UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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CONSOLIDATED EDISON, INC.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Consolidated Edison, Inc.
4 Irving Place
New York, NY 10003
John McAvoy
Chairman of the Board
April 8, 20196, 2020
Dear Stockholders:
You are cordially invited to attend theThe Annual Meeting of Stockholders of Consolidated Edison, Inc. We hope that you will joinwith the Board of Directors and the Company’s management is scheduled for Monday, May 18, 2020, at 10:00 a.m., Eastern Daylight Time, in person at the Company’s Headquarters at 4 Irving Place, New York, New York, on Monday, May 20, 2019, at 10:00 a.m.or remotely by visitingwww.meetingcenter.io/249286494 and entering your control number and the password ED2020. Due to the impact of the novel coronavirus disease,COVID-19, we encourage stockholders to utilize the remote access option. We have designed the virtual meeting to offer the same participation opportunities as an in-person meeting.
The accompanying Proxy Statement, provided to stockholders on or about April 8, 2019,6, 2020, contains information about matters to be considered at the Annual Meeting. At the Annual Meeting, stockholders will be asked to vote on the election of Directors, to ratify the appointment of independent accountants for 2019,2020, and to approve, on an advisory basis, named executive officer compensation.
Whether or not you planSo as to attend the Annual Meeting, please vote as soon as possible. It is very importantensure that as many shares as possible beare represented, we strongly recommend that you vote in advance of the Annual Meeting, even if you plan to attend in person or remotely.
As part of our effort to maintain a safe and healthy environment at our Annual Meeting and to protect the meeting.well-being of our stockholders, after closely monitoring statements issued by the World Health Organization (who.int), the Centers for Disease Control and Prevention (cdc.gov), the New York State Department of Health (health.ny.gov), and the New York City Department of Health and Mental Hygiene (nyc.gov/health) regarding the novel coronavirus disease,COVID-19, we have decided to give stockholders the option of attending the Annual Meeting by means of remote communication this year. While we currently intend to permit stockholders to attend the Annual Meeting in person, we are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials may issue. We may impose additional procedures or limitations on meeting attendees or may decide to hold the Annual Meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting), if allowed by applicable law. We plan to announce any such updates by press release and posting on our proxy website (conedison.com/shareholders), and we strongly encourage you to check this website prior to the Annual Meeting if you plan to attend in person. Note that any decision to proceed with a virtual-only meeting this year will not mean we will utilize a virtual-only format or any means of remote communication for future annual meetings.
Sincerely,
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| John McAvoy |
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Consolidated Edison, Inc.
4 Irving Place, New York, NY 10003
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
| Date: | Monday, May | |||
| In Person Location:* | Company’s Headquarters 4 Irving Place New York, New York | |||
| Virtual Meeting Website Address:* | www.meetingcenter.io/249286494. If you are a registered holder of Company Common Stock (i.e., you hold your shares through our transfer agent, Computershare), please follow the instructions on your proxy card, Notice of Internet Availability, or e-mail notification that you received. If you hold your shares through an intermediary (i.e., a broker, bank, or other financial institution), you must register in advance to attend, vote, and submit questions or comments at the Annual Meeting virtually. (See “Questions and Answers About the 2020 Annual Meeting and Voting—Annual Meeting Information” beginning on page 76.) | |||
| Items of Business: | a. To elect as the members of the Board of Directors the ten nominees named in the Proxy Statement (attached hereto and incorporated herein by reference);
b. To ratify the appointment of PricewaterhouseCoopers LLP as independent accountants for
c. To approve, on an advisory basis, named executive officer compensation; and
d. To transact such other business as may properly come before the meeting, or any adjournment or postponement of the meeting. | |||
By Order of the Board of Directors,
Sylvia V. Dooley
Vice President and Corporate Secretary
Dated: April 8, 20196, 2020
* As part of our effort to maintain a safe and healthy environment at our Annual Meeting and to protect the well-being of our stockholders, after closely monitoring statements issued by the World Health Organization (who.int), the Centers for Disease Control and Prevention (cdc.gov), the New York State Department of Health (health.ny.gov), and the New York City Department of Health and Mental Hygiene (nyc.gov/health) regarding the novel coronavirus disease,COVID-19, we have decided to give stockholders the option of attending the Annual Meeting by means of remote communication this year. While we currently intend to permit stockholders to attend the Annual Meeting in person, we are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials may issue. We may impose additional procedures or limitations on meeting attendees or may decide to hold the Annual Meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting), if allowed by applicable law. We plan to announce any such updates by press release and posting on our proxy website (conedison.com/shareholders), and we strongly encourage you to check this website prior to the Annual Meeting if you plan to attend in person. Note that any decision to proceed with a virtual-only meeting this year will not mean we will utilize a virtual-only format or any means of remote communication for future annual meetings.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDERS’ MEETING TO BE HELD ON MONDAY, MAY 20, 2019.18, 2020. THE COMPANY’S PROXY STATEMENT AND ANNUAL REPORT, PROVIDED TO STOCKHOLDERS ON OR ABOUT APRIL 8, 2019,6, 2020, ARE AVAILABLE AT
CONEDISON.COM/SHAREHOLDERS
IMPORTANT!
Whether or not you plan to attend the meeting, in person, we urge you to vote your shares of Company Common Stock by telephone, by Internet, or by completing and returning a proxy card or a voter instruction form, so that your shares will be represented at the Annual Meeting.
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| Consolidated Edison, Inc. | i |
| Table of Contents | ||||||
| ii | Consolidated Edison, Inc.Proxy Statement |
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| PROXY STATEMENT SUMMARY |
This section highlights the proposals to be acted upon, as well as information about Consolidated Edison, Inc. (the “Company”) that can be found in this Proxy Statement and does not contain all of the information that you need to consider. Before voting, please carefully review the complete Proxy Statement and the Annual Report to Stockholders of the Company provided to stockholders on or about April 8, 2019,6, 2020, which includes the consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2018,2019, and other information relating to the Company’s financial condition and results of operations.
2019 ANNUAL MEETING OF STOCKHOLDERS2020 Annual Meeting of Stockholders (“ANNUAL MEETING”Annual Meeting”)
In light of the evolving novel coronavirus,COVID-19, situation, we have decided to give stockholders the option of attending the Annual Meeting by means of remote communication this year. We have designed the virtual meeting to offer the same participation opportunities as an in-person meeting. While we currently intend to permit stockholders to attend the Annual Meeting in person, we are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials may issue. We may impose additional procedures or limitations on meeting attendees or may decide to hold the Annual Meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting), if allowed by applicable law. We plan to announce any such updates by press release and posting on our proxy website (conedison.com/shareholders), and we strongly encourage you to check this website prior to the Annual Meeting if you plan to attend in person. Note that any decision to proceed with a virtual-only meeting this year will not mean we will utilize a virtual-only format or any means of remote communication for future annual meetings.
| Monday, May | |
| , Eastern Daylight Time | ||
| Company Headquarters, 4 Irving Place, New York, NY 10003. Directions are available atconedison.com/shareholders. | |
◾Virtual Meeting | www.meetingcenter.io/249286494. If you are a registered holder of Company Common Stock (i.e., you hold your shares through our transfer agent, Computershare), please follow the instructions on your proxy card, Notice of Internet Availability, or e-mail notification that you received. If you hold your shares through an intermediary (i.e., a broker, bank, or other financial institution), you must register in advance to attend, vote, and submit questions or comments at the Annual Meeting virtually. (See “Questions and Answers About the 2020 Annual Meeting and Voting—Annual Meeting Information” beginning on page 76.) | |
| Stockholders of record at the close of business on March On the record date, Each outstanding share of Common Stock is entitled to one vote. | |
| Please follow the instructions contained in“Who Can Attend The Annual Meeting?” and“Do I Need A Ticket To Attend The Annual Meeting?” on page | |
◾Proxy Website | conedison.com/shareholders | |
STOCKHOLDER VOTING MATTERSStockholder Voting Matters
| Management Proposals | Board’s Voting Recommendation | Vote Required For Approval* | Page References (for more detail) | |||||
◾Proposal No. | Election of Directors | Nominee | Votes Cast | |||||
◾Proposal No. | Ratification of the Appointment of Independent Accountants | Votes Cast | ||||||
◾Proposal No. | Advisory Vote to Approve Named Executive Officer Compensation | Votes Cast | ||||||
Footnote:
| * | The presence at the Annual Meeting, either in person or by means of remote communication, or by proxy, of holders of a majority of the outstanding shares of Company Common Stock is required to constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and brokernon-votes (shares held by a broker or nominee that does not have discretionary authority to vote on a particular matter and has not received voting instructions from its clients) are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting but are not considered votes cast with respect to the Election of Directors (Proposal No. 1) and the Advisory Vote to Approve Named Executive Officer Compensation (Proposal No. 3) and have no effect on the vote. |
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Ten Directors are to be elected at the Annual Meeting to hold office until the next annual meeting and until their respective successors are elected and qualified. (See “Information About the Director Nominees” on pages The Corporate Governance and Nominating Committee recommends candidates for election orre-election to the Board and reviews the qualifications of possible Director candidates. When recommending to the Board the slate of Director nominees for election at the Annual Meeting, the Corporate Governance and Nominating Committee strives to maintain an appropriate balance of tenure, diversity, and skills on the Governance and Nominating Committee identifies candidates through a variety of means, including professional search firms, recommendations from members of the Board, suggestions from senior management, and submissions by the Company’s stockholders. When a professional search firm is used, the firm is directed to provide a diverse slate of candidates for the Board’s consideration. (See “The Board of Directors— Each nominee was selected by the Corporate Governance and Nominating Committee and approved by the Board for submission to the Company’s stockholders. The Company believes that all of the nominees will be able and willing to serve as Directors of the Company. All of the Directors also serve as Trustees of the Company’s subsidiary, Consolidated Edison Company of New York, Inc. (“Con Edison of New York”). Mr. McAvoy also serves as Chairman of the Board of the Company’s subsidiary, Orange and Rockland Utilities, Inc. (“Orange & Rockland”). Shares represented by every properly executed proxy will be voted at the Annual Meeting for or against the election of the Director nominees as specified by the stockholder giving the proxy. If one or more of the nominees is unable or unwilling to serve, the shares represented by the proxies will be voted for any substitute nominee or nominees as may be designated by the Board.
Information About the Director Nominees The Board and the Corporate Governance and Nominating Committee consider the qualifications of Directors and Director candidates individually and in the broader context of the Board’s overall composition and the Company’s current and future needs. The Board believes that the Board, as a whole, should possess a combination of skills, professional experience, and diversity of backgrounds necessary to oversee the Company’s business. The Board has adopted Corporate Governance Guidelines to assist it in exercising its responsibilities to the Company and its stockholders. In evaluating Director candidates and considering incumbent Directors for renomination to the Board, the Board and the Corporate Governance and Nominating Committee consider various factors. Pursuant to the Guidelines, the Corporate Governance and Nominating Committee reviews with the Board factors relating to the composition of the Board (including its size and structure), the nominees, including independence, integrity, judgment, business experience, areas of expertise, and availability for service to assure that the Board contains an appropriate mix of Directors to best further the Company’s long-term business interests. For incumbent Directors, the Corporate Governance and Nominating Committee also considers past performance of the Director on the Board. The current Director nominees bring to the Company the benefit of their qualifications, leadership, skills, and the diversity of their experience and backgrounds which provide the Board, as a whole, with the skills and expertise that reflect the needs of the Company. See pages 8 to 12 for information about each Director nominee, including their age as of the date of the Annual Meeting, business experience, period of service as a Director, public or investment company directorships, and other directorships.
The following graph displays information about the skills and experience of the Director nominees:
The makeup of the Director nominees is set forth in the pie charts below:
During In accordance with the Company’s Corporate Governance Guidelines, the Chair of the Corporate Governance and Nominating Committee (Mr. Ranger) serves as independent Lead Director and, as such, chairs the executive sessions of thenon-management Directors and the independent Directors. The Board routinely holds executive sessions at which onlynon-management Directors are present, and the independent Directors meet in executive session at least once a year. The Company’s independent Directors met During
The Company’s corporate governance documents, including its Corporate Governance Guidelines, the charters of the Audit, Corporate Governance and Nominating, and Management Development and Compensation Committees, and the Standards of Business Conduct, are available on the Company’s website atconedison.com/shareholders.The Standards of Business Conduct apply to all Directors, officers and employees. The Company intends to post on its website atconedison.com/shareholders amendments to its Standards of Business Conduct and a description of any waiver from a provision of the Standards of Business Conduct granted by the Board to any Director or executive officer of the Company within four business days after such amendment or waiver. To date, there have been no such waivers.
The Board consists of a substantial majority of independent Directors. (See “The Board of Directors—Board Members’ Independence” on The Board has an independent Lead Director who is the Chair of the Corporate Governance and Nominating Committee. The Corporate Governance Guidelines provide that the Lead Director: (i) acts as a liaison between the independent Directors and the Company’s management; (ii) chairs the executive sessions ofnon-management and independent Directors and has the authority to call additional executive sessions as appropriate; (iii) chairs Board meetings in the Chairman’s absence; (iv) coordinates with the Chairman on agendas and schedules for Board meetings, information flow to the Board, and other matters pertinent to the Company and the Board; Pursuant to the Company’s Corporate Governance Guidelines, the Board has oversight responsibility for reviewing the Company’s strategic plans, objectives and risks. Each of the standing committees of the Board, other than the Executive Committee, is chaired bynon-management Directors. (See “The Board of Directors—Standing Committees of the Board” on pages
The Board’s primary function is one of oversight. In connection with its oversight function, the Board oversees the Company’s
policies and procedures for managing risk. The Board administers its risk oversight function primarily through its Committees that report to the Board. Board Committees have assumed oversight of various risks that have been identified through the Company’s enterprise risk management program. The Audit Committee reviews the Company’s risk assessment and risk management policies and reports to the Board on the Company’s risk management program. Management regularly provides reports to the Board and its Committees concerning risks identified through the Company’s enterprise risk management program. Cybersecurity has been identified as a key enterprise risk for the Company. An annual presentation on cybersecurity risks
The Company is firmly committed to sustainability which is broadly overseen by the Board. The Board reviews and discusses various sustainability topics throughout the year and routinely considers environmental issues (including climate issues) and assesses how they impact the Company’s operations, strategies and risk profile. In 2019, the Board received reports or presentations on several sustainability topics, including diversity and inclusion and supply chain diversity and sustainability. In 2019, the Board’s strategy meeting focused on climate change. The Board received a presentation on the transition to a clean energy future by an outside consultant as well as presentations on current renewable energy policy trends and the impact of climate change on operations. In addition, the Board has delegated to the appropriate committees, responsibility for the specific sustainability categories relating to the oversight of risks with which such committees are charged. The Safety, Environment, Operations and Sustainability Committee oversees sustainability issues relating to safety and the environment and reviews the Company’s Annual Sustainability Report prior to its publication. In discharging its responsibilities, the Safety, Environment, Operations and Sustainability Committee reviews, at each of its meetings, certain key performance indicators relating to climate risk, including energy efficiency and environmental beneficial electrification. In 2019, the Safety, Environment, Operations and Sustainability Committee also reviewed and discussed presentations relating to safety and customer service. The Corporate Governance and Nominating Committee is charged with sustainability matters relating to governance and in 2019 reviewed and discussed a presentation regarding governance benchmarking. The Management, Development, and Compensation Committee’s responsibilities include oversight of sustainability issues relating to human capital management. The Management, Development, and Compensation Committee annually reviews performance results as well as proposed performance indicators for the following year. Committees not specifically tasked with oversight of sustainability also periodically review sustainability related issues. In 2019, the Audit Committee reviewed and discussed presentations regarding fraud prevention and detection activities and certain recommendations with respect to financial governance oversight. The Company and its employees are also committed to giving back to their communities. In 2019, 635 Company employees collectively volunteered 6,300 hours at various community service events and programs throughout the Company’s service territory. Events included building houses for and serving meals to those in need, judging educational competitions, educating families and students about electricity and energy efficiency, and installing solar lights to create safer neighborhood space. In addition, the Company sponsored, for the 9th year in a row, an event that raises awareness of environmental conservation and climate change. The Company developed and implemented a proxy access framework that allows a stockholder or a group of up to 20 stockholders who have owned at least
The Company has adopted a written policy for approval of transactions between the Company and its Directors, Director nominees, executive officers, greater-than-five-percent (5%) beneficial owners, and their respective immediate family members, where the amount involved in the transaction since the beginning of the Company’s last completed fiscal year exceeds or is expected to exceed $100,000. The policy provides that the Corporate Governance and Nominating Committee review certain transactions subject to the policy and determine whether or not to approve or ratify those transactions. In doing so, the Corporate Governance and Nominating Committee takes into account, among other factors it deems appropriate, whether the transaction is on terms that are no less favorable to the Company than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. In addition, the Board has delegated authority to the Chair of the Corporate Governance and Nominating Committee topre-approve or ratify transactions where the aggregate amount involved is expected to be less than $1.0 million. A summary of any new transactionspre-approved by the Chair is provided to the full Corporate Governance and Nominating Committee for its review in connection with a regularly scheduled committee meeting. The Corporate Governance and Nominating Committee has considered and adopted standingpre-approvals under the policy for limited transactions with related persons.Pre-approved transactions include:
In
The Company’s Corporate Governance Guidelines provide that the Board of Directors consist of a substantial majority of Directors who meet the New York Stock Exchange definition of independence, as determined by the Board in accordance with the standards described in the Guidelines below. The Board of Directors has affirmatively determined that the following Directors are “independent” as defined in the New York Stock Exchange’s listing standards: George Campbell, Jr., John F. Killian, William J. Mulrow, Armando J. Olivera, Michael W. Ranger, Linda S. Sanford, Deirdre Stanley, and L. Frederick Sutherland. The Board monitors the independence of its members on an ongoing basis
Board has determined that each of the following relationships is categorically immaterial and therefore, by itself, does not preclude a Director from being independent:
Selection of
The Corporate Governance and Nominating Committee has the authority under its charter to hire advisors to assist it in its decisions. The Corporate Governance and Nominating Committee identifies director candidates through a variety of means, When using a professional search firm, the Corporate Governance and Nominating Committee directs the firm to include in each director search qualified candidates who reflect diverse backgrounds, including diversity of gender and race. The firm assists in developing criteria for potential Board members to complement the Board’s existing strengths. Based on such criteria, the firm potential conflicts of interest and provides its results to the Committee. The Corporate Governance and Nominating Committee also considers candidates recommended by stockholders. There are no differences in the manner in which the Corporate Governance and Nominating Committee Stockholder recommendations for candidates, accompanied by biographical material for evaluation, may be sent to the Vice President and Corporate Secretary of the Company. Each recommendation should include information as to the qualifications of the candidate and should be accompanied by a written statement (presented to the Vice President and Corporate Secretary of the Company) from the suggested candidate to the effect that the candidate is willing to serve. The Company has a comprehensive, formal process for proactively identifying, assessing and developing a diverse slate of internal candidates to assume, in the future, key roles in the organization. Our succession planning and development processes are integrated and focused on learning through experiences, leadership commitment, diversity and targeted executive development. During succession planning and development discussions, the Company proactively seeks to develop talented gender, racially and ethnically diverse employees to ensure a diverse and talented bench of enterprise leaders. These discussions result in development plans for each employee that are reviewed and updated annually. These succession planning and development processes apply to all levels of management, including officers. The Chief Executive Officer annually reviews his succession plan with the Board. The Board is committed to diversity and would direct a search firm retained in connection with chief executive officer succession planning to provide a diverse slate of candidates for the Board’s consideration. Currently, women make up 32.3% of the Company’s executive ranks and minorities make up 30.8%.
Director Compensation Consultant The Corporate Governance and Nominating Committee has
The Compensation Committee has the authority, under its charter, to engage the services of outside advisors, experts, and others to assist it. The Compensation Committee engages Mercer to provide information, analyses, and objective advice regarding our executive
executive and director compensation consulting to the committees in $539,300. During The Compensation Committee considered the independence of Mercer under the rules of the Securities and Exchange Commission and the listing standards of the New York Stock Exchange. The Compensation Committee concluded that the services provided by the Marsh & McLennan affiliates (other than Mercer) did not raise any conflicts of interest and did not impair Mercer’s ability to provide independent advice to the Compensation Committee concerning executive or director compensation matters.
George Campbell, Jr. (Chair), John F. Killian, William J. Mulrow, Michael W. Ranger, and L. Frederick Sutherland were on the Company’s Compensation Committee during
Interested parties may communicate directly with the members of the Company’s Board of Directors, including thenon-management Directors as a group, by writing to them, care of the Company’s Vice President and Corporate Secretary, at the Company’s principal executive office at 4 Irving Place, New York, New York 10003. The Vice President and Corporate Secretary will forward communications to the Director or the Directors indicated.
