Filed by the Registrant [X] | ||||
Filed by a Party other than the Registrant [ ] | ||||
Check the appropriate box: | ||||
[ ] | Preliminary Proxy Statement | |||
[ ] | Confidential, Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
[X] | Definitive Proxy Statement | |||
[ ] | Definitive Additional Materials | |||
[ ] | Soliciting Material Pursuant to §240.14a-12 |
Southern California Edison Company | ||
(Name of Registrant as Specified In Its Charter) | ||
(Name of Person(s) Filing Proxy Statement, if |
Payment of Filing Fee (Check the appropriate box): | ||||
[X] | No fee required. | |||
[ ] | Fee computed on table below per Exchange Act Rules 14a-6(i) | |||
1) | Title of each class of securities to which transaction applies: | |||
2) | Aggregate number of securities to which transaction applies: | |||
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |||
4) | Proposed maximum aggregate value of transaction: | |||
5) | Total fee paid: | |||
[ ] | Fee paid previously with preliminary | |||
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the | |||
1) | Amount | |||
2) | Form, Schedule or Registration Statement No.: | |||
3) | Filing Party: | |||
4) | Date Filed: | |||
Edison International andSouthern California Edison Company
|
Notice of Annual Meetingto be held on Thursday, April 23, 2015
|
March 13, 201517, 2017
Dear Fellow Shareholder:
We are pleased to invite you to attend the Edison International and Southern California Edison Company Annual Meeting of Shareholders to be held on Thursday, April 23, 2015,27, 2017, at 9:00 a.m., Pacific Time, at the Hilton Los Angeles/San Gabriel Hotel, 225 West Valley Blvd., San Gabriel, California 91776. During the meeting, we will report on the Company’s strategy and performance, and provide an opportunity for shareholders to engage in a dialogue with management.
Proxy Highlights
The Joint Proxy Statement includes information about our corporate governance and executive compensation program. In particular, Iwe would like to direct your attention to the following issuesmatters discussed in the proxy statement:Proxy Statement:
● |
|
| |
● | Our key corporate governance attributes (page 2); |
● | Our leadership transition and separation of the Chair and Chief Executive Officer roles (pages 2 and 9); |
● | Our Board oversight of cybersecurity and environmental and social issues |
● | Our engagement with major shareholders on our corporate governance, |
|
Our Annual ReportYour Vote is Important
The proxy materials are being mailed or provided to Shareholders includes informationyou via the Internet beginning on our 2014 financial performance. Notably:
| |
| |
|
March 17, 2017. We hope that you will participate in the Annual Meeting by attending and/or voting. Voting by any of the available methods will ensure that you are represented at the Annual Meeting, even if you are not present. You may vote your proxy via the Internet, by telephone, or by mail. Please follow the instructions on the Notice of Internet Availability of proxy materials or Proxy MaterialsCard that you received in the mail and/or your proxy card.mail.
If you receive more than one copy of the Notice or more than one proxy card,Proxy Card, it means your shares are held in more than one account. You should vote the shares in all of your accounts.Please note that to vote your shares by Internet or telephone you will need the control number on your Notice or proxy card.Proxy Card.
Your vote is very important to us and to our business. Voting promptly will save us the cost of additional solicitations. If you vote by Internet or telephone, please cast your vote by the April 2226 deadline (April 2125 for shares held in the Edison 401(k) Savings Plan).
Thank you very much for your continued interest in our business.
Sincerely,
William P. Sullivan | Pedro J. Pizarro | |
Chair of the Board | President and Chief Executive Officer | |
Edison International | Edison International |
|
NOTICE OF 2017 ANNUAL MEETING OF Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on April 27, 2017: The Proxy Statement and Annual Report are available atwww.edison.com/annualmeeting. Directions to the Annual Meeting and information on how to vote your proxy are included in the Proxy Statement. 5 EIX and SCE shareholders may also vote on any other matters properly brought before the meeting. RECORD DATE The EIX and SCE Boards of Directors are soliciting proxies from you for use at the Annual Meeting, or at any adjournment or postponement of the meeting. Proxies allow designated individuals to vote on your behalf at the Annual Meeting.The Edison International (“EIX”) and Southern California Edison Company (“SCE”) Annual Meeting of Shareholders will be held on Thursday, April 23, 2015, at 9:00 a.m., Pacific Time, at the Hilton Los Angeles/San Gabriel Hotel, 225 West Valley Blvd., San Gabriel, California 91776, for the purpose of considering the following matters:For EIX and SCE shareholders:SHAREHOLDERS1.Meeting InformationDate: Thursday, April 27, 2017 Time: 9:00 a.m., Pacific Time Location: Hilton Los Angeles/San Gabriel Hotel 225 West Valley Blvd. San Gabriel, California 91776 Items To Be Voted On Election of nine Directors to the EIX By Edison
International (“EIX”)
ShareholdersBy Southern California
Edison Company
(“SCE”) ShareholdersBoard and ten Directors to the SCE Board. The names of the Director nominees are as follows:
Recommendation 1 Jagjeet S. BindraElection of DirectorsLinda G. Stuntz9 Nominees 10 Nominees Vanessa C.L. Chang ✓ ✓ For Louis Hernandez, Jr. ✓ ✓ For James T. Morris ✓ ✓ For Kevin M. Payne ✓ For Pedro J. Pizarro ✓ ✓ For Linda G. Stuntz ✓ ✓ For William P. Sullivan ✓ ✓ For Theodore F. Craver, Jr.Ellen O. Tauscher ✓ ✓ For Pedro J. Pizarro*Peter J. Taylor ✓ ✓ For Richard T. Schlosberg, IIIBrett White ✓ ✓ For * Pedro J. Pizarro is a director nominee for the SCE Board only.2 2.Ratification of the Appointment of the Independent Registered Public
Accounting Firm.Firm✓ ✓ For 3.3 Advisory Vote to Approve the Company’s Executive Compensation.Compensation✓ ✓ For 4 For EIX shareholders only:Advisory Vote on the Frequency of Say-on-Pay Votes ✓ ✓ 1 Year 4.Shareholder Proposal Regarding Recovery of Unearned Management Bonuses.Shareholder Proxy Access Reform ✓ Against The EIX and SCE Boards of Directors recommend you vote “FOR” Items 1 through 3, and the EIX Board of Directors recommends you vote “AGAINST” Item 4.
Only shareholders of record at the close of business on February 26, 2015March 3, 2017 are entitled to receive notice of and to vote at the Annual Meeting. Directions to the Annual Meeting are on the last page of the Joint Proxy Statement, which can be viewed atwww.edison.com/annualmeeting.For the Boards of Directors,Barbara E. MathewsVice President, Associate General Counsel,Chief Governance Officer and Corporate SecretaryEdison InternationalSOLICITATION OF PROXIESSouthern California Edison CompanyDated: March 13, 2015Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on April 23, 2015: The Proxy Statement and Annual Report are available atwww.edison.com/annualmeeting. The proxy materials are being mailed or made available to you via the Internet beginning on March 13, 2015.The mailing address of the Company’s principal executive offices is 2244 Walnut Grove Avenue, Rosemead, California 91770.Terms Used in this Proxy StatementHolding shares as a “registered shareholder” or “of record” means your shares are registered in your own name on the Company’s records. Shares held in your Dividend Reinvestment and Direct Stock Purchase Plan account are included.Holding shares in Dated: March 17, 2017“street name” means your shares are held in a brokerage account or through a trustee, custodian or other third party (referred to as a nominee), and you are consideredFor the beneficial owner of those shares. Your name does not appear on the Company’s records as a shareholder.
“401(k) Plan” is the employee benefit plan known as the Edison 401(k) Savings Plan through which participants may hold interests in EIX shares through the EIX Stock Fund.
“401(k) Plan shareholders” are participants in the 401(k) Plan who hold interests in EIX shares through the EIX Stock Fund.
“Annual Meeting” means the EIX and SCE annual meetings of shareholders, which are held jointly.
“Annual Report” means the EIX and SCE 2014 combined annual report on Form 10-K, which is prepared and filed with the SEC jointly.
“Board” means both the EIX and SCE Boards of Directors, unless otherwise indicated.
Barbara E. Mathews“Committee” means the applicable Board committees of both EIXVice President, Associate General Counsel,
Chief Governance Officer and SCE, unless otherwise indicated.Corporate Secretary
“Company” means both EIX and SCE, unless otherwise indicated.
“Edison Energy”International is a wholly-owned subsidiary of EIX and the holding company for EIX’s competitive businesses in emerging sectors of the electric industry.
“EIX” is Edison International.
“EME” is Edison Mission Energy, an indirect wholly-owned subsidiary of EIX. EME was an independent power producer that filed for bankruptcy in December 2012. In April2014, substantially all of EME’s assets and liabilities were discharged in bankruptcy or transferred to third parties.
“ERISA” is the Employee Retirement Income Security Act of 1974.
“Notice of Internet Availability” or “Notice” is the notice regarding the availability on the Internet of the Company’s proxy materials, which was mailed to most shareholders in lieu of printed copies of the proxy materials, as permitted under Securities and Exchange Commission rules.
“Proxy card” means either a proxy card, which you may receive if you are a registered shareholder, or a voting instruction form, which you may receive if you hold shares in street name or are a 401(k) Plan shareholder.
“Proxy Statement” means the EIX and SCE proxy statements, which are prepared and filed with the SEC jointly.
“SCE” is Southern California Edison Company.Company
ii
Items To Be Voted OnOur Business, Strategy, and Financial Highlights
EIX’s core business is conducted by its subsidiary SCE, a rate-regulated electric utility that supplies electric energy to approximately 15 million people in a 50,000 square-mile area of southern California. Our mission is to safely provide customers reliable, affordable and clean electricity. Our strategy has three key elements:
Invest in our infrastructure to maintain a safe and reliable transmission and distribution network. | |||||
Modernize the electric grid to enable increased penetration of | |||||
Promote operational and service excellence to enhance performance in the areas of |
This strategy is intended to provide a foundation for long-term sustainable growth and shareholder value.
Significant results for EIX include:
● | 2016 consolidated core earnings of | ||||
One-year (2016) total shareholder return (“TSR”) of24.9% exceeded the | |||||
Three-year (2014-2016) TSR of | |||||
● | Five-year (2012-2016) TSR of99.8% exceeded the Philadelphia Utility Index TSR of56.6%; and | ||||
● | Annual dividend rate has grown from $1.30 per share in 2012 to $2.17 per share in 2017. |
Our Director Nominees
Our director nominees reflect the diversity of ethnicity, gender, skills, background and qualifications valued by our Board. The range of tenure on our Board brings a variety of perspectives to strategic, financial and operational deliberations.
Director | Director Since | Industry Experience | Ethnicity/Gender | Independent | Committee Memberships | Other Public Company Boards | Mandatory Retirement Date | |||||||
Jagjeet S. | 2010 | Energy | Asian/Male | Yes | Audit | 1 | 2020 | |||||||
Bindra | FOSO | |||||||||||||
Vanessa C.L. | 2007 | Accounting/ | Asian/Female | Yes | Audit | 2 | 2025 | |||||||
Chang | Real Estate | CEP | ||||||||||||
Theodore F. | 2007 (EIX) | Electric Utilities | White/Male | No | None | 1 | N/A | |||||||
Craver, Jr. | 2008 (SCE) | |||||||||||||
Pedro J. | 2014 | Electric Utilities | Hispanic/Male | No | None | 0 | N/A | |||||||
Pizarro* | ||||||||||||||
Richard T. | 2002 | Communications/ | White/Male | Yes | CEP | 1 | 2017 | |||||||
Schlosberg, III | Publishing | NCG | ||||||||||||
Linda G. | 2014 | Law | White/Female | Yes | FOSO | 2 | 2027 | |||||||
Stuntz | NCG | |||||||||||||
William P. | N/A | Information Technology/ | White/Male | Yes | None | 1 | 2022 | |||||||
Sullivan | Biotechnology | |||||||||||||
Ellen O. | 2013 | Government/Finance | White/Female | Yes | Audit | 3 | 2024 | |||||||
Tauscher | FOSO | |||||||||||||
Peter J. | 2011 | Finance | African American/ | Yes | Audit | 0 | 2031 | |||||||
Taylor | Male | CEP | ||||||||||||
Brett | 2007 | Commercial | White/Male | Yes | CEP | 2 | 2032 | |||||||
White** | Real Estate | NCG |
*Mr. Pizarro is a director nominee for the SCE Board only
**Mr. White is the Lead Director of EIX and SCE
Name | Director Since | Industry Experience | Ethnicity/ Gender | Independent | Committee Memberships | Other Public Co. Boards | Mandatory Retirement Date | |||||||||
Vanessa C.L. Chang | 2007 | Accounting/ | Asian/ | Yes | Audit | 3 | 2025 | |||||||||
Real Estate | Female | Compensation | ||||||||||||||
Louis Hernandez, Jr. | 2016 | Multimedia/ | Hispanic/ | Yes | Audit | 1 | 2038 | |||||||||
Technology | Male | FOSO | ||||||||||||||
James T. Morris | 2016 | Insurance | White/ | Yes | Audit | 1 | 2032 | |||||||||
Male | Compensation | |||||||||||||||
Kevin M. Payne | 2016 | Electric Utilities | White/ | No | None | 0 | N/A | |||||||||
(SCE Nominee Only) | Male | |||||||||||||||
Pedro J. Pizarro | 2014 | Electric Utilities | Hispanic/ | No | None | 0 | N/A | |||||||||
Male | ||||||||||||||||
Linda G. Stuntz | 2014 | Law | White/ | Yes | FOSO | 1 | 2027 | |||||||||
Female | Governance | |||||||||||||||
William P. Sullivan | 2015 | Information | White/ | Yes | FOSO | 1 | 2022 | |||||||||
(EIX Chair) | Technology/ | Male | Governance | |||||||||||||
Biotechnology | ||||||||||||||||
Ellen O. Tauscher | 2013 | Government/ | White/ | Yes | Audit | 2 | 2024 | |||||||||
Finance | Female | FOSO | ||||||||||||||
Peter J. Taylor | 2011 | Finance | African | Yes | Audit | 0 | 2031 | |||||||||
American/ | Compensation | |||||||||||||||
Male | ||||||||||||||||
Brett White | 2007 | Commercial | White/ | Yes | Compensation | 0 | 2032 | |||||||||
Real Estate | Male | Governance |
Audit = Audit Committee
CEPCompensation = Compensation and Executive Personnel Committee
FOSO = Finance, Operations and Safety Oversight Committee
NCG
Governance = Nominating/Corporate Governance Committee
| 1 |
Our Leadership Transition Theodore F. Craver, Jr. retired at age 65 from his position as EIX Chairman and Chief Executive Board Characteristics Average Age of EIX Director Nominees 6259Average Tenure of EIX Director Nominees (Number of Years) 5.34Percentage of EIX Director Nominees Who Are Independent 89% Percentage of EIX Director Nominees Who Are Female 33% Percentage of EIX Director Nominees From Diverse Ethnic Backgrounds 33%44%Board Oversight Strong Independent Lead Director RoleChair of the EIX BoardYes✓Independent Directors Meet Regularly Without Management Present Yes✓Key Board Committees Composed Solely of Independent Directors Yes✓Board Oversight of Key Enterprise Risks, Including Cybersecurity Yes✓Board Oversight of Political Contributions Yes✓Annual Board and Committee Evaluations Yes✓Executive Compensation Majority of Executive Compensation “At Risk” and Aligned with Shareholder Interests Yes✓Quantitative Targets for Most Annual Incentive Plan Goals ✓ Incentive Compensation Clawback Policy Yes✓Anti-Hedging and Anti-Pledging Policies Yes✓Stock Ownership Guidelines for Directors and Executive Officers Yes✓Stock Holding Requirements for Executive Officers ✓ Shareholder Rights Annual Election of Directors Yes✓Majority Voting for Directors in Uncontested Elections Yes✓Threshold for Shareholders to ConveneCall Special Meetings10% Shareholder Ability to Act By Written Consent Yes✓Annual Advisory Vote on Executive Compensation Yes✓Proxy Access for Director Elections ✓ 20142016 MeetingsNumber of Board Meetings 11 Number of Independent Director Executive Sessions 46Percentage of Current DirectorsEIX Director Nominees Who Attended >75% of Applicable Board and Committee Meetings100% Percentage of Current DirectorsEIX Director Nominees Who Attended the Annual Meeting100%89%Percentage of EIX Shareholder Votes Cast in Favor of Executive Compensation at the94%Annual Meeting96% Compensation Program
Please refer toOfficer (“CEO”), effective September 30, 2016. In anticipation of Mr. Craver’s retirement, the Compensation SummaryBoard established a special committee on Board leadership and regularly discussed succession planning at Board meetings.During the succession planning process, the EIX Board determined that separating the roles of the chair and CEO upon Mr. Craver’s retirement would be in the Compensation Discussion and Analysis section below for an overviewbest interests of our shareholders.
Effective upon Mr. Craver’s retirement, the Board appointed independent director William P. Sullivan as the non-executive Chair of the EIX Board and elected Pedro J. Pizarro to succeed Mr. Craver as EIX CEO. To facilitate this leadership transition, effective June 1, 2016, the Board elected Mr. Pizarro as EIX President and Kevin M. Payne as SCE CEO, succeeding Mr. Pizarro.
Our Shareholder Engagement
We seek and value input from our shareholders. In 2016, we engaged with our major institutional shareholders to discuss the Company’s corporate governance, executive compensation, program.and business strategy. In particular, we sought feedback from shareholders regarding our proxy access framework and sustainability disclosure. Management shared the feedback received from these discussions with the Board and relevant Board committees.
2 |
|
Q: What is included in the proxy materials?
A: The proxy materials include the Notice of Annual Meeting and Proxy Statement, the Annual Report, the Proxy card, and the Notice of Internet Availability.
Q: Why did the Company mail a Notice of Internet Availability instead of a printed copy of the materials?
A: Making the proxy materials available to shareholders via the Internet saves us the cost of printing and mailing documents and reduces the impact of the Annual Meeting on the environment.
If you received only a Notice of Internet Availability, you will not receive a printed copy of the proxy materials unless you request it. The Notice includes instructions on how to access and review the proxy materials, submit your proxy via the Internet, and request a printed copy of proxy materials by mail.
Q: Why did some shareholders receive printed or email copies of the proxy materials?
A: We are distributing printed copies of the proxy materials to shareholders who have previously requested printed copies. We are providing shareholders who have previously requested electronic delivery of proxy materials with an email containing a link to the website where the materials are available via the Internet.
Q: Who can vote?
A: All owners of voting stock at the close of business on February 26, 2015 (the record date) are entitled to vote.
On each Item of EIX business, holders of EIX Common Stock are entitled to one vote per share. On each Item of SCE business, holders of SCE Cumulative Preferred Stock are entitled to six votes per share and EIX, as the holder of SCE Common Stock, is entitled to one vote per share. All shares of SCE Common and Cumulative Preferred Stock vote together as one class.
Q: Who can attend the Annual Meeting?
A: All shareholders on the record date, or their duly appointed proxies, may attend the meeting. All shareholders will be required to pass through a security inspection area (where all packages will be subject to search) and check in at the registration desk at the meeting. The registration desk will open at 8:00 a.m. and meeting room doors will open at8:30 a.m., Pacific Time. For the privacy of other attendees and to avoid distraction, shareholders will not be permitted to use cameras or recording devices at the meeting.
If you are a registered shareholder or a 401(k) Plan shareholder, we will be able to verify your share ownership from the share register with proper identification. No admission pass is required. To be admitted as a proxy for a registered shareholder, you must provide a written authorization from the registered shareholder.
If your shares are held in street name, you will need to bring proper identification and a letter or an account statement from your broker or other nominee reflecting your stock ownership as of the record date. To be admitted as a proxy for a broker, you must provide a written authorization from the broker together with a letter or account statement reflecting the broker’s ownership as of the record date. If a nominee holds the shares, you must provide a written authorization from the nominee to the broker that is assignable, a written authorization from the broker, and a letter or account statement reflecting the nominee’s ownership as of the record date.
Individual shareholders may bring one guest to the Annual Meeting. A shareholder that is a corporation, partnership, association or other entity is limited to three authorized representatives at the Annual Meeting.
Q: How do I vote?
A: Your vote is important. You can save us the expense of additional solicitations by voting promptly. Please follow the instructions described below:
By Internet – Shareholders who received a Notice of Internet Availability may vote via the Internet by following the instructions on the Notice.Shareholders who received a proxy card by mail may vote via the Internet by following the instructions on the proxy card. When voting via the Internet, all shareholders must have available the control number included on their Notice of Internet Availability or proxy card. Under California law, you may transmit a proxy via the Internet.
By Telephone – Registered or 401(k) Plan shareholders may vote by telephone by calling 1-866-883-3382 and following the recorded instructions. Most shareholderswho hold their shares in street name may vote by phone by calling the number provided by their broker. When voting by telephone, all shareholders must have available the control number included on their Notice of Internet Availability or proxy card.
By Mail – Shareholders who received a printed copy of these proxy materials may vote by mail by completing, signing, dating and returning their proxy cardas indicated.
|
In Person – Registered shareholders may vote in person by attending the Annual Meeting and completing a ballot distributed at the meeting. Shareholders whohold their shares in street name may vote in person by attending the Annual Meeting only if they have requested and received a legal proxy from their broker or other nominee, and deliver the proxy to the inspector of election before or at the meeting. 401(k) Plan shareholders may not cast votes in person at the Annual Meeting.
Q: What is the deadline to vote and how do I change my vote?
A: If you are a registered shareholder, the inspector of election will accept your proxy by telephone or via the Internet until 9:00 p.m., Pacific Time, on April 22, 2015, and by mail if it is received by the inspector of election before the polls close at the Annual Meeting. Registered shareholders may change their vote prior to the deadline by writing to the Corporate Secretary at the address above (so that it is received prior to the deadline), voting again by mail, telephone or the Internet, or voting in person at the Annual Meeting.
If you hold shares in street name, most brokers will accept your proxy by telephone or the Internet until 9:00 p.m., Pacific Time, on April 22, 2015, and by mail if it is received by your broker’s designated agent by 9:00 a.m., Pacific Time, on April 23, 2015. Contact your broker or other nominee before the Annual Meeting to determine the actual deadline and whether and how you can change your vote.
If you are a 401(k) Plan shareholder, your proxy must be received by 9:00 p.m., Pacific Time, on April 21, 2015 for the 401(k) Plan trustee to vote your shares. 401(k) Plan shareholders may change their vote at any time prior to this deadline by voting again. The last vote received within this timeframe will be the vote that is counted.
Q: What does it mean if I get more than one Notice of Internet Availability or proxy card?
A: It indicates that your shares are held in more than one account, such as two brokerage accounts, or you hold both registered and street name shares, or you hold shares in both EIX and SCE. You should use the specific control numbers provided on each Notice of Internet Availability or proxy card and vote each Notice or proxy card to ensure that all of your shares are voted.
Q: What shares are covered by the proxy card?
A: This depends on how you hold your shares, and whether you hold shares in EIX, SCE, or both EIX and SCE.
Registered and 401(k) Plan ShareholdersITEM 1: ELECTION OF DIRECTORS– For EIX registered and 401(k) Plan shareholders, you will receive or have Internet access to a single proxy card that covers all shares of EIX Common Stock in your registered and 401(k) Plan accounts, including fractional shares held in the 401(k) Plan but excluding fractional shares held in the Dividend Reinvestment and Direct Stock Purchase Plan.
For SCE registered shareholders, you will receive or have Internet access to separate proxy cards for each series of preferred stock registered in your name.
If you hold registered shares in both EIX and SCE, you will receive or have Internet access to separate proxy cards for each Company.
Street Name Shareholders – If you hold shares of EIX and/or SCE in street name, you will receive or have Internet access to separate proxy cards from each broker or other nominee.
Q: What happens if I submit my proxy card but do not indicate my voting preference?
A: The proxies and 401(k) Plan trustee will vote “FOR” election of all nominees for director (Item 1), “FOR” ratification of the appointment of the independent registered public accounting firm (Item 2), “FOR” approval of executive compensation (Item 3), and “AGAINST” the shareholder proposal regarding recovery of unearned management bonuses (Item 4, EIX only).
Q: What happens if I submit my proxy card but do not sign or date my card?
A: Those shares will be treated as unvoted shares on all matters and will not be considered as present and part of the quorum.
Q: What happens if I do not vote?
A: If you are a registered shareholder, your shares will not be voted.
If you hold your shares in street name, most brokers or other nominees will only have authority to vote your shares on ratification of the appointment of the independent registered public accounting firm (Item 2). With respect to each of the other Items, most brokers or other nominees will not have authority to vote your shares, and the shares will instead be treated as “broker non-votes.”
If you are a 401(k) Plan shareholder, the 401(k) Plan trustee will vote your shares in the same proportion to the 401(k) Plan shares voted by other 401(k) Plan shareholders, unless contrary to ERISA.
Q: How many votes do you need to hold the meeting?
A: A quorum is required for the Company to conduct business at the Annual Meeting. The presence at the Annual Meeting, in person or by proxy, of shareholders entitled to cast a majority of the votes that all shareholders are entitled to cast constitutes a quorum. All shares represented by a properly signed proxy will be considered as present and part of the quorum, even if you or your broker or other nominee doesn’t vote or abstains on any or all matters.
|
As of the record date, EIX had 325,811,206 shares of Common Stock outstanding, 325,799,900 of which are entitled to cast a total of 325,799,900 votes. Therefore, a quorum for EIX is 162,899,951 shares. SCE had 4,800,198 shares of Cumulative Preferred Stock outstanding and entitled to cast a total of 28,801,188 votes, and 434,888,104 shares of Common Stock outstanding and entitled to cast a total of 434,888,104 votes. Voting together as a class, the SCE shareholders have the right to cast a total of 463,689,292 votes. Therefore, a quorum for SCE is 231,844,647 shares.
Q: What vote is required to adopt each Item at the meeting?
A: A director nominee will be elected and a proposal will be approved if the following two votes are obtained:
| |
|
Q: Who will count the votes?
A: Wells Fargo Bank, N.A., will tabulate the votes and is expected to act as the inspector of election. To protect the confidentiality of votes cast under the 401(k) Plan, 401(k) Plan shareholders’ voting instructions are given directly to Wells Fargo. Wells Fargo will tabulate those votes and provide aggregate voting results directly to the 401(k) Plan trustee. EIX will not have access to any of the 401(k) Plan shareholders’ voting instructions, and 401(k) Plan voting results are only reported to EIX in the aggregate.
Q: How much will this proxy solicitation cost?
A: We have retained D.F. King & Co., Inc. to assist us with the solicitation of proxies and will pay an aggregate fee of $22,500 (EIX $20,000 and SCE $2,500) plus expenses. This fee does not include the costs of printing and mailing the proxy materials. Some of the directors, officers and other employees of the Company also may solicit proxies personally, by mail, by telephone or by other electronic means for no additional compensation. We will also reimburse brokers and other nominees for their reasonable out-of-pocket and other actual expenses for forwarding proxy materials to beneficial owners and obtaining voting instructions.
