Company specifically requests that the information be treated as soliciting material or the Company specifically incorporates such information by reference into a document filed with the SEC. In addition, this proxy statement includes several website addresses. These website addresses are intended to provide inactive, textual references only. The information on, or accessible through, these websites is not part of this proxy statement.
Shareholder Account Maintenance
NextEra Energy’s transfer agent is Computershare. All communications concerning accounts of NextEra Energy shareholders of record, including address changes, name changes, inquiries as to requirements to transfer shares of common stock and similar issues, can be handled by calling Computershare at888-218-4392 or by calling NextEra Energy Shareholder Services at800-222-4511. For other information about NextEra Energy, shareholders can visit NextEra Energy’s website atwww.nexteraenergy.com.
Regardless of the number of shares you own, it is important that your shares be represented at the annual meeting. Accordingly, the Company requests that you review the proxy materials and submit your proxy or voting instructions on the Internetinternet or by telephone at your earliest convenience by following the instructions on your Notice of Internet Availability of Proxy Materials. Alternatively, if you received your annual meeting proxy materials by mail, you may submit your proxy or voting instructions on the Internet, or by telephone or you may mark, date, signby marking, dating, signing and returnreturning the accompanying proxy/confidential voting instruction card.
By order of the Board of Directors.Directors,
W. Scott Seeley
Vice President, Compliance & Corporate Secretary
April 6, 20183, 2020
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Reconciliations ofNon-GAAP to GAAP FInancialFinancial Measures
The tables below present reconciliations of eachnon-GAAP financial measure to the most comparable GAAP financial measure for the years ended December 31, 20172019 and December 31, 2016.2018. See page 3436 of the Company’s Annual Report on Form10-K for the year ended December 31, 20172019 for the reasons the Company uses adjusted earnings.
Reconciliation of Adjusted Earnings to Net Income Attributable to NextEra Energy, Inc. to Adjusted Earnings
| 2017 | 2016 | |||||||
| (millions) | ||||||||
Net Income Attributable to NextEra Energy, Inc. | $ | 5,378 | $ | 2,912 | ||||
Adjustments—pretax: | ||||||||
Net losses associated withnon-qualifying hedges | 216 | 108 | ||||||
Other than temporary impairment losses (income)—net | (25 | ) | 5 | |||||
Tax reform-related(1) | (1,877 | ) | — | |||||
Duane Arnold impairment charge | 420 | — | ||||||
Resolution of contingencies related to a previous asset sale | — | (9 | ) | |||||
Gains on disposal of a business/assets | (1,096 | ) | (445 | ) | ||||
Operating loss (income) of Spain solar projects | (4 | ) | 12 | |||||
Merger-related expenses | 93 | 135 | ||||||
Less related income tax expense | 60 | 166 | ||||||
Adjusted Earnings | $ | 3,165 | $ | 2,884 | ||||
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2018
| 2019
| |||||||
(millions)
| ||||||||
Net Income Attributable to NextEra Energy, Inc.