The Company has continued to proactively engage with stockholders this year and to accept invitations to discuss matters of interest to them. The core stockholder engagement team consists of the Company’s Chief Financial Officer, the Treasurer and Investor Relations. The Company’s engagement efforts also include the Office of the Controller, the Office of the Corporate Secretary, the Environment, Health & Safety Department, and Corporate Affairs. In addition, the Chairman and Chief Executive Officer, the Presidents of each of the Company’s subsidiaries, and other Company officers participate inface-to-face meetings with stockholders during the year. During 2019, the Company participated in 23 stockholder conferences and organized 10 roadshows in the U.S., Europe, Asia, and Canada, engaging with a broad range of stockholders, including index funds, union and public pension funds, actively-managed funds and stockholder advisory firms. Key topics of discussion included corporate strategy, disclosure practices, corporate governance, executive compensation, political spending and lobbying practices, operational and financial issues, and environmental, health and safety matters. As a result of stockholder feedback on financial disclosures, the Company enhanced its quarterly earnings release presentations to include more detailed segment financial data, more information and analysis of the Utilities’ regulatory filing and the ensuing Joint Proposal and its financial impact. The Company also released a comprehensive stockholder fact book. The Company also has a targeted environmental, social and governance (“ESG”) stockholder-engagement team that consists of the Company’s Chief Financial Officer, the Corporate Secretary, the Treasurer and Investor Relations. Investor Relations and the Environment, Health & Safety Department are actively involved in national and international ESG forums that bring companies and stockholders together, helping the Company to identify important issues, adopt best practices, as appropriate, and improve related disclosures. In 2019, the Company actively participated in the trade association efforts of the Edison Electric Institute and the American Gas Association to develop industry templates for ESG reporting. Those templates are available on the Company’s website. The Company reaches out to its largest stockholders as well as smaller stockholders with an identified interest in ESG issues to discuss related issues and trends as well as Company-specific issues. The Company responds to stockholder inquiries focused on ESG issues, including stockholders that have submitted proposals for inclusion in the Company’s annual proxy statement, to understand their concerns and to address, where possible, the issues behind their proposals or inquiries. As a result of this ongoing engagement, the Company has enhanced disclosures in its proxy, as demonstrated by this more detailed description of our engagement efforts, and from last year, clearer and more accessible information on Board diversity, tenure, skills and experience. We will continue our proactive engagement and responsiveness to stockholder inquiries. The Company has engaged with stockholders on specific ESG issues. BlackRock and the New York State Common Retirement Fund, for instance, urged the Company to study climate-change risk to the Company’s infrastructure. In another example, As You Sow, urged the Company to assume an advocacy role as Federal environmental rules and regulations have been rolled back. The Company has responded by publicly joining other companies in the utility industry to defend strong state auto emission standards and to support a science-based climate policy agenda. Further, the Company’s subsidiary, Consolidated Edison Company of New York, released its science-based Climate Vulnerability Study in December 2019 and will prepare a related implementation plan byyear-end 2020. The stockholder engagement team reports the results of our annual activities to the Corporate Governance and Nominating Committee and the Board to convey the feedback received from stockholders, and to propose implementation of appropriate responses. During the 2019-2020 engagement season, the Company engaged with stockholders holding in aggregate 19% of shares outstanding and 25% of the Company’s debentures.
The Corporate Governance and Nominating Committee reviews director compensationbi-annually. The Corporate Governance and Nominating Committee reviewed director compensation in 2020. The Corporate Governance and Nominating Committee considers information, analyses, and objective advice regarding director compensation provided by Mercer. Director compensation is assessed relative to the Company’s compensation peer group (the same group used to evaluate executive compensation), general industry trends, and the total cost of governance. The Board reviews the recommendations of the Corporate Governance and Nominating Committee when determining whether changes, if any, will be made. In February
Compensation for individual Directors approximates the median of compensation for Directors in similar positions at the compensation peer group.
In
In No person who served on both the Company Board and on the Board of its subsidiary, Con Edison of New York, and corresponding Committees, was paid additional compensation for concurrent service. Directors who are employees of the Company or its subsidiaries do not receive retainers or annual equity awards for their service on the Board.
The Company has stock ownership guidelines fornon-employee Directors which provide that, within five years of joining the Board, each Director should own, and continue to hold during his or her tenure on the Board, shares (including stock equivalents and restricted stock units) with a value (measured at the time the shares are acquired) equal to five times
Non-employee Directors participate in the Company’s long term incentive plan. Pursuant to the long term incentive plan, eachnon-employee Director then serving was allocated an annual equity award of $150,000 of deferred stock units on the first business day following the Settlement of the 2019 annual equity awards of stock units on another date or to further defer any other prior annual equity award of stock units, including any related dividend equivalents earned on such prior annual equity awards of stock units. Eachnon-employee Director may also elect to defer all or a portion of his or her Dividend equivalents are payable on All payments on account of deferred stock units will be made in shares of Company Common Stock. The long term incentive plan provides that cash compensation deferred into stock units, annual equity awards, and dividend equivalents granted tonon-employee Directors that are credited in the form of additional deferred stock units, are fully vested, and payable in a singleone-time payment of whole shares (rounded to the nearest whole share) within 60 days following separation from Board service, unless the Director elected to defer distribution to another date.
Directors are eligible to participate in the stock purchase plan, which is described in Note M to the financial statements in the Company’s Annual Report onForm 10-K for the fiscal year ended December 31,
The following table sets forth the compensation for the members of the Company’s Board of Directors for the fiscal year ended December 31,
Footnotes:
The following table provides, as of February
Footnotes:
The following table provides information, as of December 31,
Footnotes:
At the Annual Meeting, as a matter of sound corporate governance, stockholders will be asked to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP (“PwC”) as independent accountants for the Company for PwC has acted as independent accountants for the Company for many years. The Audit Committee considered PwC’s qualifications in determining whether to appoint PwC as independent accountants for auditing. The Audit Committee also reviewed a report provided by PwC regarding its quality controls, inquiries or investigations by governmental or professional authorities and independence. (See “Audit Committee Matters” on page Representatives of PwC will be present at the Annual Meeting and will be afforded the opportunity to make a statement if they desire to do so and to respond to appropriate questions.
The Company’s Audit Committee is composed of five directors, all of whom meet the qualifications required by the New York Stock Exchange and Securities and Exchange Commission, and the Company’s Corporate Governance Guidelines. The Audit Committee operates under a written charter adopted by the Board of Directors that is available on the Company’s website. The Audit Committee has reviewed and discussed with management the audited financial statements of the Company for the year ended December 31, The Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence. The Audit Committee has discussed with PwC its independence and qualifications. The Audit Committee also considered whether PwC’s provision of limited tax andnon-audit services to the Company is compatible with PwC’s independence and concluded that it was. Based on the Audit Committee’s review and discussions, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in the Company’s Annual Report on Form10-K for the year ended December 31, Audit Committee: John F. Killian (Chair) Armando J. Olivera Michael W. Ranger Linda S. Sanford L. Frederick Sutherland
Fees paid or payable to PwC for services related to
Footnote:
The Audit Committee or, as delegated by the Audit Committee, the Chair of the Committee, approves in advance each auditing service andnon-audit service permitted by applicable laws and regulations, including tax services, to be provided to the Company and its subsidiaries by its independent accountants.
The Company values the opinions of its stockholders, and in accordance with Section 14A of the Securities Exchange Act of 1934, the stockholders have the opportunity to approve, on an advisory basis, the compensation of the Named Executive Officers (commonly referred to as a “say on pay” vote) as disclosed in the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement, the related compensation disclosure tables, and the narrative discussion that accompanies the compensation disclosure tables on pages As discussed in the CD&A, the Company’s executive compensation program is designed to assist in attracting and retaining key executives critical to its long-term success, to motivate these executives to create value for its stockholders, and to provide safe, reliable, and efficient service for its customers. The Management Development and Compensation Committee (the “Compensation Committee”), with the assistance of its independent compensation consultant, seeks to provide base salary and performance-based compensation, including target annual cash incentive compensation and target long-term equity-based incentive compensation, that are competitive with the median level of compensation provided by the Company’s compensation peer group to effectively link pay with performance. The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation and that most of the performance-based compensation should be in the form of long-term, rather than annual, incentives to emphasize the importance of sustained Company performance. Each year, the Compensation Committee evaluates the level of compensation, the mix of base salary, performance-based compensation and retirement and welfare benefits provided to each Named Executive Officer. The Compensation Committee chooses performance goals under the annual incentive plan and the long term incentive plan to support the Company’s short- and long-term business plans and strategies. In setting targets for the short- and long-term performance goals, the Compensation Committee considers the Company’s annual and long-term business plans and certain other factors, includingpay-for-performance alignment, economic and industry conditions, and the practices of the compensation peer group. The Compensation Committee sets challenging, but achievable, goals for the Company and its executives to drive the achievement of short- and long-term objectives. For the reasons indicated and more fully discussed in the CD&A, the Board recommends that the stockholders vote in favor of the following advisory resolution: “RESOLVED, That the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion that accompany the compensation disclosure tables is hereby approved.”
This section of the Proxy Statement provides an overview of the Company’s
The Company’s executive compensation program is designed to
The Company is committed to maintaining strong compensation governance practices to support thepay-for-performance philosophy of the executive compensation program and align the executive compensation program with the long-term interests of the Company’s stockholders:
Proactive, Year-Round, Stockholder Engagement Stockholder engagement is a key priority of the Company and the Board. The Company proactively engages with corporate governance, executive compensation, political spending and lobbying practices, operational and financial issues and environmental, health and safety matters. In
The Compensation Committee’s philosophy and objectives governing the development and implementation of the executive compensation program are
Competitive Positioning—Attraction and Retention The executive compensation program is designed to attract and retain key executives critical to the Company’s long-term success. The Compensation Committee seeks to align pay to performance and provide
For 2019, the Compensation Committee used a compensation peer group of publicly-traded utility companies of comparable size and scope to that of the Company. The purpose of the compensation peer group is to provide benchmark information on compensation levels provided to the Company’s officers and to measure relative total shareholder returns for the vesting of performance-based equity awards. The Compensation Committee annually reviews the composition of the compensation peer group companies and the impact of acquisitions. For 2019, the Compensation Committee made no changes to the compensation peer group. The Company’s 2018 revenues approximated the For 2019, the Company’s compensation peer group
For 2020, the Compensation Committee made no change to the compensation peer group.
In 2019, the target total direct compensation awarded to the Named Executive
Pay-for-Performance Alignment and Pay Mix The The Compensation Committee believes that fixed compensation should recognize each Named Executive Officer’s individual responsibility and performance. The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation and that most of the performance-based compensation should be in the form of long-term, rather than annual, incentives to emphasize the importance of sustained Company performance. Target annual cash incentive and target long-term equity-based incentive awards reflect the Compensation Committee’s desired balance between these elements, relative to the base salary paid to each Named Executive Officer. Awards under the Company’s annual incentive plan are based on the achievement of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility. Awards under the Company’s long term incentive plan are based on the achievement of financial and operating objectives critical to the Company’s business plans and strategies and the achievement, over a three-year period, of the Company’s cumulative total shareholder return relative to the total shareholder return for the Company’s compensation peer group companies. For
The following charts illustrate the average mix of target total direct compensation for
The following charts illustrate the average mix of target total direct compensation for the Company’s other Named Executive Officers and other named executive officers in the Company’s compensation peer group companies for
The following charts illustrate that all Named Executive Officer long-term incentive compensation is performance-based and that, based on proxy statements filed in
The Compensation Committee chooses performance goals under the annual
The role of the Compensation Committee is to establish and oversee the Company’s executive compensation and retirement and welfare benefit plans and policies, administer its equity plans and annual incentive plan and review and approve annually all compensation relating to the Named Executive Officers. The Chief Executive Officer considers the following factors in making his compensation
The Company’s Human Resources department Compensation Consultant’s Role The Compensation Committee has
A portion of each Named Executive Officer’s annual cash compensation is paid in the form of base salary. Base salary is reviewed annually to recognize individual performance In setting base salary for the Named Executive Officers, including the Chief Executive Officer, the Compensation Committee, or, in the case of the President and Chief Executive Officer of Orange & Rockland, the Board of Directors of Orange & Rockland, considers various factors, including:
a general assessment of each Named Executive Officer’s performance of his or her responsibilities; and
Effective February 1,
A significant portion of the annual cash incentive compensation paid to the Named Executive Officers directly relates to the Company’s financial and operating performance, factors that the Compensation Committee believes influence stockholder value. Individual performance is considered in setting annual cash incentive compensation through the establishment by the Compensation Committee of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility.
For
The range of awards included competitive level of compensation if the Named Executive Officers achieve the target financial and operating objectives. Awards under the annual incentive plan are calculated as follows:
“Base Salary
“Target Percentage” is a percentage of Base Salary that varies based on the Named Executive Officer’s position as follows:
“Weighting Earned” is the sum of the target weightings for adjusted net income, other financial performance, and operating objectives, including any adjustments (upward or downward) as a result of performance relative to target. Target weightings for each Named Executive Officer total 100% and are comprised of the following three components:
The financial objectives under the annual incentive plan are key performance measures that support the Company’s short- and long-term business plans and strategies and create value for the Company’s stockholders. For
The “adjusted net income” component, reflecting the financial results of the Company’s business for which its Named Executive Officers are responsible and accounting for 50% of each Named Executive Officer’s potential annual incentive “Company Adjusted
Footnote:
The Compensation Committee has also established an adjusted net income
“circuit breaker” for the annual incentive plan. If actual adjusted net income for
The “other financial performance” component, reflecting the Company’s business for which its Named Executive Officers are responsible and accounting for 25% of each Named Executive Officer’s potential annual incentive award Con Edison of New York’s “other financial performance” component is allocated 10% for capital budget performance and up to 15% for operating budget performance, subject to a maximum 25% upward or downward adjustment based on the achievement ofpre-established targets for 25 capital projects and 12 operating and maintenance programs, respectively. The targets for the capital projects consist of completing milestones within specified budget targets, and, for the operating and maintenance programs, completing a number of units within specified per unit budget targets.
The
Footnote:
The following table shows the targets assigned to the “other financial performance” component for capital budget and, for each Named Executive Officer indicated, the weighting earned based on achieving those targets.
Footnote:
performance.
The “operating objectives” component, reflecting the responsibilities of the Named Executive Officer and accounting for 25% of each Named Executive Officer’s potential annual incentive award
The Compensation Committee believes that
The operating objectives achieved for Con Edison of New York, Orange & Rockland Clean Energy Businesses and Con Edison Transmission are
Footnote:
The
Footnote:
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The following table shows, for each Named Executive Officer, the target weightingsweight assigned to the financial and operating objectives and the weightings earned based on achieving those objectives.
McAvoy, Hoglund, and Moore | Cawley | Sanchez | ||||||||||||||||||||||
| Target | Earned | Target | Earned | Target | Earned | |||||||||||||||||||
| (%) | (%) | (%) | (%) | (%) | (%) | |||||||||||||||||||
Financial Objectives | ||||||||||||||||||||||||
Adjusted Net Income | ||||||||||||||||||||||||
Adjusted Company Net Income | 50 | 59.5 | — | — | — | — | ||||||||||||||||||
Adjusted Regulated Net Income | — | — | 50 | 62.0 | — | — | ||||||||||||||||||
Adjusted Con Edison of New York Net Income | — | — | — | — | 10 | 12.5 | ||||||||||||||||||
Adjusted Orange & Rockland Net Income | — | — | — | — | 40 | 40.0 | ||||||||||||||||||
Other Financial Performance | ||||||||||||||||||||||||
Con Edison of New York Operating Budget | 12 | 12.0 | 15 | 15.0 | — | — | ||||||||||||||||||
Con Edison of New York Capital Budget | 10 | 11.5 | 10 | 11.5 | — | — | ||||||||||||||||||
Orange & Rockland Operating Budget | 1 | 1.2 | — | — | 25 | 29.7 | ||||||||||||||||||
Clean Energy Businesses Operating Budget | 1 | 0.9 | — | — | — | — | ||||||||||||||||||
Con Edison Transmission Operating Budget | 1 | 2.0 | — | — | — | — | ||||||||||||||||||
Operating Objectives | ||||||||||||||||||||||||
Con Edison of New York | 22 | 11.0 | 25 | 12.5 | — | — | ||||||||||||||||||
Orange & Rockland | 1 | 1.5 | — | — | 25 | 37.5 | ||||||||||||||||||
Clean Energy Businesses | 1 | 2.0 | — | — | — | — | ||||||||||||||||||
Con Edison Transmission | 1 | 1.5 | — | — | — | — | ||||||||||||||||||
Total | 100 | 103.1 | 100 | 101.0 | 100 | 119.7 | ||||||||||||||||||
McAvoy, Hoglund, and Moore | Cawley | Sanchez | ||||||||||||||||||||||||||||
| Weight | Weight | Weight | ||||||||||||||||||||||||||||
| Target | Earned | Target | Earned | Target | Earned | |||||||||||||||||||||||||
| (%) | (%) | (%) | (%) | (%) | (%) | |||||||||||||||||||||||||
| Financial Objectives | ||||||||||||||||||||||||||||||
Adjusted Net Income | ||||||||||||||||||||||||||||||
◾ Company Adjusted Net Income | 50 | 53.0 | — | — | — | — | ||||||||||||||||||||||||
◾ Regulated Adjusted Net Income | — | — | 50 | 58.5 | — | — | ||||||||||||||||||||||||
Con Edison of New York Adjusted Net Income | — | — | — | — | 10 | 11.4 | ||||||||||||||||||||||||
Orange & Rockland Adjusted Net Income | — | — | — | — | 40 | 70.8 | ||||||||||||||||||||||||
Other Financial Performance | ||||||||||||||||||||||||||||||
◾ Con Edison of New York Operating Budget | 12 | 12.0 | 15 | 15.0 | — | — | ||||||||||||||||||||||||
◾ Con Edison of New York Capital Budget | 10 | 11.5 | 10 | 11.5 | — | — | ||||||||||||||||||||||||
◾ Orange & Rockland Operating Budget | 1 | 1.0 | — | — | 25 | 25.0 | ||||||||||||||||||||||||
◾ Clean Energy Businesses Operating Budget | 1 | 2.0 | — | — | — | — | ||||||||||||||||||||||||
◾ Con Edison Transmission Operating Budget | 1 | 2.0 | — | — | — | — | ||||||||||||||||||||||||
| Operating Objectives | ||||||||||||||||||||||||||||||
◾ Con Edison of New York | 22 | 11.0 | 25 | 12.5 | — | — | ||||||||||||||||||||||||
◾ Orange & Rockland | 1 | 1.3 | — | — | 25 | 31.3 | ||||||||||||||||||||||||
◾ Clean Energy Businesses | 1 | 1.5 | — | — | — | — | ||||||||||||||||||||||||
◾ Con Edison Transmission | 1 | 1.5 | — | — | — | — | ||||||||||||||||||||||||
TOTAL | 100 | 96.8 | 100 | 97.5 | 100 | 138.5 | ||||||||||||||||||||||||
| 2019 | ||
|
In February 2019,2020, the Compensation Committee evaluated and determined whether the applicable financial and operating objectives were satisfied. In assessing performance against the objectives, the Compensation Committee considered actual results achieved against the specific targets associated with each objective and, based on the results, determined the 20182019 annual incentive awards. The Compensation Committee did not exercise discretion to adjust (upward or downward) the annual incentive award to be paid to each Named Executive Officer.
The following table shows the calculation of the 20182019 annual incentive awards for each Named Executive Officer.
| Name & Principal Position | Base Salary | × | Target Percentage | × | Weighting Earned | = | 2018 Award | |||||||||||||||||
| ($) | (%) | (%) | ($) | |||||||||||||||||||||
John McAvoy Chairman, President and Chief Executive Officer | 1,300,000 | 125 | 103.1 | 1,675,400 | ||||||||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 767,000 | 50 | 103.1 | 395,400 | ||||||||||||||||||||
Timothy P. Cawley President, Con Edison of New York | 612,000 | 80 | 101.0 | 494,500 | ||||||||||||||||||||
Elizabeth D. Moore Senior Vice President and General Counsel | 646,600 | 50 | 103.1 | 333,300 | ||||||||||||||||||||
Robert Sanchez President and Chief Executive Officer, Orange & Rockland | 438,600 | 80 | 119.7 | 420,000 | ||||||||||||||||||||
| Base Salary as of December 31, 2019 | × | Target Percentage | × | Weight Earned | = | 2019 Award | ||||||||||
| ($) | (%) | (%) | ($) | |||||||||||||
John McAvoy | 1,340,000 | 125 | 96.8 | 1,621,400 | ||||||||||||
Robert Hoglund | 790,000 | 50 | 96.8 | 382,400 | ||||||||||||
Timothy P. Cawley | 630,400 | 80 | 97.5 | 491,700 | ||||||||||||
Robert Sanchez | 459,600 | 80 | 138.5 | 509,200 | ||||||||||||
Elizabeth D. Moore | 666,000 | 50 | 96.8 | 322,300 | ||||||||||||
| Consolidated Edison, Inc.Proxy Statement | 47 |
| Compensation Discussion and Analysis |
Long-Term Incentive Compensation
Named Executive Officers are eligible to receive equity-based awards under the Company’s long term incentive plan. The Compensation Committee determines the target long-term incentive award value for each Named Executive Officer based on various factors, including:
recommendations from the Chief Executive Officer for each of the other Named Executive Officers;
a general assessment of each Named Executive Officer’s performance of his or her responsibilities; and
| ◾ | recommendations from the Chief Executive Officer for each of the other Named Executive Officers; |
a general assessment of each Named Executive Officer’s performance of his or her responsibilities; and |
| ◾ | the level of long-term incentive compensation compared to key executives in the Company’s compensation peer group companies. (See |
Performance-Based Equity Awards
It is the Compensation Committee’s practice in the first quarter of each year to approve performance-based equity awards under the long term incentive plan for the Company’s Named Executive Officers. The Compensation Committee’s use of performance-based equity awards is intended to further reinforce the alignment of Named Executive Officer pay opportunities with
stockholders stockholders’ interests by directly linking pay to the achievement of strong, sustained long-term financial and operating performance.