Q: Whom may I call with questions about the meeting or voting?
A: You may call Wells Fargo at 1-800-347-8625 or visit their Internet website at www.shareowneronline.com.
Q: What happens if additional matters are presented at the Annual Meeting?
A: The Board is not aware of, and does not intend to present, any business to be acted upon at the Annual Meeting other than the Items described in this Proxy Statement. If you submit a proxy and any other matters properly come before the Annual Meeting, including matters incident to the conduct of the Annual Meeting, the persons named as proxy holders will have the discretionary authority to vote your shares in accordance with their best judgment. If any of the nominees for election to the Board become unavailable to stand for election as a director, the proxies will also have the authority to vote for substitute nominees chosen by the Board.
Q: What is the deadline to submit shareholder proposals or other business for the 2016 Annual Meeting?
A: The deadline to submit shareholder proposals for the Company’s 2015 Annual Meeting was November 14, 2014. To be considered for inclusion in the 2016 Proxy Statement, shareholder proposals for the Company’s 2016 Annual Meeting must be received by November 13, 2015.
Shareholders intending to bring any other business before an Annual Meeting, including director nominations, must give written notice to the Corporate Secretary of the business to be presented. The notice must be received at our office within the periods, and with the information and documents, specified in the Bylaws.
Assuming that the 2016 Annual Meeting is held on April 28, 2016, as currently specified by the Bylaws, the period for the receipt by the Corporate Secretary of written notice of other business to be brought by shareholders before the 2016 Annual Meeting, including director nominations, will begin on September 14, 2015 and end on November 13, 2015.
|
Nine directors have been nominated for election to the EIX Board and ten directors have been nominated for election to the SCE Board, each to hold office until the next Annual Meeting. The director nominees of EIX and SCE are the same, except that Mr. PizarroPayne is a nominee for the SCE Board only. Director Luis G. Nogales, our longest-tenured director with 22 years of service on the Board,Directors Jagjeet S. Bindra, who decided not to stand for re-election, and Bradford M. Freeman and Thomas C. Sutton,Richard T. Schlosberg III, who reached the mandatory retirement age of 72, will leave the Board effective as of the date of the Annual Meeting.
A biography of each nominee describing his or her age as of the date of this Proxy Statement, current Board committee service, business experience during the past five years and other relevant business experience is presented below. The biography includes the specific experience, qualifications, attributes, and skills that led the Board to conclude that the nominee should serve as a director. While each nominee’s entire range of experience and skills is considered important, particular experience that contributes to the diversity and effectiveness of the Board is identified below.
| |||
Biographical Information Ms. Chang has been a director of EL & EL Investments, a private real estate investment business, since 1999. She previously served as chief executive officer and president of ResolveItNow.com, an online dispute resolution service, senior vice president of Secured Capital Corporation, a real estate investment bank, and a partner of the accounting firm KPMG Peat Marwick LLP. Ms. Chang is a director of Sykes Enterprises, Incorporated and Transocean Ltd., and a director or trustee of 17 funds advised by the Capital Group and its subsidiaries, of which seven Specific Qualifications and Experience Relevant to the Company Ms. Chang brings to the Board experience in accounting and financial reporting and oversight matters. This experience is valuable in her role as a financial expert on the |
Age64 |
Board Committees ● ●Compensation Other Public Company ● ●Sykes Enterprises, Incorporated ●Transocean Ltd. | |||
Louis Hernandez, Jr. | ||||
Age 50 Director Since2016 Board Committees ●Audit ●FOSO Other Public Company Boards ●Avid Technology, Inc. | Biographical Information Mr. Specific Qualifications and Experience Relevant to the Company Mr. | |||
2017 Proxy Statement | 3 |
ITEM 1: ELECTION OF DIRECTORS
James T. Morris | ||||
Age 57 Director Since2016 Board Committees ●Audit ●Compensation Other Public Company Boards ●Pacific Mutual Fund Complex | Biographical Information Mr. Morris is the chairman, president and chief executive officer of Pacific Life Insurance Company, and its parent companies Pacific Mutual Holding Company and Pacific LifeCorp. He has served as chief executive officer since 2007 and chairman since 2008, and served as president from 2007 to 2012 and again beginning in 2016. Mr. Morris has served in a variety of management positions since joining Pacific Life in 1982, including chief operating officer from 2006 to 2007, executive vice president and chief insurance officer, life insurance and annuities and mutual funds divisions, from 2005 to 2006, executive vice president, life insurance division, from 2002 to 2005, and senior vice president, individual insurance, from 1996 to 2002. In addition, he has been chairman of the board and trustee of the Pacific Select Fund and the Pacific Funds Series Trust, members of the same mutual fund complex, since 2007. Mr. Morris serves as a director of the American Council of Life Insurers, where he previously served as its chairman from 2012 to 2013. He is a graduate of the University of California at Los Angeles and serves as a member of the Board of Visitors of the UCLA Anderson School of Management. Specific Qualifications and Experience Relevant to the Company Mr. Morris brings to the Board business and chief executive leadership experience in an industry which, like the electric utility industry, is highly regulated. He also brings strategic perspective, product development, marketing and financial analysis experience to the Board. | |||
Kevin M. Payne | ||||
Age 56 SCE Director Since2016 Other Public Company Boards ●None | Biographical Information Mr. Payne has been the CEO of SCE since June 2016. Prior to his current role, he served as senior vice president of Customer Service for SCE from 2014 to June 2016. Mr. Payne has held various leadership positions, including Vice President of Engineering and Technical Services from 2011 to 2014, Vice President of Client Services Planning and Controls from 2010 to 2011, Vice President of Information Technology and Business Integration from 2009 to 2010, and Vice President of Enterprise Resource Planning from 2008 to 2009. Prior to that he was a Director in the Renewable and Alternative Power and Major Customer Technical Support departments. Mr. Payne began his career with SCE in 1986 in the Engineering and Construction department managing power plant retrofit and other engineering projects. He has a degree in mechanical engineering from the University of California, Berkeley, and is a registered professional engineer. Specific Qualifications and Experience Relevant to the Company Mr. Payne brings to the SCE Board in-depth knowledge of the Company’s business, | |||
4 | 2017 Proxy Statement |
ITEM 1: ELECTION OF DIRECTORS
Pedro J. Pizarro | |||
Age 51 EIX Director Since SCE Director Since 2014 Other Public Company ●None | Biographical Information Mr. Pizarro has been the President and CEO of EIX since October 2016. Prior to that, he served as President of EIX from June 2016 to September 2016 and President of SCE Specific Qualifications and Experience Relevant to the Company Mr. Pizarro brings to the | ||
Linda G. Stuntz | |||
Age 62 |
|
Director Since Board ● ● |
| ||
Governance Other Public Company ●Royal Dutch Shell plc | Biographical Information Ms. Stuntz has been a partner of the law firm of Stuntz, Davis & Staffier, P.C. since 1995, and served as a partner of the law firm of Van Ness Feldman LLP from 1993 to 1995. Her practice includes energy and environmental regulation. Ms. Stuntz previously served as Deputy Secretary of, and held senior policy positions in, the U.S. Department of Energy from 1989 to 1993, and served as associate minority counsel and minority counsel to the Energy and Commerce Committee of the U.S. House of Representatives from 1981 to 1987. She is a director of Specific Qualifications and Experience Relevant to the Company Ms. Stuntz brings to the Board utility and environmental law and public policy experience, which is particularly relevant to the Company’s business. Her experience as a director of other public companies, including in the energy and electric utilities industries, also brings value to the Board. | ||
|
ITEM 1: ELECTION OF DIRECTORS
William P. Sullivan | |||
Age 67 Director Since Chair of the EIX Board Board Committees ●FOSO ●Governance Other Public Company ● | Biographical Information Mr. Sullivan served as chief executive officer of Agilent Technologies, a global provider of scientific instruments, software, services and consumables in life sciences, diagnostics and applied chemical markets, from 2005 to Specific Qualifications and Experience Relevant to the Company
| ||
Ellen O. Tauscher | |||
Age 65 Director Since Board ●Audit ● Other Public Company ●eHealth Inc. ● Entertainment, Inc. | Biographical Information Ms. Tauscher has been a strategic advisor with the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC since 2012. Ms. Tauscher served as Under Secretary of State for Arms Control and International Security from 2009 to 2012. Prior to joining the State Department, she served from 1997 to 2009 as a member of the U.S. House of Representatives from California’s Specific Qualifications and Experience Relevant to the Company Ms. Tauscher brings to the Board extensive government affairs and public policy experience, which is particularly relevant to the Company’s business and valuable in assessing the Company’s strategy. She also brings business and financial acumen. Her experience in national security and in the State Department and in Congress is particularly valuable in the oversight of cybersecurity | ||
|
ITEM 1: ELECTION OF DIRECTORS
Peter J. Taylor | |||
Age Director Since 2011 Board ●Audit (Chair) ●Compensation Other Public Company ●None | Biographical Information Mr. Taylor has been the president of ECMC Foundation, a nonprofit corporation dedicated to educational attainment for low-income students, since May 2014. Prior to that he served as executive vice president and chief financial officer of the University of California from 2009 to 2014 and managing director of public finance at Lehman Brothers and Barclays Capital from 2002 to 2009. Mr. Taylor is a director of Pacific Mutual Holding Company and the Kaiser Family Foundation, and a member of the Board of Trustees of California State University and the J. Paul Getty Specific Qualifications and Experience Relevant to the Company Mr. Taylor brings to the Board finance and public policy experience, which is particularly relevant to the Company’s infrastructure investment strategy | ||
Brett White | |||
Age 57 Director Since 2007 Board ●Compensation (Chair) ● Governance Other Public Company ● | Biographical Information Mr. White has been chairman and chief executive Specific Qualifications and Experience Relevant to the Company Mr. White brings to the Board the experience, strategic perspective, critical judgment and analytical skills of a chief executive officer of a | ||
The Board recommends you vote |
|
ITEM 1: ELECTION OF DIRECTORS
Q: How are potential director nominees identified and selected by the Board to become nominees?
A:The Nominating/Corporate Governance Committee, comprised solely of independent directors under New York Stock Exchange LLC (“NYSE”) rules and our Corporate Governance Guidelines, is responsible for recommendingrecommends director candidates to the Board.
The Committee will consider candidates recommended by shareholders if they are submitted in writing to the Corporate Secretary and include all of the information required by Article II, Section 4 of our Bylaws plus a written description together with any supporting materials of the following:of:
● | Any direct or indirect business relationships or transactions within the last three years between EIX and its subsidiaries and senior management, on the one hand, and the candidate and his or her affiliates and immediate family members, on the other hand; and |
● | |
| The qualifications, qualities, and skills of the candidate that the shareholder deems appropriate to submit to the Committee to assist in its consideration of the candidate. |
The Committee also considers candidates recommended by our directors, senior management, and any director search firmfirms retained by the Committee. Mr. Sullivan,Hernandez, who was elected to the Board in August 2016 and is a first-time director nominee for election by the shareholders at the Annual Meeting, was recommended by a non-management director.the Committee’s director search firm. The search firm supports the process of identifying director candidates, coordinating the interview process and conducting reference checks. There are no differences in the manner in which the Committee evaluates a candidate based on the source of the recommendation.
If, based on an evaluation of the candidate’s qualifications, qualities and skills, the Committee determines to continue its consideration of a candidate, Committee members and other directors as determined by the Committee interview the candidate. The Committee conducts any further research on the candidate that it deems appropriate. The Committee then determines whether to recommend that the candidate be nominated as a director. The Board considers the recommendation and determines whether to nominate the candidate for election.
Q: What information does the Nominating/Corporate Governance Committee consider when recommending a director nominee?
A:For the Committee to recommend a director nominee, the candidate must at a minimum possess the qualifications, qualities and skills in our Corporate Governance Guidelines, including:
● | A reputation for integrity, honesty and adherence to high ethical standards; |
● | |
| Experience in a generally recognized position of leadership; and |
● | |
| The demonstrated business acumen, experience and ability to exercise sound judgment in matters that relate to the current and long-term objectives of the Company. |
The Committee also considers other factors and information, including the Board’s current need for additional members, the candidate’s potential for increasing the Board’s range of experience, skills and diversity, the candidate’s independence, and specific skills and experience that are relevant to our business strategy.
In nominating candidates for re-election to the Board, the Committee also considers the nature and time invested in a director’s service on other boards, the director’s Board, Board committee and annual meeting attendance, and the vote received at the prior annual meeting.
Q: How does the Nominating/Corporate Governance Committee consider diversity in identifying director candidates?
A:Our Corporate Governance Guidelines state the Board’s policy that the value of diversity on the Board should be considered. The Committee considers ethnic and gender diversity, as well asand diversity of skills, backgrounds and qualifications represented on the Board, in recommending nominees for election. The Committee has instructed its director search firm to identify candidates reflecting ethnic and gender diversity.
The Committee evaluates its effectiveness in achieving diversity on the Board through its annual review of Board composition, which identifies ethnicity, gender and industry experience prior to recommending nominees for election.
Q: How does the Board determine which directors are considered independent?
A:Our Corporate Governance Guidelines require that the Board consistbe comprised of at least a majority of independent directors and that the Audit, Compensation, and Executive Personnel, and Nominating/Corporate Governance Committees be comprised solelyentirely of independent directors. The Company uses the NYSE listing standards to determine independence. Also,
Directors serving on the Audit and the Compensation Committee charter contains additional independence requirements for committee membership.
No director will be considered independent to serve on the Board or an independent Board committee if he or she would not qualify as independent under NYSE rules. Directors who qualify as independent to serve on the Board are determined to be independent unless the director has a material relationship with the Company or its subsidiaries. Directors who qualify as independent to serve on an independent Board committeeCommittees must meet any additional independence criteria prescribed by the NYSE listing standards and the applicable committee charter.
|
Tablecharters of Contentsthose Committees. Director Chang serves on the audit committees of the American Funds family, Sykes Enterprises, Incorporated and Transocean Ltd. The Board has determined Ms. Chang’s simultaneous service on the audit committees of three other public companies does not impair her ability to effectively serve on our Audit Committee.
The Board has determined that the types of relationships described in Section B of Exhibit A-1 to our Corporate Governance Guidelines, which are posted on our website atwww.edison.com/corpgov, are not material for purposes of determining directors’ independence to serve on the Board. As a result, theThe Board does not consider these relationships in making independence determinations to serve on the Board.
For relationships not prohibited by NYSE rules and not covered under the categories of immaterial relationships in our Guidelines, the determination of whether a relationship is material or not, and therefore whether a director is independent to serve on the Board or not, is made in good faith by the directors. The director whose relationship is under consideration abstains from the vote regarding his or her independence.
8 | 2017 Proxy Statement |
ITEM 1: ELECTION OF DIRECTORS
Q: Which directors has the Board determined are independent to serve on the Board?
A:The Board has determined that all directors and director nominees other than Messrs. CraverPizarro and PizarroPayne are independent to serve on the Board. The Board previously determined that Dr. France A. Córdova, who resigned from the Board on March 13, 2014, was independent.
The Board reviews the independence of our directors to serve on the Board or an independent Board committee at least annually, and periodically as needed. On a monthly basis, the Company also monitors director relationships and transactions that might disqualify them as independent. In February 2015,2017, prior to recommending director nominees for election, the Board confirmed that the independent directors had no relationships or transactions that disqualified them as independent to serve on the Board.
Q: Who is the Lead DirectorChair of the Board and what are the Lead Director’sChair’s duties and responsibilities?
A: The Lead Director is designated annually byMr. Sullivan has served as the independent directors, must be independent,Chair of the EIX Board since September 30, 2016. Prior to this time, Mr. Craver served as EIX Chairman and is expected to devote a greater amount of time to Board service than the other directors. The current Lead Director isCEO and Mr. White who has served in that role since April 2014.
Theas the Company’s Lead Director’s dutiesDirector. Effective upon Mr. Craver’s retirement on September 30, 2016, the EIX Board separated the roles of Chair and responsibilities are described in ourCEO by amending the EIX Bylaws and Corporate Governance Guidelines and include allappointing Mr. Sullivan as independent Chair of the following:EIX Board and Mr. Pizarro as EIX CEO. The Company no longer has a Lead Director.
As independent Chair, Mr. Sullivan’s duties include:
● |
|
● | With the |
● | With the Governance Committee, oversee the annual evaluations of |
● | Be the principal liaison in synthesizing and communicating to the |
|
|
● | With the Compensation Committee Chair, conduct the annual CEO performance review after review with the independent |
|
|
|
|
|
|
|
|
The SCE Bylaws provide that the CEO of SCE has the duties of the Chair unless a separate Chair of the SCE Board is appointed. Since June 1, 2016, Mr. Payne has served as SCE CEO and has had the duties of the Chair of the SCE Board. SCE does not have a Lead Director’s term is one year, consistent with annual elections of directors; in practice, however, our Lead Directors have served for at least two years since 2008.Director.
Q: Why does the Board believe that its Board leadership structure is appropriate?
A:The EIX Board has determined thatbelieves separating the combined role of ChairmanChair and CEO together with an independent Lead Director havingpositions is the duties described above, is currently inmost appropriate leadership structure for EIX at this time, by allowing Mr. Pizarro to focus on the best interest of our shareholders because it provides the appropriate balance between effective leadershipday-to-day management of the Companybusiness and on executing our strategic priorities, while allowing Mr. Sullivan to focus on leading the Board, providing advice and counsel to Mr. Pizarro, and facilitating the Board’s independent oversight of management. We have the following corporate governance practices that provide for strong independent leadership on the Board and effective oversight of management and CEO performance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The EIX Board also believes having Mr. Craver serve in the combined role of EIX Chairman and CEO is in the best interests of our shareholders because:
|
|
|
|
|
|
|
|
|
The EIX Board continues to monitor trends in this area and could, under different circumstances, reach a different conclusion.
The SCE Bylaws provide that the President of SCE has the duties of the Chairman. The Lead Director of EIX also serves as Lead Director of SCE. All directors of SCE are independent, except for Messrs. Craver and Pizarro, and the key Board committees are composed entirely of independent directors. The SCE Board has determined that the current leadership structure is appropriate for SCE as a subsidiary of EIX. All directors of SCE are independent, except for Messrs. Payne and Pizarro, and the key Board committees are composed entirely of independent directors.
Q: What is the Board’s role in CEO succession planning?
A:The Board believes CEO succession planning is one of its most important responsibilities. Our Corporate Governance Guidelines provide that the Board will annually review and evaluate succession planning and management development for the Company’s senior officers, including the CEO.
At least annually, the Board meets in executive session with the EIX CEO to discuss talent and succession planning. The discussion includes CEO succession in the ordinary course, CEO succession in the event ofif an emergency occurs, and succession for other key senior management positions. The frequency of the Board’s CEO succession planning discussions depends in part on the period until the CEO’s expected retirement.
In the succession planning process, internal CEO succession candidates are identified and evaluated based on criteria considered predictive of success at the CEO level, taking into accountconsidering the Company’s business strategy. The Board uses a common talent assessment format for each individual. The assessment includes a development plan for each individual.
Our Corporate Governance Guidelines provide that the Board will have opportunities to become acquainted with the senior officers of the Company and others who may have the potential to handle significant management positions. This is carried out through opportunities for officers to make presentations to the Board and Board committees, director education sessions, other business interactions, and social events intended for this purpose.
In addition to the succession planning process, the Compensation and Executive Personnel Committee annually assesses the performance of the CEO and other senior officers against individual and corporate goals. The performance review process is discussed under “Role of Compensation Committee and Executive Officers” in the Compensation Discussion and Analysis below. The Committee reports on the results to the Board.
Q: What is the Board’s role in risk oversight?
A:Our Corporate Governance Guidelines provide that one of the Board’s primary functions is to review the Company’s enterprise risk management process and monitor strategic and emerging risks. The Board annually reviews keyenterprisekey enterprise risks identified by management, such as financial, reputational, safety, physical and cyber security, and compliance risks, and monitors key risks through reports and discussions regarding key risk areas at Board meetings. The Board also focuses on specific strategic and emerging risks in periodic strategy reviews. The Board annually reviews corporate goals and approves capital budgets.
Board committees have responsibility for risk oversight in specific areas as follows:
The Audit Committee is responsible for oversight of (i) risk assessment and risk management policies, (ii) major financial risk exposures, and (iii) the steps management has taken to monitor and control these exposures. In carrying out these responsibilities, theThe Committee semi-annually reviews the Company’s risk management processes and key enterprise risks, reviews the EIX risk management committee charter, receives regular reports on litigation, internal audits and compliance, receives “deep dive” reports on specific risk topics at meetings, and receives semi-annual reports of the Company’s political contributions. The Committee also annually reviews and approves the internal audit plan. The EIX Vice President forof Enterprise Risk Management regularly attends Committee meetings and reports on risk issues.
2017 Proxy Statement | 9 |
ITEM 1: ELECTION OF DIRECTORS
The Compensation and Executive Personnel Committee assesses and monitors risks in the Company’s compensation program. The Committee’s risk assessment process and factors considered in assessing risk are discussed under “Risk Considerations”“How We Make CompensationDecisions - Risk Considerations” in the Compensation Discussion and Analysis below.
The Finance, Operations and Safety OversightFOSO Committee is responsible for oversight of risks in the Company’s capital investment activities and operations. The Committee regularly monitors the level of capital spending relative to approved capital budgets and must approve significant capital spending variances and projects that are not included in approved capital budgets. The Committee also monitors safety and operational performance metrics, significant developments related to safety, physical and cyber security, reliability and affordability, and the availability of appropriate resources in these areas. In carrying out its responsibility for oversight of risks in the Company’s operations, theThe Committee receives “deep dive” reports on key topics related to this responsibility at each meeting. To the extent topics involve key Company risks, members of the Audit Committee may be invited to attend Finance, Operations and Safety Oversight Committee meetings.its responsibilities.
The Nominating/Corporate Governance Committee advises the Board with respect toregarding Board size and composition, Board committee composition and responsibilities, Lead Director selection of the independent Chair of the EIX Board, and corporate governance practices that help position the Board to effectively carry out its risk oversight responsibility.
The Board believes its leadership structure supports the Board’s risk oversight function. Independent directors chair the Board committees responsible for risk oversight, the Company has an independent Lead DirectorChair of the EIX Board who facilitates communication between management and directors, and all directors are involved in the review of key enterprise risks.
|
Q: What is the Board’s role in cybersecurity oversight?
A:The Company has identified cybersecurity as a key enterprise risk. As a result, cyberCyber risks are included in the key risk reports to the Board and Audit Committee discussed above. In addition, the Board has assigned primary responsibility for cybersecurity oversight to the Finance, Operations and Safety OversightFOSO Committee, which receives an annual “deep dive” report and written cybersecurity updates with each meeting. Among other things, these reportsmeeting that focus on the Company’s most critical assets, cybersecurity drills, exercises, and breaches, mitigation of cyber risks, and assessments by third-party experts. In 2014,2016, the Board also received an annual “deep dive”a report with a similar focus.focus on reducing the Company’s cybersecurity risks.
The Company has established a cybersecurity oversight group comprised of a multidisciplinary senior management team to provide governance and strategic direction for the identification, protection and detection of cybersecurity risks to the Company. Director Tauscher serves as the Board liaison to the oversight group and regularly attends meetings. Other Board members attend at least one meeting annually.
Q: DoWhat is the Board’s role in oversight of environmental and social issues?
Environmental and social policies have a significant impact on the Company’s business and strategy. As a result, the Board is regularly engaged in oversight of environmental and social issues related to the Company’s operations, including:
● | Environmental legislation and regulation related to renewable energy, distributed generation, energy efficiency and climate change; |
● | Strategic decisions and opportunities related to public policy focus on sustainability; |
● | Employee and supplier diversity; and |
● | Employee, contractor and public safety. |
The Board oversees environmental and social issues that impact the Company’s business, regulatory requirements, and reputation. Risks associated with environmental and social issues are identified in key risk reports to the Audit Committee. The Audit Committee also oversees the Company’s political and charitable contributions.
How do the Board and Board committees conduct an annual evaluation ofevaluate their performance?
A:The Board and Board committees complete aan annual self-evaluation questionnaire and discuss the results of their evaluation in executive session during the applicable Board or committee meeting. Directors have the opportunity to provide feedback on the performance of other directors during this process. The Nominating/Corporate Governance Committee oversees the annual evaluation of the Board and Board committees.committees and periodically reviews the effectiveness of the process.
Q: How many times did the Board meet in 2014?2016?
A:The Board met eleven times in 2014.2016. Each current director attended 75% or more of all Board and Board committee meetings he or she was eligible to attend. The Board held foursix executive sessions of the independent directors.
Q: Does the Company have a policy on attendance of Director nominees at Annual Meetings?
A:Director nominees are expected to attend Annual Meetings. All of the EIX and SCE directors except Mr. Taylor attended the 20142016 Annual Meeting.
Q: Are directors required to hold EIX Common Stock?
A:Within five years from the date of their initial election to the Board, directors are required tomust own an aggregate number of shares of EIX Common Stock or derivative securities convertible into EIX Common Stock, excluding stock options, having a value equivalent to five times the amount of the annual Board retainer. All deferred stock units held by a director count toward this ownership requirement.
All directors comply with this stock ownership requirement.
Q: Has EIX adopted proxy access for director elections?
In 2015, the EIX Board adopted proxy access for director elections at annual meetings. The EIX Bylaws provide that the Company will include in its Proxy Statement up to two nominees (or nominees for up to 20% of the EIX Board, whichever is greater) submitted by a shareholder or group of up to 20 shareholders owning at least 3% of EIX common stock continuously for at least three years, if the shareholder group and nominee satisfy the requirements in Article II, Section 13 of the EIX Bylaws, which are available atwww.edison.com/corpgov. The EIX Board made this decision after careful consideration of feedback received from our engagement with shareholders regarding proxy access.
10 | 2017 Proxy Statement |
ITEM 1: ELECTION OF DIRECTORS
Does EIX have a policy on shareholder rights plans?
A:The EIX Board has a policy to seek prior shareholder approval of the adoption of any shareholder rights plan unless, due to time constraints or other reasons consistent with the EIX Board’s fiduciary duties, a committee consisting solely of independent directors determines that it would be in the best interests of EIX shareholders to adopt the plan prior to shareholder approval. Any rights plan adopted by the EIX Board without prior shareholder approval will automatically terminate one year after adoption of the plan unless the plan is approved by EIX shareholders prior to such termination.
Q: Is SCE subject to the same corporate governance stock exchange rules as EIX?
A:EIX is subject to NYSE rules and SCE is subject to the NYSE MKT LLC rules, which exempt SCE from designated corporate governance rules for Board and Board committee composition, including director independence, the director nominations process, and the process to determine executive compensation.
SCE is exempt from these rules because (i) it is a “controlled company” with over 50% of the voting power held by its parent company, EIX, and (ii) it has listed only preferred stock on the exchange. However, SCE closely follows the EIX corporate governance practices required under the NYSE rules.
Q: How may I communicate with the Board?