| $
| 6,638
|
| $
| 3,769
|
| ||
Adjustments:
|
|
|
|
|
|
| ||
Net losses associated with non-qualifying hedges |
| 248
|
|
| 546
|
| ||
Change in unrealized losses (gains) on equity securities held in NEER’s nuclear decommissioning funds and OTTI-net |
| 180
|
|
| (249
| )
| ||
Impact of income tax rate change on differential membership interests |
| (572
| )
|
| 120
|
| ||
NEP investment gains-net |
| (3,786
| )
|
| (124
| )
| ||
Operating loss (income) of Spain solar projects |
| 1
|
|
| (8
| )
| ||
Acquisition-related |
| 32
|
|
| 54
|
| ||
Less related income tax expense (benefit) |
| 932
|
|
| (46
| )
| ||
Adjusted Earnings
| $
| 3,673
|
| $
| 4,062
|
| ||
Reconciliation of Adjusted Earnings Per Share to Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution)to Adjusted Earnings Per Share
| 2017 | 2016 | |||||||
Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution) | $ | 11.38 | $ | 6.25 | ||||
Adjustments—pretax: | ||||||||
Net losses associated withnon-qualifying hedges | 0.46 | 0.23 | ||||||
Other than temporary impairment losses (income)—net | (0.05 | ) | — | |||||
Tax reform-related(1) | (3.96 | ) | — | |||||
Duane Arnold impairment charge | 0.89 | — | ||||||
Resolution of contingencies related to a previous asset sale | — | (0.02 | ) | |||||
Gains on disposal of a business/assets | (2.32 | ) | (0.95 | ) | ||||
Operating loss (income) of Spain solar projects | (0.01 | ) | 0.03 | |||||
Merger-related expenses | 0.20 | 0.29 | ||||||
Less related income tax expense | 0.11 | 0.36 | ||||||
Adjusted Earnings Per Share (assuming dilution) | $ | 6.70 | $ | 6.19 | ||||
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2018
| 2019
| |||||||
(millions)
| ||||||||
Earnings Per Share Attributable to NextEra Energy, Inc. (assuming dilution)
| $
| 13.88
|
| $
| 7.76
|
| ||
Adjustments:
|
|
|
|
|
|
| ||
Net losses associated with non-qualifying hedges
|
| 0.50
|
|
| 1.12
|
| ||
Change in unrealized losses (gains) on equity securities held in NEER’s nuclear decommissioning funds and OTTI-net
|
| 0.38
|
|
| (0.51
| )
| ||
Impact of income tax rate change on differential membership interests
|
| (1.17
| )
|
| 0.25
|
| ||
NEP investment gains-net
|
| (7.91
| )
|
| (0.26
| )
| ||
Operating income of Spain solar projects
|
| —
|
|
| (0.02
| )
| ||
Acquisition-related
|
| 0.07
|
|
| 0.11
|
| ||
Less related income tax expense (benefit)
|
| 1.95
|
|
| (0.08
| )
| ||
Adjusted Earnings Per Share (assuming dilution)
| $
| 7.70
|
| $
| 8.37
|
| ||
A-1
NextEra Energy 20182020 Annual Meeting
Westin La PalomaHyatt Regency Hill Country
3800 E Sunrise9800 Hyatt Resort Drive
Tucson, AZ 85718San Antonio, TX 78251
From North:
Start out going south onI-10 E.Follow I-44 and US-281 to Texas 151 Access Rd W in San Antonio. Take Exit 250the exit toward Orange Grove Rd. Merge onto N Casa Grande Hwy. Turn left ontoWestover Hills Blvd from TX-151 W. Follow Texas 151 Access Rd W Orange Grove Rd and travel approximately 6 miles. Turn right onto E Skyline Drive. Stay straight to onto E Sunrise Drive. Turn right onto E Via Palomita. The main entrance to The Westin La PalomaHyatt Resort Dr. Hyatt Regency Hill Country Resort & Spa will be on the right.right-hand side.
Alternatively: I-10 E/US-87 S. Take TX-1604 Loop W to Texas 151 Access Rd E in San Antonio. Take the exit toward Westover Hills Blvd from TX-151E. Continue to Texas 151 Access Rd E. Take Westover Hills Blvd and Rogers Rd to Hyatt Resort Dr. Hyatt Regency Hill Country Resort & Spa will be on the left-hand side.
From South:
Start out going north onI-19 N.I-19N becomesI-10Follow I-37 N to Texas 151 Access Rd W in San Antonio. Take the exit toward Westover Hills Blvd from TX-151 W. Take Exit 255 and turn right ontoFollow Texas 151 Access Rd W MiracleMile/AZ-77. Turn left onto N OracleRd/AZ-77 and travel approximately 4 miles. Turn right onto Skyline Drive. Stay straight onto E Sunrise Drive. Turn right onto E Via Palomita. The main entrance to The Westin La PalomaHyatt Resort Dr. Hyatt Regency Hill Country Resort & Spa will be on the right.right-hand side.