The performance units awarded to the Named Executive Officers provide for the right to receive one share of Company Common Stock and/or a cash payment equal to the fair market value of one share of Company Common Stock for each unit awarded, subject to the satisfaction of certainpre-established long-term performance objectives.measures. Named Executive Officers may elect to defer the receipt of the cash value of the award into the Company’s deferred income plan and/or to defer the receipt of the shares. Dividends are not paid and do not accrue on the units during the vesting period.
20182019 Performance Unit Awards
The target award of performance units awarded to each of the Named Executive Officers in 2019 for the performance period that begins on January 1, 2019 and ends December 31, 2021 is shown in the table below.
| Base Salary as of December 31, 2018 | x | 2019 Target Award as a Percentage of Base Salary | = | 2019 Target Award | ÷ | Share Price(1) | = | 2019 Target Award of Performance Units (rounded) | |||||||||||||||||||||||||||||||||||||
| ($) | (%) | ($) | ($) | (#) | |||||||||||||||||||||||||||||||||||||||||
John McAvoy | 1,300,000 | 475 | 6,175,000 | 69.57 | 88,800 | ||||||||||||||||||||||||||||||||||||||||
Robert Hoglund | 767,000 | 200 | 1,534,000 | 69.57 | 22,000 | ||||||||||||||||||||||||||||||||||||||||
Timothy P. Cawley | 612,000 | 250 | 1,530,000 | 69.57 | 22,000 | ||||||||||||||||||||||||||||||||||||||||
Robert Sanchez | 438,600 | 200 | 872,200 | 69.57 | 12,600 | ||||||||||||||||||||||||||||||||||||||||
Elizabeth D. Moore | 646,600 | 150 | 969,900 | 69.57 | 13,900 | ||||||||||||||||||||||||||||||||||||||||
Footnotes:
| (1) | The share price is determined by taking 50% of the stock price excluding dividends and 50% of the Total Shareholder Return. The Total Shareholder Return is comprised of Monte Carlo Simulations which include volatility, risk-free rate of return, dividend yield, and grant price. Volatility is determined using daily closing stock prices over the period equal to the remaining term of the awards. The risk free rate of return is the Treasury bill rate for the length of time equal to the remaining term of the awards. |
| 48 | Consolidated Edison, Inc.Proxy Statement |
| Compensation Discussion and Analysis |
The actual number of performance units that may be awarded to each Named Executive Officer for the 2019–2021 performance period may vary, from zero to a maximum of 190% of the 2019 target award, based on the achievement of three performance measures over the performance period as shown in the chart below. The maximum payout of the 2019 performance units (if any) represents the weighted average of each of the performance measures.
| Target Weight | Maximum Payout Relative to Target | Maximum Weighted Result | ||||||||||
| (%) | (%) | (%) | |||||||||||
Shareholder Return | 50 | 200 | 100 | ||||||||||
Adjusted EPS | 30 | 200 | 60 | ||||||||||
Operating Objectives | 20 | 150 | 30 | ||||||||||
TOTAL | 190 | ||||||||||||
The Compensation Committee (i) determines the actual weighted result at the end of the 2019-2021 performance period and (ii) may exercise negative discretion to adjust the actual performance unit awards to be paid to a Named Executive Officer. The minimum, target, and maximum number of performance units that may be awarded to the Named Executive Officers in 2018 for the 2018–20202019-2021 performance period isare shown in the “Grants of Plan-Based Awards Table” on page 52. Payouts of performance units, if any, are calculated by anon-discretionary formula as follows:61.
Award X 30% X Adjusted EPS Percentage
plus
Award X 20% X Operating Objectives Percentage
plus
Award X 50% X Shareholder Return Percentage
|
“AwardShareholder Return.” A 50% target weight is assigned to the annual award of performance units under the long term incentive plan. The target award of performance units is a percentage of base salary that varies based on each Named Executive Officer’s position as follows:
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
“Adjusted EPS Percentage” is the payout relative to target over the performance period beginning January 1, 2018 and ending December 31, 2020 based on attainment ofcumulative change in the Company’s three-year cumulative Adjusted EPS performance goal,total shareholder return measure, set forth in the following table that was established in the first quarter of 2018.
Three-Year Cumulative Adjusted EPS (weighting 30%)(1) | ||||||
Performance Relative to Target | Performance Goal | Payout Relative to Target(2) | ||||
| (%) | ($) | (%) | ||||
³ 112 | ³ 14.80 | 200 | ||||
(Target) 100 | 13.21 | 100 | ||||
< 88 | < 11.62 | 0 | ||||
Footnotes:
“Operating Objectives Percentage” is the payout relative to target over the performance period beginning January 1, 2018 and ending December 31, 2020 based on the attainment of the Company’s operating performance goals, set forth in the following table, that were established in the first quarter of 2018. These performance goals further long-term reliability and foster environmental sustainability.
Operating Objectives | Performance Goals(1) | |||||||||||
| Threshold | Target | Maximum | ||||||||||
(each 5% weighting) | ||||||||||||
Advanced Meter Infrastructure Work Plan | < 7 | 9 | 11 | |||||||||
Cyber Security Work Plan | < 4 | 5(2) | 6 | |||||||||
Gas Main Replacement (Number of Miles Completed) | < 298 | 334 | 370 | |||||||||
Growth in Renewable Portfolio (MW (AC)) | < 125 | 250(3) | ³ 375 | |||||||||
Footnotes:
“Shareholder Return Percentage” is the payout relative to target based on the cumulative change in Company total shareholder return over the performance period beginning January 1, 2018 and ending December 31, 2020below, compared with the Company’s compensation peer group as constituted on the date the performance units were granted in 2018.2019. In the event that the companies that make upin the compensation peer group change during the performance period, the Compensation Committee will use the compensation peer group as constituted on the date the performance unit awards are granted. If a company ceases to be publicly traded before the end of the performance period, that company’s total shareholder returns will not be used to calculate the total shareholder return portion of the performance unit awards.
The Compensation Committee believes that total shareholder return is a performance goal that aligns executive compensation with the creation of stockholder value.
| Shareholder Return | ||||
| Company Percentile | Performance Relative to Target(1) | |||
| Rating | (%) | |||
Maximum | 90th or greater | 200 | ||
Target | 50th | 100 | ||
Minimum | 25th | 50 | ||
| Below 25th | 0 | |||
Footnote:
| (1) | Interpolated for actual performance relative to minimum, target, and maximum performance. |
| 49 |
| Compensation Discussion and Analysis |
“Adjusted EPS.” A 30% target weight is assigned to the Company’s three-year cumulative Adjusted EPS performance measure, set forth in the table below, that was established in the first quarter of 2019. The Compensation Committee believes that Adjusted EPS furthers the achievement of strong, sustained long-term financial performance.
| Three-Year Cumulative Adjusted EPS(1) | ||||||
| Performance Goal | Performance Relative to Target(2) | |||||
| ($) | (%) | |||||
Maximum | ³ 15.05 | 200 | ||||
Target | 13.44 | 100 | ||||
Minimum | < 11.83 | 0 | ||||
Footnotes:
| (1) | Adjusted EPS is the Company’s earnings per share based on adjusted earnings, which excludes the impact of certain items from net income determined in accordance with GAAP. Information on how the Company calculates adjusted net income is disclosed in the “Non-GAAP Financial Measure” section of the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2019. |
| (2) | Interpolated for actual performance between performance relative to minimum, target, and maximum performance. |
“Operating Objectives.” A 20% target weight is assigned to the Company’s operating objectives measure, set forth in the table below, that was established in the first quarter of 2019. The Compensation Committee believes that the operating objectives further long-term reliability and foster environmental sustainability.
| Operating Objectives (5% weight for each objective below) | Performance Goals(1) | ||||||||||||||
| Minimum | Target | Maximum | |||||||||||||
Advanced Meter Infrastructure Work Plan Milestones/Tasks | < 6 | 8 | 10 | ||||||||||||
Cyber Security Work Plan Milestones/Tasks | < 3 | 4(2) | 5 | ||||||||||||
Gas Main Replacement (Con Edison of New York and Orange & Rockland) Number of Miles Completed | < 297 | 330 | 363 | ||||||||||||
Growth in Renewable Portfolio (MW (AC)) | < 22 | 44(3) | ³ 66 | ||||||||||||
Footnotes:
| (1) | Payouts for Gas Main Replacement and Growth in Renewable Portfolio are interpolated for actual performance between minimum, target, and maximum performance. |
| (2) | The Compensation Committee approves the annual work plan. Performance results are based on average achievement over the three-year period. The target approved by the Compensation Committee for 2019 applies to the first year of the three-year performance period for the 2019 performance units, the second year of the three-year performance period for the 2018 performance units, and the third year of the three-year performance period for the 2017 performance units. |
| (3) | The Compensation Committee approves annual plan levels on a three-year cumulative basis. The target approved by the Compensation Committee for 2019 applies to the first year of the three-year performance period for the 2019 performance units, the second year of the three-year performance period for the 2018 performance units, and the third year of the three-year performance period for the 2017 performance units. |
| 50 |
|
The level of performance units will be earned as follows:
of Payout
| |||||
| |||||
| |||||
| |||||
| |||||
Footnote:
The actual payout of the performance unit awards to the Named Executive Officers for the 2018–2020 performance period may vary from zero to a maximum of 190% of such award, based on actual performance over the performance period. The maximum payout of the performance unit awards represents the weighted average under each of the performance objectives as follows:
| Maximum Percentage Payout | Target Weight | Weighted Average | ||||
| (%) | (%) | (%) | ||||
Adjusted EPS | 200 | 30 | 60 | |||
Operating Objectives | 150 | 20 | 30 | |||
Shareholder Return | 200 | 50 | 100 | |||
TOTAL | 190 |
The Compensation Committee may exercise negative discretion to adjust the actual performance unit awards to be paid to a Named Executive Officer.
Calculation of Payout of 2016 Performance Unit Awards for Messrs. McAvoy, Hoglund, and Cawley, and Ms. Moore
Following the end of the relevant performance period for each outstanding performance unit, award, the Compensation Committee reviews the Company’s achievement of the performance goals.measures. The Compensation Committee evaluates and approves the Company’s performance relative to target and pays out the performance units in either cash and/or shares of Company Common Stock (as elected by the Named Executive Officer), based on the attainment of the performance goals.measures.
For the 2016-20182017-2019 performance period, payouts of the performance units were calculated based on the followingnon-discretionary formula:
Award X 30% X Adjusted EPS Percentage
plus
Award X 20% X Operating Objectives Percentage
plus
Award X 50% X Shareholder Return Percentage
“Award” was the annual award of performance units under the long term incentive plan. The target award of performance units wasas a percentage of base salary that varies based onand the target number of performance units awarded to each of the Named Executive Officer’s position atOfficers in 2017 for the time of award as follows:2017–2019 performance period are shown in the table below.
| 2017 Target Award as a Percentage of Base Salary | 2017 Target Award | |||||||||
| (%) | (#) | |||||||||
John McAvoy | 450 | 78,300 | ||||||||
Robert Hoglund | 200 | 20,500 | ||||||||
Timothy P. Cawley(1) | 200 | 11,600 | ||||||||
Robert Sanchez(2) | 100 | 4,400 | ||||||||
Elizabeth D. Moore | 150 | 13,000 | ||||||||
Footnote:
| (1) |
| |
| ||
| ||
|
| (2) | ||
Mr. Sanchez was Senior Vice President
|
“Adjusted EPS PercentageShareholder Return.” A 50% target weight was assigned to the payout relative to target over the performance period that began January 1, 2016 and ended December 31, 2018, based on attainment ofcumulative change in the Company’s three-year cumulative Adjusted EPS performance goal,total shareholder return measure, set forth in the following table that was established in the first quarter of 2016.
Three-Year Cumulative Adjusted EPS (weighting 30%) | ||||||
Performance Relative to Target | Performance Goal | Payout Relative to Target(1) | ||||
| (%) | ($) | (%) | ||||
³ 112 | ³ 13.57 | 200 | ||||
(Target) 100 | 12.12 | 100 | ||||
< 88 | < 10.67 | 0 | ||||
ACTUAL | 12.44(2) | 122.2 | ||||
Footnotes:
|
“Operating Objectives Percentage” was the payout relative to target over the performance period that began January 1, 2016 and ended December 31, 2018, based on the attainment of the Company’s operating performance goals, set forth in the following table.
| Operating Objectives | Performance Goals | Achievement/ Payout Relative to Target(1) | ||||||||||||||||
| Threshold | Target | Maximum | ||||||||||||||||
2016-2018 |
| |||||||||||||||||
Advanced Metering |
| |||||||||||||||||
| 2016 | < 2 | 3 | 4 | 4 / 150% | ||||||||||||||
| 2017 | < 5 | 7 | 9 | 9 / 150% | ||||||||||||||
| 2018 | < 7 | 9 | 11 | 11 / 150% | ||||||||||||||
Average | 150% | |||||||||||||||||
Cyber Security(2) |
| |||||||||||||||||
| 2016 | < 5 | 6 | 7 | 7 / 150% | ||||||||||||||
| 2017 | < 3 | 4 | 5 | 5 / 150% | ||||||||||||||
| 2018 | < 4 | 5 | 6 | 6 / 150% | ||||||||||||||
Average | 150% | |||||||||||||||||
Gas Main Replacement Number of Miles | < 200 | 235 | ³ 270 | 285 / 150.0% | ||||||||||||||
Growth in Renewable |
| |||||||||||||||||
| 2016 | < 127.5 | 255 | ³ 382.5 | 372 | ||||||||||||||
| 2017 | < 110.0 | 220 | ³ 330.0 | 264 | ||||||||||||||
| 2018 | < 125.0 | 250 | ³ 375.0 | 252 | ||||||||||||||
Cumulative | < 362.5 | 725 | ³ 1087.5 | 888 / 123% | ||||||||||||||
TOTAL | 143% | |||||||||||||||||
Footnotes:
“Shareholder Return Percentage” was the payout relative to target based on the cumulative change in Company total shareholder return over the performance period that began January 1, 2016 and ended December 31, 2018below, compared
with the Company’s compensation peer group as constituted on the date the performance units were granted in 2016. In the event that the companies that made up the compensation peer group changed during the performance period, the Compensation Committee used the compensation peer group as constituted on the date the performance unit awards were granted. If a company ceased to be publicly traded before the end of the performance period, that company’s total shareholder returns were not used to calculate the total shareholder return portion of the performance unit awards.2017.
The level of performance units earned was as follows:
| Shareholder Return | ||||||||||||
Company Percentile Rating | Payout Relative to Target(1) | Weight | ||||||||||
| (%) | (%) | |||||||||||
Maximum | 90th or greater | 200 | 100 | |||||||||
Target | 50th | 100 | 50 | |||||||||
Minimum | 25th | 25 | 25 | |||||||||
| Below 25th | 0 | 0 | ||||||||||
Actual | 42nd percentile | 76 | 38 | |||||||||
Footnote:
| (1) | Interpolated for actual performance between minimum, target, and maximum performance. |
| Consolidated Edison, Inc.Proxy Statement | 51 |
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Footnote:
“Adjusted EPS.” A 30% target weight was assigned to the Company’s three-year cumulative Adjusted EPS performance measure, set forth in the table below.
| Three-Year Cumulative Adjusted EPS | ||||||||||||||||
Performance Relative to Target | Performance Goal | Payout Relative to Target(1) | Weight | |||||||||||||
| (%) | ($) | (%) | (%) | |||||||||||||
Maximum | > 112 | > 13.92 | 200 | 60 | ||||||||||||
Target | 100 | 12.43 | 100 | 30 | ||||||||||||
Minimum | < 88 | < 10.94 | 0 | 0 | ||||||||||||
Actual | 103.2 | 12.83(2) | 127 | 38.1 | ||||||||||||
Footnotes:
| (1) | Interpolated for actual performance between |
| (2) | Excludes effects of the Hypothetical Liquidation at Book Value and netmark-to-market accounting of the Clean Energy Businesses. |
“Operating Objectives.” A 20% target weight was assigned to the Company’s operating objectives measure, set forth in the table below.
| Performance Goals | Achievement Relative to Target(1) | Payout Relative to Target | ||||||||||||||||||||||||||
| Operating Objectives | Minimum | Target | Maximum | |||||||||||||||||||||||||
| 2017-2019 (each 5% weight) | (#) | (#) | (#) | (#) | (%) | (%) | ||||||||||||||||||||||
Advanced Metering Infrastructure Work Plan |
| |||||||||||||||||||||||||||
| < 5 | 7 | 9 | 9 | 150 | 7.5 | |||||||||||||||||||||||
Cyber Security(2) |
| |||||||||||||||||||||||||||
| 2017 | < 3 | 4 | 5 | 5 | 150 | — | ||||||||||||||||||||||
| 2018 | < 4 | 5 | 6 | 6 | 150 | — | ||||||||||||||||||||||
| 2019 | < 3 | 4 | 5 | 5 | 150 | — | ||||||||||||||||||||||
Average |
| — | — | — | — | 150 | 7.5 | |||||||||||||||||||||
Gas Main Replacement (Con Edison of New York and Orange & Rockland) Number of Miles Completed |
| |||||||||||||||||||||||||||
| < 279 | 317 | ³ 355 | 328 | 103.5 | 5.7 | |||||||||||||||||||||||
Growth in Renewable Portfolio (MW (AC))(3) |
| |||||||||||||||||||||||||||
| 2017 | < 110 | 220 | ³ 330 | 264 | — | — | ||||||||||||||||||||||
| 2018 | < 125 | 250 | ³ 375 | 252 | — | — | ||||||||||||||||||||||
| 2019 | < 22 | 44 | ³ 66 | 54 | — | — | ||||||||||||||||||||||
| Cumulative | < 257 | 514 | ³ 771 | 570 | 110.9 | 5.5 | ||||||||||||||||||||||
ACTUAL |
| — | — | — | — | 128.6 | 26.2 | |||||||||||||||||||||
Footnotes:
| (1) | Payouts for Gas Main Replacement and Growth in Renewable Portfolio were interpolated for actual performance between minimum, target, and maximum performance. |
| (2) | The Compensation Committee approved annual work plans in 2017, 2018 and 2019. The performance results are based on the average achievement at the end of the three-year period. |
| (3) | The Compensation Committee approved annual work plans in 2017, 2018 and 2019. The performance results are based on the cumulative achievement over the three-year period. |
| 52 | Consolidated Edison, Inc.Proxy Statement |
| Compensation Discussion and Analysis |
The payout of the performance unit awardsunits represents the weighted average of the percentage payout under each of the performance objectives as follows:
| Maximum Percentage Payout | Target Weight | Payout Relative to Target | Weighted Result | Payout Relative to Target | Target Weight | Weighted Result | |||||||||||||||||||||||||||||
| (%) | (%) | (%) | (%) | (%) | (%) | (%) | |||||||||||||||||||||||||||||
Shareholder Return | 76.0 | 50 | 38.0 | ||||||||||||||||||||||||||||||||
Adjusted EPS | 200 | 30 | 122.2 | 36.7 | 103.2 | 30 | 38.1 | ||||||||||||||||||||||||||||
Operating Objectives | 150 | 20 | 143 | 28.6 | 128.6 | 20 | 26.2 | ||||||||||||||||||||||||||||
Shareholder Return | 200 | 50 | 76 | 38.0 | |||||||||||||||||||||||||||||||
TOTAL | 190 | 103.3 | — | 100 | 102.3 | ||||||||||||||||||||||||||||||
The table below shows, for each Named Executive Officer, the calculation of the payout with respect to the performance units for the 2017-2019 performance period. The Compensation Committee did not exercise negative discretion to adjust the actual performance unit awards to be paid to aany Named Executive Officer.
2017 Target (in Units) | Weighted Result | 2017 Actual Award Paid in 2020 | ||||
| (#) | (%) | (#) | ||||
John McAvoy | 78,300 | 102.3 | 80,101 | |||
Robert Hoglund | 20,500 | 102.3 | 20,972 | |||
Timothy P. Cawley | 11,600 | 102.3 | 11,867 | |||
Robert Sanchez | 4,400 | 102.3 | 4,501 | |||
Elizabeth D. Moore | 12,632(1) | 102.3 | 12,922 |
Footnotes:
| (1) | Elizabeth D. Moore’s performance unit award was pro rated to reflect the period for which she was employed during the vesting period. Ms. Moore retired effective December 31, 2019. |
| 53 |
| Compensation Discussion and Analysis |
The Company’s executive compensation program is primarily performance based and seeks to align the performance goals with our overall business strategy and objectives. The information shown below supplements the information in the “Summary Compensation Table” on page 59. The Summary Compensation Table includes several items that reflect accounting or actuarial assumptions rather than compensation actually received or realized by the Named Executive Officers for the performance periods that ended on December 31, 2019. For example, the Summary Compensation Table combines pay actually received or earned (base salary and annual cash incentive awards) with the accounting value of equity compensation granted in 2019, which may be realized in the future or not at all. The Summary Compensation Table is also required to include the change in pension values that are based on actuarial assumptions and not compensation realized until retirement.