A:Shareholders and other interested parties may communicate with the Board or individual directors by following the procedures described on our website atwww.edison.com/corpgov.corpgov.
Q: Where can I find the Company’s corporate governance documents?
A:The EIX Bylaws, Corporate Governance Guidelines, and Board committee charters, the Director Ethics and Compliance Code for Directors applicable to all directors of EIX and SCE, and the Employee Ethics and Compliance Code of Conduct applicable to all EIX and SCE officers and employees, are posted on our website atwww.edison.com/corpgov.corpgov.
The SCE Bylaws, Corporate Governance Guidelines and Board committee charters are posted on our website atwww.sce.com/corpgov.corpgov.
|
Certain Relationships and Related Transactions |
It is the Company’s policy that the Nominating/CorporateThe Governance Committee reviewreviews at least annually, and periodically as needed, any transaction in the prior calendar year or any proposed transaction between the EIX companies and a related person in which the amount involved exceeds $120,000 and the related person has a material interest. A related person is generally a director, a director nominee, an executive officer, or a greater than 5% beneficial owner of any class of voting securities of EIX or SCE, and their immediate family members. This policy is stated in writing in the Committee’s charter.
The Committee’s regular procedure is to obtain from management annually, and periodically as needed, a list of the transactions with related persons described above, and to review these transactions at a meeting held in advance ofbefore recommending director nominationsdirectornominations to the Board. The list is based on information from questionnaires completed by our directors, director nominees, and executive officers, together with information obtained from our accounts payable and receivable records, and is reviewed by legal counsel. The Committee’s procedure is evidenced in the minutes and records for the Committee meeting at which the review occurred.
Linda G. Stuntz
Director Linda Stuntz is an equity partner at the law firm of Stuntz, Davis & Staffier, P.C. (“SD&S”), which paid the Company approximately $233,000$201,777 in 20142016 to sublease approximately 4,344 square feet of office space in Washington, D.C. Effective upon the completionThe Company’s sublease of pending tenant improvements, the sublease has been amended to reduce the subleasedoffice space to 3,625 square feet at a monthly rent of $16,325, which will increase annually by 4%. The sublease will expire two years following completion ofSD&S began before Ms. Stuntz joined the tenant improvements, unless SD&S elects to renew the lease for up to two additional one year terms.
Adam S. Umanoff
On October 8, 2014, Adam S. Umanoff was elected EIX Vice President and General Counsel, effective January 2, 2015. In connection with his election, EIX entered into an agreement with Akin Gump Strauss Hauer and Feld LLP, Mr. Umanoff’s previous employer, to retain Mr. Umanoff’s legal services from November 10, 2014 through December 31, 2014 as he prepared to assume his new position. The amount paid to Akin Gump in connection with Mr. Umanoff’s services was $166,127.Board.
| 11 |
ITEM 1: ELECTION OF DIRECTORS
Board Committees |
The current membership and primary functionskey responsibilities of our Audit, Compensation, and Executive Personnel, Nominating/Corporate Governance, and Finance, Operations and Safety OversightFOSO Committees are described below. The duties and powers of each Committee are further described in its charter. The Board occasionally creates special Board committees to focus on certain topics.
Audit Committee
The Audit Committee’s duties and powers include the following:
|
|
|
|
|
| |
Peter J. Taylor, (Chair) Meetings in 2016:6 |
Key Responsibilities: ●Appoint, compensate and | |
|
| |
|
| |
firm (the “Independent Auditor”), including: - | the qualifications, performance and independence of the Independent Auditor; - the scope and plans for the annual audit; and - the scope and extent of all audit and non-audit services to be performed by the Independent Auditor. ●Review the Company’s financial statements and financial reporting processes, including internal controls over financing reporting. ●Oversee the Company’s internal audit function, including the General Auditor’s performance, ●Oversee the | |
|
| |
|
| ||
|
| ||
|
●Discuss the Company’s | ||
|
| ||
|
| ||
|
| ||
risks. ● | Establish and maintain procedures for the receipt, retention and treatment of complaints ●Review the Company’s political contribution policies and expenditures and approve contributions that exceed $1 million. | ||
The EIX Audit Committee also reviews at least semi-annually (i) any changes to the Company’s political contribution policies and (ii) a written report of political contributions and related political expenditures of the Company and its consolidated subsidiaries, political action committee and civic action committee. The EIX Board approves all political contributions in excess of $1 million.
COMPENSATION AND EXECUTIVE PERSONNEL COMMITTEE | ||||
Brett White (Chair) Meetings in 2016:3 | Key Responsibilities: |
Compensation and Executive Personnel Committee
The Compensation and Executive Personnel Committee’s duties and powers include the following:
Review the performance and set the compensation of designated elected officers, including the executive officers. | ||||
● | Review director compensation for consideration and action by the Board. | |||
● | Approve the design of executive | |||
● | Approve stock ownership guidelines for officers and recommend | |||
director stock ownership guidelines to the Board. ● | Review and assess whether any risks arising from compensation policies and practices are reasonably likely to have a material adverse effect on the Company. | |||
12 | 2017 Proxy Statement |
Nominating/Corporate Governance CommitteeTable of Contents
The Nominating/Corporate Governance Committee’s duties and powers include the following:ITEM 1: ELECTION OF DIRECTORS
NOMINATING/CORPORATE GOVERNANCE COMMITTEE | ||||
Richard T. Schlosberg, III Meetings in 2016:6 | Key Responsibilities: ●Identify and recommend director candidates. ●Periodically review Board size and | |||
composition. ● | Make recommendations to the Board regarding Board committee and committee chair assignments and | |||
the EIX independent Board Chair appointment. ● | Review related party transactions. | |||
● | Periodically review and recommend updates to the Corporate Governance Guidelines and Board committee charters. | |||
● | Advise the Board with respect to corporate governance matters. | |||
● | Oversee the annual evaluation of the Board and Board committees. | |||
● | Review the orientation program for new directors and continuing education activities for all directors. | |||
Finance, Operations and Safety Oversight Committee
The Finance, Operations and Safety Oversight Committee’s duties and powers include the following:
FINANCE, OPERATIONS AND SAFETY OVERSIGHT COMMITTEE | ||||
Jagjeet S. Bindra (Chair) Meetings in 2016:4 | Key Responsibilities: ●Review and monitor capital spending and investments in subsidiaries compared to the annual budget | |||
● | Monitor operational and service excellence performance ●Monitor significant developments relating to safety, reliability and affordability, specifically including |
The EIX Finance, Operations and Safety Oversight Committee has the following additional duties and powers:
●Annually review the sources and uses of funds and the trust investments of the Company. ●Authorize financing, redemption and repurchase transactions. |
| |||
|
| 13 |
ITEM 1: ELECTION OF DIRECTORS
Director Compensation |
The following table presents information regarding the compensation paid for 20142016 to our non-employee directors. The compensation paid to any director who is also an employee of EIX or SCE is presented in the EIX and SCE Summary Compensation Tables and the related explanatory tables.
Director Compensation Table – Fiscal Year 20142016
Name | Fees Earned or Paid in Cash ($) | Stock Awards(1)(2) ($) | Option Awards(3) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings(4) ($) | All Other Compensation(5) ($) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards(1)(2) ($) | Option Awards(3) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings(4) ($) | All Other Compensation(5) ($) | Total ($) | ||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | ||||||||||||||
Jagjeet S. Bindra | 117,000 | 115,012 | — | — | — | 10,000 | 242,012 | $125,125 | $135,032 | — | — | — | $10,000 | $270,157 | ||||||||||||||
Vanessa C.L. Chang | 135,000 | 115,012 | — | — | 15,621 | 10,000 | 275,633 | $124,000 | $135,032 | — | — | $24,331 | $10,000 | $293,363 | ||||||||||||||
France A. Córdova(6) | 38,750 | — | — | — | 20,142 | — | 58,892 | |||||||||||||||||||||
Bradford M. Freeman | 115,000 | 115,012 | — | — | 29,341 | 10,000 | 269,353 | |||||||||||||||||||||
Luis G. Nogales | 115,000 | 115,012 | — | — | 14,169 | 10,000 | 254,181 | |||||||||||||||||||||
Ronald L. Olson(7) | 46,500 | — | — | — | 35,066 | — | 81,566 | |||||||||||||||||||||
Louis Hernandez, Jr. | $55,000 | $67,537 | — | — | $250 | — | $122,787 | |||||||||||||||||||||
James T. Morris | $82,500 | $135,032 | — | — | $718 | — | $218,250 | |||||||||||||||||||||
Richard T. Schlosberg, III | 127,000 | 115,012 | — | — | 32,148 | 10,000 | 284,160 | $123,125 | $135,032 | — | — | $43,993 | $10,000 | $312,150 | ||||||||||||||
Linda G. Stuntz | 61,316 | 115,012 | — | — | 422 | 5,000 | 181,750 | $110,000 | $135,032 | — | — | $2,152 | $10,000 | $257,184 | ||||||||||||||
Thomas C. Sutton | 107,000 | 115,012 | — | — | 21,371 | 10,000 | 253,383 | |||||||||||||||||||||
William P. Sullivan | $127,625 | $150,666 | — | — | — | — | $278,291 | |||||||||||||||||||||
Ellen O. Tauscher | 107,000 | 115,012 | — | — | 510 | 10,000 | 232,522 | $116,000 | $135,032 | — | — | $1,102 | — | $252,133 | ||||||||||||||
Peter J. Taylor | 113,000 | 115,012 | — | — | — | 5,000 | 233,012 | $131,000 | $135,032 | — | — | — | $10,000 | $276,032 | ||||||||||||||
Brett White | 138,750 | 115,012 | — | — | 13,751 | 10,000 | 277,513 | $144,375 | $135,032 | — | — | $22,606 | $10,000 | $312,013 |
(1) | The amounts reported for stock awards reflect the aggregate grant date fair value of those awards computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to calculate the amounts reported, see Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of EIX’s |
(2) | Each non-employee director, other than |
(3) | We |
(4) | Amounts reported consist of interest on deferred compensation account balances considered under SEC rules to be at above-market |
(5) | EIX has a matching gift program that provides assistance to qualified public and private schools by matching dollar-for-dollar gifts of at least $25 up to a prescribed maximum amount per calendar year for the Company’s employees and EIX and SCE directors. The amounts in this column reflect matching gifts made by EIX pursuant to this program in 2016. EIX matches aggregate director contributions of up to $10,000 per calendar year to qualified schools. Under the Director Matching Gift Program, matching amounts for non-cash gifts are determined based on the value of the gift on the date given by the director. For purposes of determining the date on which |
|
ITEM 1: ELECTION OF DIRECTORS
Annual Retainer and Meeting Fees
Compensation for non-employee directors during 20142016 included an annual retainer, fees for attending certain meetings, and an annual equity award. Directors were offered the opportunity to receive all of their compensation on a deferred basis under the EIX Director Deferred Compensation Plan. The following table sets forth the currentcash retainers and meeting fees:fees paid to directors in 2016:
Type of Fee | Jan. to Sept. 2016 | Oct. to Dec. 2016 | |||
Board Retainer Per Quarter | $27,500 | $27,500 | |||
Additional Board Retainer Per Quarter to: | |||||
● | Audit Committee Chair | $5,000 | $5,000 | ||
● | Compensation Committee Chair | $3,750 | $4,375 | ||
● | Other Committee Chairs | $3,125 | $3,750 | ||
● | Lead Director | $6,250 | N/A | ||
● | Chair of the EIX Board | N/A | $15,625 | ||
Fee Per Meeting:(1) | |||||
● | Shareholder/Board/Committee | N/A | N/A | ||
● | Other Business Meeting | $2,000 | $2,000 |
on behalf of the Company as a director, for example, cybersecurity oversight group meetings | (see page 10). No director received more than $6,000 in meeting fees in 2016. Directors only receive one meeting fee for any concurrent meetings attended by the director. |
Directors receive only one meeting fee for each Board or Board committee meeting held jointly or consecutively, and for joint meetings of more than one committee. It is the usual practice that meetings of the EIX and SCE Boards and Board committees are held jointly and a single meeting fee is paid for each joint meeting.
All directors are also reimbursed for out-of-pocket expenses incurred for serving as directors and are eligible to participate in the Director Matching Gift Program described above in footnote (5) to the Director Compensation Table above.
Annual Equity Awards
Upon re-electioninitial election or initial electionre-election to the Board, in April 2014, non-employee directors wereare granted an annual equity award of EIX Common Stock (oror deferred stock units as(as explained below) with an aggregate grant date value of $115,000. Non-employee directors who are re-elected to$135,000. Upon initial appointment or re-appointment of a non-employee director as Chair of the EIX Board, in April 2015 will bethe director is granted an additional annual equity award of EIX Common Stock (or deferred stock units) with an aggregate grant date value of $125,000. If a director is initially elected at or after the 2015 Annual Meeting, he or she will be granted an award of EIX deferred stock units with an aggregate grant date value of $125,000 on$62,500. If the grant date of an award for an initial election to the Board or initial appointment as Chair of the EIX Board occurs after the date of election.EIX’s Annual Meeting for that year, then the grant date value of the award is prorated by multiplying it by the following percentage: 75% if the grant date is in the second quarter of the year; 50% if the grant date is in the third quarter of the year; 25% if the grant date is in the fourth quarter of the year.
The number of shares or units granted is determined by dividing the grant date value of the equity award ($115,000135,000, $62,500, or $125,000,a prorated portion thereof, as described above) by the closing price of EIX Common Stock on the grant date of election or re-election and rounding up to the next whole share. Each award is fully vested when granted.
DirectorsThe annual equity award for an initial election to the Board is made in the form of deferred stock units. For re-election awards and the additional equity award for appointment or re-appointment as Chair of the EIX Board, directors have the opportunity to elect in advance to receive their re-election award entirely insuch awards entirelyin EIX Common Stock, entirely in deferred stock units, or in any combination of the two. A deferred stock unit is a contractual right to receive one share of EIX Common Stock. Deferred stock units are credited to the director’s account under the EIX Director DeferredCompensationDeferred Compensation Plan described below. Deferred stock units cannot be voted or sold andsold. They accrue dividend equivalents on the ex-dividend date, if and when dividends are declared on EIX Common Stock, thatStock. The accrued dividend equivalents are converted to additional deferred stock units.
Each director’s equity award in 20142016 was granted under the EIX 2007 Performance Incentive Plan. Directors serving on both Company Boards receive only one award per year.year for election to the Boards. In April 2016, EIX shareholders approved amendments to the EIX 2007 Performance Incentive Plan, including a limit of $500,000 per calendar year on the grant date fair value of awards to each non-employee director. In 2016, each non-employee director received equity awards totaling less than $200,000 in grant date fair value.
EIX Director Deferred Compensation Plan
The EIX Director Deferred Compensation Plan is separated into two different plan documents. The grandfathered plan document applies to deferrals that were earned prior to January 1, 2005, while the 2008 plan document applies to deferrals that were earned on or after January 1, 2005.
Non-employee directors are eligible to defer up to 100% of their annual retainers and meeting fees. Any portion of a director’s annual equity award that he or she elects to receive as deferred stock units is automatically deferred. Amounts deferred (other than deferred stock units) accrue interest until paid to the director at a rate equal to the average monthly Moody’s Corporate Bond Yield for Baa Public Utility Bonds over a 60-month period ending November 1 of the prior year or, effective with interest credits beginning in 2015, over a 60-month period ending September 1 of the prior year.
Payment of Grandfathered Plan Benefits
Amounts deferred under the grandfathered plan document (other than deferred stock units) may be deferred until a specified date, retirement, death or discontinuance of service as a director. At the director’s election, any such compensation that is deferred until retirement or death may be paid as a lump sum, in monthly installments over 60, 120, or 180 months, or in a combination of a partial lump sum and installments. Any such deferred compensation is paid as a single lump sum or in three annual installments upon any other discontinuance of service as a director. Directors may elect at the time of deferral to receive payment on a fixed date. Deferred amounts may also be paid in connection with a change in control of EIX or SCE in certain circumstances.
Deferred stock units may be deferred until retirement, death or discontinuance of service as a director, and when payable will be distributed in EIX Common Stock. Payment will be made in a lump sum upon the director’s retirement, unless a request to receive distribution in the form of annual installments over 5, 10, or 15 years was previously approved. Discontinuance of service as a director prior to retirement will result in a lump sum payout of deferred stock units. Upon the director’s death, any remaining deferred stock unit balance will be paid to the director’s beneficiary in a lump sum.
Deferred stock units may also be paid in connection with a change in control of EIX or SCE in certain circumstances.
| 15 |
ITEM 1: ELECTION OF DIRECTORS
Payment of 2008 Plan Benefits
Any amounts deferred under the 2008 plan document (including deferred stock units) may be deferred until a specified date no later than the date the director turns age 75, retirement, death, disability or other separation from service. Directors have sub-accounts for each annual deferral for which the following forms of payment may be elected:
● | Single lump-sum; |
● | Two to fifteen annual installments; |
● | Monthly installments for 60 to 180 months; or |
● | Any combination of the above. |
Payments triggered by retirement, death, disability or other separation from service may begin upon the applicable triggering event or a specified number of months and/or years following the applicable triggering event. However, payments may not begin later than the director’s 75th birthday unless the director is still on the Board. Payments are subject to certain administrative earliest payment date rules, and may be delayed or accelerated in accordance withunder the 2008 plan document if permitted or required under Section 409A of the Internal Revenue Code.
If a director who was eligible to participate in the plan on or beforeby December 31, 2008 dies within ten years of his or her initial eligibility to participate in the plan, the amount of the director’s remaining deferred compensation account balance that will be doubled and paid to his or her beneficiary will be doubled.beneficiary. However, deferred stock units and any amounts attributable to dividend equivalents previously associated with stock options will not be doubled. All amounts payable are treated as obligations of EIX.
Retirement Plan for Directors
Messrs. Nogales and Olson participate in the Retirement Plan for Directors. No new director after 1997 may participate in the plan. Each participating director is generally entitled to quarterly payments, commencing upon his retirement, resignation or death, based on the amount of the annual retainer and regular Board meeting fees in effect at the time of such termination of service unless another payment schedule was elected under Section 409A of the Internal Revenue Code. The annual benefit for Messrs. Nogales and Olson is payable in quarterly installments for a number of years equal to the years of his service as a director prior to 1998. Years of service for benefit determination purposes were frozen at the end of 1997. However, the present value of these frozen benefits can change over time. Mr. Olson commenced receiving his benefit payments under this plan in connection with his retirement from the Board.
Determination of Director Compensation
The Board makes all decisions regarding director compensation. These decisions are typicallynormally made after receiving recommendations from the Compensation Committee. The Compensation Committee typically makes its recommendations after receiving input from its independent compensation consultant and management. The Compensation Committee retained F.W. CookPay Governance LLC (“Pay Governance”) to evaluate and make recommendations regarding director compensation for 2014. Generally, F.W. Cook’s2016. Pay Governance’s assistance included helping the Compensation Committee identify industry trends and norms for director compensation;compensation, reviewing and identifying the appropriate peer group companies;companies, and evaluating relevant director compensation data for these companies. The changes made to director compensation in 2016, including the additional cash retainer and equity award for the Chair of the EIX Board, were based on analysis and recommendations provided by Pay Governance. Management’s input generally focuses on legal, compliance, and administrative issues.
16 |
|
ITEM 1: ELECTION OF DIRECTORS
Directors, Director Nominees and Executive Officers
The following table shows the number of shares of EIX Common Stock beneficially owned as of February 26, 2015,March 3, 2017, except as otherwise indicated, by each of our directors, director nominees, individualsofficers and former officers named in the EIX and SCE Summary Compensation Tables (“NEOs”), and our current directors and executive officers as a group. None of the persons included in the table beneficially owns any other equity securities of the Company or its subsidiaries. The table includes shares that the individual has a right to acquire through April 27, 2015.May 3, 2017.
Name of Beneficial Owner | Category | Deferred Stock Units(1) | Stock Options | Common Stock Shares(2) | Total Shares Beneficially Owned(3) | Percent of Class(4) | Category | Deferred Stock Units(1) | Stock Options | Common Stock Shares(2) | Total Shares Beneficially Owned(3) | Percent of Class(4) | ||||||||||||
Jagjeet S. Bindra | Director/Nominee | 3,387 | — | 9,037 | 12,424 | * | Director | 3,581 | — | 8,357 | 11,938 | * | ||||||||||||
Vanessa C.L. Chang | Director/Nominee | 4,333 | 7,500 | 113 | 11,946 | * | Director/Nominee | 5,410 | 7,500 | 113 | 13,023 | * | ||||||||||||
Theodore F. Craver, Jr. | Director/Nominee | — | 3,289,264 | 252,648 | 3,541,912 | * | ||||||||||||||||||
Louis Hernandez, Jr. | Director/Nominee | 930 | — | — | 930 | * | ||||||||||||||||||
James T. Morris | Director/Nominee | 393 | — | — | 393 | * | ||||||||||||||||||
Kevin M. Payne | SCE Director/Nominee | — | 42,918 | 6,649 | 49,567 | * | ||||||||||||||||||
EIX NEO | EIX/SCE NEO | |||||||||||||||||||||||
Bradford M. Freeman | Director | 2,258 | 10,000 | 55,500 | 67,758 | * | ||||||||||||||||||
Luis G. Nogales | Director | 33,541 | 10,000 | — | 43,541 | * | ||||||||||||||||||
Pedro J. Pizarro | SCE Director/Nominee | — | 65,879 | 33,921 | 99,800 | * | Director/Nominee | — | 134,411 | 38,734 | 173,145 | * | ||||||||||||
SCE NEO | EIX/SCE NEO | |||||||||||||||||||||||
Richard T. Schlosberg, III | Director/Nominee | 33,863 | 12,500 | 5,000 | 51,363 | * | Director | 39,944 | — | 5,000 | 44,944 | * | ||||||||||||
Linda G. Stuntz | Director/Nominee | 207 | — | 1,000 | 1,207 | * | Director/Nominee | 632 | — | 1,000 | 1,632 | * | ||||||||||||
William P. Sullivan | Nominee | — | — | — | — | * | Director/Nominee | — | — | 4,214 | 4,214 | * | ||||||||||||
Thomas C. Sutton | Director | 6,612 | 12,500 | 69,878 | 88,990 | * | ||||||||||||||||||
Ellen O. Tauscher | Director/Nominee | 2,581 | — | 1,014 | 3,595 | * | Director/Nominee | 4,581 | — | 217 | 4,798 | * | ||||||||||||
Peter J. Taylor | Director/Nominee | — | — | — | — | * | Director/Nominee | — | — | 1,965 | 1,965 | * | ||||||||||||
Brett White | Director/Nominee | 21,653 | 7,500 | — | 29,153 | * | Director/Nominee | 27,034 | 7,500 | — | 34,534 | * | ||||||||||||
W. James Scilacci | EIX NEO | — | 613,962 | 49,238 | 663,200 | * | ||||||||||||||||||
Robert L. Adler | EIX NEO | — | 348,820 | 37,216 | 386,036 | * | ||||||||||||||||||
Ronald L. Litzinger | EIX/SCE NEO | — | 729,087 | 57,817 | 786,904 | * | EIX NEO | — | 624,920 | 67,190 | 690,210 | * | ||||||||||||
Bertrand A. Valdman | EIX NEO | — | 203,205 | 7,241 | 210,446 | * | ||||||||||||||||||
Adam S. Umanoff | EIX NEO | — | 60,790 | 994 | 61,784 | * | ||||||||||||||||||
Maria Rigatti | SCE NEO | — | 18,386 | 13,531 | 31,917 | * | EIX/SCE NEO | — | 30,567 | 14,868 | 45,435 | * | ||||||||||||
Stuart R. Hemphill | SCE NEO | — | 64,447 | 16,218 | 80,665 | * | ||||||||||||||||||
Linda G. Sullivan(6) | SCE NEO | — | — | 7,722 | 7,722 | * | ||||||||||||||||||
Peter T. Dietrich | SCE NEO | — | 132,439 | 14,870 | 147,309 | * | ||||||||||||||||||
William M. Petmecky, III | SCE NEO | — | 8,029 | 1,781 | 9,810 | * | ||||||||||||||||||
Ronald O. Nichols | SCE NEO | — | 21,048 | 3,371 | 24,419 | * | ||||||||||||||||||
Russell C. Swartz | SCE NEO | — | 186,278 | 16,512 | 202,790 | * | SCE NEO | — | 182,236 | 24,538 | 206,774 | * | ||||||||||||
Kevin M. Payne | SCE NEO | — | 40,192 | 565 | 40,757 | * | ||||||||||||||||||
David L. Mead | SCE NEO | — | 23,388 | 1,811 | 25,199 | * | ||||||||||||||||||
Leslie E. Starck(7) | SCE NEO | — | 77,478 | 8,741 | 86,219 | * | ||||||||||||||||||
Current EIX Directors and Executive Officers | ||||||||||||||||||||||||
Peter T. Dietrich(5) | SCE NEO | — | 68,594 | 16,171 | 84,765 | * | ||||||||||||||||||
Theodore F. Craver, Jr.(6) | EIX NEO | — | 2,448,181 | 287,168 | 2,735,349 | * | ||||||||||||||||||
W. James Scilacci(7) | EIX NEO | — | 391,306 | 46,301 | 437,607 | * | ||||||||||||||||||
EIX Directors and Executive Officers | EIX Directors and Executive Officers | 82,505 | 1,075,396 | 169,259 | 1,327,160 | * | ||||||||||||||||||
as a Group (20 individuals) | ||||||||||||||||||||||||
SCE Directors and Executive Officers | SCE Directors and Executive Officers | 82,505 | 505,886 | 113,671 | 702,062 | * | ||||||||||||||||||
as a Group (17 individuals) | 108,435 | 4,863,892 | 540,933 | 5,513,260 | 1.69% | |||||||||||||||||||
Current SCE Directors and Executive Officers | ||||||||||||||||||||||||
as a Group (17 individuals) | 108,435 | 3,856,885 | 488,807 | 4,454,127 | 1.37% |
(1) | The reported number consists only of deferred stock units that could be settled in shares of EIX Common Stock within 60 days at the director’s discretion (for example, by retirement). However, all deferred stock units held by a director count toward the stock ownership requirement for directors. In addition to the deferred stock units reported in this table, Messrs. |
(2) | Except as follows, each individual has sole voting and investment power: |
Shared voting and sole investment power: Mr. | |
Shared voting and shared investment power: Mr. Bindra | |
(3) | Includes shares listed in the three columns to the left. |
(4) | Each individual beneficially owns less than 1% of the |
(5) | |
(6) | |
(7) | Mr. |
| 17 |
Section 16(a) Beneficial Ownership Reporting ComplianceITEM 1: ELECTION OF DIRECTORS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s Directors and executive officers to file reports regarding their ownership in EIX or SCE equity securities, as applicable to the Director or officer. Based solely on a review of the reports filed and written representations from Directors and executive officers that no other reports were required, we believe that all filing requirements were timely met during 2014, except as follows:
On January 6, 2014, Mr. Sutton, who is retiring at the Annual Meeting, filed a Form 4 with the SEC reporting the conversion of EIX deferred stock units to EIX common stock that occurred on January 1, 2014. Mr. Sutton’s Form 4 was filed one day late due to an administrative error by the Company that incorrectly believed the transaction date was January 2, 2014 rather than January 1, 2014 because January 1 is a holiday.