From East:
Start out going southwest onFollow I-10 W to Texas 151 Access Rd W in San Antonio. Take the exit toward Westover Hills Blvd from TX-151 W. Take Exit 265 and merge onto S Alvernon Way. Turn slight left onto E Golf Links Rd. Turn left onto S SwanFollow Texas 151 Access Rd and travel approximately 7 miles. Turn left onto E Sunrise Drive. Turn left onto E Via Palomita. The main entranceW to The Westin La PalomaHyatt Resort Dr. Hyatt Regency Hill Country Resort & Spa will be on the right.right-hand side.
From West:
Start out going east onI-8 E. Merge ontoI-10Follow US-90 E viato Texas 151 Access Rd W in San Antonio. Take the exit 178A. Take Exit 250 toward Orange Grove Rd. Merge onto N Casa Grande Hwy. Turn left ontoWestover Hills Blvd from TX-151 W. Follow Texas 151 Access Rd W Orange Grove Rd and travel approximately 6 miles. Turn right onto E Skyline Drive. Stay straight to onto E Sunrise Drive. Turn right onto E Via Palomita. The main entrance to The Westin La PalomaHyatt Resort Dr. Hyatt Regency Hill Country Resort & Spa will be on the right.right-hand side.
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700 UNIVERSE BOULEVARD JUNO BEACH, FL 33408
VOTE BY INTERNET—www.proxyvote.com/NEE or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern time on May 20, 2020 for shares held directly and by 11:59 p.m. Eastern time on May 18, 2020 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BYPHONE—800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern time on May 20, 2020 for shares held directly and by 11:59 p.m. Eastern time on May 18, 2020 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy/confidential voting instruction card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
D05964-P36701-Z76606 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY
THIS PROXY/CONFIDENTIAL VOTING INSTRUCTION CARD IS VALID ONLY WHEN SIGNED AND DATED.
NEXTERA ENERGY, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL THE NOMINEES LISTED:
1. Election as directors of the nominees specified in the proxy statement
Nominees: For Against Abstain
1a. Sherry S. Barrat ! ! ! For Against Abstain 1b. James L. Camaren ! ! ! 1l. William H. Swanson ! ! ! 1c. Kenneth B. Dunn ! ! ! 1m. Darryl L. Wilson ! ! !
1d. Naren K. Gursahaney ! ! ! THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE For Against Abstain “FOR” PROPOSALS 2 AND 3:
1e. Kirk S. Hachigian ! ! ! 2. Ratification of appointment of Deloitte & Touche LLP as ! ! ! NextEra Energy’s independent registered public accounting firm for 2020 1f. Toni Jennings ! ! !
3. Approval, bynon-binding advisory vote, of NextEra Energy’s
1g. Amy B. Lane ! ! ! compensation of its named executive officers as disclosed in the ! ! ! proxy statement
1h. David L. Porges ! ! ! THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE For Against Abstain “AGAINST” PROPOSALS 4 AND 5:
1i. James L. Robo ! ! ! 4. A proposal entitled “Political Contributions Disclosure” to request ! ! ! semiannual reports disclosing political contribution policies and expenditures 1j. Rudy E. Schupp ! ! !
5. A proposal entitled “Right to Act by Written Consent” to request
1k. John L. Skolds action by written consent of shareholders
The proxies are also authorized to vote in their discretion upon such other business as may properly be brought before the meeting or any adjournment(s) or postponement(s) thereof.
The shares represented by this proxy/confidential voting instruction card when properly executed will be voted in the manner directed herein by the undersigned. If no direction is made, this proxy/confidential voting instruction card will be voted FOR all nominees listed in proposal 1, FOR proposals 2 and 3 and AGAINST proposals 4 and 5. If any other matters properly come before the meeting or any adjournment(s) or postponement(s) thereof, the persons named in this proxy/the trustee will vote in their/its discretion.
Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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Annual Meeting Admission Ticket
Admission: This ticket, along with a form of picture
identification, admits the named shareholder(s).