The realized pay table and the comparison graph for 2019 present elements of pay that John McAvoy and the other Named Executive Officers (as a group) actually received (base salary and all other compensation) plus the gross amounts earned under the annual incentive plan for 2019, and upon the vesting of performance units for the 2017-2019 performance period, as shown in the “Option Exercises and Stock Vested Table” on page 63.
| Year | Base Salary | Annual Cash Incentive | Long-term Stock Incentives Realized | All Other Compensation | Total | |||||||
| (#) | ($) | ($) | ($) | ($) | ($) | |||||||
John McAvoy | 2019 | 1,336,667 | 1,621,400 | 7,557,529 | 76,469 | 10,592,065 | ||||||
All Other NEOs (as a group) | 2019 | 2,539,183 | 1,705,600 | 4,742,219 | 920,723 | 9,907,725 |
  |
Footnote:
| (1) | The Summary Comp Table amount includes the change in pension values that are based on actuarial assumptions. |
| 54 |
|
The following table shows, for each Named Executive Officer (other than Mr. Sanchez), the calculation of the payout with respect to the performance units for the 2016-2018 performance period:
2016 Award (in Units) | Weighted Result | 2016-2018 Payout (in Units) Total | |||||||||||||
| Name & Principal Position | (#) | (%) | (#) | ||||||||||||
John McAvoy Chairman, President and Chief Executive Officer | 83,100 | 103.3 | 85,842 | ||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 23,400 | 103.3 | 24,172 | ||||||||||||
Timothy P. Cawley President, Con Edison of New York (President and Chief Executive Officer, Orange & Rockland, at the time the 2016 performance units were awarded) | 13,400 | 103.3 | 13,842 | ||||||||||||
Elizabeth D. Moore Senior Vice President and General Counsel | 14,800 | 103.3 | 15,288 | ||||||||||||
Calculation of Payout of 2016 Performance Unit Awards for Mr. Sanchez
Similar to the other Named Executive Officers, Mr. Sanchez received an award of performance units in 2016 under the Company’s long-term incentive plan. At the time the award was granted, Mr. Sanchez served as a Vice President of the Company and his award was subject to different performance goals than those applicable to the other Named Executive Officers. Following the end of the 2016-2018 performance period, the Compensation Committee evaluated and approved the performance goals relative to target and the payout of Mr. Sanchez’s performance units was calculated based on the followingnon-discretionary formula:
Award X 50% X Shareholder Return Percentage
plus
Award X 50% X Incentive Plan Percentage
“Award” was the target award of performance units granted to Mr. Sanchez (i.e., 3,000 units).
“Shareholder Return Percentage” was the weighting earned based on the cumulative change in Company total shareholder return over the performance period that began January 1, 2016 and ended December 31, 2018 compared with the Company’s compensation peer group on the date the performance units were granted.
The level of performance units were calculated as follows:
| |||||
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Footnote:
“Incentive Plan Percentage” was based on the average calculated payouts under the Company’s annual incentive plan over the performance period that began January 1, 2016 and ended December 31, 2018.
|
Based on the Company’s achievement of the performance goals, Mr. Sanchez received the following payout for the 2016-2018 performance period:
( | Award × 50% | ) | × | Shareholder Return Percentage | + | ( | Award × 50% | ) | × | Incentive | = | 2016-2018 Payout Total | ||||||||||||
| 1,500 | 76% | 1,500 | 116.9% | 2,895 |
Footnote:
| 2016 | 2017 | 2018 | Average | |||
| (%) | (%) | (%) | (%) | |||
| 125.1 | 105.9 | 119.7 | 116.9 |
The Company did not exercise negative discretion to adjust the actual performance units to be paid to Mr. Sanchez.
RETIREMENT AND OTHER BENEFITSRetirement and Other Benefits
The Company provides employees with a range of retirement and welfare benefits that reflect the competitive practices of the utility industry. These benefits assist the Company in attracting, retaining and motivating employees critical to its long-term success. Named Executive Officers are eligible for benefits under the following Company plans:
tax-qualified defined benefit retirement plan and its relatednon-qualified supplemental retirement income plan (collectively, the “retirement plans”) (closed to new and rehired management employees as of December 31, 2016);
| ◾ | tax-qualified defined benefit pension plan and its relatednon-qualified supplemental retirement income plan (collectively, the “defined benefit pension plans”) (closed to new and rehired management employees as of December 31, 2016); |
tax-qualified savings plan (including the defined contribution pension formula) and its relatednon-qualified deferred income plan (collectively, the “savings plans”);
| ◾ | tax-qualified defined contribution pension plan and its relatednon-qualified defined contribution supplemental pension plan (collectively, the “defined contribution pension plans”); |
stock purchase plan; and
| ◾ | tax-qualified savings plan and its relatednon-qualified deferred income plan (collectively, the “savings plans”); |
| ◾ | stock purchase plan; and |
health and welfare plans.
| ◾ | health and welfare plans. |
The Company maintains atax-qualified defined benefit retirementpension plan that covers substantially all of the Company’s employees, including the Named Executive Officers, hired before 2017. All management employees, including Named Executive Officers, whose benefits under the retirementpension plan are limited by the Internal Revenue Code, are eligible to participate in anon-qualified supplemental retirement income plan. The estimated pension benefits payable to the Named Executive Officers (determined on a present value basis) under
the retirementpension plans are described in the “DefinedBenefit Pension BenefitsTable” and the narrative to the “Defined BenefitPension Benefits Table” on pages 5564 to 56. All changes to the retirement plans for plan year 2018 with respect to the Named Executive Officers are described in the narrative to the “Pension Benefits Table” on page 56.65.
As required by Securities and Exchange Commission rules, the “Change in Pension Value andNon-Qualified Deferred Compensation Earnings” column of the “Summary Compensation Table” on page 5059 sets forth the year-over-year change in the actuarial present value of the accumulated pension benefits for each Named Executive Officer under the retirementdefined benefit pension plans.
The change in the actuarial present value of an accumulated pension benefit is subject to many external variables, including fluctuations in interest rates and changes in actuarial assumptions, and does not represent actual compensation paid to the Named Executive Officers in 2018.2019. Instead, the amounts represent changes in the estimated pension benefits payable to the Named Executive Officers based on the year-over-year difference between the amounts required to be disclosed in the “Defined Benefit Pension Benefits Table” on page 5665 as of December 31, 20182019 and the amounts reported in the “Pension BenefitsTable” in the 20182019 proxy statement on page 5256 as of December 31, 2017.2018.
The change toin the actuarial present value of Mr.John McAvoy’s accumulated pension benefit in 20182019 was $1,750,204,$6,399,303, which was primarily due to the increase in base pay and credit for an additional year of service (due to another year of employment), partially offset by changes in the actuarial assumptions used for the Company’s financial statements, including an increasea decrease in the assumed discount rate from 3.70%4.25% to 4.25%3.35%.
The Company also maintains, effective as of January 1, 2017, a defined contribution pension formula within the tax qualified savings plan that, following the closure of the pension plan to new management participants, covers all new and rehired management employees of the Company. Effective January 1, 2019, the Company established a supplemental defined contribution pension formula which covers management employees. All Company contributions allocated to the Named Executive Officers under the defined contribution pension formula supplemental defined contribution plan are included in the “All Other Compensation” column of the “Summary Compensation Table” on page 59.
| Consolidated Edison, Inc.Proxy Statement | 55 |
| Compensation Discussion and Analysis |
The Company maintains atax-qualified savings plan that covers substantially all of the Company’s employees, including the Named Executive Officers. All management employees, including the Named Executive Officers, whose benefits under the savings plan are subject to the compensation limit in the Internal Revenue Code, are eligible to participate in a deferred income plan, anon-qualified deferred compensation plan. (TheThe Internal Revenue Code compensation limit for 20182019 was $275,000.)$280,000. Named Executive Officers may elect to defer a portion of their salary into the deferred income plan. The deferred income plan is described in the narrative to the “Non-Qualified Deferred Compensation Table” on page 57.
|
The Company also maintains, effective as of January 1, 2017, a defined contribution pension formula within thetax-qualified savings plan that, following the closure of the retirement plan to new management participants, covers all new and rehired management employees of the Company. Until June 30, 2021, management employees hired between January 1, 2001 and December 31, 2016, including Mr. Hoglund and Ms. Moore, may make an irrevocable election to earn future retirement benefits under the defined contribution pension formula in the savings plan instead of the retirement plan.
Effective January 1, 2018, Mr. Hoglund made an irrevocable election to earn future retirement benefits under the defined contribution pension formula in the savings plan instead of the retirement plan. Under the defined contribution pension formula in the savings plan, the Company makesnon-elective employer contributions for a participant at the same level as it would under the cash balance formula in the retirement plan. The cash balance formula and the defined contribution pension formula are both described in the narrative to the “Pension Benefits Table” on pages 55 and 56. All Companynon-elective contribution amounts under the defined contribution pension formula that are based on compensation that is above the compensation limit in the Internal Revenue Code are credited to the deferred income plan.
Employees who participate in the savings plan, including the Named Executive Officers, may contribute up to 50% of their compensation on abefore-tax basis and/or anafter-tax basis, into their savings plan accounts. For participating employees whose pension benefit is based on the final average salary formula in the retirement plan, including Messrs. McAvoy, Cawley, and Sanchez, the Company matches 50% for each dollar contributed by participating employees on the first 6% of their regular earnings. For participating employees whose pension benefits are determined using the retirement plan’s cash balance formula, including Ms. Moore, or for participants who actively participate in the defined contribution pension formula in the savings plan, including Mr. Hoglund, the Company matches 100% for each dollar contributed by such participating employees on the first 4% of their regular earnings plus an additional 50% for each dollar contributed on the next 4% of their regular earnings.
66. All Company contributions allocated to the Named Executive Officers under the savings plan and credited under the deferred income plan are included in the “All Other Compensation” column of the “Summary Compensation TableTable”’ on page 50.59.
The stock purchase plan covers substantially all of the Company’s employees, including the Named Executive Officers, and provides the opportunity to purchase shares of Company Common Stock. The stock purchase plan is described in Note Mto the financial statements in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2018.2019.
Active employee benefits, such as medical, prescription drug, dental, vision, life insurance, and disability coverage, are available to substantially all employees, including the Named Executive Officers, through the Company’s health and welfare benefits plans. Employees contribute toward the cost of the health plans by paying a portion of the premium costs on apre-tax basis. Employees may purchase additional life insurance and disability coverage on anafter-tax basis. Officers, including the Named Executive Officers, may purchase supplemental health benefits on anafter-tax basis with the option to continue their participation following retirement.basis. The Company also provides all employees with paidtime-off benefits, such as vacation and sick leave.
Perquisites and Personal Benefits
The Company provides certain officers, including the Named Executive Officers, with limited specific perquisites that are competitive with industry practices. The Compensation Committee reviews the level of perquisites and personal benefits annually. The Company provides the following perquisites, the costs of which, if used by a Named Executive Officer in 2018,2019, are set forth in the “All Other Compensation” column of the “Summary Compensation Table” on page 50:59:
supplemental health insurance;
reimbursement for reasonable costs of financial planning; and
a company vehicle and, in the case of the Chief Executive Officer, a company vehicle and driver.
supplemental health insurance;
|
| ◾ | reimbursement for reasonable costs of financial planning; and |
| ◾ | a company vehicle and, in the case of the Chief Executive Officer, a company vehicle and driver. |
Severance and Change of Control Benefits
The Company provides for the payment of severance benefits upon certain types of employment terminations. Providing severance and change of control benefits assists the Company in attracting and retaining executive talent and reduces the personal uncertainty that executives are likely to feel when considering a corporate transaction. These arrangements also provide valuable retention incentives that focus executives on completing such transactions, thus, enhancing long-term stockholder value. The compensation under the various circumstances that trigger payments or provision of benefits upon termination or a change of control was chosen to be broadly consistent with prevailing competitive practices.
Officers of the Company, including the Named Executive Officers, are provided benefits under the officers’ severance program. The severance benefits payable to each Named Executive Officer are described in footnotes (2) and (3) to the “Potential Payments Upon Termination of Employment or Change of Control” table on page 59.68. The estimated severance benefits that each Named Executive Officer would be entitled to receive upon a hypothetical termination of employment are set forth in the “Potential Payments Upon Termination of Employment or Change of Control” table beginning on page 59.68.
| 56 | Consolidated Edison, Inc.Proxy Statement |
| Compensation Discussion and Analysis |
STOCK OWNERSHIP GUIDELINESRisk Mitigation
The Company has stock ownership guidelines for senior officers, including the Named Executive Officers. TheFor 2019, the stock ownership guidelines for the Company’s Named Executive Officers arewere as follows:
| Multiple of Base Salary | ||
John McAvoy | 3 × | |
Robert Hoglund | 2 × | |
Timothy P. Cawley | 2 × | |
Robert Sanchez | 2 × | |
Elizabeth D. Moore | 1 × |
Officers of the Company subject to the guidelines have five years from January 1st after their appointment to one of the covered titles or promotion to a position with a higher ownership requirement to meet the guidelines.guideline. In January 2019,2020, it was determined that, as of December 31, 2018, these officers have2019, the Named Executive Officers either met their ownership milestonesguideline or are making reasonable progress toward their milestones.
The officers covered by the guidelines are expected to retain for at least one year a minimum of 25% of the net shares acquired upon exercise of stock options and 25% of the net shares acquired pursuant to vested restricted stock and restricted stock unit grants until their holdings of common stock equal or exceed their applicable ownership guidelines.
While stock options may be granted under the Company’s long term incentive plan, the Company has no outstanding stock options and no stock options have been granted by the Company since 2006.guideline.
For purposes of the guidelines:
| ◾ | “Stock ownership” includes the value of the officers’ individually-owned shares, the value of vested restricted shares and performance-based restricted shares, and shares held under the Company’s benefit plans. Equity-based incentive compensation held by the Company’s officers is based 100% on performance. Restricted stock and restricted stock units do not vest until after the end of the performance period and performance is determined by the Compensation Committee. |
| ◾ | “Net shares” means the shares remaining after sale of shares necessary to pay the related tax liability and, if applicable, exercise price. |
| ◾ | While stock options may be granted under the Company’s long term incentive plan, the Company has no outstanding stock options and no stock options have been granted by the Company since 2006. |
| ◾ | The officers covered by the guidelines are expected to retain for at least one year a minimum of 25% of the net shares acquired upon exercise of stock options and 25% of the net shares acquired pursuant to vested restricted stock and restricted stock unit grants until their holdings of common stock equal or exceed their applicable ownership guidelines. |
| ◾ | Theone-year period is measured from the date the stock options are exercised or the restricted stock or restricted stock units vest, as applicable. |
No Hedging and performance-based restricted shares, and shares held under the Company’s benefit plans. Equity-based incentive compensation held by the Company’s officers is based 100% on performance. Restricted stock and restricted stock units do not vest until after the end of the performance period and performance is determined by the Compensation Committee.
Theone-year period is measured from the date the stock options are exercised or the restricted stock or restricted stock units vest, as applicable.
“Net shares” means the shares remaining after sale of shares necessary to pay the related tax liability and, if applicable, exercise price.
NO HEDGING AND NO PLEDGINGNo Pledging
To encourage a long-term commitment to the Company’s sustained performance, the Company’s Hedging and Pledging Policy and Insider Trading Policy each prohibit all directors and officers, including the Named Executive Officers, financial personnel, and certain other individuals, respectively, from shorting, hedging, and pledging Company securities or holding Company securities in a margin account as collateral for a loan. All officers, finance department employees, employees who receive or review drafts of the Company’s financial statements, employees who work in the Corporate Secretary’s office, and any other employee specifically designated by the General Counsel are also covered by the Insider Trading Policy’s prohibition on hedging and pledging.
|
RECOUPMENT POLICYRecoupment (Clawback) Policy
In 2010, the Company adopted a Recoupment Policy (commonly referred to as a “clawback policy”). The Recoupment Policy allows the Company to recoup excess incentive-based compensation received by any current or former officer during the three-year period preceding the date on which the Company’s Audit Committee determines that the Company is required to prepare an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws. The Recoupment Policy applies to the long-term incentive-based compensation awards under the Company’s long term incentive plan, and the incentive-based compensation payments made under the Company’s annual incentive plan.
| Consolidated Edison, Inc.Proxy Statement | 57 |
| Compensation Discussion and Analysis |
TAX DEDUCTIBILITY OF PAYTax Deductibility of Pay
Section 162(m) of the Internal Revenue Code generally precludes a public corporation from taking an income tax deduction for compensation in excess of $1 million payable in any fiscal year to the corporation’s chief executive officer and other “covered employees,” as defined in Section 162(m). Prior
to January 1, 2018, an exception to this deduction limit was available for “performance-based” compensation that was approved by stockholders and otherwise satisfied certain other requirements under Section 162(m). As a result of newrecent tax legislation, the performance-based compensation exception is no longer available to public corporations for taxable years beginning after December 31, 2017, unless suchother than pursuant to certain “grandfathered” compensation qualifies for certain transition relief. The newarrangements that were in effect on November 2, 2017. While our executive compensation program has sought to maximize the tax legislation also expandeddeductibility of compensation payable to the definition of “covered employees”Named Executive Officers to include the chief financial officer and certain former named executive officers who were disclosed inextent permitted by law, the Company’s proxy statement after January 1, 2017. The Compensation Committee continues to retain flexibility to make compensation decisions that are driven by market competiveness and based on the other factors other than Section 162(m)discussed in this Compensation Discussion and Analysis when necessary or appropriate (as determined by the Compensation Committee in its sole discretion) to enable the Company to continue to attract, retain, reward and motivate its highly-qualified executives.
For 2018, the Company estimates that approximately $2,253,000 of the compensation paid to Mr. McAvoy was not deductible for federal income tax purposes.
|
| SUMMARY COMPENSATION TABLE |
The following table sets forth certain information with respect to the compensation for the Named Executive Officers for the fiscal years ended December 31, 2019, 2018, 2017, and 2016.2017. Information for Mr.Robert Sanchez for fiscal yearsyear ended December 31, 2017 and 2016 is not provided because he was not a Named Executive Officer in those years.that year.