CertainOther Shareholders
The following are the only shareholders known to beneficially own more than 5% of any class of EIX or SCE voting securities as of December 31, 2014,2016, except as otherwise indicated:
Title of Class of Stock | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | |||
EIX Common Stock | ||||||
100 Vanguard Blvd. | ||||||
Malvern, PA 19355 | ||||||
EIX Common Stock | State Street Corporation | 25,631,157(2) | 7.9% | |||
One Lincoln Street | ||||||
Boston, MA 02111 | ||||||
EIX Common Stock | BlackRock Inc. | |||||
55 East 52ndStreet | ||||||
New York, NY | ||||||
EIX Common Stock | ||||||
SCE Common Stock | Edison International | 434,888,104 | 100% | |||
2244 Walnut Grove Avenue | ||||||
Rosemead, CA 91770 |
(1) | This information is based on a Schedule 13G filed with the SEC on February |
(2) | This information is based on a Schedule 13G filed with the SEC on February 14, 2017. Acting in various fiduciary capacities, State Street reports |
(3) | This information is based on a Schedule 13G filed with the SEC on |
(4) | This information is based on a Schedule 13G filed with the SEC on January 19, 2017. JPMorgan Chase reports it has sole voting power over 15,311,419 shares, shared voting power over 105,858 shares, sole investment power over |
EIX became the holder of all issued and outstanding shares of SCE Common Stock on July 1, 1988, when it became the holding company of SCE. EIX continues to have sole voting and investment power over these shares. |
18 |
|
ITEM 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firmIndependent Auditor retained to audit the Company’s financial statements. The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firmIndependent Auditor for calendar year 2015.2017. The Company is asking shareholders to ratify this appointment.
PwC is an international accounting firm which provides leadership in public utility accounting matters. Representatives of PwC are expected to attend the Annual Meeting to respond to appropriate questions and to make a statement if they wish.
PwC has been retained as the Company’s independent registered public accounting firmIndependent Auditor continuously since 2002. The Audit Committee has adopted restrictions on hiring certain persons formerly associated with PwC into an accounting or financial reporting oversight role to help ensure PwC’s continuing independence.
The Audit Committee meets annually in executive session without PwC present to evaluate the performance of PwC, taking into consideration the quality of PwC’s written reportsaudit services and meetings with the Committee,their performance, including PwC’s industry knowledge from an accounting and tax perspective, PwC’s continued independence and professional skepticism, the Committee’s discussions with management about PwC’s performance, and information available from Public Company Accounting Oversight Board (“PCAOB”) inspection reports, among other things. reports.
The Audit Committee annually considers whethertherewhether the Independent Auditor firm should be a rotation ofreappointed for another year. The lead engagement partner is required to rotate off the independent externalCompany’s audit firm.every five years. The Audit Committee is involved in the selection of PwC’sthe lead engagement partner when mandated rotation is required every five years.partner. In 2015, in connection with the mandated rotation of PwC’s lead engagementleadengagement partner effective beginning with PwC’s audit of the Company’s 2016 financial statements, the Company will interviewinterviewed candidates who meetmet professional, industry and personal criteria, and select theselected finalists. The Audit Committee Chair will participateparticipated in interviews with viable candidatesthe finalists and approveselected the lead engagement partner, in consultation with the Audit Committee.
The Audit Committee considered a number ofseveral factors when determining whether to reappoint PwC as the Company’s independent registered public accounting firm, including the length of time PwC has been engaged, their knowledge of the Company and its personnel, processes, accounting systems and risk profile, the quality of the Audit Committee’s ongoing discussions with PwC, and an assessment of the professional qualifications, utility industry experience and past performance of PwC, its lead engagement partner, and other members of the core engagement team. Independent Auditor, including:
● | The length of time PwC has been engaged; |
● | PwC’s knowledge of the Company and its personnel, processes, accounting systems and risk profile; |
● | The quality of the Audit Committee’s ongoing discussions with PwC, their independence and professional skepticism; and |
● | An assessment of the professional qualifications, utility industry experience and past performance of PwC, its lead engagement partner, and other members of the core engagement team. |
The Audit Committee and the Board believe that the continued retention of PwC to serve as the Company’s independent external auditorIndependent Auditor is in the best interests of the Company and its investors.
The Company is not required to submit this appointment to a shareholder vote. Ratification would be advisory only. However, if the shareholders of either EIX or SCE do not ratify the appointment, the appropriate Audit Committee will investigate the reasons for rejection by the shareholders and will reconsider the appointment.
The Board recommends you vote “FOR” Item 2. |
| 19 |
ITEM 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Independent |
The following table sets forth the aggregate fees billed by PwC to EIX (consolidated total including EIX and its subsidiaries) and SCE, respectively, for the fiscal years ended December 31, 20142016 and December 31, 2013, by PwC:2015:
EIX and Subsidiaries ($000) | SCE ($000) | EIX and Subsidiaries ($000) | SCE ($000) | |||||||||||||
Type of Fee | 2014 | 2013 | 2014 | 2013 | 2016 | 2015 | 2016 | 2015 | ||||||||
Audit Fees(1) | $6,420 | $6,312 | $5,608 | $5,477 | $6,511 | $6,326 | $5,632 | $5,488 | ||||||||
Audit-Related Fees(2) | 120 | 35 | 120 | 35 | 60 | 240 | 60 | 240 | ||||||||
Tax Fees(3) | 2,604 | 1,335 | 820 | 702 | 693 | 1,402 | 389 | 713 | ||||||||
All Other Fees(4) | 73 | 5 | 73 | 5 | 96 | 1,248 | 96 | 1,248 | ||||||||
TOTAL | $9,217 | $7,687 | $6,621 | $6,219 | $7,360 | $9,216 | $6,177 | $7,689 |
(1) | These represent fees for professional services provided in connection with the audit of the Company’s annual financial statements and internal controls over financial reporting, and reviews of the Company’s quarterly financial statements. |
(2) | These represent fees for assurance and related services related to the performance of the audit or review of the financial statements and not reported under “Audit Fees” above. |
(3) | These represent fees for tax-related compliance and other tax-related services to support compliance with federal and state tax reporting and payment requirements, including tax return review and review of tax laws, regulations or cases. |
(4) | These represent fees for |
The Audit Committee annually approves all proposed audit fees in executive session without PwC present, taking into consideration a number ofconsidering several factors, including a breakdown of the services to be provided, proposed staffing and hourly rates, and changes in the Company and industry from the prior year. The audit fees are the culmination of a process which included a comparison of the prior year’s proposed fees to actual fees incurred and fee proposals for known and anticipated 20152016 services in the audit, audit-related, tax and other categories. The Audit Committee’s deliberations consider balancing the design of an audit scope that will achieve a high quality audit with driving efficiencies from both the Company and PwC while compensating PwC fairly.
The Audit Committee is required to pre-approve all audit and permitted non-audit services performed by PwC to ensure that these services will not impair the firm’s independence.
The Committee’s pre-approval responsibilities may beAudit Committee has delegated to one or morethe Committee members,Chair the authority to pre-approve services between Committee meetings, provided that such delegates present any pre-approval decisions are presented to the Committee at its next meeting. The Committee has delegated such pre-approval responsibilities to the Committee Chair. PwC must assure that all audit and non-audit services provided to the Company have been approved by the Audit Committee.
During the fiscal year ended December 31, 2014,2016, all services performed by PwC were pre-approved by the Audit Committee, irrespective of whether the services required pre-approval under the Exchange Act.
20 |
|
ITEM 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Audit Committee Report |
The Audit Committee is composed of five non-employeeindependent directors and operates under a charter adopted by the Board, which is posted on our website atwww.edison.com/corpgov.corpgov. The Audit Committee complied with the requirements of its charter in 2016.
The Board has determined that each Audit Committee member is independent and financially literate, and that at least one member has accounting or other related financial management expertise, as such qualifications are defined by NYSE rules, our Corporate Governance Guidelines, and/or the Committee charter. The Board has also determined that Ms.directors Chang, qualifiesHernandez and Taylor each qualify as an “audit committee financial expert” as defined by SEC rules.
The scope of the Audit Committee’s duties and thekey responsibilities are described above under“Board Committees – Audit Committee.”The Audit Committee’s role in risk oversight areis described in “Board Committees – Audit Committee” and “Information About above under“Our Corporate Governance – Q: What is the Board’s role in risk oversight?”
Audit Committee meeting agendas are developed based on input from each Committee member, the independent registered public accounting firm,Independent Auditor, the General Auditor, and management. TheIn 2016, the Committee requestsrequested and receivesreceived presentations on specificsignificant risk issues and a variety of topics, such as: (i) the procurement process and key vendor review; (ii) the electric system inspection program; (iii) income tax issues; (iv) the enterprise risk management process; (v) the ethics helpline; and (vi) political and charitable contributions.
● | Power procurement accounting; |
● | New accounting standards related to revenue recognition and lease accounting; |
● | The Company’s privacy compliance program; and |
● | Records management. |
Management is responsible for the Company’s internal controls and the financial reporting process, including the integrity and objectivity of the financial statements. The independent registered public accounting firm is responsible for performingIndependent Auditor performs an independent audit of the Company’s financial statements in accordance withunder the standards of the PCAOB and issuingissues a report thereon.on the financial statements. The Audit Committee monitors and oversees these processes. The Committee members are not accountants or auditors by profession and therefore have relied on certain representations from management and the independent registered public accounting firm aboutIndependent Auditor in carrying out itstheir responsibilities.
In discharging our oversight responsibilities in connection with the December 31, 20142016 financial statements, the Audit Committee:
● | Reviewed and discussed the audited financial statements with the Company’s |
● | Discussed various matters with |
● | Received the written disclosures and |
Based upon these reviews and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s 20142016 Annual Report to be filed with the SEC.
Peter J. Taylor, Chair
Vanessa C.L. ChangChairJagjeet S. BindraLouis Hernandez, Jr.Luis G. NogalesJames T. Morris
Ellen O. TauscherPeter J. Taylor
| 21 |
ITEM 3: ADVISORY VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION |
The advisory vote to approve the Company’s executive compensation, commonly known as “Say-on-Pay,” gives shareholders the opportunity to endorse or not endorse our executive compensation. This advisory vote is required by SEC rules to be provided at least once every three years. However, in 2011, our shareholders voted in favor of holding the advisory vote every year, and the Board determined that it would be held annually. The advisory vote to approve the Company’s executive compensationSay-on-Pay proposal received support from at least 94%91% of the votes cast in 2012, 2013 and 2014.each of the last six years.
Our executive compensation program is described under “Compensation“Compensation Discussion and Analysis”Analysis” below. We encourage you to read it carefully. Our executive compensation program is reviewed and approved by the Compensation and Executive Personnel Committee. The Board believes our competitiveexecutive compensation structure is competitive, aligns executive compensation with shareholder value and serves shareholders well.
EIX and SCE request shareholder approval of the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement pursuant tounder the SEC’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables.
The Company values constructive dialogue with shareholders on compensation and other important governance matters. Because your vote is advisory, it will not be binding on the Board or the Company and will not be construed as overruling a decision by the Board or the Company. However, the Compensation and Executive Personnel Committee will consider the outcome of the vote and any constructive feedback from shareholders when making future executive compensation decisions. See “Shareholder“Compensation Summary – Shareholder Communication and Compensation Program for 2015” in the Compensation Summary of the Compensation Discussion and Analysis below.2017.”
It is expected that the next suchSay-on-Pay vote will occur at the 20162018 Annual Meeting.
The Board recommends you vote “FOR” Item 3. |
22 |
|
ITEM 4: ADVISORY VOTE ON THE FREQUENCY OF SAY-ON-PAY VOTES
Item 3 above provides our shareholders the opportunity to cast an advisory Say-on-Pay vote to endorse or not endorse the compensation of our named executive officers. In 2011, our shareholders voted in favor of holding the Say-on-Pay vote every year, and the Board determined that it would be held annually. The Board continues to believe that Say-on-Pay votes should be conducted every year so that shareholders may annually express their views on the Company’s executive compensation program.
SEC rules require that at least every six years the Company provide our shareholders the opportunity to cast an advisory vote on how often we should include a Say-on-Pay proposal in our proxy materials for future shareholder meetings at which directors will be elected and for which we must include executive compensation information in the proxy statement for that meeting. Under this Item 4, shareholders are given the choice in the proxy card to vote to have the Say-on-Pay vote every year, every two years or every three years, or abstain from voting. Therefore, shareholders will not be voting to approve or disapprove the Board’s specific recommendation.
Like the Say-on-Pay vote, your vote on this Item 4 is advisory and will not be binding upon the Board or the Company. However, the Board and its Compensation Committee value the opinions expressed by shareholders and will take into account the outcome of the vote when considering the frequency of future Say-on-Pay votes.
|
2017 Proxy Statement | 23 |
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) describes the principles of our executive compensation program, how we applied those principles in compensating our named executive officers (“NEOs”) for 2014,2016, and how we use our compensation program to drive performance. We also discuss the roleroles and responsibilities of our Compensation and Executive Personnel Committee (the “Committee”) in determining executive compensation. The CD&A is organized as follows:
● | Compensation Summary |
● | |
| What We Pay and Why: Elements of Total Direct Compensation |
● | |
| How We Make Compensation Decisions |
● | Post-Employment and Other Benefits |
● |
|
| Other Compensation Policies and Guidelines |
The CD&A contains information that is relevant to your decision regarding the advisory vote to approve our executive compensation (Item 3 on your proxy card)Proxy Card). When voting on Item 3, EIX shareholders will vote on EIX executive compensation, while SCE shareholders will vote on SCE executive compensation.
Compensation Summary |
Certain key information about our executive compensation program is highlighted in this Compensation Summary.
Executive Compensation Practices
Our executive compensation program is designed with the objective of strongly linking pay with performance. The table below highlights our current compensation practices for NEOs, including practices that we believe drive performance and are aligned with good governance principles, and practices we have not implemented because we do not believe they would serve our shareholders’ long-term interests.
What We Do | What We Don’t Do | |||
✓ | We tie pay to performance by making the majority of compensation “at risk” and linking it to shareholders’ interests |
| ✗We do not have any employment contracts | |
✓ | We target a competitive range around the market median |
| ✗We do not provide excise tax gross-ups on change in control payments | |
✓ | We compare executive compensation to a peer group |
| ✗We do not have individually negotiated change in control agreements | |
✓ | We balance multiple metrics for annual and long-term incentives |
| ✗We do not provide perquisites | |
✓ | We have double-trigger change in control provisions for |
| ✗We do not provide personal use of any corporate aircraft | |
✓ | We seek shareholder feedback on our executive compensation program and share the feedback with the Board and the Committee |
| ✗We do not | |
✓ | We have stock ownership guidelines, which include holding requirements, and an incentive compensation clawback policy |
| ✗We do not permit pledging of Company securities by directors or EIX executive officers | |
✓ | Our Committee’s compensation consultant is independent and does not provide any other services to the Company |
| ✗We do not permit hedging of Company securities by directors or employees |
|
COMPENSATION DISCUSSION AND ANALYSIS
Leadership Transition
The 2016 compensation of NEOs reported in the tables below reflects compensation changes resulting from our leadership transition during 2016. As discussed above, effective September 30, 2016, Theodore F. Craver, Jr. retired from his position as EIX’s Chairman and CEO, and Pedro J. Pizarro succeeded him as EIX CEO. Effective June 1, 2016, Mr. Pizarro became EIX President, Kevin M. Payne became SCE CEO and Ronald O. Nichols became SCE President.
In addition, effective September 30, 2016, W. James Scilacci retired from his position as EIX Executive Vice President (“EVP”) and Chief Financial Officer (“CFO”), and Maria Rigatti succeeded him. William M. Petmecky, III was promoted effective September 30, 2016 to replace Ms. Rigatti as SCE’s Senior Vice President (“SVP”) and CFO.
The Committee generally targets a competitive range of +/-15% around the market median for base salary and annual and long-term incentives for each NEO position. However, the Committee set compensation for most of the newly promoted NEOs below this range for their new positions, with the opportunity for increases after evaluating their performance in their new positions. More information is under “What We Pay and Why: Elements of Total Direct Compensation” and “How We Make Compensation Decisions: Use of Competitive Data.”
The two charts below in this "Compensation Summary" compare EIX CEO pay to EIX’s performance and to peer group median pay for a five-year period. Since Mr. Craver served as EIX CEO during all but the last three months of this period, his compensation is used for these purposes.
EIX NEOs for 2016
EIX NEOs are identified below. EIX shareholders will vote on EIX executive compensation.
EIX NEOs | Title | |
Pedro J. Pizarro | EIX CEO effective 9/30/16; EIX President effective 6/1/16; SCE President through 5/31/16 | |
Theodore F. Craver, Jr. | EIX Chairman of the Board and CEO through 9/30/16; also EIX President through 5/31/16 | |
Maria Rigatti | EIX EVP and CFO effective 9/30/16; SCE SVP and CFO through 9/30/16 | |
W. James Scilacci | EIX EVP and CFO through 9/30/16 | |
Adam S. Umanoff | EIX EVP and General Counsel | |
Kevin M. Payne | SCE CEO effective 6/1/16; SCE SVP through 5/31/16 | |
Ronald L. Litzinger | Edison Energy Group (“EEG”) President; also EIX EVP through 3/28/16 |
SCE NEOs for 2016
SCE NEOs are identified below. SCE shareholders will vote on SCE executive compensation.
SCE NEOs | Title | |
Kevin M. Payne | CEO effective 6/1/16; SVP through 5/31/16 | |
Pedro J. Pizarro | President through 5/31/16 | |
William M. Petmecky, III | SVP and CFO effective 9/30/16; Vice President and Treasurer through 9/30/16 | |
Maria Rigatti | SVP and CFO through 9/30/16 | |
Ronald O. Nichols | President effective 6/1/16; SVP through 5/31/16 | |
Russell C. Swartz | SVP and General Counsel | |
Peter T. Dietrich | SVP through 1/20/17 |
Executive Benefit Changes
In the last two years, the Committee has approved changes to various executive benefits after a thorough review of our compensation and benefits program. The key changes are below. More information is under“Potential Payments Upon Termination or Change in Control – Executive Survivor Benefit Plan,”“Other Compensation Policies and Guidelines – Stock Ownership Guidelines,”“Non-Qualified Deferred Compensation – Executive Deferred Compensation Plan”and“Pension Benefits – Executive Retirement Plan.”
Benefit | Change | Effective Date | Key Objectives of Changes | ||
Executive Survivor Benefit Plan | Terminated | December 31, 2016 | ●Decrease portion of compensation and benefits package not directly tied to performance ●Simplify benefits for new executives ●Continue strong compliance with Stock Ownership Guidelines for Officers | ||
Long-Term Incentive Awards | Added holding requirements for officers subject to Stock Ownership Guidelines | February 22, 2017 | |||
Executive Deferred Compensation Plan | Eliminated matching contributions | January 1, 2018 | |||
Executive Retirement Plan | Reduced plan benefit | January 1, 2018 |
2017 Proxy Statement | 25 |
COMPENSATION DISCUSSION AND ANALYSIS
Elements and Objectives of Total Direct Compensation
Element | Form | Key Objective | % of Direct | |||||
Base Salary | Fixed Pay: Cash | Establish a pay foundation to attract and retain qualified executives |
| |||||
Annual Incentive | Variable Pay: Cash | Focus executives’ attention on specific financial, strategic and operating objectives of the Company that we believe will increase shareholder value and benefit customers | 15% | |||||
Long-Term Incentive Awards |
| |||||||
| Variable Pay: Equity | Align executive pay |
| |||||
● | 50% stock options | ● |
| |||||
● | 25% performance shares | ● | Reward relative shareholder return compared to peers and earnings per share compared to pre-established targets | |||||
● | 25% restricted stock units | ● | Encourage retention, |
* | In this CD&A, the term |
EIX NEOs for 2014
EIX NEOs are identified below. EIX shareholders will vote on EIX executive compensation.
|
| |
|
| |
|
| |
|
| |
|
|
SCE NEOs for 2014Alignment of EIX CEO Pay with Performance
SCE NEOs are identified below. SCE shareholders will vote on SCE executive compensation.
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Our Business and Strategy
During the five-year period from 2012 to 2016, EIX’s core business is conducted by its subsidiary SCE, a rate-regulated electric utility that supplies electric energy to anTSR1 was approximately 50,000 square-mile area of southern California. SCE’s strategy is to provide customers safe, reliable and affordable electricity as a foundation for long-term sustainable growth and shareholder value. SCE’s investment focus is on distribution and transmission infrastructure. EIX’s strategy includes investing in, owning, and operating competitive businesses in the electricity industry, with a focus on commercial and industrial energy services. The Company is committed to driving operational and service excellence to achieve its strategic objectives.
2014 Financial Highlights
Significant results for EIX in 2014 include:
|
|
|
|
|
|
EIX’s relative TSR performance and earnings per share performance contributed to the above-target payout of performance shares described under “Long-Term Incentive Awards” below. EIX’s consolidated core earnings exceeding our goal was a key factor in determining 2014 annual incentive awards for EIX. The determination of annual incentive awards is described under “Annual Incentive Awards” below.
2014 NEO Pay
The following table shows the100%. Mr. Craver’s total direct compensation for 2014 compared to 2013 forchanged by less than 10% during the executives who were EIX NEOs both years.period. “Total direct compensation” or “TDC” means the sum of base salary, the actual annual incentive awardsaward paid for the year and the grant date fair value of long-term incentive awards (columns (c), (e), (f) and (g) of the EIX Summary Compensation Table) for the NEO for the applicable year.
EIX NEO | 2013 TDC (million) | 2014 TDC (million) | TDC Increase From 2013 to 2014 |
Theodore F. Craver, Jr. | $8.743 | $9.360 | 7% |
W. James Scilacci | $2.334 | $2.568 | 10% |
Robert L. Adler | $2.347 | $2.532 | 8% |
Ronald L. Litzinger | $2.303 | $2.566 | 11% |
Bertrand A. Valdman | $1.388 | $1.452 | 5% |
The increases infollowing chart shows the alignment over the past five years between Mr. Craver’s total direct compensation shown above were due almost entirely to higher annual incentive awardsbased primarilyand our indexed TSR, which represents the value of an initial investment of $100 in EIX common stock at the beginning of the five-year period, and assumes that dividends are reinvested on the Company’s strong financial performance. Mr. Litzinger also had a 3% salary increase, which resulted in a comparable 3% increaseex-dividend date. For purposes of comparison, the 2016 CEO TDC in the grant date fair value of his long-term incentive award (sincechart represents Mr. Craver’s pro forma total direct compensation for the grant date fair value of his long-termfull 2016 year, assuming he continued receiving the same salary rate and annual incentive award as a percentagepercent of base salary did not change). The salaries andfor the grant date fair valueremainder of long-term incentive awards of Messrs. Craver, Scilacci, Adler, and Valdman either did not change or increased by 1% or less.the year.
More information on the reasons for changes in compensation from 2013 to 2014 is under “What We Pay and Why: Elements ofEIX CEO Total Direct Compensation” below.Compensation (TDC)____________________vs. Indexed TSR 2012-2016
(1) | In this Proxy Statement, for all purposes other than performance share payouts, TSR is calculated using the difference between (i) the closing stock price for the relevant stock on the last NYSE trading day preceding the first day of the relevant period and (ii) the closing stock price for the relevant stock on the last trading day of the relevant period, and assumes all dividends during the period are reinvested on the ex-dividend date. Under this methodology, EIX’s 2014-2016 TSR was at the 90th percentile of the Philadelphia Utility Index. A different methodology is used to |
26 | 2017 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
Comparison of EIX CEO Pay with Peer Group
The following chart shows Mr. Craver’s total direct compensation for the last five years as reported in the EIX Summary Compensation Table, compared to the median TDC for the chief executive officers of the companies that comprise the Philadelphia Utility Index peer group. The 2016 CEO TDC in the chart represents Mr. Craver’s pro forma total direct compensation for the full 2016 year. (The 2016 Peer Median TDC in the chart is the same as the 2015 Peer Median TDC, since peer group data for 2016 was generally unavailable in time to include in this Proxy Statement.)
Mr. Craver’s total direct compensation was somewhat above the peer group median from 2012 through 2014, due primarily to chief executive officer turnover at peer companies and annual incentive awards for Mr. Craver that were significantly above-target, largely as a result of above-target core earnings.2 Mr. Craver’s 2015 and pro forma 2016 total direct compensation was slightly below the peer group median, largely due to the annual incentive awards at peer companies.
Mr. Pizarro’s total direct compensation in 2016 was significantly below the peer group median for chief executive officers. His compensation before the September 30 effective date of his election as EIX CEO was targeted at the market median for his prior positions (SCE President through May 31 and EIX President from June 1 through September 29). In addition, his annualized compensation after the effective date of his election as EIX CEO was below the peer group median for chief executive officers. For purposes of comparison, the following chart shows Mr. Pizarro’s pro forma total direct compensation for 2016, based on the annualized compensation the Committee approved in connection with the September 30, 2016 effective date of his election as EIX CEO.
EIX CEO vs. Peer Group Median TDC
Shareholder Communication and Compensation Program for 2017
We seek and value input from our shareholders. In 2016, we engaged with our major institutional shareholders to discuss the Company’s corporate governance, executive compensation, and business strategy. Management shared the feedback received from these discussions with the Board and relevant Board committees.
EIX’s Say-on-Pay proposal received support from approximately 96% of the votes cast in 2016. The Committee reviewed the results of the shareholder vote, including feedback from major shareholders. Taking the vote results and shareholder feedback into account, and considering trends in executive compensation and the best interests of shareholders, the Committee approved maintaining our executive compensation program with the following changes for 2017: the previously-approved termination of the Executive Survivor Benefit Plan went into effect; and the Company’s stock ownership guidelines were amended February 22, 2017 to implement holding restrictions for EIX common stock acquired pursuant to long-term incentive awards. More information is under “Potential Payments Upon Termination or Change in Control – Executive Survivor Benefit Plan” and “Other Compensation Policies and Guidelines – Stock Ownership Guidelines.”
What We Pay and Why: Elements of Total Direct Compensation |
We generally target a competitive range of +/-15% around the market median for each element of total direct compensation offered under our program: base salaries, annual cash incentives, and long-term equity-based incentives. The reasons for the Committee’s decision to target the competitive range around the median level include:
● | The policy of the applicable regulatory authorities that SCE should provide market level compensation, and the desire for internal compensation equity between EIX and SCE; |
● | Above-median compensation usually is not needed, except occasionally for recruitment and retention purposes and to reward exceptional performers; and |
(2) | Core earnings is defined on a consolidated basis for EIX as earnings attributable to EIX shareholders less non-core items. Non-core items include income or loss from discontinued operations, income resulting from allocation of losses to tax equity investor under the HLBV accounting method and income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as: exit activities, including sale of certain assets and other activities that areno longer |
|
Alignment of CEO Pay with Performance
During the five-year period from 2010 to 2014, EIX’s TSR was approximately 119%, significantly due to our strong TSR performance in 2014. During this period, Mr. Craver’s total direct compensation increased by approximately 29%. The following chart shows the alignment over the past five years between Mr. Craver’s total direct compensation and our indexed TSR, which represents the value of an initial investment of $100 in EIX common stock at the beginning of the five-year period, and assumes that dividends are reinvested on the ex-dividend date.