Security: For the safety of attendees, all boxes,
handbags and briefcases are subject to inspection.
NextEra Energy, Inc.’s 20182020 Annual Meeting of Shareholders will be
held at 8:00 a.m. MountainCentral time on May 24, 2018,21, 2020, at The Westin La Paloma
Hyatt Regency Hill Country at 3800 East Sunrise9800 Hyatt Resort Drive, Tucson, Arizona.
San Antonio, Texas.
If you plan to attend the Annual Meeting of Shareholders, please
bring this Admission Ticket. If you require special assistance, call
NextEra Energy Shareholder Services at800-222-4511.
Note: As part of our precautions regarding the coronavirus orCOVID-19, we are planning for the possibility that the 2020 annual meeting may be held virtually over the internet. If we decide to hold a virtual annual meeting, we will announce the decision to do so in advance and details on how to participate will be issued by press release, posted on our website and filed with the SEC as additional proxy material.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 24, 2018:
21, 2020: The proxy statement and annual report to security holders are available atwww.proxyvote.com/NEE
D05965-P36701-Z76606
NEXTERA ENERGY, INC.
PROXY AND CONFIDENTIAL VOTING INSTRUCTION Annual Meeting ofShareholders-May 21, 2020
This proxy is solicited on behalf of the Board of Directors. The shareholder(s) signing on the reverse side hereby appoint(s) W. Scott Seeley and Charles E. Sieving, and each of them, proxies, with full power of substitution, and hereby authorize(s) them to represent and to vote all shares of Common Stock, par value $.01 per share, of NextEra Energy, Inc. (“Common Stock”) that such shareholder(s) would be entitled to vote at the Annual Meeting of Shareholders of NextEra Energy, Inc. to be held May 21, 2020, and any adjournment(s) or postponement(s) thereof, upon the matters referred to on this proxy and, in their discretion, upon any other business that may properly be brought before the meeting or any adjournment(s) or postponement(s) thereof.
This confidential voting instruction card is solicited on behalf of the Trustee (as hereinafter defined) of the Plan (as hereinafter defined). The participant or beneficiary in the NextEra Energy, Inc. Employee Retirement Savings Plan (“Plan”) signing on the reverse side, acting as a named fiduciary, hereby provides the voting instructions specified to the trustee of the Plan (the “Trustee”), which instructions shall be kept confidential and shall be taken into account by the Trustee in voting, in person, by limited or general power of attorney, or by proxy, the shares and fractional shares of Common Stock that are held by the Trustee, in its capacity as Trustee of the Plan, as of March 23, 2020, at the Annual Meeting of Shareholders of NextEra Energy, Inc. to be held on May 21, 2020, and at any adjournment(s) or postponement(s) thereof. As a named fiduciary, the participant has the right to direct the Trustee how to vote the shares allocated to the participant in the NextEra Energy Stock Fund and NextEra Energy Leveraged ESOP Fund. The Trustee must follow the participant’s directions, except in limited circumstances. As a named fiduciary, the participant, and not the Trustee, will be responsible for the consequences of the voting directions given. As to the proposals listed on the reverse side, which are more particularly described in the Proxy Statement, the voting instructions on this confidential voting instruction card will instruct the Trustee how to vote the number of shares of Common Stock reflecting the participant’s proportionate interest in the NextEra Energy Stock Fund and the NextEra Energy Leveraged ESOP Fund. The instructions will also determine the vote on a proportionate number of shares of Common Stock in the NextEra Energy Leveraged ESOP Fund which are not yet allocated to participants. If the participant does not give the Trustee voting instructions, the number of shares reflecting the participant’s proportionate interest in the NextEra Energy Stock Fund and NextEra Energy Leveraged ESOP Fund will be voted by the Trustee in the same manner as it votes proportionate interests for which it receives voting instructions and a proportionate share of the unallocated NextEra Energy Leveraged ESOP Fund shares will be voted by the Trustee in the same manner as it votes unallocated shares for which instructions are received.
E40550-P05371-Z72014
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