| Name & Principal Position | Year | Salary | Bonus | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(3) | All Other Compensation(4) | Securities and Exchange Commission Total(5) | Securities and Exchange Commission Total Without Change in Pension Value(6) | ||||||||||||||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||||||||||
| John McAvoy | 2018 | 1,296,667 | — | 4,968,812 | 1,675,400 | 1,750,204 | 74,775 | 9,765,858 | 8,015,654 | ||||||||||||||||||||||||||||||||||||||
Chairman, President and Chief Executive Officer | 2017 | 1,257,083 | — | 5,507,622 | 1,864,800 | 7,346,614 | 71,792 | 16,047,911 | 8,701,297 | ||||||||||||||||||||||||||||||||||||||
| 2016 | 1,220,767 | — | 6,176,408 | 2,237,200 | 5,103,773 | 64,256 | 14,802,404 | 9,698,631 | |||||||||||||||||||||||||||||||||||||||
| Robert Hoglund | 2018 | 765,142 | — | 1,235,340 | 395,400 | (110,367 | ) | 171,838 | 2,457,353 | 2,567,720 | |||||||||||||||||||||||||||||||||||||
Senior Vice President and Chief Financial Officer | 2017 | 742,892 | — | 1,441,970 | 440,900 | 277,846 | 60,418 | 2,964,026 | 2,686,180 | ||||||||||||||||||||||||||||||||||||||
| 2016 | 721,242 | — | 1,739,205 | 528,200 | 134,593 | 59,272 | 3,182,512 | 3,047,919 | |||||||||||||||||||||||||||||||||||||||
| Timothy P. Cawley(7) | 2018 | 611,000 | — | 1,242,203 | 494,500 | 307,835 | 37,951 | 2,693,489 | 2,385,654 | ||||||||||||||||||||||||||||||||||||||
President, Con Edison of New York | 2017 | 420,975 | — | 815,944 | 449,700 | 1,296,529 | 30,984 | 3,014,132 | 1,717,603 | ||||||||||||||||||||||||||||||||||||||
| 2016 | 409,033 | — | 995,955 | 401,500 | 559,125 | 30,587 | 2,396,200 | 1,837,075 | |||||||||||||||||||||||||||||||||||||||
| Elizabeth D. Moore | 2018 | 645,033 | — | 782,382 | 333,300 | 128,971 | 54,977 | 1,944,663 | 1,815,692 | ||||||||||||||||||||||||||||||||||||||
Senior Vice President and General Counsel | 2017 | 626,275 | — | 914,420 | 371,700 | 144,744 | 52,623 | 2,109,762 | 1,965,018 | ||||||||||||||||||||||||||||||||||||||
| 2016 | 608,017 | — | 1,100,010 | 445,300 | 125,952 | 51,049 | 2,330,328 | 2,204,376 | |||||||||||||||||||||||||||||||||||||||
| Robert Sanchez | 2018 | 437,883 | — | 713,752 | 420,000 | 378,160 | 19,647 | 1,969,442 | 1,591,282 | ||||||||||||||||||||||||||||||||||||||
President and Chief Executive Officer, Orange & Rockland | |||||||||||||||||||||||||||||||||||||||||||||||
| Name & Principal Position | Year | Salary | Bonus | Stock Awards(1) | Non-Equity Incentive Plan Compensation(2) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(3) | All Other Compensation(4) | Securities and Exchange Commission Total(5) | Securities and Exchange Commission Total Without Change in Pension Value(6) | ||||||||||||||||||||||||||||||||||||||||||
| (#) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||||||||||||||||
John McAvoy | 2019 | 1,336,667 | — | 5,912,304 | 1,621,400 | 6,398,445 | 76,469 | 15,345,285 | 8,946,840 | ||||||||||||||||||||||||||||||||||||||||||
Chairman, | 2018 | 1,296,667 | — | 4,968,812 | 1,675,400 | 1,750,204 | 74,775 | 9,765,858 | 8,015,654 | ||||||||||||||||||||||||||||||||||||||||||
President and Chief Executive Officer | 2017 | 1,257,083 | — | 5,507,622 | 1,864,800 | 7,346,614 | 71,792 | 16,047,911 | 8,701,297 | ||||||||||||||||||||||||||||||||||||||||||
Robert Hoglund | 2019 | 788,083 | — | 1,464,760 | 382,400 | 75,101 | 808,645 | 3,518,989 | 3,443,888 | ||||||||||||||||||||||||||||||||||||||||||
Senior Vice | 2018 | 765,142 | — | 1,235,340 | 395,400 | (110,367 | ) | 171,838 | 2,457,353 | 2,567,720 | |||||||||||||||||||||||||||||||||||||||||
President and Chief Financial Officer | 2017 | 742,892 | — | 1,441,970 | 440,900 | 277,846 | 60,418 | 2,964,026 | 2,686,180 | ||||||||||||||||||||||||||||||||||||||||||
Timothy P. Cawley | 2019 | 628,867 | — | 1,464,760 | 491,700 | 4,381,349 | 40,905 | 7,007,581 | 2,626,232 | ||||||||||||||||||||||||||||||||||||||||||
President, Con | 2018 | 611,000 | — | 1,242,203 | 494,500 | 307,835 | 37,951 | 2,693,489 | 2,385,654 | ||||||||||||||||||||||||||||||||||||||||||
Edison of New York | 2017 | 420,975 | — | 815,944 | 449,700 | 1,296,529 | 30,984 | 3,014,132 | 1,717,603 | ||||||||||||||||||||||||||||||||||||||||||
Robert Sanchez | 2019 | 457,850 | — | 838,908 | 509,200 | 1,787,377 | 19,624 | 3,612,959 | 1,825,582 | ||||||||||||||||||||||||||||||||||||||||||
President and Chief | 2018 | 437,883 | — | 713,752 | 420,000 | 378,160 | 19,647 | 1,969,442 | 1,591,282 | ||||||||||||||||||||||||||||||||||||||||||
Executive Officer, Orange & Rockland | |||||||||||||||||||||||||||||||||||||||||||||||||||
Elizabeth D. Moore(7) | 2019 | 664,383 | — | 925,462 | 322,300 | 140,277 | 51,550 | 2,103,972 | 1,963,695 | ||||||||||||||||||||||||||||||||||||||||||
Senior Vice President and General Counsel | 2018 | 645,033 | — | 782,382 | 333,300 | 128,971 | 54,977 | 1,944,663 | 1,815,692 | ||||||||||||||||||||||||||||||||||||||||||
| 2017 | 626,275 | — | 914,420 | 371,700 | 144,744 | 52,623 | 2,109,762 | 1,965,018 | |||||||||||||||||||||||||||||||||||||||||||
Footnotes:
| (1) | Dividends are not paid and do not accrue on awards during the vesting period. Amounts shown do not reflect the payment or accrual of dividends during the vesting period for any portion of the awards and otherwise reflect the assumptions used for the Company’s financial statements. (See Note M to the financial statements in the Company’s Annual Report on Form10-K.) Actual value to be realized, if any, on awards by the Named Executive Officers will depend on the satisfaction of certainpre-established objectives, the performance of Company Common Stock, and the Named Executive Officer’s continued service. The awards granted for fiscal year |
| (2) | The amounts paid were awarded under the annual incentive plan. |
| (3) | Amounts do not represent actual compensation paid to the Named Executive Officers. Instead, the amounts represent the aggregate change in the actuarial present value for Messrs. McAvoy, Cawley, and Sanchez, and the change in account balance for Mr. Hoglund and Ms. Moore of the accumulated pension benefit based on the difference between the amounts required to be disclosed in the “Pension Benefits Table” for the year indicated and the amounts reported or that would have been reported in the “Pension Benefits Table” for the previous year. |
|
| (4) | For |
| McAvoy | Hoglund | Cawley | Moore | Sanchez | John McAvoy | Robert Hoglund | Timothy P. Cawley | Robert Sanchez | Elizabeth D. Moore | |||||||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||||
Personal use of Company provided vehicle | 10,177 | 3,961 | 7,821 | 2,750 | 6,564 | 10,559 | 3,594 | 7,356 | 6,732 | 1,946 | ||||||||||||||||||||||||||||||
Driver costs | 3,671 | — | — | — | — | 4,161 | — | — | — | — | ||||||||||||||||||||||||||||||
Financial planning | 18,500 | 11,800 | 11,800 | 11,800 | — | 18,500 | 11,800 | 11,800 | — | 11,800 | ||||||||||||||||||||||||||||||
Supplemental health insurance | 3,527 | 3,527 | — | 1,725 | — | 3,449 | 3,449 | 3,449 | — | 1,686 | ||||||||||||||||||||||||||||||
Company matching contributions: Qualified savings plan | 8,250 | 16,500 | 8,250 | 16,500 | 8,250 | |||||||||||||||||||||||||||||||||||
Company matching contributions: | ||||||||||||||||||||||||||||||||||||||||
Qualified savings plan | 8,100 | 16,800 | 7,834 | 7,556 | 13,055 | |||||||||||||||||||||||||||||||||||
Non-qualified deferred income plan | 30,650 | 29,409 | 10,080 | 22,202 | 4,833 | 31,700 | 30,485 | 10,466 | 5,336 | 23,063 | ||||||||||||||||||||||||||||||
Companynon-elective contributions (defined contribution pension formula): Qualified savings plan | — | 17,552 | — | — | — | |||||||||||||||||||||||||||||||||||
Non-qualified deferred income plan | — | 89,089 | — | — | — | |||||||||||||||||||||||||||||||||||
Companynon-elective contributions | ||||||||||||||||||||||||||||||||||||||||
Qualified defined contribution pension formula | — | 23,725 | — | — | — | |||||||||||||||||||||||||||||||||||
Non-qualified defined contribution pension formula | — | 718,792 | — | — | — | |||||||||||||||||||||||||||||||||||
Total | 74,775 | 171,838 | 37,951 | 54,977 | 19,647 | 76,469 | 808,645 | 40,905 | 19,624 | 51,550 | ||||||||||||||||||||||||||||||
The value of the items in the table are based on the aggregate incremental cost, which except for the Company provided vehicle, is the actual cost to the Company. The cost of the Company provided vehicle was determined based on the personal use of the vehicle as a percentage of total usage compared to the lease value of the vehicle. The Company did not provide above-market or preferential earnings with respect to thenon-qualified deferred compensation arrangements.
| (5) | As per the applicable Securities and Exchange Commission (SEC) rules, represents, for each Named Executive Officer, the total of amounts shown for the Named Executive Officer in all other columns of the table. |
| (6) | To show the effect that the year-over-year change in pension value had on total compensation, this column is included to show total compensation minus the change in pension value. The amounts reported in the “Securities and Exchange Commission Total Without Change in Pension Value” column may differ substantially from the amounts reported in the “Securities and Exchange Commission Total” column required under SEC rules and are not a substitute for total compensation. The “Securities and Exchange Commission Total Without Change in Pension Value” column represents total compensation, as required under applicable SEC rules, minus the change in pension value reported in the “Change in Pension Value andNon-Qualified Deferred Compensation Earnings” column. See “Compensation Discussion and Analysis—Retirement and Other Benefits— |
| (7) | Ms. Moore retired effective |
|
| GRANTS OF PLAN-BASED AWARDS TABLE |
The following table sets forth certain information with respect to the grant of equity plan awards andnon-equity incentive plan awards awarded to the Named Executive Officers for the fiscal year ended December 31, 2018.2019.
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | Grant Stock ($) | ||||||||||||||||||||||||||||||||||||||
| Name & Principal Position | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||
John McAvoy Chairman, President and | 2/15/2018 | 203,125 | 1,625,000 | 3,168,750 | 1,810 | 72,400 | 137,560 | 4,968,812 | ||||||||||||||||||||||||||||||||
Robert Hoglund Senior Vice President and | 2/15/2018 | 47,938 | 383,500 | 747,825 | 450 | 18,000 | 34,200 | 1,235,340 | ||||||||||||||||||||||||||||||||
Timothy P. Cawley President, Con Edison of | 2/15/2018 | 61,200 | 489,600 | 954,720 | 453 | 18,100 | 34,390 | 1,242,203 | ||||||||||||||||||||||||||||||||
Elizabeth D. Moore Senior Vice President and | 2/15/2018 | 40,413 | 323,300 | 630,435 | 285 | 11,400 | 21,660 | 782,382 | ||||||||||||||||||||||||||||||||
Robert Sanchez President and Chief Executive | 2/15/2018 | 43,863 | 350,900 | 701,800 | 260 | 10,400 | 19,760 | 713,752 | ||||||||||||||||||||||||||||||||
| Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | Grant Stock ($) | ||||||||||||||||||||||||||||||||||||||
| Name & Principal Position | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||
John McAvoy Chairman, President and Chief Executive Officer | 2/20/2019 | 209,375 | 1,675,000 | 3,266,250 | 2,220 | 88,800 | 168,720 | 5,912,304 | ||||||||||||||||||||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 2/20/2019 | 49,375 | 395,000 | 770,250 | 550 | 22,000 | 41,800 | 1,464,760 | ||||||||||||||||||||||||||||||||
Timothy P. Cawley President, Con Edison of New York | 2/20/2019 | 63,038 | 504,300 | 983,385 | 550 | 22,000 | 41,800 | 1,464,760 | ||||||||||||||||||||||||||||||||
Robert Sanchez President and Chief Executive Officer, Orange & Rockland | 2/20/2019 | 45,963 | 367,700 | 735,400 | 315 | 12,600 | 23,940 | 838,908 | ||||||||||||||||||||||||||||||||
Elizabeth D. Moore(4) Senior Vice President and General Counsel | 2/20/2019 | 41,625 | 333,000 | 649,350 | 348 | 13,900 | 26,410 | 925,462 | ||||||||||||||||||||||||||||||||
Footnotes:
| (1) | Represents annual cash incentive award opportunity awarded under the Company’s annual incentive plan. (See “Compensation Discussion and Analysis— |
| (2) | Represents grants of performance units for the |
| (3) | The “Grant Date Fair Value of Stock Awards” column reflects the grant date fair value of the performance units for the |
| (4) | Ms. Moore retired effective December 31, 2019. |
|
| OUTSTANDING EQUITY AWARDS TABLE |
The following table sets forth certain information with respect to all unvested stock awards previously awarded to the Named Executive Officers as of the fiscal year ended December 31, 2018.2019.
| STOCK AWARDS(1) | ||||||||||
| Name & Principal Position | Equity Incentive Number of unearned | Equity Incentive Market or Payout Value | ||||||||
| (#) | ($) | |||||||||
| John McAvoy | 78,300 | (2) | 5,986,818 | |||||||
Chairman, President and Chief Executive Officer | 72,400 | (3) | 5,535,704 | |||||||
| Robert Hoglund | 20,500 | (2) | 1,567,430 | |||||||
Senior Vice President and Chief Financial Officer | 18,000 | (3) | 1,376,280 | |||||||
| Timothy P. Cawley | 11,600 | (2) | 886,936 | |||||||
President, Con Edison of New York | 18,100 | (3) | 1,383,926 | |||||||
| Elizabeth D. Moore | 13,000 | (2) | 993,980 | |||||||
Senior Vice President and General Counsel | 11,400 | (3) | 871,644 | |||||||
| Robert Sanchez | 4,400 | (2) | 336,424 | |||||||
President and Chief Executive Officer, Orange & Rockland | 10,400 | (3) | 795,184 | |||||||
| STOCK AWARDS(1) | ||||||||||
Equity Incentive Number of unearned | Equity Incentive Market or Payout Value | |||||||||
| Name & Principal Position | (#) | ($) | ||||||||
John McAvoy | 72,400(2) | 6,550,028 | ||||||||
Chairman, President and Chief Executive Officer | 88,800(3) | 8,033,736 | ||||||||
Robert Hoglund | 18,000(2) | 1,628,460 | ||||||||
Senior Vice President and Chief Financial Officer | 22,000(3) | 1,990,340 | ||||||||
Timothy P. Cawley | 18,100(2) | 1,637,507 | ||||||||
President, Con Edison of New York | 22,000(3) | 1,990,340 | ||||||||
Robert Sanchez | 10,400(2) | 940,888 | ||||||||
President and Chief Executive Officer, Orange & Rockland | 12,600(3) | 1,139,922 | ||||||||
Elizabeth D. Moore(4) | 11,400(2)(5) | 1,031,358 | ||||||||
Senior Vice President and General Counsel | 13,900(3)(5) | 1,257,533 | ||||||||
Footnotes:
| (1) | Value of unvested performance-based equity awards using the closing price of |
| (2) |
The number of performance units and payment amount of the performance units will be determined as of December 31, 2020 based on satisfaction of performance goals for the 2018-2020 performance cycle. |
| (3) | The number of performance units and payment amount of the performance units will be determined as of December 31, 2021 based on satisfaction of performance goals for the 2019-2021 performance cycle. |
| (4) | Ms. Moore retired effective December 31, 2019. |
| (5) | The amounts shown for Ms. Moore reflect the full amount of her performance unit awards; however, in accordance with the terms of the long term incentive plan, the future payout of her performance unit awards will be pro rated based on the actual period of service from the grant date to the date of her retirement (December 31, 2019). Had the amounts shown for Ms. Moore’s performance unit awards been pro rated, performance units and value on December 31, 2019 for the 2018-2020 and the 2019-2021 performance cycles would have been 7,593 and 4,629 units; and valued at $686,939 and $418,786, respectively. |
|
| OPTION EXERCISES AND STOCK VESTED TABLE |
The following table sets forth certain information with respect to all stock awards vested in 20182019 for the Named Executive Officers.
| STOCK AWARDS(1) | ||||||||||
| Name & Principal Position | Number of Shares Acquired on Vesting | Value Realized on Vesting | ||||||||
| (#) | ($) | |||||||||
John McAvoy Chairman, President and Chief Executive Officer | 85,842 | 6,770,359 | ||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 24,172 | 1,906,446 | ||||||||
Timothy P. Cawley President, Con Edison of New York | 13,842 | 1,091,719 | ||||||||
Elizabeth D. Moore Senior Vice President and General Counsel | 15,288 | 1,205,765 | ||||||||
Robert Sanchez President and Chief Executive Officer, Orange & Rockland | 2,895 | 228,329 | ||||||||
| STOCK AWARDS(1) | ||||||||||
| Number of Shares Acquired on Vesting | Value Realized on Vesting | |||||||||
| Name & Principal Position | (#) | ($) | ||||||||
John McAvoy Chairman, President and Chief Executive Officer | 80,101 | 7,557,529 | ||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 20,972 | 1,978,708 | ||||||||
Timothy P. Cawley President, Con Edison of New York | 11,867 | 1,119,651 | ||||||||
Robert Sanchez President and Chief Executive Officer, Orange & Rockland | 4,501 | 424,669 | ||||||||
Elizabeth D. Moore(2) Senior Vice President and General Counsel | 12,922 | 1,219,191 | ||||||||
Footnote:
| (1) | Represents the vesting of each Named Executive Officer’s performance unit award for the |
| (2) | Ms. Moore retired effective December 31, 2019. |
|
RETIREMENT PLAN BENEFITSPension Plan Benefits
The retirement plan, atax-qualified defined benefit retirementpension plan covers substantially all of the Company’s employees, including the Named Executive Officers, hired before 2017. The defined benefit pension plan was closed to new management and rehired management employees as of December 31, 2016. The supplemental retirement income plan provides certain highly compensated employees, including the Named Executive Officers, whose benefits are limited by the Internal Revenue Code, with that portion of their retirementdefined benefit pension benefit that represents the difference between: (i) the amount they would have received under the retirementdefined benefit pension plan absent Internal Revenue Code limitations; and (ii) the amount actually paid from the retirementdefined benefit pension plan. All amounts under the supplemental retirement income plan are paid out of the Company’s general assets.
For management employees who participate in the retirementdefined benefit pension plan and who were hired before January 1, 2001, including Messrs. McAvoy, Cawley, and Sanchez, pension benefits are based on: (i) the participant’s highest average salary for 48 consecutive months within the 120 consecutive months prior to retirement (“final average salary”); (ii) the portion of final average salary in excess of the Social Security Wage Base ($128,400132,900 for 2018)2019) in the year of retirement; and (iii) the participant’s length of service. For purposes of the supplemental retirement income plan’s final average salary formula, a participant’s salary for a year is deemed to include any award under the Company’s annual incentive plans paid for that year. Participants in the retirement plan’s final average salary formula whose age and years of service equal 75, including Messrs. McAvoy, Cawley, and Sanchez, are entitled to an annual pension benefit for life, payable in monthly installmentsimmediate or indeferred lifetime annuity or a lump sum. Participants may earn increased pensionEmployees receiving retirement benefits by working additional years. Benefits payable to a participant who retires between ages 55 and 59 with less than 30 years of service are subject to a reduction of 1.5% for each full year of retirement before age 60. Early retirement reduction factors are not applied to pensions of participants electing retirement at age 55 or older with at least 30 years of service. Effective January 1, 2013,under the portion of future benefits earned and payable at retirement to participants who were under age 50 prior to 2013 and who retire between ages 55 and 59 are subject to an early retirement reduction. The reduction applied to benefits earned after 2012 is 5% for each full year of retirement before age 60. The retirement plan provides an annual adjustment equal to the lesser of 3% or three-quarters (3/4) of the annual increase in the Consumer Price Index to offset partially the effects of inflation. The retirement plan’s final average salary formula
does not apply are eligible to management employees hired on or after January 1, 2001, including Mr. Hoglund and Ms. Moore.receive subsidized retiree medical benefits upon retirement.
For management employees who participate in the retirementdefined benefit pension plan and who were hired on or after January 1, 2001, including Mr. Hoglund and Ms. Moore, pension benefits are based on a cash balance formula that is expressed as a hypothetical account balance. Under the retirementdefined benefit pension plan’s cash balance formula, the Company provides each participant with two allocations: one is(i) an allocation based on athe participant’s annual compensation (a compensation credit) and the other is(ii) an allocation based on an interest percentage (an interest credit). The compensation credit percent, which can range from 4% to 7% depending on the participant’s age and years of service, is applied to the participant’s compensation during the quarter. In addition, a participant whose compensation exceeds the Social Security Wage Base ($128,400132,900 for 2018)2019) will receive a 4% credit on the amount of his or her compensation that exceeds the Social Security Wage Base. A participant’s cashCash balance account receivesaccounts receive a quarterly interest credit at a rate equal toone-quarter (1/4) of the annual interest rate payable on the30-year U.S. Treasury bond, subject to a minimum annual rate of 3% and a maximum annual rate of 9%. The following table shows how the compensation credit is calculated:calculated for Ms. Moore:
| Age Plus Years of Service | Crediting Rate on Compensation | Plus | Crediting Rate on Compensation Above Social Security Wage Base | ||||||||||||
| (%) | + | (%) | |||||||||||||
| Under 35 | 4 | 4 | |||||||||||||
| 35–49 | 5 | 4 | |||||||||||||
| 50–64 | 6 | 4 | |||||||||||||
| Over 64(1) | 7 | 4 | |||||||||||||
| Age Plus Years of Service | Crediting Rate on Compensation | Plus | Crediting Rate on Compensation Above Social Security Wage Base | |||
| (%) | + | (%) | ||||
Over 64(1) | 7 | 4 |
Footnotes:
| (1) | Applicable for Ms. Moore under the cash balance formula in the |
| 64 | Consolidated Edison, Inc.Proxy Statement |
| Pension Benefits |
Benefit distributions are made in the form of an immediate or deferred lifetime annuity, although participants may also elect a lump sum payment.
The retirement plan was closed to new management and rehired management employees as of December 31, 2016. Management employees hired or rehired on or after January 1, 2017, participate in the defined contribution pension formula within the savings plan. Until June 30, 2021, management
|
employees hired between January 1, 2001 and December 31, 2016 including Mr. Hoglund and Ms. Moore, maycan make an irrevocable election to earn future retirement benefits under the defined contribution pension formula in the savings plan instead of future participation inrather than the retirementdefined benefit pension plan. Effective January 1, 2018, after 14 years of credited service under the retirement plan, Mr. Hoglund made an irrevocablethis election to earn future retirement benefits under the definedand his first contribution pension formula in the savings plan instead of the retirement plan.took effect on April 1, 2018. The Company continues to provide Mr. Hoglund’s cash
balance account in the retirementdefined benefit pension plan with interest credits attributable to his account balance prior to January 1, 2018. The defined contribution pension formula in the savings plan provides the same level of Company compensation credits for a participant as the cash balance formula in the retirementdefined benefit pension plan. However, under the defined contribution pension formula in the savings plan, participating employees make their own investment elections and are responsible for their own investment results.