CEO Total Direct Compensation (TDC)vs. Indexed TSR 2010-2014
The value attributed to equity awards in the chart above is the grant date fair value reported in the Summary Compensation Table of Company Proxy Statements. It does not reflect those equity awards’ realized value, which depends on the actual payout of performance shares compared to target, the appreciation or depreciation of EIX stock after the grant date, and dividends after the grant date through the end of the performance period. Mr. Craver realized approximately $1.9 million less in total value from his 2010 and 2011 performance share awards than the total grant date fair value reported in the Summary Compensation Table for the years of grant. This difference was largely the result of payouts of 2010 and 2011 performance shares being significantly below target due to EIX’s below-median relative TSR performance for the 2010-12 and 2011-13 performance periods.
In contrast, Mr. Craver realized approximately $1.8 million more in total value from his 2012 performance share awards than the grant date fair value reported in the Summary Compensation Table. Payouts of 2012 performance shares were significantly above-target due to EIX’s strong performance during the 2012-14 performance period, as measured by relative TSR and above-target core earnings per share. (Earnings per share compared to target was added in 2012 as a second performance metric). In addition, EIX’s stock appreciated significantly after the grant date of this award.
The following chart shows the difference for Mr. Craver between the target number of shares at grant and the number of shares vested at payout for each of the three most-recently completed performance periods.
CEO Performance Shares –Number of Shares at Grant vs. at Payout
|
Comparison of CEO Pay with Peer Group
The following chart shows Mr. Craver’s total direct compensation for the last five years as reported in the EIX Summary Compensation Table, compared to the Philadelphia Utility Index peer group median. (The chart uses 2013 peer group data for 2014 since peer group data for 2014 was generally unavailable in time for inclusion in this Proxy Statement.)
Mr. Craver’s 2010 total direct compensation was slightly below the peer group median. Since 2011, his total direct compensation has been somewhat above the peer group median, partly due to chief executive officer turnover at peer companies. Another factor was that Mr. Craver’s annual incentive awards for these years were above target, largely due to above-target core earnings, as discussed in the Company’s 2012, 2013, and 2014 Proxy Statements and under “Annual Incentive Awards” below.
CEO vs. Peer Group Median TDC
As discussed in “Use of Competitive Data” below, the Committee uses peer group data and data from pay surveys to determine market compensation. The additional data provides a more robust set of information for making compensation decisions. In February 2014, the Committee used data from three pay surveys, in addition to peer group data, to set Mr. Craver’s 2014 salary, target annual incentive award, and grant date fair value of long-term incentive awards (together, “target total direct compensation”) at approximately the projected market median level for 2014.
Shareholder Communication and Compensation Program for 2015
In 2014, we engaged with many of EIX’s large institutional shareholders to discuss their views on the Company’s corporate governance, proxy disclosure, and executive compensation. Management shared the feedback received from these discussions with the Board and the Committee.
The advisory vote to approve EIX’s executive compensation received support from approximately 94% of the votes cast in 2014. The Committee reviewed the results of the shareholder vote, including feedback from major shareholders. Taking the vote results and shareholder feedback into account, and considering trends in executive compensation and the best interests of shareholders, the Committee approved maintaining our executive compensation program without any significant changes for 2015.
|
Our executive compensation program seeks to achieve three fundamental objectives:COMPENSATION DISCUSSION AND ANALYSIS
● |
|
| |
|
We target the market median for each element of total direct compensation offered under our program: base salaries, annual cash incentives, and long-term equity-based incentives. The reasons for the Committee’s decision to target the median level include:
| |
| |
Below-median compensation would create retention and recruitment difficulties. |
A significant portion of our executives’ total direct compensation is tied to company performance. The following charts show that incentive compensation (annual and long-term incentive awards) comprised approximately 85%86% of our CEO’s 2014EIX CEO 2016 target total direct compensation and approximately 70% on average of ourEIX’s and SCE’s other NEOs’ 20142016 target total direct compensation. Most of the target incentive compensation was in the form of long-term incentives.
EIX CEO Pay Mix
Other NEO Pay Mix
This pay mix provides an opportunity for NEO compensation to reflect the upside and downside potential of company performance and helps to focus NEOs’ attention on our financial, strategic and operating objectives, and shareholder return.returns.
Base Salary
For 2014,2016, each NEO’s base salary was evaluated according to his or her position and performance. For each position, a market base salary range was determined, consistingdetermined. The median of a minimum, median and maximum. The Committee targetsthe range was the market median level of base salaries for comparable positions. None ofWe do not have employment contracts and our NEOs has ado not have contractual rightrights to receive a fixed base salary.salaries.
TheIn connection with the leadership transition during 2016, the Committee increased the annual base salary increases between 2013rates of Messrs. Pizarro, Payne, Petmecky, and 2014 shown in the Summary Compensation TablesNichols and Ms. Rigatti. Aftertheir respective final promotions for Messrs. Scilacci, Litzinger, Dietrich, and Swartz2016, these NEOs’ annual base salary rates were made to bring their salaries closer toapproximately 10-40% below the market median for comparabletheir respective new positions. TheEach NEO has an opportunity for an increase in his or her annual base salary rate in 2017 after the NEO’s performance in the new position is evaluated.
In addition, in early 2016, the Committee increased the salariesbase salary rates of Messrs. AdlerScilacci and ValdmanUmanoff and set them abovewithin 1% of the market median after deciding the salaries were appropriate in light offor their individual performance and overall responsibilities and contributions.respective positions.
Annual Incentive Awards
Executive Incentive Compensation Plan
NEOs are eligible for annual incentive awards under the EIX Executive Incentive Compensation Plan for achieving specific financial, strategic and operational goals pre-establishedthat are established at the beginning of each year. The goals are tied to the key elements of our strategy described on page 1 and specific quantitative targets are set for most of the goals.
The 2016 annual incentive award target value for each NEO is statedwas set as a percentage of the NEO’s base salary (the “Annual Incentive Target %”). In connection with the leadership transition during 2016, the Committee increased the Annual Incentive Target % for Messrs. Pizarro, Payne, Petmecky, and is based
|
on the market median of targetfor the new positions. In addition, in early 2016, the Committee increased the respective Annual Incentive Target % for Messrs. Craver, Scilacci, and Umanoff to bring it closer to or approximately at the market median for their respective positions.
The minimum annual incentive awards for comparable positions. The minimum award is $0. The maximum award is 200% of target, which the Committee’s independent compensation consultant, for 2014, Frederic W. Cook & Co., Inc. (“F.W. Cook”),Pay Governance, advised is the most prevalent practice among the peer group companies.
The Committee determines annual incentive awards based on corporate and individual performance. The corporate performance factor is based on performance relative to the pre-established goals.goals established at the beginning of the year. For each goal category, the Committee assigned a target score reflecting the relative weight given that goal category and a potential score range. In February2015,February 2017, the Committee determined the score achieved for each goal category, depending on the extent to which the goals were unmet, met or exceeded.
Separate goals were established for EIX and SCE. Annual incentive awards forHowever, as reflected in the 2016 EIX NEOs were based on EIXCorporate Performance Scoring Matrix below, many of EIX’s goals related to SCE’s performance. Annual incentive awards for the SCE NEOsMessrs. Craver, Scilacci, Litzinger, and Umanoff were based on the EIX corporate performance factor. Annual incentive awards for Messrs. Payne, Petmecky, Dietrich, Nichols, and Swartz were based on the SCE performance.corporate performance factor. Mr. Litzinger’sPizarro’s and Ms. Rigatti’s annual incentive award wasawards were based on EIX performance for the portiona blend of the year he wasEIX and SCE corporate performance factors, weighted based upon the relative time each respectively served as an EIX Executive Vice President,officer and onas an SCE performance for the portion of the year he was SCE’s President.officer in 2016.
2014 EIX Corporate Performance Scoring Matrix
Goal Category | Target Score | Potential Score | Actual Score | Key Factors Contributing to Actual Score | ||||
Financial Performance(1) | 60 | 0-120 | 120 | ●Achieved consolidated core earnings of $1.497 billion, which exceeded the target of $1.206 billion and the maximum score level of $1.329 billion. | ||||
Strategic Initiatives | 25 | 0-50 | 40 | ●Met goal to launch initiatives aimed at positioning the Company for transformative change in the electric industry, and achieved all milestones. Exceeded or met goals for growth in EIX’s commercial and industrial energy services platform. | ||||
●Implemented settlement agreement that fairly resolved claims related to EME’s bankruptcy. | ||||||||
●Obtained CPUC approval of fair settlement resolving outstanding issues related to the early retirement of the San Onofre Nuclear Generating Station. | ||||||||
●Met goals of no serious injuries to the public and no significant noncompliance events. | ||||||||
●Achieved goals for operations and maintenance cost per customer and system average rate per kilowatt hour. | ||||||||
●Met goals for reliability of service to customers. | ||||||||
●Did not meet DART (Days Away, Restricted, and Transfer) injury rate goal. | ||||||||
●Did not meet goal of maintaining first quartile status in J.D. Power and Associates customer satisfaction studies. | ||||||||
People and Culture | 15 | 0-30 | 10 | ●Maintained, but did not meet goal to increase, executive diversity. | ||||
Total: | 100 | 0-200 | 170 |
|
2014 SCE Corporate Performance Scoring Matrix
Goal Category | Target Score | Potential Score | Actual Score | Key Factors Contributing to Actual Score | ||||
Financial Performance(1) | 40 | 0-80 | 80 | ●Achieved core earnings of $1.525 billion, which exceeded the target of $1.254 billion and the maximum score level of $1.380 billion. | ||||
Operational and Service Excellence | 25 | 0-50 | 23 | ●Met goals of no serious injuries to the public and no significant noncompliance events. | ||||
●Achieved goals foroperations and maintenance cost per customer and system average rate per kilowatt hour. | ||||||||
●Met goals for reliability of service to customers. | ||||||||
●Did not meet DART (Days Away, Restricted, and Transfer) injury rate goal. | ||||||||
●Did not meet goal of maintaining first quartile status in J.D. Power and Associates customer satisfaction studies. | ||||||||
Strategic Initiatives | 20 | 0-40 | 27 | ●Obtained CPUC approval of fair settlement resolving outstanding issues related to the early retirement of the San Onofre Nuclear Generating Station. | ||||
●Met goal to launch initiatives aimed at positioning the Company for transformative change in the electric industry, and achieved all milestones. | ||||||||
People and Culture | 15 | 0-30 | 10 | ●Maintained, but did not meet goal to increase, executive diversity. | ||||
Total: | 100 | 0-200 | 140 |
|
|
COMPENSATION DISCUSSION AND ANALYSIS
2016 EIX Corporate Performance Scoring Matrix
Goal Category | Key Goals/Performance Contributing to Actual Score | Actual Score for Goal(2) | Target Score for Goal Category | Potential Score for Goal Category | Actual Score for Goal Category(2) | |||||||
Goal(1) | Performance(1) | |||||||||||
Financial Performance | ●Core earnings of $1.274 billion | ●Goal Exceeded:$1.294 billion(3) | 66 | 60 | 0-120 | 66 | ||||||
Strategic Initiatives | ●Execute SCE goals for affordable customer rates | ●Goal Exceeded:see SCE matrix below for additional information | 6 | 30 | 0-60 | 10 | ||||||
●Obtain favorable outcome in SCE’s Distribution Resources Plan (“DRP”) (10-K, pgs. 5-6) | ●Goal Exceeded:favorable market reaction to DRP; CPUC acknowledged important link between DRP and SCE’s General Rate Case | 5 | ||||||||||
●Grow EEG’s distributed energy and commercial and industrial energy services businesses (10-K, pg. 106): contract 150 megawatts (“MW”) and complete construction of 122 MW of distributed solar projects; complete 20 MW of community solar projects and 20 MW of rural cooperative projects; sign 10 new contracts for advisory and integrated solutions | ●Goal Not Met:new contracts and completed projects below target | 2 | ||||||||||
●Grow EEG’s transmission business: complete Grid Assurance investment decision (10-K, pg. 106); submit two transmission bids | ●Goal Met:completed Grid Assurance investment decision; submitted two transmission bids | 2 | ||||||||||
●Evaluate business case for SCE fiber business; prepare for 2017 launch | ●Goal Met:SCE established business case and began implementing fiber business | 2 | ||||||||||
●Propose three new business opportunities; begin implementing one | ●Goal Met:three new business opportunities evaluated; SCE developed transportation electrification plan (10-K, pg. 6) | 2 | ||||||||||
●Evaluate business case for EEG water business; begin operation of one pilot project | ●Goal Partially Met:business case evaluated; decision made to wind down business | 1 | ||||||||||
●Achieve SCE capital spending targets | ●Goal Not Met:see SCE matrix below for additional information | 0 | ||||||||||
●No significant noncompliance events; no worker or public safety issues; defend San Onofre settlement agreement(4) | ●Goal Not Met:see SCE matrix below for additional information | -10 | ||||||||||
People and | ●Integrate new EEG companies; develop and begin implementing plan for EEG human capital platform; hire and retain key employees | ●Goal Exceeded:integrated new companies; implemented human capital platform; retained key employees | 6 | 10 | 0-20 | 9 | ||||||
●Diversify leadership pipeline above 2015 levels: ethnic minorities 25.4% of executives and 39.8% of leadership pool; women 27% of executives and 29.6% of leadership pool | ●Goal Not Met:increased ethnic minorities to 26.1% of executives and 40.3% of leadership pool; did not increase womenin leadership pipeline | 3 | ||||||||||
Total: | 100 | 0-200 | 85 |
(1) | The parenthetical “10-K” page references in the “Goal” and “Performance” columns refer to pages in the combined Form 10-K filed by EIX and SCE for the fiscal year ended December 31, 2016 (“10-K”). The referenced pages contain additional information about the relevant topics, but do not address annual incentive plan goals or the scoring of the performance for purposes of this matrix. |
(2) | Score determinations are generally made in the judgment of the Committee after assessing overall performance against goals. |
(3) | Linear interpolation between the target of $1.274 billion and the maximum score level of $1.474 billion was used to determine the actual score. |
(4) | When the Committee established this goal, it determined that the Actual Score for the goal would be zero if the goal was met and could be negative if the goal was not met. |
2017 Proxy Statement | 29 |
COMPENSATION DISCUSSION AND ANALYSIS
2016 SCE Corporate Performance Scoring Matrix
Goal Category | Key Goals/Performance Contributing to Actual Score | Actual Score for Goal(2) | Target Score for Goal Category | Potential Score for Goal Category | Actual Score for Goal Category(2) | |||||||
Goal(1) | Performance(1) | |||||||||||
Financial Performance | ●Core earnings of $1.333 billion | ●Goal Exceeded: $1.376 billion(3) | 53 | 40 | 0-80 | 53 | ||||||
Safety | ●DART (Days Away, Restricted, and Transfer) injury rate ≤0.61 | ●Goal Not Met: 0.80 | 0 | 10 | 0-20 | 0 | ||||||
●No serious injuries to the public from system failures(4) | ●Goal Met:no serious injuries to the public | 0 | ||||||||||
●No worker fatalities(4) | ●Goal Not Met:four worker fatalities | 0 | ||||||||||
Operational and | ●Affordable customer rates: controllable operations and maintenance (“O&M”) cost per customer ≤$334; system average rate of 14.9-15.3 cents per kilowatt-hour | ●Goal Exceeded: controllable O&M cost per customer of $329; system average rate of 14.8 cents per kilowatt-hour | 6 | 20 | 0-40 | 8 | ||||||
●Improve J.D. Power Customer Satisfaction Study scores: business customer rank ≤14; residential customer rank ≤17 | ●Goal Partially Met: business customer rank of 13; residential customer rank of 20 | 3 | ||||||||||
●Protect critical infrastructure: no significant data breaches, control system compromises or IT infections caused by phishing | ●Goal Met: no significant data breaches, control system compromises or IT infections caused by phishing | 2 | ||||||||||
●Diverse Business Enterprise spend ≥40% | ●Goal Met: 45% | 2 | ||||||||||
●Achieve capital spending targets: $3.321 billion CPUC-jurisdictional; $0.628 billion FERC-jurisdictional | ●Goal Not Met: $3.042 billion CPUC-jurisdictional $0.457 billion FERC-jurisdictional | 0 | ||||||||||
●Achieve system performance and reliability goals: SAIDI≤95.3; SAIFI≤0.85; MAIFI≤1.24 | ●Goal Not Met: SAIDI–100.8; SAIFI–0.91; MAIFI–1.31 | 0 | ||||||||||
●No significant noncompliance events(4) | ●Goal Not Met: penalty expected for Long Beach service interruptions (10-K, pg. 8) | -5 | ||||||||||
Strategic | ●Advance grid modernization efforts: favorable outcome in DRP (10-K, pgs. 5-6); initiate one microgid project; customer commitments for 500 charging stations (10-K pgs. 5-6); progress on energy storage projects (10-K, pgs. 5, 111) | ●Goal Exceeded: favorable market reaction to DRP; microgrid project initiated; commitments for 686 charging stations; energy storage placed in service (40 MW) and contracted (142 MW) | 13 | 20 | 0-40 | 21 | ||||||
●Advance key regulatory proceedings: file 2018 General Rate Case (10-K, pg. 7); defend San Onofre settlement agreement (10-K pgs. 7, 94-96) | ●Goal Partially Met: filed 2018 General Rate Case; adverse impact of CPUC ruling on settlement agreement | 8 | ||||||||||
People and | ●Enhance decision-making processes and encourage employee engagement | ●Goal Met: streamlined decision-making structure; new X-Change program implements employee ideas | 5 | 10 | 0-20 | 8 | ||||||
●Diversify leadership pipeline above 2015 levels: ethnic minorities 29.5% of executives and 41.4% of leadership pool; women 31.8% of executives and 29.5% of leadership pool | ●Goal Not Met: increased ethnic minorities to 30% of executives and 42.1% of leadership pool; did not increase women in leadership pipeline | 3 | ||||||||||
Total: | 100 | 0-200 | 90 |
(1) | The referenced 10-K pages contain additional information about the relevant topics, but do not address annual incentive plan goals or the scoring of the performance for purposes of this matrix. “CPUC” means the California Public Utilities Commission. “FERC” means the Federal Energy Regulatory Commission. “SAIDI” means the System Average Interruption Duration Index. “SAIFI” means the System Average Interruption Frequency Index. “MAIFI” means the Momentary Average Interruption Frequency Index. |
(2) | Score determinations are generally made in the judgment of the Committee after assessing overall performance against goals. |
(3) | Linear interpolation between the target of $1.333 billion and the maximum score level of $1.466 billion was used to determine the actual score. |
(4) | When the Committee established this goal, it determined that the Actual Score for the goal would be zero if the goal was met and could be negative if the goal was not met. |
30 | 2017 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
2016 Annual Incentive Awards
TheBased on 2016 performance, the corporate performance factorfactors for EIX and SCE were 85% and 90% of target, respectively. These factors were determined by adding the “Actual Scores” above would have been 170% of target.in the corporate performance scoring matrices above. Notwithstanding strong financial performance, the corporate performance factors were below target primarily due to below-target performance on safety and operational and service excellence goals. The Committee hasdid not exercise its discretion however, to increase or decrease the corporate performance factor from the amount determined by application of the scoring matrix. The Committee exercised discretion to reduce EIX’s corporate performance factor from 170% to 155% to bring it closer to SCE’s corporate performance factor of 140% of target and thereby achieve closer parity in incentive pay between EIX and SCE executives, recognizing that SCE’s financial performance was the predominant contributor to EIX’s financial performance.
The Committee determined the annual incentive award for each NEO by multiplying the annual incentive target percentage for the NEO by the EIX or SCE corporate performance factor and an individual performance factor. Individual performance factors were determined by the Committee in its discretion (subject to the limitation described below under “Impact of Other Plans”), based on its assessment of each NEO’s performance and achievements for the year, and relative impact and contribution to corporate performance compared to executives in similar roles. The maximum award is two timesfollowing table shows the target percentage. The resulting annual incentive awards to our EIX NEOs were as follows:a percentage of salary and as a multiple of target:
EIX NEOs(1) | Annual Incentive Target as % of Salary | Corporate Performance Factor(2) | Individual Performance Factor | Annual Incentive Award as % of Salary | Annual Incentive Award as Multiple of Target | Annual Incentive Target as % of Salary(2)(3) | Corporate Performance Factor(3)(4) | Individual Performance Factor(3)(5) | Annual Incentive Award as % of Salary(3)(6) | Annual Incentive Award as Multiple of Target(3)(6) | ||||||||||
Pedro J. Pizarro | 94% | 0.87 | 1.00 | 81% | 0.87x | |||||||||||||||
Theodore F. Craver, Jr. | 115% | 1.550 | 1.29 | 230% | 2.0x | 125% | 0.85 | 1.00 | 106% | 0.85x | ||||||||||
Maria Rigatti | 63% | 0.89 | 1.13 | 62% | 0.99x | |||||||||||||||
W. James Scilacci | 70% | 1.550 | 1.23 | 133% | 1.9x | 75% | 0.85 | 1.00 | 64% | 0.85x | ||||||||||
Robert L. Adler | 70% | 1.550 | 1.29 | 140% | 2.0x | |||||||||||||||
Adam S. Umanoff | 75% | 0.85 | 1.07 | 68% | 0.91x | |||||||||||||||
Kevin M. Payne | 64% | 0.90 | 1.00 | 58% | 0.90x | |||||||||||||||
Ronald L. Litzinger | 70% | 1.438 | 1.32 | 133% | 1.9x | 70% | 0.85 | 0.75 | 45% | 0.64x | ||||||||||
Bertrand A. Valdman | 60% | 1.550 | 1.10 | 102% | 1.7x |
(1) | Target and actual annual incentive awards for all EIX and SCE NEOs are shown in the Grants of Plan-Based Awards tables and the Summary Compensation Tables, respectively. |
(2) | The amounts shown for Messrs. Pizarro and Payne and Ms. Rigatti are the weighted average Annual Incentive Target % for the respective NEO, with the weighting based on the number of workdays in 2016 that the NEO served in each position for which a different Annual Incentive Target % applied. The 2016 Annual Incentive Target % for Mr. Pizarro as SCE President was 75%. It was adjusted to 90% in connection with his promotion to EIX President and adjusted again to 115% in connection with his promotion to EIX CEO. The 2016 Annual Incentive Target %s for Ms. Rigatti as SCE SVP and CFO and for Mr. Payne as SCE SVP were 55% and 50%, respectively, and these percentages were adjusted to 75% and 70%, respectively, in connection with Ms. Rigatti’s promotion to EIX EVP and CFO and Mr. Payne’s promotion to SCE President. |
(3) | The amounts shown have been rounded to two decimal places or to the nearest whole percentage point for purposes of the table. |
(4) | The corporate performance factor for all EIX NEOs (other than |
(5) | In determining Mr. Litzinger’s individual performance factor, the Committee placed particular emphasis on the performance of EEG given his responsibilities as President of that business. In 2016, EEG did not meet or only partially met many of its goals. As a result, the Committee set Mr. Litzinger’s individual performance factor low relative to the other NEOs, despite solid performance by Mr. Litzinger. |
(6) | The actual annual incentive awards to Messrs. Craver and |
Impact of Other Plans
The EIX Committee adopted the EIX 20142016 Executive Annual Incentive Program (“162(m) Program”) so that annual incentive awards under the EIX Executive Incentive Compensation Plan could be designed to qualify as deductible performance-based compensation under Section 162(m) of the Internal Revenue Code.Code (“Section 162(m)”). Under the 162(m) Program, an overall maximum annual incentive award for 20142016 was established for each participating EIX NEOofficer as a specified percentage of an annual incentive award pool. The aggregate award pool for the participating officers had a maximum value equal to 1.5%3% of EIX’s 20142016 consolidated earnings from continuing operations (after interest, taxes, depreciation and amortization), subject to adjustment for the effects of any special charges to earnings.earnings (the “Section 162(m) Pool”). The following percentages of the pool were allocated to the NEOs to determine maximum annual incentive awards for 2016: Mr. Pizarro, 11%; Mr. Craver, 28%; Ms. Rigatti, 4%; Mr. Scilacci, 10%; Mr. Umanoff, 8%; Mr. Payne, 3%; Mr. Litzinger, 8%; Mr. Nichols, 3%; Mr. Swartz, 4%; and Mr. Dietrich, 5% (each, an “Individual Section 162(m) Cap”). Neither the Section 162(m) Pool nor the IndividualSection 162(m) Caps served as a basis for the Committee’s compensation decisions for NEOs. Instead, these caps served to establish a ceiling on annual incentive awards for purposes of tax deductions. For 2016, the total amount awarded under the 162(m) Program was less than the Section 162(m) Pool and the actual annual incentive awarded to each participating EIX NEO under the EIX Executive Incentive Compensation Plan for 2014 was less than the applicable maximum under thehis or her Individual Section 162(m) Program. Thus, we believe all such compensation was tax-deductible under Section 162(m).Cap.
Long-Term Incentive Awards
We provide our NEOs with long-term incentives that are directly linked to the value provided to EIX shareholders. All of our long-term incentives are awarded as equity instruments reflecting, or valued by reference to, EIX Common Stock. Long-term incentive awardsThey are made undertherefore directly linked to the value provided to EIX 2007 Performance Incentive Plan.
Long-Term Incentive Mix
In 2014, each NEO’s long-term incentive award value was in the form of 50% non-qualified stock options, 25% performance shares, and 25% restricted stock units. Thisallocation was consistent with the allocation of NEO long-term incentive awards in 2013.shareholders. The Committee believes this allocation strikes an appropriate balance among equity awards that have the following key objectives:
| |
| |
|
These equity awardsalso align executives’ interests with the long-term interests of shareholders and customers by enhancing executives’ focus on the Company’s long-term goals.
75%Seventy-five percent (75%) of our long-term equity mix is performance-based. In addition toperformance-based: the non-qualified stock options that comprise 50% of each NEO’s long-term incentive award value; and the performance shares wethat comprise 25% of the award value. We believe stock options are performance-based because
2017 Proxy Statement | 31 |
COMPENSATION DISCUSSION AND ANALYSIS
NEOs will realize value only if the market value of EIX Common Stock appreciates over time.appreciates. Long-term incentive awards are made under the EIX 2007 Performance Incentive Plan.