PENSION BENEFITS TABLEDefined Benefit Pension Table
The following table shows certain pension benefits information for each Named Executive Officer as of December 31, 2018.2019.
| Number of Years Credited Service | Present Value of Accumulated Benefit(1) | Payments during Last Fiscal Year | ||||||||||||||||||||
| (#) | ($) | ($) | ||||||||||||||||||||
John McAvoy Chairman, President and Chief Executive Officer | Retirement Plan Supplemental Retirement | |
| |
| | 0 0 | |||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | Retirement Plan Supplemental Retirement |
|
| |
| (2) | 363,945 1,937,361 | | 0 0 | |||||||||||||
Timothy P. Cawley President, Con Edison of New York | Retirement Plan Supplemental Retirement | |
| |
| | 0 0 | |||||||||||||||
| Retirement Plan Supplemental Retirement | |
| |
| | 0 0 | |||||||||||||||
Senior Vice President and
| Retirement Plan Supplemental Retirement | |
| |
| | 0 0 | |||||||||||||||
Footnotes:
| (1) | Amounts were calculated as of December 31, |
| (2) | As part of Mr. Hoglund’s employment offer in 2004, the Company agreed to provide |
| (3) | Ms. Moore retired effective December 31, |
|
| NON-QUALIFIED DEFERRED COMPENSATION |
DEFERRED INCOME PLANDeferred Income Plan
All management employees, including the Named Executive Officers, whose benefits under thetax-qualified savings plan, described on pages 46 and 47,page 56, are subject to the compensation limit in the Internal Revenue Code, are eligible to participate in a deferred income plan, anon-qualified deferred compensation plan. (The Internal Revenue Code limit for 20182019 was $275,000.$280,000.) The deferred income plan permits participating employees, including the Named Executive Officers, to defer on abefore-tax basis: (i) up to 50% of their base salary; (ii) all or a portion of their annual incentive award; and (iii) the cash value of any restricted stock unit awards. Under the deferred income plan, the Company credits participating employees with a Company matching contribution on that portion of their contributions that cannot be matched under thetax-qualified savings plan because of Internal Revenue Code limitations.
Effective as of January 1, 2017 all new management employees, all rehired management employees, and all management employees hired between January 1, 2001 and December 31, 2016 who make an irrevocable election to participate in the defined contribution pension formula in thetax-qualified savings plan instead of the retirement plan and Participants whose benefits under the defined contribution pension formula in the savings plan arefor 2018 were subject to the compensation limitlimits in the Internal Revenue Code, arewere also eligible to participate in the deferred income plan. Effective January 1, 2018, Mr. Hoglund made an irrevocable election to earn future retirement benefits under the defined contribution pension formula in the savings plan instead of the retirement plan.
Earnings on amounts contributed under the deferred income plan reflect investment in accordance with participating employees’ investment elections. Deferrals and any earnings thereon are always 100% vested. Companynon-elective contributions vest 100% three years after a participating employee’s date of hire.
There were no above-market or preferential earnings with respect to the deferred income plan. Individuals participating in the deferred income plan may elect to receive the performance of institutionally managed funds. Participants may change their investment allocation once per calendar quarter. All amounts distributed from the deferred income plan are paid out of the Company’s general assets.
Employees who participate in the savings plan, including the Named Executive Officers, may contribute up to 50% of their compensation on abefore-tax basis and/or anafter-tax basis, into their savings plan accounts. For Messrs. McAvoy, Cawley, and Sanchez, whose pension benefit is based on the final average salary formula in the defined benefit pension plan, the Company matches 50% for each dollar contributed by participating employees on the first 6% of their regular earnings. For Ms. Moore, whose pension benefits are determined using the retirement plan’s cash balance formula, or for Mr. Hoglund, who participates in the defined contribution pension formula in the savings plan, the Company matches 100% for each dollar contributed by such participating employees on the first 4% of their regular earnings plus an additional 50% for each dollar contributed on the next 4% of their regular earnings.
Under the defined contribution pension formula in the savings plan, the Company makesnon-elective employer contributions for a participant at the same level as it would under the cash balance formula in the defined benefit pension plan. Effective January 1, 2018, Robert Hoglund made an election to earn future retirement benefits under the defined contribution pension formula in the savings plan instead of the cash balance formula under the defined benefit pension plan. Effective January 1, 2019, management employees who participate in the defined contribution pension formula and are subject to Internal Revenue Code limits, are eligible to participate in the supplemental defined contribution pension formula. The cash balance formula and the defined contribution pension formula are both described in the narrative to the “Defined Benefit Pension Table” on pages 64 and 65.
Amounts deferred under the savings plan and the deferred income plan by the Named Executive Officers are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns of the “Summary Compensation Table” on page 50.59. Company matching contributions andnon-elective contributions under the defined contribution pension formula in the deferred income plan allocated to the Named Executive Officers under the savings plan and the deferred income plan are shown in the “All Other Compensation” column of the “Summary Compensation Table” on page 50.59. Amounts realized upon vesting of stock awards that were deferred into the deferred income plan, if any, are shown on the “Value Realized on Vesting” column of the “Option Exercises and Stock Vested Table” on page 54.63.
|
NON-QUALIFIED DEFERRED COMPENSATION TABLENon-Qualified Deferred Compensation Table
The following table sets forth certain information with respect tonon-qualified deferred compensation for each Named Executive Officer as of December 31, 2018.2019.
| Name & Principal Position | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY(2) | Aggregate in Last | Aggregate Distributions | Aggregate Balance at Last FYE(4) | ||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
John McAvoy Chairman, President and | 2,003,766 | 30,650 | (84,588 | ) | 0 | 3,246,397 | |||||||||||||||||||
Robert Hoglund Senior Vice President and Chief Financial Officer | 259,661 | 118,498 | (130,202 | ) | 0 | 1,653,505 | |||||||||||||||||||
Timothy P. Cawley President, Con Edison of New York | 1,009,071 | 10,080 | (79,822 | ) | 0 | 1,123,118 | |||||||||||||||||||
Elizabeth D. Moore Senior Vice President and General Counsel | 29,603 | 22,202 | (190,571 | ) | 0 | 1,766,004 | |||||||||||||||||||
Robert Sanchez President and Chief Executive Officer, | 9,665 | 4,833 | (1,696 | ) | 0 | 71,698 | |||||||||||||||||||
| Plan Name | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY(2) | Aggregate in Last | Aggregate Distributions | Aggregate Balance at Last FYE(4) | |||||||||||||||||
| Name & Principal Position | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||
John McAvoy Chairman, President and |
Deferred Income Plan |
|
63,400 |
|
|
31,700 |
|
|
303,928 |
|
|
0 |
|
|
3,645,425 |
| ||||||
Robert Hoglund Senior Vice President | Deferred Income Plan
Supplemental Defined |
| 238,347
0 |
|
| 30,485
718,792 |
|
| 553,735
65,688 |
|
| 0
0 |
|
| 2,476,072
784,480 |
| ||||||
Timothy P. Cawley President, Con Edison |
Deferred Income Plan |
|
20,932 |
|
|
10,466 |
|
|
310,022 |
|
|
0 |
|
|
1,464,538 |
| ||||||
Robert Sanchez President and Chief |
Deferred Income Plan |
|
10,671 |
|
|
5,336 |
|
|
25,394 |
|
|
0 |
|
|
113,098 |
| ||||||
Elizabeth D. Moore(5) Senior Vice President |
Deferred Income Plan |
|
197,401 |
|
|
23,063 |
|
|
453,206 |
|
|
0 |
|
|
2,439,674 |
| ||||||
Footnotes:
| (1) | Amounts set forth under “Executive Contributions in Last FY” column are reported in either: (i) the “Salary” column of the “Summary Compensation Table” on page |
| (2) | The amounts set forth under the “Registrant Contributions in Last FY” column are reported in the “All Other Compensation” column of the “Summary Compensation Table” on page |
| (3) | Represents earnings or losses on accounts for fiscal year |
| (4) | Aggregate account balances in thenon-qualified deferred |
| McAvoy | Hoglund | Cawley | Moore | Sanchez | John McAvoy | Robert Hoglund | Timothy P. Cawley | Robert Sanchez | Elizabeth D. Moore | |||||||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||||||
| Deferred Income Plan | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||||||||
Executive contributions | 2,928,822 | 947,927 | 1,119,967 | 1,325,494 | 59,133 | 2,992,222 | 1,186,273 | 1,140,899 | 69,804 | 1,522,895 | ||||||||||||||||||||||||||||||
Company matching contributions | 152,596 | 240,552 | 29,767 | 146,507 | 6,770 | 184,296 | 271,036 | 40,233 | 12,105 | 169,570 | ||||||||||||||||||||||||||||||
Companynon-elective contributions | — | 89,089 | — | — | — | — | 89,089 | — | — | — | ||||||||||||||||||||||||||||||
Earnings | 164,979 | 375,937 | (26,616 | ) | 294,003 | 5,795 | 468,907 | 929,674 | 283,406 | 31,189 | 747,209 | |||||||||||||||||||||||||||||
Total | 3,246,397 | 1,653,505 | 1,123,118 | 1,766,004 | 71,698 | 3,645,425 | 2,476,072 | 1,464,538 | 113,098 | 2,439,674 | ||||||||||||||||||||||||||||||
Supplemental Defined Contribution Pension Plan | ||||||||||||||||||||||||||||||||||||||||
Companynon-elective contributions | 0 | 718,792 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Earnings | 0 | 65,688 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Total | 0 | 784,480 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||
| (5) | Ms. Moore retired effective December 31, 2019. |
|
| POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL |
The Severance Program for Officers of the Company and its subsidiaries (the “Severance Program”) provides compensation to officers, including the Named Executive Officers, in the event of certain terminations of employment or a change of control of the Company. The amount of compensation that is potentially payable to each Named Executive Officer in each situation is listed in the table. These amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to these Named Executive Officers, which would only be known at the time that they become eligible for payment. The table reflects the amount that could be payable under the Severance Program assuming such termination occurred at December 31, 2018.2019. The price per share of Company Common Stock on December 31, 20182019 was $76.46$90.47 per share.
| Name & Principal Position | Executive Benefits and Payments Upon Termination(1) | Resignation for any Reason (prior to CIC) or Resignation without Good Reason (following a CIC) | Retirement | Termination without Cause(2) | Termination for Cause | Termination without Cause or Resignation for Good Reason (following a CIC)(3) | Death or Disability | Executive Benefits and Payments Upon Termination(1) | Resignation for any Reason (prior to CIC) or Resignation without Good Reason (following a CIC) | Retirement | Termination without Cause(2) | Termination for Cause | Termination without Cause or Resignation for Good Reason (following a CIC)(3) | Death or Disability | ||||||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||||||
John McAvoy | Severance | 0 | 0 | 4,550,000 | 0 | 7,475,000 | 0 | Severance | 0 | 0 | 4,690,000 | 0 | 7,705,000 | 0 | ||||||||||||||||||||||||||||||
| Chairman, President and Chief Executive Officer | Long-term plan incentives(4) | 0 | 11,522,522 | (5) | 11,522,522 | (5) | 0 | 11,522,522 | (5) | 11,522,522 | (5) | Long-term plan incentives(4) | 0 | 14,583,764 | (5) | 14,583,764 | (5) | 0 | 14,583,764 | (5) | 14,583,764 | (5) | ||||||||||||||||||||||
| Benefits and Perquisites | 0 | 0 | 319,855 | 0 | 614,710 | 1,300,000 | Benefits and Perquisites | 0 | 0 | 281,551 | 0 | 538,101 | 1,340,000 | |||||||||||||||||||||||||||||||
Total(6) | 0 | 11,522,522 | 16,392,377 | 0 | 19,612,232 | 12,822,522 | ||||||||||||||||||||||||||||||||||||||
Total(6) | 0 | 14,583,764 | 19,555,315 | 0 | 22,826,865 | 15,923,764 | ||||||||||||||||||||||||||||||||||||||
| Robert Hoglund | Severance | 0 | 0 | 1,534,000 | 0 | 2,684,500 | 0 | Severance | 0 | 0 | 1,580,000 | 0 | 2,765,000 | 0 | ||||||||||||||||||||||||||||||
| Senior Vice President and Chief Financial Officer | Long-term plan incentives(4) | 0 | 2,943,710 | (5) | 2,943,710 | (5) | 0 | 2,943,710 | (5) | 2,943,710 | (5) | Long-term plan incentives(4) | 0 | 3,618,800 | (5) | 3,618,800 | (5) | 0 | 3,618,800 | (5) | 3,618,800 | (5) | ||||||||||||||||||||||
| Benefits and Perquisites | 0 | 0 | 185,043 | 0 | 345,085 | 767,000 | Benefits and Perquisites | 0 | 0 | 1,219,644 | 0 | 2,414,288 | 790,000 | |||||||||||||||||||||||||||||||
Total(6) | 0 | 2,943,710 | 4,662,753 | 0 | 5,973,295 | 3,710,710 | ||||||||||||||||||||||||||||||||||||||
Total(6) | 0 | 3,618,800 | 6,418,444 | 0 | 8,798,088 | 4,408,800 | ||||||||||||||||||||||||||||||||||||||
Timothy P. Cawley | Severance | 0 | 0 | 1,591,200 | 0 | 2,692,800 | 0 | Severance | 0 | 0 | 1,639,000 | 0 | 2,773,700 | 0 | ||||||||||||||||||||||||||||||
| President, Con Edison of New York | Long-term plan incentives(4) | 0 | 2,270,862 | (5) | 2,270,862 | (5) | 0 | 2,270,862 | (5) | 2,270,862 | (5) | Long-term plan incentives(4) | 0 | 3,627,847 | (5) | 3,627,847 | (5) | 0 | 3,627,847 | (5) | 3,627,847 | (5) | ||||||||||||||||||||||
| Benefits and Perquisites | 0 | 0 | 635,582 | 0 | 1,246,163 | 612,000 | Benefits and Perquisites | 0 | 0 | 808,035 | 0 | 1,591,070 | 630,400 | |||||||||||||||||||||||||||||||
Total(6) | 0 | 2,270,862 | 4,497,644 | 0 | 6,209,825 | 2,882,862 | ||||||||||||||||||||||||||||||||||||||
| Elizabeth D. Moore | Severance | 0 | 0 | 1,293,200 | 0 | 2,263,100 | 0 | |||||||||||||||||||||||||||||||||||||
| Senior Vice President and General Counsel | Long-term plan incentives(4) | 0 | 1,865,624 | (5) | 1,865,624 | (5) | 0 | 1,865,624 | (5) | 1,865,624 | (5) | |||||||||||||||||||||||||||||||||
| Benefits and Perquisites | 0 | 0 | 152,296 | 0 | 279,592 | 646,600 | ||||||||||||||||||||||||||||||||||||||
Total(6) | 0 | 1,865,624 | 3,311,120 | 0 | 4,408,316 | 2,512,224 | ||||||||||||||||||||||||||||||||||||||
Total(6) | 0 | 3,627,847 | 6,074,882 | 0 | 7,992,617 | 4,258,247 | ||||||||||||||||||||||||||||||||||||||
Robert Sanchez | Severance | 0 | 0 | 1,140,400 | 0 | 1,929,900 | 0 | Severance | 0 | 0 | 1,195,000 | 0 | 2,022,300 | 0 | ||||||||||||||||||||||||||||||
| President and Chief Executive Officer, Orange & Rockland | Long-term plan incentives(4) | 0 | 1,131,608 | (5) | 1,131,608 | (5) | 0 | 1,131,608 | (5) | 1,131,608 | (5) | |||||||||||||||||||||||||||||||||
| Benefits and Perquisites | 0 | 0 | 674,867 | 0 | 1,324,733 | 438,600 | ||||||||||||||||||||||||||||||||||||||
Total(6) | 0 | 1,131,608 | 2,946,875 | 0 | 4,386,241 | 1,570,208 | ||||||||||||||||||||||||||||||||||||||
| President and Chief Executive | Long-term plan incentives(4) | 0 | 2,080,810 | (5) | 2,080,810 | (5) | 0 | 2,080,810 | (5) | 2,080,810 | (5) | |||||||||||||||||||||||||||||||||
| Officer, Orange & Rockland | Benefits and Perquisites | 0 | 0 | 707,940 | 0 | 1,390,880 | 459,600 | |||||||||||||||||||||||||||||||||||||
Total(6) | 0 | 2,080,810 | 3,983,750 | 0 | 5,493,990 | 2,540,410 | ||||||||||||||||||||||||||||||||||||||
Footnotes:
| (1) | Assumes the compensation of Messrs. McAvoy, Hoglund, Cawley, and Sanchez |
| (2) | As per the Severance Program, the Named Executive Officer’s severance benefit pursuant to a termination without “Cause” (before a Change of Control or “CIC”) is equal to: (i) a lump sum equal to any unpaid base salary and annual target bonus prorated through the termination date and any accrued vacation pay; (ii) a lump sum equal to the net present value of one additional year of service credit under the Company’s retirement plans (assuming compensation at Named Executive Officer’s then annual rate of base salary and target annual bonus); (iii) a lump sum equal to 1x the sum of the Named Executive Officer’s then base salary and target annual bonus; (iv) one year continuation of health and life insurance coverage and one year of additional service credit toward eligibility for (but not for commencement of) retiree benefits, and (v) one year of outplacement costs. |
| (3) | As per the Severance Program, the Named Executive Officer’s severance benefit under a termination without Cause or resignation for Good Reason (on or following CIC) is equal to the same severance benefit under a termination without Cause (before CIC) as described in footnote (2) except the amounts in clauses (ii), (iii), and (iv) are 2x instead of 1x. |
|
| (4) | Potential payments under the long term incentive plan require the occurrence of a (i) CIC and (ii) qualifying termination of employment (a “CIC Separation from Service”) unless the Compensation Committee determines otherwise. |
| (5) | For disclosure purposes, the Compensation Committee is assumed to have taken action pursuant to the long term incentive plan to fully accelerate the vesting of target performance unit awards. |
| (6) | The total amounts are in addition to: (i) vested or accumulated benefits under the Company’s defined benefit pension plans, 401(k) plans, andnon-qualified deferred compensation plans, which are set forth in the compensation disclosure tables; (ii) benefits paid by insurance providers under life and disability insurance policies; and (iii) benefits generally available to all management employees, such as accrued vacation. |
| 68 | Consolidated Edison, Inc.Proxy Statement |
| Potential Payments Upon Termination of Employment or Change of Control |
A description of the assumptions that were used in creating the table for the Named Executive Officers is as follows:
EQUITY ACCELERATIONEquity Acceleration
Separation from Service
With respect to unvested performance-based equity awards under the long term incentive plan, in the event of a Termination, Retirement, death or Disability, the Compensation Committee has discretion to determine the terms of the awards (including, without limitation, to accelerate the vesting of unvested awards). Unless otherwise provided by the Compensation Committee, in the event of a Retirement, death or Disability, performance-based equity awards vest prorata through the date of the event.
For the purposes of the long term incentive plan: (i) “Termination” means a resignation or discharge from employment, except death, Disability or Retirement; (ii) “Retirement” means resignation on or after age 55 with at least five years of service; and (iii) “Disability” means an inability to work in any gainful occupation for which the person is reasonably qualified by education, training or experience because of a sickness or injury for which the person is under doctor’s care.
Change in Control
As per the long term incentive plan, in the event of a CIC Separation from Service, unvested performance-based equity awards vestpro-rata, assuming targeted performance was achieved.
For purposes of the long term incentive plan, “Change in Control” has the same meaning as “Change of Control” under the Severance Program.
For purposes of the long term incentive plan, a “CIC Separation from Service” means a termination without Cause or due to a resignation for Good Reason that occurs on or before the second anniversary following the occurrence of a Change in Control.
“Cause” means the conviction of the Named Executive Officer of a felony or the entering by the Named Executive Officer of a plea ofnolo contendere to a felony, in either case having a significant adverse effect on the business and affairs of the Company.
“Good Reason” occurs if the Named Executive Officer resigns for any of the following reasons: (i) any material decrease in base compensation; (ii) any material breach by the Company of any material provisions of the long term incentive plan; (iii) a requirement by the Company for the Named Executive Officer to be based at any office or location more than 50 miles from the location the Named Executive Officer is employed prior to the Change in Control; or (iv) the assignment of any duties materially inconsistent in any respect with the Named Executive Officer’s position, authority, duties or responsibilities.
INCREMENTAL RETIREMENT AMOUNTSIncremental Retirement Amounts
As per the Severance Program, the amounts relating to the incremental retirement amounts in the table are based on the net present value of one additional year of service credit under the Company’s retirement plans following a termination without Cause or a resignation for Good Reason (two additional years if such termination is in connection with a Change in Control) assuming compensation at the Named Executive Officer’s annual salary and target award, age 65 normal retirement, and the assumptions used to calculate lump sum benefits under the qualified retirement plan in December 2018.2019.
The assumptions for Messrs. McAvoy, Cawley, and Sanchez, include interest rates of 3.21%2.13% for the first five years, 4.26%3.07% for the next 15 years, and 4.55%3.65% thereafter (adjusted to 1.48%0.52%, 2.52%1.45% and 2.80%2.02%, respectively, to reflect cost of living adjustments) and theRP-2000 mortality table projected for 20182019 (50% male/50% female blend).
The assumptions for Ms. Moore’sMr. Hoglund’s retirement amount are in accordance with the “cash balance” formula in the retirement plan and the defined contribution pension formula within the savings plan for Mr. Hoglund.and reflect only additional compensation credits. All amounts payable pursuant to an incrementalnon-qualified retirement plan are assumed to be paid as a lump sum.
|
TERMINATION WITHOUT CAUSE OR A RESIGNATION FOR GOOD REASONTermination Without Cause or a Resignation for Good Reason
As per the Severance Program, the Named Executive Officer will receive certain benefits as described in the table if he or she is terminated by the Company for reasons other than Cause or he or she resigns for Good Reason (following a Change of Control). A termination is for Cause if it is for any of the following reasons: (i) willful and continued failure to substantially perform his or her duties; (ii) a conviction of a felony or entering a plea ofnolo contendere to a felony that has a significant adverse effect on the business of the Company; or (iii) a willful engaging in illegal conduct or in gross misconduct materially and demonstrably injurious to the Company.
As per the Severance Program, a resignation for Good Reason occurs if the Named Executive Officer resigns for any of the following reasons on or following a Change of Control: (i) any material decrease in base compensation (except uniform decreases affecting similarly situated employees); (ii) any material breach by the Company of any material provisions of the Severance Program; (iii) a requirement by the Company for the Named Executive Officer to be based more than 50 miles from the location the Named Executive Officer is employed prior to the Change of Control; or (iv) the assignment of any duties materially inconsistent in any respect with the Named Executive Officer’s position, authority, duties or responsibilities.
PAYMENTS UPON TERMINATION OF EMPLOYMENT IN CONNECTION WITH A CHANGE OF CONTROLPayments Upon Termination of Employment in Connection with a Change of Control
As per the Severance Program, the Named Executive Officer will receive certain benefits as described in the table if his or her termination of employment is without Cause by the Company or he or she resigns for Good Reason following a Change of Control.
SECTIONSection 280G REDUCTIONReduction
As per the Severance Program, in the event a Named Executive Officer receives any payment or distribution from the Company in connection with a Change of Control, he or she may be subject to certain excise taxes pursuant to Section 280G of the Internal Revenue Code. If any such payment or distribution subjects the Named Executive Officer to such taxes and the Named Executive Officer would receive a greater netafter-tax amount if the payment were reduced to avoid such taxation, the aggregate present value of amounts payable to the Named Executive Officer pursuant to the Severance Program will be reduced (but not below zero) to the extent it does not trigger taxation under Section 4999 of the Internal Revenue Code.
As per the Company’s Deferred Income Plan, participating officers, including the Named Executive Officers, are entitled to a death benefit equal to their individual base salary. The benefits are payable in a lump sum.
Payment Upon Retirement for Elizabeth D. Moore
Elizabeth D. Moore retired effective December 31, 2019. Ms. Moore retains her performance unit awards for the 2018-2020 and the 2019-2021 performance cycles. Payment of the performance units will be based on the attainment of the relevant performance goals and will be pro rated based on her actual service from the grant date to the date of her retirement, December 31, 2019. No other payments were made to Ms. Moore in connection with her retirement. See “Outstanding Equity Awards Table” on page 62.
|
| COMPENSATION COMMITTEE REPORT |
The Management Development and Compensation Committee of the Board of Directors of the Company has reviewed and discussed the Compensation Discussion and Analysis (the “CD&A”) for 20182019 with management of the Company. Based on this review and discussion, the Committee recommended to the Board of Directors that the CD&A be included in the Company’s Annual Report onForm 10-K for the year ended December 31, 20182019 and this Proxy Statement.
Management Development and Compensation Committee:
George Campbell, Jr. (Chair)
John F. Killian
William J. Mulrow
Michael W. Ranger
Deirdre Stanley
L. Frederick Sutherland
| COMPENSATION RISK MANAGEMENT |
In 2018,2019, the Compensation Committee asked Mercer to undertake a risk assessment of the Company’s compensation programs to determine whether the Company’s compensation policies and practices for employees, generally, would reasonably be expected to have a material adverse effect on the Company’s risk management and create incentives that could lead to excessive or inappropriate risk taking by employees. The Compensation Committee also asked management to review the assessment. Based on Mercer’s risk assessment findings, with which the Compensation Committee and management concur, the Company’s compensation programs are not reasonably likely to have a material adverse effect on the Company’s risk management or create incentives that could lead to excessive or inappropriate risk taking by employees.
Among the relevant features of the Company’s compensation programs that mitigate risk are:
a recoupment policy applicable to all Company officers with respect to incentive-based compensation;
| ◾ | a recoupment policy applicable to all Company officers with respect to incentive-based compensation; |
annual and long-term incentives under the Company’s compensation programs appropriately balanced between annual and long-term financial performance goals that are expected to enhance stockholder value;
annual and long-term incentives tied to multiple performance goals to reduce undue weight on any one goal;
| ◾ | annual and long-term incentives under the Company’s compensation programs appropriately balanced between annual and long-term financial performance goals that are expected to enhance stockholder value; |
non-financial performance factors used in determining the actual payout of annual incentive compensation as a counterbalance to financial performance goals;
| ◾ | annual and long-term incentives tied to multiple performance goals to reduce undue weight on any one goal; |
compensation programs designed to deliver a significant portion of compensation in the form of long-term incentives, discouraging excessive focus on annual results;
| ◾ | non-financial performance factors used in determining the actual payout of annual incentive compensation as a counterbalance to financial performance goals; |
performance-based equity awards based on performance over a three-year period, focusing on sustainable performance over a three-year cycle rather than any one year;
| ◾ | compensation programs designed to deliver a significant portion of compensation in the form of long-term incentives, discouraging excessive focus on annual results; |
annual and long-term incentive awards that are subject to appropriate payment caps and Compensation Committee discretion to reduce payouts; and
| ◾ | performance-based equity awards based on performance over a three-year period, focusing on sustainable performance over a three-year cycle rather than any one year; |
| ◾ | annual and long-term incentive awards that are subject to appropriate payment caps and Compensation Committee discretion to reduce payouts; and |
share ownership guidelines that further the long-term interests of executives and stockholders, and restrictions on shorting, hedging, and pledging Company securities.
| ◾ | share ownership guidelines that further the long-term interests of executives and stockholders, and restrictions on shorting, hedging, and pledging Company securities. |
|
| PAY RATIO |
The Company is required by Securities and Exchange Commission (“SEC”) rules to disclose the median of the annual total compensation of all employees of the Company (excluding the Chief Executive Officer), the annual total compensation of the Chief Executive Officer, and the ratio of these two amounts (the “pay ratio”). The pay ratio below is a reasonable estimate based on the Company’s payroll records and the methodology described below, and was calculated in a manner consistent with SEC rules. Because SEC rules for identifying the median employee and calculating the pay ratio allow companies to adopt a variety of methodologies, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies may have different employment and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
As permitted by SEC rules, the Company’s median employee for 20182019 is the employee identified in 2017. The employee is based in New York and is represented by a collective bargaining unit. The Company has determined that there have been no changes in its employee population or employee compensation arrangements during the last completed fiscal year that would significantly impact the pay ratio disclosure for 2018.2019. As of December 1, 2018,2019, the Company’s entire workforce (excluding
the Chief Executive Officer), consisted of 15,32414,947 full andpart-time employees of the Company and its subsidiaries. On December 1, 2017, this number was 15,603. In identifiyingidentifying the median employee last year,in 2017, the Company used earnings as reported on Internal Revenue Service FormW-2 for 2017, annualized the compensation of all employees hired during 2017, and did not make any cost of living adjustments.
For 2018,2019, the annual total compensation of the Company’s median employee, as calculated using Summary Compensation Table requirements, was $106,453$215,556 and the annual total compensation of the Chief Executive Officer, as disclosed in the column “Securities and Exchange Commission Total” in the “Summary Compensation Table” on page 50,59, was $9,765,858.$15,345,285. The resulting pay ratio of the Chief Executive Officer’s annual total compensation to the annual total compensation of the Company’s median employee was 9271 to 1.
Subtracting the change in pension value from the median employee’s annual total compensation, as was done for the Chief Executive Officer’s annual total compensation and shown in the column “Securities and Exchange Commission Total Without Change in Pension Value” in the “Summary Compensation Table,” the pay ratio of the Chief Executive Officer’s compensation to the Company’s median employee would be 70 to 1.
| CERTAIN INFORMATION AS TO INSURANCE AND INDEMNIFICATION |
No stockholder action is required with respect to the following information that is included to fulfill the requirements of Section 726 of the Business Corporation Law of the State of New York.
Effective December 2, 2018,2019, the Company purchased Directors and Officers (“D&O”) Liability insurance for aone-year term providing for reimbursement, with certain exclusions and deductions, to: (i) the Company and its subsidiaries for payments they make to indemnify Directors, Trustees, officers and assistant officers of the Company and its subsidiaries, (ii) Directors, Trustees, officers, and assistant officers for losses, costs and expenses incurred by them in actions brought against them in connection with their acts in those capacities for which they are not indemnified by the Company or its subsidiaries, and (iii) the Company and its subsidiaries for any payments they make resulting from a securities claim. The insurers are: ACE American Insurance Company, Associated Electric & Gas Insurance Services Limited, Arch Insurance Company, Axis Insurance Company, Berkshire Hathaway SpecialtyBeazley Insurance Company, Continental Casualty Company, Endurance American Insurance Company,
Federal Endurance American Specialty Insurance Company, IllinoisEverest National Insurance Company, National Union Fire Insurance Company of Pittsburgh, Pa., Travelers Casualty and Surety Company of America, U.S. Specialty Insurance Company, X.L. Insurance (Bermuda)XL Bermuda Ltd., and XL Specialty Insurance Company and Zurich American Insurance Company. The total cost of the D&O Liability insurance for one year from December 2, 20182019 amounts to $2,845,718.$3,026,304. The Company also purchased from Associated Electric & Gas Insurance Services Limited, Arch Insurance Company, Axis Insurance Company, Great American Insurance Company, Illinois National Union Fire Insurance Company of Pittsburgh, Pa., RLI Insurance Company, Travelers Casualty and Surety Company of America, U.S. Specialty Insurance Company and Zurich American Insurance Company, additional insurance coverage for one year effective January 1, 2019,2020, insuring the Directors, Trustees, officers, assistant officers and employees of the Company and its subsidiaries and certain other parties against certain liabilities which could arise in connection with fiduciary obligations mandated by ERISA and from the administration of the employee benefit plans of the Company and its subsidiaries. The cost of such coverage was $765,692.
|
| QUESTIONS AND ANSWERS ABOUT THE |
PROXY MATERIALSProxy Materials
What Are The Proxy Materials?
The Proxy Materials include the following:
The Proxy Statement.
| ◾ | The Proxy Statement. |
The Annual Report to Stockholders of the Company, which includes the consolidated financial statements and accompanying notes for the year ended December 31, 2018, and other information relating to the Company’s financial condition and results of operations.
| ◾ | The Annual Report to Stockholders of the Company, which includes the consolidated financial statements and accompanying notes for the year ended December 31, 2019, and other information relating to the Company’s financial condition and results of operations. |
If you received the Proxy Materials by mail, they also include a proxy card or a voter instruction form for use at the 20192020 Annual Meeting.
Why Am I Receiving The Proxy Materials?
The Proxy Materials are provided to stockholders of the Company on or about April 8, 2019,6, 2020, in connection with the solicitation of proxies by the Board of Directors of the Company for use at the Annual Meeting and any adjournments or postponements of the Annual Meeting. As a stockholder, you are invited to attend the Annual Meeting either in person or by means of remote communication and to vote on the items of business described in this Proxy Statement. The Proxy Materials include information that we are required to provide to you under the rules of the Securities and Exchange Commission. We are providing the Proxy Materials to our stockholders by mail,e-mail, or in accordance with the Securities and Exchange Commission’s “Notice and Access” rule.
Why Did I Receive Thethe Proxy Materials In The Mail?
We are providing some of our stockholders, including stockholders who have previously requested to receive paper copies of the Proxy Materials, with paper copies of the Proxy Materials. You may also access the Proxy Materials and vote online at the Internet address provided on the proxy card or the voter instruction form. If you do not want to receive paper copies of proxy materials on an ongoing basis, please follow the instructions for Internet voting on your proxy card or voter instruction form.
Why Did I ReceiveE-Mail Delivery Ofof The Proxy Materials?
We are providinge-mail delivery of the Proxy Materials to those stockholders who have previously elected electronic delivery. Those stockholders should have received ane-mail containing a link to the website where those materials are available and a link to the proxy voting website.
Why Did I Receive A Notice Of Internet Availability Of Proxy Materials?
To reduce the environmental impact of our Annual Meeting, we are providing the Proxy Materials over the Internet. As a result, we are sending many of our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) instead of a paper copy of the Proxy Materials. All stockholders receiving the Notice of Internet Availability may access the Proxy Materials over the Internet and request a paper copy of the Proxy Materials by mail. Instructions on how to access the Proxy Materials over the Internet, to vote online, and to request a paper copy may be found in the Notice of Internet Availability. In addition, the Notice of Internet Availability contains instructions on how you may request delivery of proxy materials in printed form by mail or electronically on an ongoing basis.
| Consolidated Edison, Inc.Proxy Statement | 73 |
| Questions and Answers About the 2020 Annual Meeting and Voting |
Can I Request A Paper Copy Of The Proxy Statement And Annual Report?
The Company’s Proxy Statement and Annual Report are available on our website atconedison.com/shareholders.A copy of these materials is also available without charge upon written request to the Company’s Vice President and Corporate Secretary at the Company’s principal executive office at 4 Irving Place, New York, New York 10003.
I Share An Address With Another Stockholder, And We Received Only One Copy Of The Proxy Materials. How May I Obtain An Additional Copy?
We have adopted a procedure approved by the Securities and Exchange Commission called “householding.” Under this procedure, registered holders of Company Common Stock who have the same address and last name and who receive either a Notice of Internet Availability or a paper copy of the Proxy Materials in the mail, will receive only one copy of the Proxy Materials, or a single envelope containing the Notice of Internet Availability, for all stockholders at that address. This consolidated method of delivery will continue unless we are notified from a stockholder at that address that individual copies are preferred. Householding allows us to realize significant cost savings and reduces the amount of duplicate information stockholders receive.
If you are a registered holder of Company Common Stock and wish to discontinue householding, please notify Computershare, the Company’s Transfer Agent and Registrar, by calling1-800-522-5522.
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If you are a beneficial holder of Company Common Stock who holds Company Common Stock through a broker, bank, or other financial institution (“broker”), and wish to discontinue householding, please submit a request to Broadridge Householding Department by telephone at1-866-540-7095 or by mail at 51 Mercedes Way, Edgewood, NY 11717.
Who Pays The Cost Of Soliciting Proxies For The Annual Meeting?
The Company will pay the expenses associated with the solicitation of proxies. The solicitation of proxies is being made by mail, telephone, the Internet, electronic transmission, or overnight delivery. The expense associated with the solicitation of proxies will include reimbursement for postage and clerical expenses to brokerage houses and other custodians, nominees or fiduciaries for forwarding Proxy Materials and other documents to beneficial owners of stock held in their names. Morrow Sodali LLC (“Morrow”), 470 West Avenue, Stamford, CT 06902, has been retained to assist in the solicitation of proxies. The estimated cost of Morrow’s services is $22,000plus distribution costs and other costs and expenses.
VOTING AND RELATED MATTERSVoting and Related Matters
What Is The Record Date?
The Board of Directors has established March 25, 201923, 2020 as the record date for the determination of the Company’s stockholders entitled to receive notice of and to vote at the Annual Meeting.
How Many Votes Do I Have?
You are entitled to one vote on each proposal presented at the Annual Meeting for each outstanding share of Company Common Stock you owned on the record date.
How Many Votes Can Be Cast By All Stockholders Entitled To Vote At The Annual Meeting?
One vote on each proposal presented at the Annual Meeting for each of the 326,946,537333,976,078 shares of Company Common Stock that were outstanding on the record date.
| 74 | Consolidated Edison, Inc.Proxy Statement |
| Questions and Answers About the 2020 Annual Meeting and Voting |
How Many Votes Must Be Present To Hold The Annual Meeting?
To constitute a quorum to transact business at the Annual Meeting, the holders of a majority of the shares of Company Common Stock entitled to vote at the Annual Meeting must be present at the Annual Meeting, either in person or by means of remote communication, or by proxy. We urgestrongly recommend that you to vote by proxyin advance of the Annual Meeting, even if you plan to attend the Annual Meeting, either in person or by means of remote communication, so that we will know as soon as possible that enough votes will be present to hold the meeting. Abstentions and brokernon-votes are counted in the determination of the quorum.
How Do I Vote?
You can vote whether or not you attend the Annual Meeting. Stockholders have a choice of voting over the Internet, by telephone, by mail, using a proxy card or voter instruction form, or in person at the Annual Meeting.Meeting either in person or by means of remote communication.
If you received a printed copy of the Proxy Materials, please follow the instructions on your proxy card or voter instruction form. Your proxy card or voter instruction form provides information on how to vote over the Internet, by telephone, or by mail.
| ◾ | If you received a printed copy of the Proxy Materials, please follow the instructions on your proxy card or voter instruction form. Your proxy card or voter instruction form provides information on how to vote. |
If you received a Notice of Internet Availability, please follow the instructions on the notice. The Notice of Internet Availability provides information on how to vote over the Internet, by telephone, or by mail.
| ◾ | If you received a Notice of Internet Availability, please follow the instructions on the notice. The Notice of Internet Availability provides information on how to vote. |
If you received ane-mail notification, please click on the link provided in thee-mail notification, and follow the instructions on how to vote over the Internet or by telephone.
| ◾ | If you received ane-mail notification, please click on the link provided in thee-mail notification and follow the instructions on how to vote. |
If you are a registered holder of the Company’s Common Stock, you may also vote in person at the Annual Meeting.
| ◾ | If you are a registered holder of the Company’s Common Stock, you may vote at the Annual Meeting either in person or by means of remote communication. Please follow the instructions on your proxy card, Notice of Internet Availability, or e-mail notification. Special rules apply if you hold your shares through a broker. (See “Questions and Answers About the 2020 Annual Meeting and Voting—Annual Meeting Information” beginning on page 76.) |
To help us reduce the environmental impact of our meeting, we ask that you vote through the Internet or by telephone, both of which are available 24 hours a day. To ensure that your vote is counted, please remember to submit your vote by the date and time indicated on your proxy card, voter instruction form, Notice of Internet Availability, proxy card or voter instruction form,e-mail notification, as applicable.
If My Shares Are Held By My Broker, Can My Shares Be Voted If I Don’t Instruct My Broker?
The Securities and Exchange Commission has approved a New York Stock Exchange rule that affects the manner in which your broker may vote your shares. Your broker may not vote on your behalf for the election of directors or compensation-related matters unless you provide specific voting instructions to your broker. For your vote to be counted, you need to communicate your voting decisions to your broker, in the manner prescribed by your broker, before the date of the Annual Meeting.
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If you have any questions about this rule or the proxy voting process in general, please contact the broker where you hold your shares. The Securities and Exchange Commission also has a website (www.sec.gov/spotlight/proxymatters.shtml) with more information about your rights as a stockholder.
If I Am A Registered Holder Of Company Common Stock, What If I Don’t Vote For One Or More Of The Matters Listed On My Proxy Card?
All shares represented by properly executed proxies received in time for the Annual Meeting will be voted at the Annual Meeting in the manner specified by the persons giving those proxies. If you return a signed proxy without indicating voting instructions your shares will be voted as follows:
for the election of the ten Director nominees; |
for the ratification of the appointment of independent accountants; and |
for the advisory vote to approve named executive officer compensation. |
| Consolidated Edison, Inc.Proxy Statement | 75 |
| Questions and Answers About the 2020 Annual Meeting and Voting |
Can I Revoke My Proxy Or Change My Vote?
Yes, depending on how your shares of Company Common Stock are held, you may revoke your proxy or change your vote by sending in a new, properly executed proxy card or voter instruction form with a later date, or by casting a new vote by Internet or telephone, or by sending a properly executed written notice of revocation to the Company’s Vice President and Corporate Secretary at the Company’s principal executive office at 4 Irving Place, New York, New York 10003. Check the instructions on your proxy card, voter instruction form, Notice of Internet Availability, proxy card or voter instruction forme-mail notification for information regarding your specific revocation options. If you are a registered holder of Company Common Stock, you may also change your vote by appearing atattending the Annual Meeting and voting in person.person or by means of remote communication. Attendance at the Annual Meeting without voting will not by itself revoke a proxy.
Who Tabulates The Votes?
Votes will be tabulated by Computershare Trust Company, N.A., as inspector of election for the Annual Meeting.
ANNUAL MEETING INFORMATIONAnnual Meeting Information
What Is The Location, Date, And Time Of The Annual Meeting?
The Annual Meeting will be held at the Company’s principal executive office at 4 Irving Place, New York, New York 10003, on Monday, May 20, 2019,18, 2020, at 10:00 a.m., Eastern Daylight Time.
Where Can I Find Directions To TheAs part of our effort to maintain a safe and healthy environment at our Annual Meeting?Meeting and to protect the well-being of our stockholders, after closely monitoring statements issued by the World Health Organization (who.int) and the Centers for Disease Control and Prevention (cdc.gov), the New York State Department of Health (health.ny.gov), and the New York City Department of Health and Mental Hygiene (nyc.gov/health) regarding the novel coronavirus disease,COVID-19, we have decided to give stockholders the option of attending the Annual Meeting by means of remote communication this year atwww.meetingcenter.io/249286494 (enter your control number and the password ED2020). We have designed the virtual meeting to offer the same participation opportunities as an in-person meeting. We strongly encourage all stockholders who are currently planning to attend the Annual Meeting in person to review guidance from public health authorities on this issue and, in particular, if you have been exposed or are at risk for exposure toCOVID-19, we encourage you to attend the Annual Meeting by means of remote communication.