Long-Term Incentive Value
The target value of each NEO’sOn February 24, 2016, the Committee approved 2016 long-term incentive award target values for the NEOs. Each target value was set as a percentage of base salary and based on the market median level of target long-term incentive award values for comparable positions. On February 26, 2014, the(the “Long-Term Incentive Target %”). The Committee also approved award values for each NEO (other than Mr. Pizarro and Ms. Rigatti, whose awards were approved in connection with their mid-year commencement of employment with SCE, and other than Mr. Payne’s second award of 2014, which was approved in connection with his March 2014 promotion to Senior Vice President), as well as the methodology for converting those values into the number
|
of stock options, performance shares, and restricted stock units granted to each NEO on the March 3, 20141, 2016 grant date (the “Initial LTI Grants”). On May 25, 2016, the Committee increased the Long-Term Incentive Target % for Messrs. Payne and Nichols in connection with their promotions and approved a second award for each of them that was granted on June 30, 2016. The target value of the June 30 grants was 75% of the difference between (i) the Long-Term Incentive Target % approved on May 25, as applied to the NEO’s increased base salary for the new position, and (ii) the value of the NEO’s Initial LTI Grant. On August 24, 2016, the Committee increased the Long-Term Incentive Target % for Messrs. Pizarro and Petmecky and Ms. Rigatti in connection with their promotions and approved a second award for each of them that was granted on September 30, 2016. The target value of the September 30 grants was 50% of the difference between (i) the Long-Term Incentive Target % approved on August 24, as applied to the NEO’s increased base salary for the new position, and (ii) the value of the NEO’s Initial LTI Grant. The Committee generally applies the following proration for awards granted after the first quarter: 75% if the grant date was December 31, 2014 for Mr. Pizarro, September 30, 2014 for Ms. Rigatti and March 31, 2014 for Mr. Payne’sis in the second award).quarter of the year; 50% if the grant date is in the third quarter of the year; 25% if the grant date is in the fourth quarter of the year. The grant date value of each award is listed in the “Grants of Plan-Based Awards” tables below.
For 2014,2016, the Committee decreased Mr. Dietrich’s long-term incentive award as a percentage of base salary. Thisdid not change brought his long-term incentive award closerthe Long-Term Incentive Target % for the NEOs who were not promoted during the year. For Messrs. Pizarro, Payne, and Nichols, the Long-Term Incentive Target % approved for their second awards ranged from approximately 15% to but still above, market median for his new position. The Committee set Ms. Sullivan’s and Messrs. Dietrich’s, Payne’s, and Mead’s long-term incentive awards as a percentage of base salary above55% below the market median for the new positions, with the opportunity for increases in subsequent year(s) after evaluating their performance in their new positions. For Ms. Rigatti and Mr. Petmecky, the Long-Term Incentive Target % approved for their second awards was within 6% of the market median for the respective new positions. In each case, the Committee decided the Long-Term Incentive Target % was appropriate relative to the market median level for comparable positions, largely for purposesbased on the Committee’s overall assessment of retention.each NEO’s experience, time in position, and individual performance, and internal equity and retention concerns.
Stock Options
Each stock option granted may be exercised to purchase one share of EIX Common Stock at an exercise price equal to the closing price of a share of EIX Common Stock on the applicable grant date. Options vest over a four-year period, subject to continued employment, with one-fourth of each award generally vesting and becoming exercisable at the beginning of each year.
The number of options granted to each NEO was determined by dividing the option award value approved by the Committee for that NEO by the grant date value of an option using a Black-Scholes Merton valuation model.model based on the same assumptions and principles used to determine the grant date fair value of options generally for purposes of EIX’s financial reporting.
Performance Shares
Performance shares reward performance over three years against pre-established metrics. Each performance share awarded is a contractual right to receive one share of EIX Common Stock or its cash equivalent if performance and continued service vesting requirements are satisfied. The actual payout can range from zero to 200% of target performance shares, and depends on actual performance against pre-established metrics. The performance share awards provide for reinvested dividend equivalents. For each dividend declared for which the ex-dividend date falls within the performance period and after the date of grant, the NEO will be credited with an additional number of target performance shares having a value equal to the dividend that would have been payable on the target performance shares subject to the award. The performance shares credited as dividend equivalents are subject tohave the same vesting and other terms and conditions as the original performance shares.shares and are forfeited if the underlying shares are not earned.
A conversion formula is used to determine the number of performance shares awarded to each NEO. For the portion of performance shares subject to the TSR metric discussed below, the formula involves dividing the award value approved by the Committee is divided by the grant date value of the TSR performance shares using a Standard Monte Carlo simulation model.model based on the same assumptions and principles used to determine the grant date fair value of performance-based awards generally for purposes of EIX’s financial reporting. For the portion of performance shares subject to the earnings per share metric discussed below, the respective grant dateaward value is converted into a specificnumberspecific number of earnings per share performance shares by dividing the grant dateaward value by the closing price of a share of EIX Common Stock on the grant date.
Performance shares granted before 2015 generally are paid half in EIX Common Stock and half in cash having a value equal to the EIX Common Stock that otherwise would have been delivered. EIX converts a portion of the awards otherwise payable in stock to cash to the extent necessary to satisfy minimum tax withholding or any governmental levies. NEOs may elect to defer payment of the portion of performance shares payable in cash under the Executive Deferred Compensation Plan. Performance shares granted in or after 2015 will beare payable solely in cash.
2012-2014 Performance Share Awards: TSR Metric
For performance shares granted in 2012, 2013 and 2014, twoTwo metrics are used to measure performance share payouts, with each metric weighted 50%. One of the two performance metrics is based on the percentile ranking of EIX’s TSR for the three-year performance period beginning January 1 in the year of grant compared to the TSR of each company in EIX’s peer group for the same period. The following charttable provides the percentile ranking and corresponding payout levels:
Payout Levels | TSR Ranking | Payout | ||
Below Threshold | <25thPercentile | 0 | ||
Threshold | 25thPercentile | 25% of Target | ||
Target | 50thPercentile | Target | ||
Maximum | ≥75thPercentile | 200% of Target |
32 | 2017 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
If EIX achieves a TSR ranking between the 25th percentile and the 50th percentile or between the 50th percentile and the 75thpercentile, the number of shares paid will be interpolated on a straight-line basis with discrete intervals at every 5th percentile. For purposes of determiningTo determine performance share payouts, TSR is calculated using the difference between (i) the average closing stock price for the relevant stock for the 20 trading days ending with the last NYSE trading day preceding the first day of the performance period and (ii) the average closing stock price for the relevant stock for the 20 trading days ending with the measurement date,last trading day of the performance period, and assumes all dividends are reinvested on the ex-dividend date.
EIX’s TSR from 2012-20142014-2016 ranked in the 8090th percentile of the peer group under the methodology used to calculate TSR for performance shares and resulted in a 200% of target payout for the TSR performance shares granted in 2012.2014.
2012-2014 Performance Share Awards: EPS Metric
The second performance metric for performance shares granted in 2012, 2013, and 2014 is based on EIX’s three-year average annual core earnings3 per share (“EPS”), measured against target levels. Core EPS is defined as GAAP basic EPS, excluding income or loss from discontinued operations and income or loss from significant discrete items that are not representative of ongoing earnings. The Committee establishes the EPS target for each calendar year in February of that year.
|
In February 2015, the Committee certified the following EPS performance multiples for the three calendar years in the performance period for the 2012 grant:
Year | Actual EPS | Target EPS | Actual EPS as % of Target EPS | EPS Performance Multiple | ||||
2012 | $3.92 | $3.58 | 109% | 1.40x | ||||
2013 | $3.80 | $3.60 | 106% | 1.20x | ||||
2014 | $4.59 | $3.70 | 124% | 2.00x | ||||
Average of performance multiples | ||||||||
(actual payout): | 1.53x |
The performance multiple for a calendar year is based on EIX’s actual EPS performance for that year as a percentage of the EPS target for that year, in accordance with the following chart:table:
Performance Level | Actual EPS as % of Target EPS | EPS Performance Multiple | |||||||
Below Threshold | <80% | 0 | |||||||
Threshold | 80% | 0.25x | |||||||
Target | 100% | 1.0x | |||||||
Maximum | ≥120% | 2.0x |
(3) | Footnote 2 in the “Compensation Summary” provides additional information regarding the determination of core earnings. |
If EIX’s EPS for a year as a percentage of target EPS is between 80% and 100% or between 100% and 120%, the EPS performance multiple is interpolated on a straight-line basis, with discrete intervals at every 4th percentile.percentage point. The EPS performance multiples achieved for each calendar year in the three-year performance period are averaged, and the resulting average determines the performance share payout as a multiple of target.
In February 2012,2017, the Committee setcertified the following EPS targetperformance multiples for 2012 at $2.32, under the assumption that losses at EME would be includedthree calendar years in consolidated core earnings. However, on December 17, 2012, EME and certain of its wholly-owned subsidiaries filed voluntary petitionsthe performance period for relief under Chapter 11 of the United States Bankruptcy Code. As of that date, EME was deconsolidated from EIX’s financial results and accounted for as discontinued operations. As a result, EME was classified as non-core for purposes of EIX’s 2012 consolidated core earnings. Accordingly,2014 grant:
Year | Actual EPS | Target EPS(1) | Actual EPS as % of Target EPS | EPS Performance Multiple | ||||
2014 | $4.59 | $3.70 | 124% | 2.00x | ||||
2015 | $4.10 | $3.92 | 105% | 1.20x | ||||
2016 | $3.97 | $3.91 | 101% | 1.00x | ||||
Average of performance multiples (actual payout): | 1.40x |
(1) | In each case, the Target EPS was set below the prior year’s Actual EPS due to lower projected income tax benefits. |
Since the Committee adjusted the 2012 EPS target to exclude EME’s results. The adjusted target was $3.58.
EME’s 2012 losses through the date of deconsolidation were lower (i.e., better) than the budgeted target, so the adjustment of the target to exclude EME’s losses resulted in a lower performance multiple than if EME’s losses had been included and the original target had been applied.
The average of the EPS performance multiples for 2012, 2013,2014, 2015, and 20142016 was 1.53. Accordingly,1.4, EPS performance shares granted in 20122014 paid out at 153%140% of target.
2006-2011 Performance Share Awards
Performance shares granted between 2006 and 2011 utilized only one metric—the TSR metric described above—except that the threshold for a payout was set as a 40th percentile TSR ranking. EIX’s TSR from 2011-2013 ranked in the 40th percentile of the peer group and resulted in a payout of the2011 performance share grants at 25% of target. EIX’s TSR from 2009-2011 ranked in the 45th percentile of the peer group and resulted in a payout of the 2009 performance share grants at 63% of target. Relative TSR as compared to our peer group for the 2010-2012, 2008-2010, 2007-2009, and 2006-2008 performance periods was below the threshold required for payout of the performance shares, resulting in no payouts.
Restricted Stock Units
Each restricted stock unit awarded is a contractual right to receive one share of EIX Common Stock ifafter the vesting requirement of three years of continued service vesting requirements areis satisfied. The restricted stock units for NEOs provide for reinvested dividend equivalents. For each dividend declared for which the ex-dividend date falls within the vesting period, the NEO will be credited with an additional number of restricted stock units having a value equal to the dividend that would have been payable on the number of restricted stock units subject to the award. The restricted stock units credited as dividend equivalents are subject tohave the same vesting and other terms and conditions as the original restricted stock units.units and are forfeited if the underlying units do not vest.
The restricted stock units are paid in EIX Common Stock, except EIX converts awards to cash having a value equal to the stock that otherwise would have been delivered to satisfy minimum tax withholding and governmental levies. The EIX Committee may elect to pay any restricted stock units in cash rather than shares of EIX Common Stock if and to the extent that payment in shares would exceed the applicable share limits of the EIX 2007 Performance Incentive Plan.
The number of restricted stock units granted to each NEO was determined by dividing the grant dateaward value approved by the Committee for that NEO by the closing price of a share of EIX Common Stock on the grant date. At payout, NEOs realize an increase or decrease in value compared(compared to the grant date value that isvalue) commensurate with the increase or decrease in value realized by shareholders from changes in the stock price and dividends over the three-year vesting period.
Acceleration of Long-Term Equity
If an NEO terminates employment after reaching age 65, or age 61 with five years of service, (i) stock options will vest and continue to become exercisable as scheduled, (ii) performance shares will be retained with vesting based on the applicable performance metrics, and (iii) restricted stock units will vest and become payable as scheduled; in each instance, as though the NEO’s employment had continued through the vesting period and subject to a pro-rated reduction if the NEO retires within the year of grant. Messrs. Adler and Mead received accelerated vesting under these provisions when they retired effective January 1, 2015 and November 15, 2014, respectively. Messrs. Craver and Swartz areScilacci were eligible for these accelerated vesting provisions.provisions when they retired. Mr. Swartz would also be eligible if he retires. If an NEO dies or becomes disabled while employed, stock options and restricted stock units will immediately vest and become exercisable and payable, respectively, and performance shares will be retained.retained, with vesting based on the applicable performance metrics.
|
COMPENSATION DISCUSSION AND ANALYSIS
How We Make Compensation Decisions |
Role of Compensation Committee and Executive Officers
The Committee is responsible for reviewing and determining the compensation paid to executive-level Company officers, including the NEOs. The Committee annually reviews all components of compensation for our CEO and other NEOs. This review encompasses all forms of compensation,NEOs, including base salary and annual and long-term incentives, and otherincentives. The Committee also reviews significant benefits, as well as amounts pursuant toincluding retirement and non-qualified deferred compensation plans.
Toward the start of each year,Each February, the Committee approvessets the base salary range, and the target and maximum potential annual and long-term incentive award values for the current year for each officer. The annual and long-term incentive target awards are stated as percentages of base salary and are based onAt that time, the market median of target annual and long-term incentive award values for comparable positions. Each February, after performance results for the prior year are finalized, the Committee also determines annual incentive awards for the prior year and performance share payouts for the prior performance period. At that time, the Committee also approves base salary changes and long-term incentive grants for the current year. Base salary changes are generally effective inearly March of each year.
TheFor the February Committee meeting, the EIX CEO provides the Committee with recommendations regarding the compensation of NEOs (other than his own compensation). Other NEOs participate in developing and reviewing executive compensation recommendations, but do not participate in recommendations regarding their own compensation.
The Committee evaluates the EIX CEO’s performance relative to goals and determines his compensation in executive session without the EIX CEO present. The Committee Chair reports to the Board in a non-managementan independent director executive session regarding the evaluation and the compensation determination.
For officers who are not EIX executive officers, the Committee has authorized the EIX CEO and the EIX executive responsible for executive compensation matters to jointly approve special relocation, recruitment and retention awards within specific limits pre-approved by the Committee. Mid-year compensation determinations for newly hired and promoted officers who are not EIX executive officers that are within guidelines previously approved by the Committee do not require additional Committee approval.approval if the individuals are not EIX executive officers.
Tally Sheets
The Committee periodically reviews tally sheets for EIX NEOs. Tally sheets provide the Committee with information about the following components of compensation, including compensation paid over the three-year period ending December 31, 2014:preceding three calendar years:
● | Cash compensation (base pay and annual incentives); |
● | Long-term incentive award values (stock options, performance shares and restricted stock units); and |
● | Changes in pension values and non-qualified plan earnings. |
The tally sheets also provide the amounts payable in the event of voluntary or involuntary separation from service, death or disability, or a change in control resulting in termination.
The Committee also reviews additional information regarding long-term incentives, including stock program statistics on share usage, analysis of current exercise values of prior option grants, and a summary of current and past performance share results.
Except as otherwise noted, the Committee’s executive compensation determinations are subjective and the result of the Committee’s business judgment, which is informed by the experiences of the Committee members as well as theand input from the Committee’s independent compensation consultant.
Role of the Committee’s Independent Compensation Consultant
The Committee retained F.W. CookPay Governance to assist in the evaluation ofevaluating officer compensation for 2014,2016, including the compensation of NEOs; however, the Committee decides our officers’ compensation. Generally, thisThis assistance included helping the Committee identify industry trends and norms for executive compensation; reviewing and identifying the appropriate peer group companies and pay surveys; and evaluating relevant executive compensation data for these companies.
During 2014, F.W. Cook’s services included2016, Pay Governance provided the following:following services:
● | Provided a presentation on executive compensation trends and competitive evaluation of total direct compensation for executives; |
● | Reviewed Committee agendas and supporting materials before each meeting, and raised questions/issues with management and the Committee Chair, as appropriate; |
● | Reviewed drafts of the CD&A for the Proxy Statement and related compensation tables; and |
● | Provided recommendations on EIX CEO |
|
In addition, an F.W. Cooka Pay Governance representative attended Committee meetings and communicated directly with the Committee as needed. F.W. CookPay Governance did not perform any services for the Company in 20142016 unrelated to the Committee’s responsibilities for our compensation programs, and all interactions by the consultants with management were incidentalrelated to itstheir work for the Committee.Committee and conducted in accordance with the directions of the Committee or its Chair.
The Committee retains sole authority to hire its compensation consultant, approve its compensation, determine the nature and scope of its services, evaluate its performance, and terminate its engagement. Pursuant to SEC rules, the Committee assessed and determined that no conflict of interest exists with respect to the engagement of F.W. CookPay Governance as the Committee’s compensation consultant.
Use of Competitive Data
Except as otherwise noted in this CD&A, theThe Committee generally targets a competitive range of +/-15% around the market median for comparable positions for each element of total direct compensation. TheFor 2016, the Committee usesused peer group data and data from pay surveys by Towers Watson and AonHewitt to determine the “market median.”
The Committee decided to useused the companies in the Philadelphia Utility Index as the peer group for benchmarking performance and comparing NEO compensation for 2014.2016. The Philadelphia Utility
34 | 2017 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
Index has been used by the Committee as the basis for the peer group since 2005. Use of an established market index for peer group purposes is consistent with the way in which investors evaluate performance across companies within an industry.
AES Corporation | Entergy | |
Ameren | Eversource Energy | |
American Electric Power | Exelon | |
CenterPoint Energy | FirstEnergy | |
Consolidated Edison | NextEra Energy | |
Covanta (replaced by American | PG&E Corporation | |
Water Works during 2016)(1) | ||
Dominion Resources | Public Service Enterprise Group | |
DTE Energy | Southern Company | |
Duke Energy | Xcel Energy | |
El Paso Electric |
(1) | The peer group data used to determine the “market median” for 2016 included Covanta (and not American Water Works), since Covanta was in the Philadelphia Utility Index at the time of the February 2016 Committee meeting. In contrast, American Water Works (and not Covanta) was included in the peer group for determining EIX’s TSR ranking for the TSR Performance Shares granted in 2014. The performance period for those Performance Shares ended December 31, 2016 and the terms and conditions of the awards required that the peer group consist of the companies in the Philadelphia Utility Index at the end of the performance period. American Water Works’ TSR was higher than Covanta’s for the 2014-2016 performance period. |
EIX is just above the peer group median in revenues and market capitalization. For the four quarters ending September 30, 2014, EIX’s2016, EIX had revenues of $13.2$11.33 billion were approximately 3% abovecompared to the peer group median of $12.8$11.27 billion (ranking9th 10th out of the 20 companies in the peer group), based on reported revenues. As of December 31, 2014,2016, EIX’s market capitalization of $21.3$23.46 billion was approximately 14%9% above the peer group median of $18.7$21.44 billion (ranking 8th8th out of 20).
F.W. CookAs part of the process of setting 2016 target total direct compensation for NEOs, Pay Governance provided the Committee with benchmarking data from peer group proxy statements. In addition, the Committee received base salary, target annual incentive, and target long-term incentive grant value data from the Towers Watson 20132015 Energy Services and the Towers Watson 20132015 General Industry and the AonHewitt 2013 Total Compensation Measurement pay surveys. The pay survey data included compensation information from utilities, other energy companies, and companies in other industries with comparable revenues, in order to reflect the range of the Company’s competitors for executive talent and provide a robust set of information to make compensation decisions. The pay survey data was presented to the Committee in aggregated form. The Committee does not consider the identities of the individual companies in the survey data to be material for its decision-making process, and the individual companies were not provided to the Committee.
The specific components of the market data and the relative weighting used to calculate a market median varied for each NEO position, based on the availability of sufficient comparative data for the position,theposition, and were reviewed by F.W. Cook.Pay Governance. Market median levels for 20142016 were projected from available data with input from F.W. Cook.Pay Governance.
AlthoughThe Committee exercises its judgment in setting each executive’s compensation levels within the Committee generally targets the market median, itcompetitive range described above, and may time to time vary from market medianthe competitive range, after taking into account the executive’s experience, time in position, individual performance, internal equity, retention concerns, or other factors it considers relevant under the circumstances.
Risk Considerations
Our executive compensation policy directs that our total compensation structure should not encourage inappropriate or excessive risk-taking. The Committee takes risk into consideration when reviewing and approving executive compensation.
As specified in its charter, and with the assistance of F.W. CookPay Governance and Company management, the Committee reviewed the Company’s compensation programs for executives and for employees generally and has concluded that these programs do not create risks that are reasonably likely to have a material adverse effect on the Company.
In particular, in concluding that the current executive compensation program does not encourage inappropriate or excessive risk-taking, the Committee noted the following characteristics whichthat limit risk:
● | Annual incentives are balanced with long-term incentives to lessen the risk that short-term objectives might be pursued to the detriment of long-term |
● | Goals for annual incentive programs are varied (not focused on just one metric) |
|
● | Long-term incentive awards are subject to a multi-year vesting schedule; |
● | The ultimate value of equity grants is not solely dependent on stock price due to the use of relative TSR and EPS for performance shares; |
● | Stock ownership guidelines require top officers to |
● | Executives are prohibited from hedging Company securities and EIX executive officers are prohibited from pledging Company securities; |
● |
|
● | Executive retirement and deferred compensation benefits are unfunded and thus depend in part on the continued solvency of the Company. |
35 |
COMPENSATION DISCUSSION AND ANALYSIS
Post-Employment and Other Benefits |
Post-Employment Benefits
The NEOs receive retirement benefits under qualified and non-qualified defined-benefit and defined-contribution retirement plans. The SCE Retirement Plan and the 401(k) Plan are both qualified retirement plans in which the NEOs participate on substantially the same terms as other participating employees.
Due to limitations imposed by ERISA and the Internal Revenue Code, the benefits payable to the NEOs under the SCE Retirement Plan and the 401(k) Plan are limited. The Executive Retirement Plan and the Executive Deferred Compensation Plan provide for our NEOs to receive the full amount of benefits that would be paid under the qualified plans but for such limitations, and certain additional benefits. The Committee believes these programs help us to attract and retain qualified executives.
For descriptions of the tax-qualified and non-qualified defined benefit pension plans and the Executive Deferred Compensation Plan, see the narrative below to the “Pension Benefits”“Pension Benefits” and “Non-Qualified“Non-Qualified Deferred Compensation”Compensation” tables, respectively.
The Company also sponsors survivor and disability benefit plans in which the NEOs arewere eligible to participate.participate in 2016.
Severance and Change in Control Benefits
Our policy regarding severance protection for NEOs stems from its importance in recruitingretaining and retainingrecruiting executives. Executives have attractive opportunities with other companies or are recruited from well-compensated positions in other companies or have attractive opportunities with other companies. We believe offering one year’s worth of compensation and benefits if any officer is involuntarily severed without cause offersprovides financial security to offset the risk of leaving another company or foregoing an opportunity with another company. Severance benefits are not offered for resignation for “good reason,” except in the event ofif a change in control.control occurs.
The current executive compensation plans offer additional benefits in the event ofif a change in control of EIX.EIX occurs. We believe that the occurrence, or expected occurrence, of a change-in-control transaction would create uncertainty regarding continued employment for NEOs. This uncertainty would result from the fact that many change-in-control transactions result in significant organizational changes, particularly at the senior executive level.
To encourage the NEOs to remain employed with the Company during a time when their prospects for continued employment following the transactionchange in control would be uncertain, and to permit them to remain focused on the Company’s interests, during the change in control, NEOs are provided with enhanced severance benefits if their employment is actually or constructively terminated without cause within a defined period of time around a change in control of EIX.
Constructive termination (or a resignation for “good reason”) would include occurrences such as a material diminution in duties or salary, or a substantial relocation.
Given that none of the NEOs has an employment agreement that provides for fixed positions or duties, or for a fixed base salary or annual incentive award, we believe that a constructive termination severance trigger is needed to prevent potential acquirorsan acquirer from having an incentive to constructively terminate an NEO’s employment to avoid paying any severance benefits at all.benefits. We do not provide excise tax gross-ups on change-in-control severance benefits for any of our executives. We do not believe that NEOs should be entitled to receive their cash severance benefits merely because a change-in-control transaction occurs. Therefore, the payment of cash severance benefits is subject to a double-trigger where an actual or constructive termination of employment wouldmust also have to occur before payment.
However, if a change in control occurs where EIX is not the surviving corporation, and following the transaction, outstanding equity awards would not be continued or assumed, then NEOs and other holders of awards under our equity incentive plan would receive immediate vesting of their outstanding equity awards as described under “Potential“Potential Payments Upon Termination or Change in Control” below.
|
We believe it is appropriate to fully vest equity awards in change-in-control situations where EIX is not the surviving corporation and the equity awards are not assumed, whether or not employment is terminated, because such a transaction effectively ends the NEOs’ ability to realize any further value with respect to the equity awards. However, restricted stock units will continue, in connection with a change in control, to vest and be paid on the original schedule unless the award is terminated in connection with the change in control in accordance with special rules under Code Section 409A, or the officer’s employment is terminated involuntarily not for cause or constructively terminated within a specified period around the change in control.
For detailed information on the estimated potential payments and benefits payable to NEOs in the event of their termination ofif they terminate employment, including following a change in control of the Company, see “Potential“Potential Payments Upon Termination or Change in Control” below.Control.”
Perquisites
In general, we provide no perquisites for our NEOs. From time to time the Company may provide a retirement gift to a retiring executive in recognition of the executive's long and dedicated service. In certain circumstances, the Company pays for or reimburses spousal travel expenses where an executive’s spouse attends a business-related function. Given the nature of these functions and the benefits to the Company, the Company does not consider the payment of spousal travel expenses to be a perquisite. However, in accordance withunder SEC rules, the incremental cost of such travel by an NEO’s spouse is included as All Other Compensation for the NEO for the corresponding year in the applicable Summary Compensation Table below.
Other Compensation Policies and Guidelines |
Tax-Deductibility
Section 162(m) generally disallows a tax deduction by public companies for compensation over $1,000,000 paid to chief executive officers and certain other most highly compensated executive officers unless certain tests are met. While EIX’s first priority is to achievetoachieve its executive compensation objectives, it will generally attempt to design and administer its executive compensation program to preserve the deductibility of compensation payments. However, it may grant non-deductible compensation in circumstances it considers appropriate and no guarantees can be made that any compensation intended to constitute
36 | 2017 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS
deductible performance-based compensation within the meaning of Section 162(m) will in fact be deductible.