DirectionsWhile we currently intend to permit stockholders to attend the Annual Meeting in person, we are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials may issue. We may impose additional procedures or limitations on meeting attendees or may decide to hold the meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting), if allowed by applicable law. We plan to announce any such updates by press release and posting on our proxy website (conedison.com/shareholders), and we strongly encourage you to check this website prior to the Annual Meeting are available on our website atconedison.com/shareholders.if you plan to attend in person. Note that any decision to proceed with a virtual-only meeting this year will not mean we will utilize a virtual-only format or any means of remote communication for future annual meetings.
Who Can Attend The Annual Meeting?
Attendance (in person and by means of remote communication) at the Annual Meeting will be limited to holders of Company Common Stock on March 25, 2019,23, 2020, the record date, the authorized representative (one only) of an absent stockholder, and invited guests of management.
Where Can I Find Directions To The Annual Meeting At The Company’s Headquarters?
Directions to the Annual Meeting at the Company’s Headquarters are available on our website atconedison.com/shareholders.
| 76 | Consolidated Edison, Inc.Proxy Statement |
| Questions and Answers About the 2020 Annual Meeting and Voting |
How Do I Attend The Annual Meeting Virtually and Submit Questions Or Make Comments?
If you are a registered holder of Company Common Stock (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register in advance to attend the Annual Meeting virtually. To be admitted to the Annual Meeting atwww.meetingcenter.io/249286494, you must enter the control number and the password ED2020 found on your proxy card, Notice of Internet Availability, or e-mail notification. If you hold your shares through a broker, you must register in advance using the instructions below. (See“Questions and Answers About the 2020 Annual Meeting and Voting—Annual Meeting Information—My Shares Are Held Through A Broker, How Do I Register In Advance To Attend, Vote, And Submit Questions Or Make Comments At The Annual Meeting Virtually.”)
If you wish to submit a question or make a comment before the Annual Meeting or during the Annual Meeting, you may log intowww.meetingcenter.io/249286494 and enter your control number and the password ED2020 beginning at 9:30 a.m. Eastern Daylight Time, on May 18, 2020. Once past the login screen, click on the ‘‘messages’’ icon at the top of the screen and type your question or comment in the “Ask a question” field and then click to submit.
Questions or comments pertinent to meeting matters will be addressed during the Annual Meeting, subject to time constraints. Questions or comments that relate to proposals that are not properly before the Annual Meeting, relate to matters that are not proper subject for action by stockholders, are irrelevant to the Company’s business, relate to materialnon-public information of the Company, relate to personal concerns or grievances, are derogatory to individuals or that are otherwise in bad taste, are in substance repetitious of a question or comment made by another stockholder, or are not otherwise suitable for the conduct of the Annual Meeting as determined in the sole discretion of the Company, will not be answered. Additional rules of conduct and procedures may apply during the Annual Meeting and will be available for you to review in advance of the meeting atwww.meetingcenter.io/249286494. Any questions pertinent to meeting matters that cannot be answered during the Annual Meeting due to time constraints will be posted online and answered atconedison.com/shareholders. The questions and answers will be available as soon as practical after the meeting and will remain available until one week after posting.
My Shares Are Held Through A Broker, How Do I Register In Advance To Attend, Vote, And Submit Questions Or Make Comments At The Annual Meeting Virtually?
If you hold your shares through a broker, you must register in advance to attend, vote, and submit questions or comments at the Annual Meeting virtually. To register to attend the Annual Meeting, you must submit proof of your proxy power (legal proxy) reflecting your Company Common Stock holdings along with your name ande-mail address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m. Eastern Daylight Time, on May 13, 2020. You will receive a confirmation of your registration bye-mail after Computershare receives your registration materials.
Requests for registration should be directed to Computershare at the following:
| By e-mail: | Forward thee-mail from your bank or broker, or attach an image of your legal proxy tolegalproxy@computershare.com. |
| By mail: | Computershare |
Consolidated Edison Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001
| Consolidated Edison, Inc.Proxy Statement | 77 |
| Questions and Answers About the 2020 Annual Meeting and Voting |
What If I Have Trouble Accessing The Annual Meeting Virtually?
The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong WiFi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start time.
Do I Need A Ticket To Attend The Annual Meeting?Meeting Held At The Company’s Headquarters?
Yes, you will need an admission ticket and proof of ownership of Company Common Stock on the record date to enter the meeting.meeting held at 4 Irving Place, New York, New York 10003.
If you received a printed copy of the Proxy Materials and you are a registered holder of Company Common Stock, your proxy card serves as your admission ticket to the Annual Meeting.
| ◾ | If you received a printed copy of the Proxy Materials and you are a registered holder of Company Common Stock, your proxy card serves as your admission ticket to the Annual Meeting. |
If you received a printed copy of the Proxy Materials and you hold your shares through a broker or through an employee plan, please bring to the Annual Meeting a copy of a brokerage or other statement reflecting your stock ownership as of the record date.
| ◾ | If you received a printed copy of the Proxy Materials and you hold your shares through a broker, please bring to the Annual Meeting a copy of a brokerage or other statement reflecting your stock ownership as of the record date. |
If you received a Notice of Internet Availability, that Notice of Internet Availability serves as your admission ticket to the Annual Meeting.
| ◾ | If you received a Notice of Internet Availability, that Notice of Internet Availability serves as your admission ticket to the Annual Meeting. |
If you received ane-mail notification, please access the Proxy Materials by clicking on the link provided in thee-mail notification and follow the instructions for downloading a copy of your admission ticket.
| ◾ | If you received ane-mail notification, please access the Proxy Materials by clicking on the link provided in thee-mail notification and follow the instructions for downloading a copy of your admission ticket. |
You may be asked to present valid picture identification to gain entrance to the Annual Meeting. Any person claiming to be an authorized representative of a stockholder must, upon request, produce written evidence of the authorization.
Are There Any Special Attendance Procedures?Procedures If I Attend The Annual Meeting In Person?
In order to assure the holding of a fair and orderly meeting and to accommodate as many stockholders as possible who may wish to speak at the Annual Meeting, management will limit the general discussion portion of the meeting and permit only stockholders or their authorized representatives to address the meeting. No signs, banners, placards, handouts, cameras, recording equipment, nor similar items may be brought to the meeting room. Many cellular phones havebuilt-in digital cameras, and, while these phones may be brought into the Annual Meeting, the camera function may not be used at any time. Recording of the Annual Meeting is prohibited. Suitcases, briefcases, packages, and other items may be subject to inspection.
While we currently intend to permit stockholders to attend the Annual Meeting in person, we are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials may issue on the novel coronavirus,COVID-19. We may impose additional procedures or limitations on the in person Annual Meeting attendees or may decide to hold the Annual Meeting in a different location or solely by means of remote communication (i.e., a virtual-only meeting), if allowed by applicable law. We plan to announce any such updates by press release and posting on our proxy website (conedison.com/shareholders), and we strongly encourage you to check this website prior to the Annual Meeting if you plan to attend in person. Note that any decision to proceed with a virtual-only meeting this year will not mean we will utilize a virtual-only format or any means of remote communication for future annual meetings.
|
| STOCKHOLDER PROPOSALS FOR THE |
PROPOSALS FOR INCLUSION IN 2020 PROXY STATEMENTProposal for Inclusion in 2021 Proxy Statement
In order to be included in the Proxy Statement and form of proxy relating to the Company’s 20202021 annual meeting of stockholders, stockholder proposals must be received by the Company at its principal executive office at 4 Irving Place, New York, New York 10003, Attention: Vice President and Corporate Secretary, by the close of business on December 10, 2019.7, 2020.
DIRECTOR NOMINATIONS FOR INCLUSION IN 2020 PROXY STATEMENT (PROXY ACCESS)Director Nomination for Inclusion in 2021 Proxy Statement (Proxy Access)
Pursuant to the Company’sBy-laws, a stockholder (or a group of up to 20 stockholders) who has owned at least three percent (3%)3% of the Company’s shares for at least three years and has complied with the other requirements set forth in theBy-laws may request that the Company include director nominees (up to the greater of two nominees or twenty
percent (20%)20% of the Board) for election in the Company’s 20202021 Proxy Statement and form of proxy relating to the Company’s 20202021 annual meeting of stockholders. The nominations must include the information specified inthe By-laws and must be received by the Vice President and Corporate Secretary of the Company at its principal executive office no earlier than November 10, 20197, 2020 and no later than December 10, 2019.7, 2020.
OTHER PROPOSALS OR NOMINATIONS TO COME BEFORE THE 2020 ANNUAL MEETINGOther Proposals or Nominations to Come Before the 2021 Annual Meeting
Under the Company’sBy-laws, written notice of any proposal to be presented by any stockholder or any other person to be nominated by any stockholder for election as a Director must include the information specified inthe By-laws and must be received by the Vice President and Corporate Secretary of the Company at its principal executive office no earlier than January 21, 202018, 2021 and no later than February 20, 2020.17, 2021.
| OTHER MATTERS TO COME BEFORE THE MEETING |
Management intends to bring before the meeting only the election of Directors (Proposal No. 1) and Proposals No. 2 and 3 and knows of no matters to come before the meeting other than the matters set forth herein. If other matters or motions come before the meeting, it is the intention of the persons named in the accompanying form of proxy to vote such proxy in accordance with their judgment on such matters or motions, including any matters dealing with the conduct of the meeting.
By Order of the Board of Directors, |
|
Sylvia V. Dooley |
Vice President and Corporate Secretary |
Dated: April |
| Consolidated Edison, Inc.Proxy Statement | 79 |
| APPENDIX A |
For 2019, the operating objectives for Con Edison of New York are shown in the following table:
| Con Edison of New York Operating Objectives(1) | Unit of Measure | Target | Actual | |||||||
Employee and Public Safety | ||||||||||
◾ Injury/Illness Incidence Rate | Rate | £ 1.0 | 1.26 | |||||||
◾ SignificantHigh-Hazard Injuries | # | 0 | 5 | |||||||
◾ Public Safety-Related Equipment Failures | # | £ 170 | 151 | |||||||
◾ Motor Vehicle Collisions | # | £ 284 | 311 | |||||||
◾ Operating Errors | # | £ 64 | 38 | |||||||
Environment and Sustainability | ||||||||||
◾ Dielectric Fluid Released to the Environment | Gallons and milestone | | £ 22,400 and meet milestone | | 29,242 and milestone achieved | | ||||
◾ Late Spill Notifications | # | £ 9 | 2 | |||||||
◾ SF6 Gas Emissions | Pounds | £ 8,500 | 6,984 | |||||||
◾ Electric Energy Efficiency (MWh Reductions) | # | ³ 391,000 | 561,347 | |||||||
◾ Gas Energy Efficiency (Dth Reduction) | # | ³ 480,00 | 546,209 | |||||||
Operational Excellence | ||||||||||
◾ Steam System Reliability Measures | # | 2 | 2 | |||||||
◾ Reliability Performance Measures | % | ³ 98.5 | 96.1 | |||||||
◾ Gas Made Safe Time | % | ³ 88 | 95.6 | |||||||
◾ Workable Gas Leak Inventory | # | £ 20 | 5 | |||||||
◾ Cyber Security | # | 0 | 0 | |||||||
◾ Physical Security | # | 0 | 0 | |||||||
Customer Experience | ||||||||||
◾ Customer Project Completion Dates | % | ³ 90 | 94.5 | |||||||
◾ First Call Resolution | % | ³ 83.1 | 82.9 | |||||||
◾ Estimated Time for Restoration | % | ³ 60 | 68.6 | |||||||
◾ Customer Appointments | % | ³ 95 | 99.1 | |||||||
Footnote:
| (1) | Operating objectives were weighted equally. |
| 80 | Consolidated Edison, Inc.Proxy Statement |
 | Appendix A |
For 2019, the operating objectives for Orange & Rockland are shown in the following table:
| Orange & Rockland Operating Objectives(1) | Unit of Measure | Target | Actual | |||||||
Employee and Public Safety | ||||||||||
◾ Injury/Illness Incidence Rate | Rate | £ 1.00 | 1.46 | |||||||
◾ SignificantHigh-Hazard Injuries | # | 0 | 0 | |||||||
◾ Motor Vehicle Collisions | # | £ 38 | 44 | |||||||
◾ Operating Errors | # | £ 20 | 14 | |||||||
◾ Damage Prevention | Rate | £ 2.20 | 1.34 | |||||||
Environment and Sustainability | ||||||||||
◾ Written Notice of Violations | # | 0 | 1 | |||||||
◾ Reduce Customer Emissions (Energy Efficiency) | # | ³ 43,400 | 53,373 | |||||||
◾ Gas Energy Efficiency (Dth Reductions) | # | ³ 26,860 | 31,100 | |||||||
◾ Gas Leak Inventory | # | £ 40 | 23 | |||||||
◾ Solar Connections— CompleteInitial Screening CompleteCoordinated Review | % % | | ³ 92 ³ 80 |
| | 99.9 100 |
| |||
Operational Excellence | ||||||||||
◾ Outage Frequency | # | £ 1.20 | 1.03 | |||||||
◾ Outage Duration | # | £ 115.5 | 102.5 | |||||||
◾ Gas Made Safe Time | % | ³ 73 | 87 | |||||||
◾ Cyber Security | # | 0 | 0 | |||||||
◾ Physical Security | # | 0 | 0 | |||||||
Customer Experience | ||||||||||
◾ Customer Service Performance Incentive Mechanism | # | 3 | 3 | |||||||
◾ Customer Service Appointments Kept | % | ³ 95 | 95 | |||||||
◾ New Business Electric Services Energized | % | ³ 94 | 96 | |||||||
◾ First Call Resolution | % | ³ 84 | 84 | |||||||
◾ Storm Scorecard | # | ³ 90 | 97 | |||||||
Footnote:
| (1) | Operating objectives were weighted equally. |
| Appendix A |
For 2019, the operating objectives for Clean Energy Businesses and Con Edison Transmission are shown in the following tables:
| Clean Energy Businesses Operating Objectives(1) | Unit of Measure | Target | Actual | |||||||
Employee and Public Safety | ||||||||||
◾ Injury/Illness Incident Rate | Rate | 0.8 | 0.2 | |||||||
Environment and Sustainability | ||||||||||
◾ Renewable Portfolio Production | % | 100 | 98.1 | |||||||
◾ Significant Risk Limit Violations | # | 0 | 0 | |||||||
Operational Excellence | ||||||||||
◾ Annual Availability for Financed Projects | % | 99 | 99.8 | |||||||
◾ Retail Energy Services Profit Margin | % | 22 | 23 | |||||||
◾ Material Financial Weaknesses or Significant Deficiencies and Ethical Violation | # | 0 | 0 | |||||||
◾ Complete Required Training | % | 100 | 100 | |||||||
◾ Timely Recruiting | % | 85 | 95 | |||||||
◾ Implement IT Strategic Plan | # | 3 | 3 | |||||||
◾ Cyber Security Performance | % | 90 | 93 | |||||||
Footnote:
| (1) | Operating objectives were weighted equally. |
| Con Edison Transmission Operating Objectives(1) | Unit of Measure | Target | Actual | |||||||
Employee and Public Safety | ||||||||||
◾ Injury/Illness Incident Rate | Rate | 0 | 0 | |||||||
◾ Operating Incidents | # | 0 | 0 | |||||||
Environment and Sustainability | ||||||||||
◾ Late Spill Notifications | # | 0 | 0 | |||||||
◾ Regulatory Violations | # | 0 | 5 | |||||||
Operational Excellence | ||||||||||
◾ Cyber Security Plan | Completion | Y | Y | |||||||
◾ Subsurface Integrity Plan | Completion | Y | Y | |||||||
◾ Pipeline Integrity Plan | Completion | Y | Y | |||||||
◾ Construction Oversight Plan | Completion | Y | Y | |||||||
◾ Material Financial Weaknesses or Significant Deficiencies | # | 0 | 0 | |||||||
◾ Complete Required Training | % | 100 | 100 | |||||||
Footnote:
| (1) | Operating objectives were weighted equally. |
| 82 | Consolidated Edison, Inc.Proxy Statement |
01—01 - George Campbell, Jr. 02—02 - Ellen V. Futter 03—03 - John F. Killian 06—06 - Armando J. Olivera 07—07 - Michael W. Ranger 08—08 - Linda S. Sanford For Against Abstain For Against Abstain 1 U P X 04—04 - John McAvoy 09—09 - Deirdre Stanley 05—05 - William J. Mulrow 10—10 - L. Frederick Sutherland Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 02ZUVE + +036SAD Proposals — The Board of Directors recommends a vote FOR A all nominees listed, A and FOR Proposals 2 and 3. 2. Ratification of appointment of independent accountants. 3. Advisory vote to approve named executive officer compensation. 1. Election of Directors: For Against Abstain Please sign exactly as name(s) appears hereon. Full title of one signing in representative capacity should be clearly designated after signature. Names of all joint holders should be written even if signed by only one. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q Consolidated Edison, Inc. Annual Meeting of Stockholders Proxy Card For Against Abstain 000004 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 ADD 5 ADD 6 ENDORSEMENT_LINE______________ SACKPACK_____________ 1234 5678 9012 345 MMMMMMMMM MMMMMMMMMMMMMMM 4 0 3 1 4 3 MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE 140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND C 1234567890 J N T C123456789 MMMMMMMMMMMM MMMMMMM 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext 000000000.000000 ext If no electronic voting, delete QR code and control # Δ â‰^ You may vote online or by phone instead of mailing this card. Online Go to www.investorvote.com/ED or scan the QR code — login details are located in the shaded bar below. Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/ED. Phone Call toll free1-800-652-VOTE (8683) within the USA, US territories and Canada. Votes submitted online or by phone must be received by 1:00 a.m., EDT, on Monday, May 20, 2019. Your vote matters – here’s how to vote!
Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/ED qIF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q C Non-Voting Items + + Change of Address — Please print new address below. Comments — Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting of Stockholders. CONSOLIDATED EDISON, INC. COMMON STOCK THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints John F. Killian, John McAvoy and Michael W. Ranger and each or any of them with power of substitution, proxies to vote all stock of the undersigned (including any shares held through the Company’s Automatic Dividend Reinvestment and Cash Payment Plan) at the Annual Meeting of Stockholders on Monday, May 20, 201918, 2020 at 10:00 a.m. at the Company’s Headquarters, 4 Irving Place, New York, NY and at http://www.meetingcenter.io/249286494, or at any adjournments or postponements thereof, as specified on the reverse side in the election of Directors and on the proposals, all as more fully set forth in the proxy statement, and in their discretion on any matters that may properly come before the meeting or at any adjournments or postponements thereof. Your vote for the election of Directors may be indicated on the reverse side. Nominees are: 01—01 - George Campbell, Jr., 02—02 - Ellen V. Futter, 03—03 - John F. Killian, 04—04 - John McAvoy, 05—05 - William J. Mulrow, 06—06 - Armando J. Olivera, 07—07 - Michael W. Ranger, 08—08 - Linda S. Sanford, 09—09 - Deirdre Stanley, and 10—10 - L. Frederick Sutherland. THIS PROXY WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE, BUT IF NO CHOICE IS MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED ABOVE (PROPOSAL 1), AND “FOR” PROPOSALS 2 AND 3. (Items to be voted appear on reverse side.) 20192020 Annual Meeting Admission Ticket 20192020 Annual Meeting of Consolidated Edison, Inc. Stockholders Monday, May 20, 2019,18, 2020, 10:00 a.m. EDT Consolidated Edison, Inc. 4 Irving Place, New York, NY 10003 Available via live webcast at http://www.meetingcenter.io/249286494 The password for this meeting is ED2020. To access the virtual meeting, you must have the information that is printed in the shaded bar located on the front of this form. This ticket admits only the named stockholder(s). Please bring this admission ticket and a proper form of identification with you if attending the Annual Meeting of Stockholders. YOUR VOTE IS IMPORTANT! Whether or not you planStockholders in person. While we currently intend to permit stockholders to attend the Annual Meeting of Stockholders, please promptly vote by telephone, through the Internet or by completing and returning the attached proxy card. Voting early will not prevent you from voting in person, atwe are sensitive to the public health and travel concerns our stockholders may have and recommendations that public health officials may issue in light of the evolving novel coronavirus, COVID-19, situation. We may impose additional procedures or limitations on meeting attendees or may decide to hold the Annual Meeting in a different location or solely by means of Stockholdersremote communication (i.e., a virtual-only meeting), if allowed by applicable law. We plan to announce any such updates by press release and posting on our proxy website (conedison.com/shareholders), and we strongly encourage you to check this website prior to the Annual Meeting if you wishplan to do so. Your proxy is revocableattend in accordance withperson. We also strongly encourage all attendees to review guidance from public health authorities regarding COVID-19 and, in particular, if you have been exposed or are at risk for exposure to COVID-19, we encourage you to attend the procedures set forthAnnual Meeting by means of remote communication. YOUR VOTE IS IMPORTANT! We strongly recommend that you vote in advance of the proxy statement.Annual Meeting, even if you plan to attend in person or remotely.