Under the EIX 2007 Performance Incentive Plan, non-qualified stock options, performance shares and annual incentive awards awarded to the EIX NEOs are intended to constitute deductible performance-based compensation within the meaning of Section 162(m). However, restricted stock units are not deductible performance-based compensation within the meaning of Section 162(m). This is consistent withfollows EIX’s philosophy that its goal of preserving the deductibility of compensation is secondary in importance to achievement of its compensation objectives.
Stock Ownership Guidelines
To underscore the importance of linking executive and shareholder interests, the Company has adopted stock ownership guidelines that require the NEOsSVPs and more senior officers to own EIX Common Stock or equivalents in an amount rangingfromranging from two to six times their annual base salary. The stock ownership guidelines for NEOs who are stillwere executive officers on December 31, 2016 are as follows:
● | Mr. |
| |
● | Ms. Rigatti and Messrs. |
● | Messrs. Petmecky, Nichols, Swartz, and |
The NEOs are expected to achieve their ownership targets within five years from the date they became subject to the guidelines. EIX Common Stock owned outright, shares held in the 401(k) Plan, and vested and unvested restricted stock units which do not depend on performance measures are included in determining compliance with the guidelines. Shares that NEOs have the right tomay acquire through the exercise or payout of stock options and performance shares are not included in determining compliance until such time as the options or performance shares are actually exercised, or paid, as the case may be, and the shares are acquired. AllBased on ownership as of March 3, 2017, all of the NEOs currently meet their stock ownership requirements under these guidelines.
The guidelines were amended effective February 22, 2017 to provide that an officer subject to the guidelines may not sell EIX Common Stock acquired pursuant to an EIX long-term incentive award (“Acquired Stock”) if the officer does not meet his or her ownership requirement under the guidelines. An officer whose ownership satisfies the guidelines may not sell Acquired Stock to the extent the sale would cause his or her ownership to fall below the applicable guideline level. These transfer limitations do not apply to transfers to satisfy the exercise price of an EIX stock option or to satisfy tax obligations with respect to an EIX long-term incentive award. Exceptions to the guidelines may be approved on a case-by-case basis.
Hedging and Pledging Policy
Under the Company’s Insider Trading Policy, hedging related to Company securities, including EIX shares, is prohibited for all directors and employees, including NEOs. In addition, directors and EIX executive officers may not pledge Company securities as collateral for loans.
|
Clawback Policy
In 2014, the Committee adoptedThe Company maintains an incentive compensation clawback policy that allows itthe Board or the BoardCommittee to recoup incentive compensation in the eventif the Company restates its financial statements. The policy applies to cash or equity-based incentive compensation to current and former EIX and SCE NEOs and other executive officers that is paid, granted, vested or accrued in any fiscal year within the three-year period preceding the filing of the restatement (but only if the payment, grant, vesting or accrual occurs after December 10, 2014). The policy allows recoupment of the difference between the incentive compensation paid, granted, vested or accrued under the original results and the incentive compensation that would have been paid, granted, vested or accrued under the restated results. The policy can be enforced by reducing or cancelling outstanding and future incentive compensation, as well asand by a claim for repayment.
The SEC isand NYSE have been expected to issueprovide rules requiring public companies to adopt clawback policies to recover incentive compensation overpayments from executive officers under certain conditions involving accounting restatements. WhenIf and when this guidance is received, the Committee or the Board will review the existing clawback policy and determine whether changes are needed.
Compensation Committee Report |
The Committee has reviewed and discussed with management the Compensation Discussion and Analysis section of this Proxy Statement. Based upon this review and the discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis section be included in the Company’s 20142016 Annual Report and this Proxy Statement.
Brett White,Chair
Vanessa C.L. ChangLuis G. NogalesJames T. Morris
Richard T. Schlosberg, III
Peter J. Taylor
Compensation Committee Interlocks and Insider Participation |
AllMr. Morris became a Committee member when the Committees were reappointed on April 28, 2016. The other Committee members whose names appear on the Compensation Committee Report above were Committee members during all of 2014.2016. Under applicable SEC rules, there were no interlocks or insider participation on the Committee.
| 37 |
Summary Compensation Tables |
The following tables present information regarding compensation of the EIX and SCE NEOs for service during 2014,2016, and for 20132015 and/or 20122014 for individuals who were also NEOs in those years.
The tables below were prepared in accordance with SEC requirements. The total compensation presented below does not necessarily reflect the actual total compensation received by our NEOs. Specifically, theThe amounts under “Stock Awards”“Stock Awards” and “Option Awards” do not represent the actual amounts paid to or realized by our NEOs for these awards during 2012-2014,2014-2016, but represent the aggregate grant date fair value of awards granted in those years for financial reporting purposes. Likewise, the amounts under “Change“Change in Pension Value and Non-Qualified Deferred Compensation Earnings”Earnings” do not reflect amounts paid to or realized by our NEOs during 2012-2014. For example, the 2014 “Pension Value” increases are due in large part to changes in actuarial assumptions that may have no impact on the actual amounts that ultimately will be paid to the NEO, as actuarial assumptions may differ from time to time.2014-2016.
EIX Summary Compensation Table – Fiscal Years 2012, 20132014, 2015 and 20142016
Name and Principal | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(2) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(3) ($) | All Other Compensation(4) ($) | Total ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
Theodore F. Craver, Jr. EIX Chairman of the Board, President and CEO | 2014 | 1,200,000 | — | 2,700,105 | 2,700,005 | 2,759,952 | 4,708,778 | 163,843 | 14,232,683 |
2013 | 1,200,000 | — | 2,700,109 | 2,700,004 | 2,142,450 | 875,885 | 183,008 | 9,801,456 | |
2012 | 1,191,762 | — | 2,670,074 | 2,670,004 | 2,049,300 | 3,656,595 | 143,283 | 12,381,018 | |
W. James Scilacci EIX Executive Vice President and CFO; Treasurer through 9/1/2014 | 2014 | 600,000 | — | 585,038 | 585,002 | 798,000 | 2,609,953 | 53,004 | 5,230,997 |
2013 | 596,705 | — | 585,052 | 585,001 | 567,000 | 185,351 | 53,034 | 2,572,143 | |
2012 | 577,529 | — | 565,587 | 565,503 | 575,505 | 2,007,382 | 48,787 | 4,340,293 | |
Robert L. Adler EIX Executive Vice President and General Counsel through 12/31/2014 | 2014 | 582,000 | — | 567,565 | 567,452 | 814,800 | 546,930 | 53,964 | 3,132,711 |
2013 | 579,199 | — | 567,537 | 567,452 | 632,489 | 161,534 | 54,295 | 2,562,506 | |
2012 | 562,529 | — | 550,923 | 550,877 | 694,103 | 413,443 | 48,922 | 2,820,797 | |
Ronald L. Litzinger SCE President through 9/30/2014; EIX Executive Vice President and Edison Energy President effective 10/1/2014 | 2014 | 597,529 | — | 585,038 | 585,002 | 798,000 | 2,465,664 | 53,241 | 5,084,474 |
2013 | 581,705 | — | 570,475 | 570,379 | 580,466 | 80,004 | 51,688 | 2,434,717 | |
2012 | 561,705 | — | 578,516 | 578,423 | 560,621 | 1,389,965 | 44,988 | 3,714,218 | |
Bertrand A. Valdman(5) EIX Senior Vice President through 2/20/2015 | 2014 | 465,000 | — | 255,813 | 255,755 | 475,695 | 337,042 | 25,567 | 1,814,872 |
2013 | 462,529 | — | 255,807 | 255,752 | 414,315 | 122,636 | 22,952 | 1,533,991 | |
2012 | 450,000 | — | 222,890 | 222,753 | 350,831 | 160,606 | 20,682 | 1,427,762 |
Name and Principal | Year | Salary(1) | Bonus | Stock | Option | Non-Equity | Change in | All Other | Total | |||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||
Pedro J. Pizarro EIX CEO effective 9/30/16; EIX President effective 6/1/16; SCE President through 5/31/16 | 2016 | 836,782 | — | 1,553,399 | 1,553,133 | 678,402 | 914,498 | 75,382 | 5,611,596 | |||||||||
2015 | 662,931 | — | 843,867 | 843,756 | 520,931 | 6,052 | 45,653 | 2,923,190 | ||||||||||
2014 | 151,724 | — | 585,196 | 585,006 | 148,690 | 762,977 | 7,080 | 2,240,673 | ||||||||||
Theodore F. Craver, Jr. EIX Chairman of the Board and CEO through 9/30/16; also EIX President through 5/31/16 | 2016 | 938,697 | — | 2,968,836 | 2,968,751 | 997,366 | 371,205 | 415,051 | 8,659,905 | |||||||||
2015 | 1,241,954 | — | 2,968,833 | 2,968,752 | 1,659,738 | 2,081,101 | 194,389 | 11,114,767 | ||||||||||
2014 | 1,200,000 | — | 2,700,105 | 2,700,005 | 2,759,952 | 4,708,778 | 163,843 | 14,232,683 | ||||||||||
Maria Rigatti EIX EVP and CFO effective 9/30/16; SCE SVP and CFO through 9/30/16 | 2016 | 392,891 | — | 362,080 | 361,687 | 244,994 | 364,218 | 29,596 | 1,755,466 | |||||||||
2015 | 315,000 | — | 170,178 | 170,100 | 209,199 | 14,867 | 47,935 | 927,279 | ||||||||||
2014 | 136,379 | — | 141,856 | 141,756 | 110,263 | 342,536 | 29,507 | 902,297 | ||||||||||
W. James Scilacci EIX EVP and CFO through 9/30/16 | 2016 | 484,100 | — | 682,597 | 682,508 | 311,178 | 803,918 | 339,740 | 3,304,041 | |||||||||
2015 | 620,977 | — | 656,357 | 656,253 | 461,125 | 974,465 | 62,594 | 3,431,771 | ||||||||||
2014 | 600,000 | — | 585,038 | 585,002 | 798,000 | 2,609,953 | 53,004 | 5,230,997 | ||||||||||
Adam S. Umanoff EIX EVP and General Counsel | 2016 | 548,391 | — | 589,961 | 589,876 | 375,169 | 241,541 | 46,535 | 2,391,473 | |||||||||
2015 | 537,931 | — | 631,860 | 631,804 | 454,686 | 110,007 | 32,400 | 2,398,688 | ||||||||||
Kevin M. Payne SCE CEO effective 6/1/16; SCE SVP through 5/31/16 | 2016 | 421,171 | — | 323,185 | 322,942 | 243,790 | 470,168 | 23,028 | 1,804,284 | |||||||||
2015 | 294,097 | — | 122,534 | 122,434 | 163,611 | 105,588 | 18,299 | 826,563 | ||||||||||
2014 | 274,975 | — | 113,742 | 113,551 | 199,557 | 693,339 | 15,928 | 1,411,092 | ||||||||||
Ronald L. Litzinger EEG President; also EIX EVP through 3/28/16 | 2016 | 600,000 | — | 630,031 | 630,003 | 267,750 | 804,297 | 50,490 | 2,982,571 | |||||||||
2015 | 600,000 | — | 630,049 | 630,005 | 483,000 | 932,224 | 61,325 | 3,336,603 | ||||||||||
2014 | 597,529 | — | 585,038 | 585,002 | 798,000 | 2,465,664 | 53,241 | 5,084,474 |
(1) | The Committee increased the annual base salary rates of Messrs. Pizarro and Payne in connection with their promotions effective June 1, 2016 and set them at $800,000 and $500,000, respectively. The Committee increased the annual base salary rates of Mr. Pizarro and Ms. Rigatti in connection with their promotions effective September 30, 2016 and set them at $1,100,000 and $550,000, respectively. |
(2) | Stock awards consist of performance shares and restricted stock units granted under the 2007 Performance Incentive Plan in the year indicated. The performance share and restricted stock unit amounts shown in the EIX Summary Compensation Table reflect the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718. For performance shares, the value is reported as of the grant date based on the probable outcome of performance conditions, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions and methodologies used to calculate these amounts, see the discussion contained in (i) Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of the Company’s |
38 |
|
EXECUTIVE COMPENSATION
The table below shows the maximum value of performance share awards included in the EIX Summary Compensation Table at the grant date assuming that the highest level of performance conditions will be achieved. For the grant date fair value of each award based on the probable outcome of the applicable performance conditions, see the “Grants of Plan-Based Awards” table below. The 20122014 performance share awards vested as of December 31, 2014;2016; see the “Option Exercises and Stock Vested” table below for the value realized when they vested. The performance periods for the 20132015 and 20142016 performance shares have not ended.
Name | Maximum | Maximum | Maximum Performance Share Potential as of Grant Date for 2012 Awards ($) | |||
Theodore F. Craver, Jr. | 2,700,165 | 2,700,173 | 2,670,124 | |||
W. James Scilacci | 585,058 | 585,047 | 565,604 | |||
Robert L. Adler | 567,655 | 567,567 | 550,948 | |||
Ronald L. Litzinger | 585,058 | 570,535 | 578,572 | |||
Bertrand A. Valdman | 255,863 | 255,833 | 222,938 |
Name | Maximum | Maximum | Maximum | ||||
Pedro J. Pizarro | 1,553,513 | 843,953 | 456,145 | ||||
Theodore F. Craver, Jr. | 2,968,868 | 2,968,825 | 2,700,165 | ||||
Maria Rigatti | 362,240 | 170,223 | 141,900 | ||||
W. James Scilacci | 682,616 | 656,397 | 585,058 | ||||
Adam S. Umanoff | 590,040 | 631,872 | — | ||||
Kevin M. Payne | 323,286 | 122,597 | 94,000 | ||||
Ronald L. Litzinger | 630,052 | 630,034 | 585,058 |
Option awards consist of non-qualified stock options granted under the 2007 Performance Incentive Plan in the year indicated. The option amounts shown in the EIX Summary Compensation Table reflect the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to calculate these amounts, see the discussion of options contained in (i) Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of the Company’s | |
The annual incentive awards to Messrs. Craver and Scilacci were prorated, based on (i) the ratio of the number of workdays from January 2016 through September 30, 2016, compared to (ii) the total number of workdays in 2016. The reported amounts for Messrs. Craver and Scilacci are presented after proration. | |
(5) | The reported amounts |
Amounts reported for | |
SCE Summary Compensation Table – Fiscal Years 2014, 2015 and 2016
Name and Principal | Year | Salary(1) | Bonus | Stock | Option | Non-Equity | Change in | All Other | Total | |||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||
Kevin M. Payne CEO effective 6/1/16; SVP through 5/31/16 | 2016 | 421,171 | — | 323,185 | 322,942 | 243,790 | 470,168 | 23,028 | 1,804,284 | |||||||||
2015 | 294,097 | — | 122,534 | 122,434 | 163,611 | 105,588 | 18,299 | 826,563 | ||||||||||
2014 | 274,975 | — | 113,742 | 113,551 | 199,557 | 693,339 | 15,928 | 1,411,092 | ||||||||||
Pedro J. Pizarro President through 5/31/16 | 2016 | 836,782 | — | 1,553,399 | 1,553,133 | 678,402 | 914,498 | 75,382 | 5,611,596 | |||||||||
2015 | 662,931 | — | 843,867 | 843,756 | 520,931 | 6,052 | 45,653 | 2,923,190 | ||||||||||
2014 | 151,724 | — | 585,196 | 585,006 | 148,690 | 762,977 | 7,080 | 2,240,673 | ||||||||||
William M. Petmecky, III SVP and CFO effective 9/30/16; Vice President and Treasurer through 9/30/16 | 2016 | 267,797 | — | 122,561 | 122,341 | 110,585 | 216,661 | 15,900 | 855,845 | |||||||||
| 39 |
SCE Summary Compensation Table – Fiscal Years 2012, 2013 and 2014EXECUTIVE COMPENSATION
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock | Option Awards(2) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(3) ($) | All Other Compensation(4) ($) | Total ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
Pedro J. Pizarro SCE President effective 10/1/2014 | 2014 | 151,724 | — | 585,196 | 585,006 | 148,690 | 762,977 | 7,080 | 2,240,673 |
Ronald L. Litzinger SCE President through 9/30/2014; EIX Executive Vice President and Edison Energy President effective 10/1/2014 | 2014 | 597,529 | — | 585,038 | 585,002 | 798,000 | 2,465,664 | 53,241 | 5,084,474 |
2013 | 581,705 | — | 570,475 | 570,379 | 580,466 | 80,004 | 51,688 | 2,434,717 | |
2012 | 561,705 | — | 578,516 | 578,423 | 560,621 | 1,389,965 | 44,988 | 3,714,218 | |
Maria Rigatti SCE Senior Vice President and CFO effective 7/28/2014 | 2014 | 136,379 | — | 141,856 | 141,756 | 110,263 | 342,536 | 29,507 | 902,297 |
Stuart R. Hemphill SCE Senior Vice President; acting CFO from 4/1/2014 through 7/27/2014 | 2014 | 336,700 | — | 151,600 | 151,518 | 272,222 | 933,055 | 27,327 | 1,872,422 |
2013 | 336,700 | — | 151,615 | 151,516 | 237,500 | 32,713 | 28,077 | 938,121 | |
Linda G. Sullivan(5) SCE Senior Vice President and CFO through 3/31/2014 | 2014 | 84,998 | — | 169,021 | 168,947 | — | 685,337 | 15,044 | 1,123,347 |
2013 | 341,300 | — | 169,027 | 168,947 | 291,428 | 34,422 | 29,981 | 1,035,105 | |
2012 | 341,300 | — | 161,336 | 161,267 | 316,769 | 685,306 | 27,221 | 1,693,199 | |
Peter T. Dietrich SCE Senior Vice President | 2014 | 480,000 | — | 237,712 | 237,605 | 388,080 | 370,877 | 116,630 | 1,830,904 |
2013 | 477,611 | — | 280,933 | 280,805 | 617,178 | 163,156 | 372,994 | 2,192,677 | |
2012 | 460,475 | — | 251,449 | 251,374 | 522,520 | 170,696 | 411,166 | 2,067,680 | |
Russell C. Swartz SCE Senior Vice President and General Counsel | 2014 | 362,000 | — | 163,011 | 162,906 | 320,551 | 871,160 | 24,470 | 1,904,098 |
2013 | 360,138 | — | 163,005 | 162,901 | 295,664 | 137,588 | 24,284 | 1,143,580 | |
2012 | 350,700 | — | 165,774 | 165,709 | 299,454 | 660,783 | 21,945 | 1,664,365 | |
Kevin M. Payne SCE Senior Vice President effective 3/18/2014 | 2014 | 274,975 | — | 113,742 | 113,551 | 199,557 | 693,339 | 15,928 | 1,411,092 |
David L. Mead(5) SCE Senior Vice President through 11/14/2014 | 2014 | 262,070 | — | 202,591 | 202,505 | 181,614 | 1,033,541 | 173,298 | 2,055,619 |
Leslie E. Starck(5) SCE Senior Vice President through 10/1/2014 | 2014 | 204,397 | — | 74,545 | 74,470 | — | 32,526 | 501,984 | 887,922 |
Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock Awards(2) ($) | Option Awards(3) ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(4) ($) | All Other Compensation(5) ($) | Total ($) | |||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||
Maria Rigatti SVP and CFO through 9/30/16 | 2016 | 392,891 | — | 362,080 | 361,687 | 244,994 | 364,218 | 29,596 | 1,755,466 | |||||||||
2015 | 315,000 | — | 170,178 | 170,100 | 209,199 | 14,867 | 47,935 | 927,279 | ||||||||||
2014 | 136,379 | — | 141,856 | 141,756 | 110,263 | 342,536 | 29,507 | 902,297 | ||||||||||
Ronald O. Nichols President effective 6/1/16; SVP through 5/31/16 | 2016 | 362,759 | — | 175,430 | 175,196 | 184,345 | 119,918 | 41,027 | 1,058,675 | |||||||||
Russell C. Swartz SVP and General Counsel | 2016 | 362,000 | — | 162,993 | 162,906 | 202,485 | 147,204 | 22,485 | 1,060,073 | |||||||||
2015 | 362,000 | — | 163,013 | 162,903 | 219,508 | 60,518 | 25,517 | 993,459 | ||||||||||
2014 | 362,000 | — | 163,011 | 162,906 | 320,551 | 871,160 | 24,470 | 1,904,098 | ||||||||||
Peter T. Dietrich SVP through 1/20/17 | 2016 | 480,000 | — | 216,124 | 216,007 | 237,600 | 264,864 | 36,700 | 1,451,295 | |||||||||
2015 | 480,000 | — | 216,090 | 216,004 | 263,340 | 167,704 | 116,550 | 1,459,688 | ||||||||||
2014 | 480,000 | — | 237,712 | 237,605 | 388,080 | 370,877 | 116,630 | 1,830,904 |
(1) | The Committee increased the annual base salary rates of Messrs. Pizarro, Payne, and Nichols in connection with their respective promotions effective June 1, 2016 and set them at $800,000, $500,000, and $400,000, respectively. The Committee increased the annual base salary rates of Messrs. Pizarro and Petmecky and Ms. Rigatti in connection with their respective promotions effective September 30, 2016 and set them at $1,100,000, $300,000, and $550,000, respectively. |
(2) | Stock awards consist of performance shares and restricted stock units granted under the 2007 Performance Incentive Plan in the year indicated. The performance share and restricted stock unit amounts shown in the SCE Summary Compensation Table reflect the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718. For performance shares, the value is reported as of the grant date based on the probable outcome of performance conditions, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions and methodologies used to calculate these amounts, see the discussion contained in (i) Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of the Company’s |
|
The table below shows the maximum value of performance share awards included in the SCE Summary Compensation Table at the grant date assuming that the highest level of performance conditions will be achieved. For the grant date fair value of each award based on the probable outcome of the applicable performance conditions, see the “Grants of Plan-Based Awards” table below. The |
Name | Maximum Performance Share Potential as of Grant Date for 2014 Awards ($) | Maximum Performance Share Potential as of Grant Date for 2013 Awards ($) | Maximum Performance Share Potential as of Grant Date for 2012 Awards ($) | ||||
Pedro J. Pizarro | 585,263 | — | — | ||||
Ronald L. Litzinger | 585,058 | 570,535 | 578,572 | ||||
Maria Rigatti | 141,900 | — | — | ||||
Stuart R. Hemphill | 151,652 | 151,681 | — | ||||
Linda G. Sullivan | 169,055 | 169,052 | 161,427 | ||||
Peter T. Dietrich | 237,722 | 280,973 | 251,552 | ||||
Russell C. Swartz | 163,055 | 163,021 | 165,786 | ||||
Kevin M. Payne | 110,191 | — | — | ||||
David L. Mead | 202,669 | — | — | ||||
Leslie E. Starck | 74,563 | — | — |
Name | Maximum | Maximum | Maximum | ||||
Kevin M. Payne | 323,286 | 122,597 | 94,000 | ||||
Pedro J. Pizarro | 1,553,513 | 843,953 | 456,145 | ||||
William M. Petmecky, III | 122,581 | — | — | ||||
Maria Rigatti | 362,240 | 170,223 | 141,900 | ||||
Ronald O. Nichols | 175,443 | — | — | ||||
Russell C. Swartz | 163,066 | 163,030 | 163,055 | ||||
Peter T. Dietrich | 216,226 | 216,169 | 237,722 |
Option awards consist of non-qualified stock options granted under the 2007 Performance Incentive Plan in the year indicated. The option amounts shown in the SCE Summary Compensation Table reflect the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to calculate these amounts, see the discussion of options contained in (i) Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of the Company’s | |
The reported amounts | |
Amounts reported for | |
|
EXECUTIVE COMPENSATION
Grants of Plan-Based Awards |
The following tables present information regarding the incentive plan awards granted to the EIX and SCE NEOs during 20142016 under the EIX 2007 Performance Incentive Plan and the potential 20142016 target and maximum amount of performance-based annual incentive awards payable under the 162(m) Program or the EIX Executive Incentive Compensation Plan (EICP). See the CD&A above for further information regarding award terms reported in the tables below and for discussions regarding NEO stock ownership guidelines, dividends paid on equity awards, and allocations between short-term and long-term compensation.
EIX Grants of Plan-Based Awards Table – Fiscal Year 20142016
Estimated Future Payouts | Estimated Future Payouts | All Other | All Other | Exercise or Base Price of Option Awards ($/Sh) | Grant | |||||||||||||||||||
Name | Grant | Date of | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||
Pedro J. Pizarro | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 116,785 | 66.88 | 906,252 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 687 | 2,749 | 5,498 | 226,600 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 847 | 3,388 | 6,776 | 226,589 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 6,776 | 453,179 | ||||||||||||||||||||
Stock Options | 9/30/2016 | 8/24/2016 | 75,836 | 72.25 | 646,881 | |||||||||||||||||||
TSR Performance Shares | 9/30/2016 | 8/24/2016 | 460 | 1,838 | 3,676 | 161,799 | ||||||||||||||||||
EPS Performance Shares | 9/30/2016 | 8/24/2016 | 560 | 2,239 | 4,478 | 161,768 | ||||||||||||||||||
Restricted Stock Units | 9/30/2016 | 8/24/2016 | 4,477 | 323,463 | ||||||||||||||||||||
Annual Incentive | N/A | 784,885 | 1,569,770 | |||||||||||||||||||||
Theodore F. Craver, Jr.(5) | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 382,571 | 66.88 | 2,968,751 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 2,251 | 9,004 | 18,008 | 742,200 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 2,775 | 11,098 | 22,196 | 742,234 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 22,195 | 1,484,421 | ||||||||||||||||||||
Annual Incentive | N/A | 1,562,500 | 3,125,000 | |||||||||||||||||||||
Maria Rigatti | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 22,103 | 66.88 | 171,519 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 130 | 521 | 1,042 | 42,946 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 161 | 642 | 1,284 | 42,937 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 1,283 | 85,807 | ||||||||||||||||||||
Stock Options | 9/30/2016 | 8/24/2016 | 22,294 | 72.25 | 190,168 | |||||||||||||||||||
TSR Performance Shares | 9/30/2016 | 8/24/2016 | 135 | 541 | 1,082 | 47,624 | ||||||||||||||||||
EPS Performance Shares | 9/30/2016 | 8/24/2016 | 165 | 659 | 1,318 | 47,613 | ||||||||||||||||||
Restricted Stock Units | 9/30/2016 | 8/24/2016 | 1,317 | 95,153 | ||||||||||||||||||||
Annual Incentive | N/A | 246,694 | 493,388 | |||||||||||||||||||||
W. James Scilacci(5) | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 87,952 | 66.88 | 682,508 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 518 | 2,070 | 4,140 | 170,630 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 638 | 2,552 | 5,104 | 170,678 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 5,103 | 341,289 | ||||||||||||||||||||
Annual Incentive | N/A | 487,500 | 975,000 | |||||||||||||||||||||
Adam S. Umanoff | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 76,015 | 66.88 | 589,876 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 448 | 1,790 | 3,580 | 147,550 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 551 | 2,205 | 4,410 | 147,470 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 4,410 | 294,941 | ||||||||||||||||||||
Annual Incentive | N/A | 412,500 | 825,000 |
2017 Proxy Statement | 41 |
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(3) ($) | |||||||||||||||||||
Name | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold Number of Shares of Stock or Units (#) | Target Number of Shares of Stock or Units (#) | Maximum Number of Shares of Stock or Units (#) | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||
Theodore F. Craver, Jr. | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 378,152 | 51.90 | 2,700,005 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 2,371 | 9,484 | 18,968 | 675,071 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 3,252 | 13,006 | 26,012 | 675,011 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 26,012 | 1,350,023 | ||||||||||||||||||||
Annual Incentive | N/A | 1,380,000 | 2,760,000 | |||||||||||||||||||||
W. James Scilacci | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 81,933 | 51.90 | 585,002 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 514 | 2,055 | 4,110 | 146,275 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 705 | 2,818 | 5,636 | 146,254 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 5,636 | 292,508 | ||||||||||||||||||||
Annual Incentive | N/A | 420,000 | 840,000 | |||||||||||||||||||||
Robert L. Adler | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 79,475 | 51.90 | 567,452 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 499 | 1,994 | 3,988 | 141,933 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 684 | 2,734 | 5,468 | 141,895 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 5,467 | 283,737 | ||||||||||||||||||||
Annual Incentive | N/A | 407,400 | 814,800 | |||||||||||||||||||||
Ronald L. Litzinger | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 81,933 | 51.90 | 585,002 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 514 | 2,055 | 4,110 | 146,275 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 705 | 2,818 | 5,636 | 146,254 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 5,636 | 292,508 | ||||||||||||||||||||
Annual Incentive | N/A | 420,000 | 840,000 | |||||||||||||||||||||
Bertrand A. Valdman | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 35,820 | 51.90 | 255,755 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 225 | 899 | 1,798 | 63,991 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 308 | 1,232 | 2,464 | 63,941 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 2,464 | 127,882 | ||||||||||||||||||||
Annual Incentive | N/A | 279,000 | 558,000 |
EXECUTIVE COMPENSATION
Estimated Future Payouts | Estimated Future Payouts | All Other | All Other | Exercise or Base Price of Option Awards ($/Sh) | Grant | |||||||||||||||||||
Name | Grant | Date of | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||
Kevin M. Payne | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 16,882 | 66.88 | 131,004 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 100 | 398 | 796 | 32,807 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 123 | 490 | 980 | 32,771 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 980 | 65,542 | ||||||||||||||||||||
Stock Options | 6/30/2016 | 5/25/2016 | 20,795 | 77.67 | 191,938 | |||||||||||||||||||
TSR Performance Shares | 6/30/2016 | 5/25/2016 | 124 | 495 | 990 | 48,065 | ||||||||||||||||||
EPS Performance Shares | 6/30/2016 | 5/25/2016 | 155 | 618 | 1,236 | 48,000 | ||||||||||||||||||
Restricted Stock Units | 6/30/2016 | 5/25/2016 | 1,236 | 96,000 | ||||||||||||||||||||
Annual Incentive | N/A | 270,878 | 541,756 | |||||||||||||||||||||
Ronald L. Litzinger | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 81,186 | 66.88 | 630,003 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 478 | 1,911 | 3,822 | 157,524 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 589 | 2,355 | 4,710 | 157,502 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 4,710 | 315,005 | ||||||||||||||||||||
Annual Incentive | N/A | 420,000 | 840,000 |
(1) | Options, performance shares, and restricted stock units were granted to each NEO on March 1, 2016 as part of the NEO’s compensation package for his or her position as of that date. Additional options, performance shares, and restricted stock units were granted to Mr. Payne in connection with his election as SCE CEO effective June 1, 2016 (the actual grant date of June 30, 2016 was the last New York Stock Exchange trading date for that quarter). Additional options, performance shares, and restricted stock units were granted to Mr. Pizarro and Ms. Rigatti in connection with their respective elections as EIX CEO and EIX EVP and CFO, effective September 30, 2016. |
(2) | Maximum amounts reported reflect 200% of the applicable annual incentive target under the EICP and are lower than the maximum annual incentive award payable under the 162(m) Program to participating NEOs; NEOs |
Half of each NEO’s | |
The amounts shown for options, performance shares, and restricted stock units represent the grant date fair value of the awards in |
|
SCE Grants of Plan-Based Awards Table – Fiscal Year 2014
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(3) ($) | |||||||||||||||||||
Name | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold Number of Shares of Stock or Units (#) | Target Number of Shares of Stock or Units (#) | Maximum Number of Shares of Stock or Units (#) | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||
Pedro J. Pizarro | ||||||||||||||||||||||||
Stock Options | 12/31/2014 | 8/28/2014 | 65,879 | 65.48 | 585,006 | |||||||||||||||||||
TSR Performance Shares | 12/31/2014 | 8/28/2014 | 354 | 1,414 | 2,828 | 146,349 | ||||||||||||||||||
EPS Performance Shares | 12/31/2014 | 8/28/2014 | 559 | 2,234 | 4,468 | 146,282 | ||||||||||||||||||
Restricted Stock Units | 12/31/2014 | 8/28/2014 | 4,468 | 292,565 | ||||||||||||||||||||
Annual Incentive | N/A | 106,207 | 212,414 | |||||||||||||||||||||
Ronald L. Litzinger | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 81,933 | 51.90 | 585,002 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 514 | 2,055 | 4,110 | 146,275 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 705 | 2,818 | 5,636 | 146,254 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 5,636 | 292,508 | ||||||||||||||||||||
Annual Incentive | N/A | 420,000 | 840,000 | |||||||||||||||||||||
Maria Rigatti | ||||||||||||||||||||||||
Stock Options | 9/30/2014 | 6/19/2014 | 18,386 | 55.92 | 141,756 | |||||||||||||||||||
TSR Performance Shares | 9/30/2014 | 6/19/2014 | 108 | 430 | 860 | 35,497 | ||||||||||||||||||
EPS Performance Shares | 9/30/2014 | 6/19/2014 | 159 | 634 | 1,268 | 35,453 | ||||||||||||||||||
Restricted Stock Units | 9/30/2014 | 6/19/2014 | 1,268 | 70,907 | ||||||||||||||||||||
Annual Incentive | N/A | 75,009 | 150,017 | |||||||||||||||||||||
Stuart R. Hemphill | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 21,221 | 51.90 | 151,518 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 133 | 533 | 1,066 | 37,939 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 183 | 730 | 1,460 | 37,887 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 1,460 | 75,774 | ||||||||||||||||||||
Annual Incentive | N/A | 185,185 | 370,370 | |||||||||||||||||||||
Linda G. Sullivan | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 23,662 | 51.90 | 168,947 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 149 | 594 | 1,188 | 42,281 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 204 | 814 | 1,628 | 42,247 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 1,628 | 84,493 | ||||||||||||||||||||
Annual Incentive | N/A | 46,030 | 92,059 | |||||||||||||||||||||
Peter T. Dietrich | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 33,278 | 51.90 | 237,605 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 209 | 835 | 1,670 | 59,435 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 286 | 1,145 | 2,290 | 59,426 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 2,290 | 118,851 | ||||||||||||||||||||
Annual Incentive | N/A | 264,000 | 528,000 | |||||||||||||||||||||
Russell C. Swartz | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 22,816 | 51.90 | 162,906 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 143 | 573 | 1,146 | 40,786 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 196 | 785 | 1,570 | 40,742 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 1,570 | 81,483 | ||||||||||||||||||||
Annual Incentive | N/A | 199,100 | 398,200 |
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(3) ($) | |||||||||||||||||||
Name | Grant Date | Date of Committee Action | Threshold ($) | Target ($) | Maximum ($) | Threshold Number of Shares of Stock or Units (#) | Target Number of Shares of Stock or Units (#) | Maximum Number of Shares of Stock or Units (#) | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||
Kevin M. Payne | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 13,159 | 51.90 | 93,955 | |||||||||||||||||||
Stock Options | 3/31/2014 | 3/18/2014 | 2,319 | 56.61 | 19,596 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 83 | 330 | 660 | 23,489 | ||||||||||||||||||
TSR Performance Shares | 3/31/2014 | 3/18/2014 | 14 | 56 | 112 | 4,945 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 113 | 453 | 906 | 23,511 | ||||||||||||||||||
EPS Performance Shares | 3/31/2014 | 3/18/2014 | 22 | 87 | 174 | 4,925 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 906 | 56.61 | 47,021 | |||||||||||||||||||
Restricted Stock Units | 3/31/2014 | 3/18/2014 | 174 | 9,850 | ||||||||||||||||||||
Annual Incentive | N/A | 121,860 | 243,720 | |||||||||||||||||||||
David L. Mead | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 28,362 | 51.90 | 202,505 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 178 | 712 | 1,424 | 50,680 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 244 | 976 | 1,952 | 50,654 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 1,951 | 101,257 | ||||||||||||||||||||
Annual Incentive | N/A | 144,138 | 288,277 | |||||||||||||||||||||
Leslie E. Starck | ||||||||||||||||||||||||
Stock Options | 3/3/2014 | 2/26/2014 | 10,430 | 51.90 | 74,470 | |||||||||||||||||||
TSR Performance Shares | 3/3/2014 | 2/26/2014 | 66 | 262 | 524 | 18,649 | ||||||||||||||||||
EPS Performance Shares | 3/3/2014 | 2/26/2014 | 90 | 359 | 718 | 18,632 | ||||||||||||||||||
Restricted Stock Units | 3/3/2014 | 2/26/2014 | 718 | 37,264 | ||||||||||||||||||||
Annual Incentive | N/A | 121,860 | 243,720 |
EXECUTIVE COMPENSATION
SCE Grants of Plan-Based Awards Table – Fiscal Year 2016
Estimated Future Payouts | Estimated Future Payouts | All Other | All Other | Exercise or Base Price of Option Awards ($/Sh) | Grant | |||||||||||||||||||
Name | Grant | Date of | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||
Kevin M. Payne | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 16,882 | 66.88 | 131,004 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 100 | 398 | 796 | 32,807 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 123 | 490 | 980 | 32,771 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 980 | 65,542 | ||||||||||||||||||||
Stock Options | 6/30/2016 | 5/25/2016 | 20,795 | 77.67 | 191,938 | |||||||||||||||||||
TSR Performance Shares | 6/30/2016 | 5/25/2016 | 124 | 495 | 990 | 48,065 | ||||||||||||||||||
EPS Performance Shares | 6/30/2016 | 5/25/2016 | 155 | 618 | 1,236 | 48,000 | ||||||||||||||||||
Restricted Stock Units | 6/30/2016 | 5/25/2016 | 1,236 | 96,000 | ||||||||||||||||||||
Annual Incentive | N/A | 270,878 | 541,756 | |||||||||||||||||||||
Pedro J. Pizarro | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 116,785 | 66.88 | 906,252 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 687 | 2,749 | 5,498 | 226,600 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 847 | 3,388 | 6,776 | 226,589 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 6,776 | 453,179 | ||||||||||||||||||||
Stock Options | 9/30/2016 | 8/24/2016 | 75,836 | 72.25 | 646,881 | |||||||||||||||||||
TSR Performance Shares | 9/30/2016 | 8/24/2016 | 460 | 1,838 | 3,676 | 161,799 | ||||||||||||||||||
EPS Performance Shares | 9/30/2016 | 8/24/2016 | 560 | 2,239 | 4,478 | 161,768 | ||||||||||||||||||
Restricted Stock Units | 9/30/2016 | 8/24/2016 | 4,477 | 323,463 | ||||||||||||||||||||
Annual Incentive | N/A | 784,885 | 1,569,770 | |||||||||||||||||||||
William M. Petmecky, III | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 12,502 | 66.88 | 97,016 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 74 | 295 | 590 | 24,317 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 91 | 363 | 726 | 24,277 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 726 | 48,555 | ||||||||||||||||||||
Stock Options | 9/30/2016 | 8/24/2016 | 2,969 | 72.25 | 25,326 | |||||||||||||||||||
TSR Performance Shares | 9/30/2016 | 8/24/2016 | 18 | 72 | 144 | 6,338 | ||||||||||||||||||
EPS Performance Shares | 9/30/2016 | 8/24/2016 | 22 | 88 | 176 | 6,358 | ||||||||||||||||||
Restricted Stock Units | 9/30/2016 | 8/24/2016 | 176 | 12,716 | ||||||||||||||||||||
Annual Incentive | 119,294 | 238,588 | ||||||||||||||||||||||
Maria Rigatti | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 22,103 | 66.88 | 171,519 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 130 | 521 | 1,042 | 42,946 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 161 | 642 | 1,284 | 42,937 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 1,283 | 85,807 | ||||||||||||||||||||
Stock Options | 9/30/2016 | 8/24/2016 | 22,294 | 72.25 | 190,168 | |||||||||||||||||||
TSR Performance Shares | 9/30/2016 | 8/24/2016 | 135 | 541 | 1,082 | 47,624 | ||||||||||||||||||
EPS Performance Shares | 9/30/2016 | 8/24/2016 | 165 | 659 | 1,318 | 47,613 | ||||||||||||||||||
Restricted Stock Units | 9/30/2016 | 8/24/2016 | 1,317 | 95,153 | ||||||||||||||||||||
Annual Incentive | N/A | 246,694 | 493,388 | |||||||||||||||||||||
Ronald O. Nichols | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 12,984 | 66.88 | 100,756 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 77 | 306 | 612 | 25,224 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 94 | 377 | 754 | 25,214 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 754 | 50,428 | ||||||||||||||||||||
Stock Options | 6/30/2016 | 5/25/2016 | 8,065 | 77.67 | 74,440 | |||||||||||||||||||
TSR Performance Shares | 6/30/2016 | 5/25/2016 | 48 | 192 | 384 | 18,643 | ||||||||||||||||||
EPS Performance Shares | 6/30/2016 | 5/25/2016 | 60 | 240 | 480 | 18,641 | ||||||||||||||||||
Restricted Stock Units | 6/30/2016 | 5/25/2016 | 480 | 37,282 | ||||||||||||||||||||
Annual Incentive | N/A | 204,828 | 409,655 |
2017 Proxy Statement | 43 |
EXECUTIVE COMPENSATION
Estimated Future Payouts | Estimated Future Payouts | All Other | All Other | Exercise or Base Price of Option Awards ($/Sh) | Grant | |||||||||||||||||||
Name | Grant | Date of | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | |||||||||||||
Russell C. Swartz | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 20,993 | 66.88 | 162,906 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 124 | 495 | 990 | 40,803 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 152 | 609 | 1,218 | 40,730 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 1,218 | 81,460 | ||||||||||||||||||||
Annual Incentive | N/A | 199,100 | 398,200 | |||||||||||||||||||||
Peter T. Dietrich | ||||||||||||||||||||||||
Stock Options | 3/1/2016 | 2/24/2016 | 27,836 | 66.88 | 216,007 | |||||||||||||||||||
TSR Performance Shares | 3/1/2016 | 2/24/2016 | 164 | 656 | 1,312 | 54,074 | ||||||||||||||||||
EPS Performance Shares | 3/1/2016 | 2/24/2016 | 202 | 808 | 1,616 | 54,039 | ||||||||||||||||||
Restricted Stock Units | 3/1/2016 | 2/24/2016 | 1,615 | 108,011 | ||||||||||||||||||||
Annual Incentive | N/A | 264,000 | 528,000 |
(1) | Options, performance shares, and restricted stock units were granted to each NEO on March 1, 2016 as part of the NEO’s compensation package for his or her position as of that date. Additional options, performance shares, and restricted stock units were granted to Messrs. Payne and Nichols in connection with their respective elections as CEO and President effective June 1, 2016 (the actual grant date of June 30, 2016 was the last New York Stock Exchange trading date for that quarter). Additional options, performance shares, and restricted stock units were granted to Messrs. Pizarro and Petmecky and Ms. Rigatti in connection with their respective elections as EIX CEO, SCE SVP and CFO, and EIX EVP and CFO, effective September 30, 2016. |
(2) | Maximum amounts reported reflect 200% of the applicable annual incentive target under the EICP and are lower than the maximum annual incentive award payable under the 162(m) Program to participating NEOs; NEOs |
Half of each NEO’s | |
The amounts shown for options, performance shares, and restricted stock units represent the grant date fair value of the awards in |
44 |
|
EXECUTIVE COMPENSATION
Outstanding Equity Awards at Fiscal Year-End |
The following tables present information regarding the outstanding equity awards held by the EIX and SCE NEOs at the end of 2014.2016. Outstanding equity awards consist of non-qualified stock options, performance shares, and restricted stock units. Column (d) “Equity Incentive Plan Awards” has been omitted in accordance with SEC rules because no such awards were outstanding at the end of 2014.2016.
EIX Outstanding Equity Awards Table – Fiscal Year-End 20142016
Option Awards | Stock Awards | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($) | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2)(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)(4) ($) | Grant | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($) | Option | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2)(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)(4) ($) | |||||||||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||||||||||
Pedro J. Pizarro | 12/31/2014 | 32,940 | 32,939 | 65.48 | 1/2/2024 | 4,724 | 340,099 | — | — | ||||||||||||||||||||||||||||
3/2/2015 | 27,902 | 83,706 | 63.72 | 1/2/2025 | 7,001 | 503,983 | 12,665 | 911,753 | |||||||||||||||||||||||||||||
3/1/2016 | — | 116,785 | 66.88 | 1/2/2026 | 6,962 | 501,162 | 12,610 | 907,801 | |||||||||||||||||||||||||||||
9/30/2016 | — | 75,836 | 72.25 | 1/2/2026 | 4,511 | 324,757 | 8,216 | 591,482 | |||||||||||||||||||||||||||||
Theodore F. | 3/1/2006 | 60,020 | — | 44.295 | 1/4/2016 | — | — | — | — | 3/3/2009 | 295,614 | — | 24.84 | 1/2/2019 | — | — | — | — | |||||||||||||||||||
Craver, Jr. | 3/5/2007 | 84,699 | — | 47.410 | 1/3/2017 | — | — | — | — | 3/3/2010 | 461,129 | — | 33.30 | 1/2/2020 | — | — | — | — | |||||||||||||||||||
3/3/2008 | 87,793 | — | 49.950 | 1/2/2018 | — | — | — | — | 3/3/2011 | 440,361 | — | 37.96 | 1/4/2021 | — | — | — | — | ||||||||||||||||||||
6/30/2008 | 23,149 | — | 51.380 | 1/2/2018 | — | — | — | — | 3/5/2012 | 511,495 | — | 43.10 | 1/3/2022 | — | — | — | — | ||||||||||||||||||||
9/30/2008 | 240,385 | — | 39.900 | 1/2/2018 | — | — | — | — | 3/1/2013 | 503,732 | — | 48.48 | 1/3/2023 | — | — | — | — | ||||||||||||||||||||
3/3/2009 | 498,349 | — | 24.840 | 1/2/2019 | — | — | — | — | 3/3/2014 | 189,076 | 189,076 | 51.90 | 1/2/2024 | — | — | — | — | ||||||||||||||||||||
3/3/2010 | 461,129 | — | 33.300 | 1/2/2020 | — | — | — | — | 3/2/2015 | 98,173 | 294,519 | 63.72 | 1/2/2025 | — | — | 44,553 | 3,207,347 | ||||||||||||||||||||
3/3/2011 | 330,273 | 110,088 | 37.960 | 1/4/2021 | — | — | — | — | 3/1/2016 | — | 286,929 | 66.88 | 1/2/2026 | — | — | 30,979 | 2,230,155 | ||||||||||||||||||||
Maria Rigatti | 9/30/2014 | 9,194 | 9,192 | 55.92 | 1/2/2024 | 1,349 | 97,109 | — | — | ||||||||||||||||||||||||||||
3/5/2012 | 255,748 | 255,747 | 43.100 | 1/3/2022 | — | — | — | — | 3/2/2015 | 5,625 | 16,875 | 63.72 | 1/2/2025 | 1,412 | 101,619 | 2,555 | 183,903 | ||||||||||||||||||||
3/1/2013 | 125,933 | 377,799 | 48.480 | 1/3/2023 | — | — | 55,765 | 3,651,462 | 3/1/2016 | — | 22,103 | 66.88 | 1/2/2026 | 1,318 | 94,892 | 2,390 | 172,034 | ||||||||||||||||||||
3/3/2014 | — | 378,152 | 51.900 | 1/2/2024 | — | — | 46,126 | 3,020,304 | 9/30/2016 | — | 22,294 | 72.25 | 1/2/2026 | 1,327 | 95,534 | 2,418 | 174,093 | ||||||||||||||||||||
W. James | 3/1/2006 | 15,926 | — | 44.295 | 1/4/2016 | — | — | — | — | ||||||||||||||||||||||||||||
Scilacci | 3/5/2007 | 19,902 | — | 47.410 | 1/3/2017 | — | — | — | — | ||||||||||||||||||||||||||||
W. James Scilacci | 3/3/2010 | 57,597 | — | 33.30 | 1/2/2020 | — | — | — | — | ||||||||||||||||||||||||||||
3/3/2008 | 25,788 | — | 49.950 | 1/2/2018 | — | — | — | — | 3/3/2011 | 96,986 | — | 37.96 | 1/4/2021 | — | — | — | — | ||||||||||||||||||||
9/30/2008 | 48,354 | — | 39.900 | 1/2/2018 | — | — | — | — | 3/5/2012 | 108,334 | — | 43.10 | 1/3/2022 | — | — | — | — | ||||||||||||||||||||
3/3/2010 | 107,597 | — | 33.300 | 1/2/2020 | — | — | — | — | 3/1/2013 | 109,142 | — | 48.48 | 1/3/2023 | — | — | — | — | ||||||||||||||||||||
3/3/2011 | 72,741 | 24,245 | 37.960 | 1/4/2021 | — | — | — | — | 3/3/2014 | 40,968 | 40,965 | 51.90 | 1/2/2024 | — | — | — | — | ||||||||||||||||||||
3/5/2012 | 54,168 | 54,166 | 43.100 | 1/3/2022 | 7,130 | 466,902 | — | — | 3/2/2015 | 21,702 | 65,104 | 63.72 | 1/2/2025 | — | — | 9,850 | 709,124 | ||||||||||||||||||||
3/1/2013 | 27,286 | 81,856 | 48.480 | 1/3/2023 | 6,368 | 417,006 | 12,083 | 791,164 | 3/1/2016 | — | 65,964 | 66.88 | 1/2/2026 | — | — | 7,123 | 512,774 | ||||||||||||||||||||
Adam S. Umanoff | 3/2/2015 | 20,893 | 62,679 | 63.72 | 1/2/2025 | 5,242 | 377,398 | 9,482 | 682,635 | ||||||||||||||||||||||||||||
3/3/2014 | — | 81,933 | 51.900 | 1/2/2024 | 5,780 | 378,444 | 9,994 | 654,421 | 3/1/2016 | — | 76,015 | 66.88 | 1/2/2026 | 4,531 | 326,169 | 8,209 | 590,951 | ||||||||||||||||||||
Robert L. | 3/3/2011 | 1 | 23,602 | 37.960 | 1/4/2021 | — | — | — | — | ||||||||||||||||||||||||||||
Adler | 3/5/2012 | 52,766 | 52,766 | 43.100 | 1/3/2022 | — | — | — | — | ||||||||||||||||||||||||||||
Kevin M. Payne | 3/1/2013 | 13,790 | — | 48.48 | 1/3/2023 | — | — | — | — | ||||||||||||||||||||||||||||
3/1/2013 | 26,467 | 79,401 | 48.480 | 1/3/2023 | — | — | 11,722 | 767,529 | 3/3/2014 | 6,580 | 6,579 | 51.90 | 1/2/2024 | 982 | 70,720 | — | — | ||||||||||||||||||||
3/3/2014 | — | 79,475 | 51.900 | 1/2/2024 | — | — | 9,697 | 634,949 | 3/31/2014 | 1,160 | 1,159 | 56.61 | 1/2/2024 | 187 | 13,493 | — | — | ||||||||||||||||||||
3/2/2015 | 4,049 | 12,146 | 63.72 | 1/2/2025 | 1,016 | 73,150 | 1,840 | 132,447 | |||||||||||||||||||||||||||||
3/1/2016 | — | 16,882 | 66.88 | 1/2/2026 | 1,007 | 72,482 | 1,825 | 131,355 | |||||||||||||||||||||||||||||
6/30/2016 | — | 20,795 | 77.67 | 1/2/2026 | 1,254 | 90,242 | 2,258 | 162,523 |
| 45 |
Option Awards | Stock Awards | |||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($) | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2)(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)(4) ($) | |||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||
Ronald L. | 3/1/2006 | 18,777 | — | 44.295 | 1/4/2016 | — | — | — | — | |||||||||
Litzinger | 3/5/2007 | 24,107 | — | 47.410 | 1/3/2017 | — | — | — | — | |||||||||
3/3/2008 | 28,242 | — | 49.950 | 1/2/2018 | — | — | — | — | ||||||||||
6/30/2008 | 32,932 | — | 51.380 | 1/2/2018 | — | — | — | — | ||||||||||
3/3/2009 | 122,215 | — | 24.840 | 1/2/2019 | — | — | — | — | ||||||||||
3/3/2010 | 100,750 | — | 33.300 | 1/2/2020 | — | — | — | — | ||||||||||
3/3/2011 | 77,181 | 25,727 | 37.960 | 1/4/2021 | — | — | — | — | ||||||||||
3/5/2012 | 55,406 | 55,403 | 43.100 | 1/3/2022 | 7,293 | 477,577 | — | — | ||||||||||
3/1/2013 | 26,604 | 79,810 | 48.480 | 1/3/2023 | 6,209 | 406,570 | 11,783 | 771,537 | ||||||||||
3/3/2014 | — | 81,933 | 51.900 | 1/2/2024 | 5,780 | 378,444 | 9,994 | 654,421 | ||||||||||
Bertrand A. | 3/31/2011 | 57,750 | 19,247 | 36.590 | 1/4/2021 | — | — | — | — | |||||||||
Valdman | 3/5/2012 | 21,338 | 21,335 | 43.100 | 1/3/2022 | 2,809 | 183,957 | — | — | |||||||||
3/1/2013 | 11,929 | 35,786 | 48.480 | 1/3/2023 | 2,784 | 182,311 | 5,283 | 345,962 | ||||||||||
3/3/2014 | — | 35,820 | 51.900 | 1/2/2024 | 2,527 | 165,452 | 4,371 | 286,184 |
EXECUTIVE COMPENSATION
Option Awards | Stock Awards | |||||||||||||||||
Name | Grant | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($) | Option | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2)(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)(4) ($) | |||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||
Ronald L. Litzinger | 3/3/2008 | 28,242 | — | 49.95 | 1/2/2018 | — | — | — | — | |||||||||
6/30/2008 | 32,932 | — | 51.38 | 1/2/2018 | — | — | — | — | ||||||||||
3/3/2009 | 76,385 | — | 24.84 | 1/2/2019 | — | — | — | — | ||||||||||
3/3/2010 | 70,526 | — | 33.30 | 1/2/2020 | — | — | — | — | ||||||||||
3/3/2011 | 90,045 | — | 37.96 | 1/4/2021 | — | — | — | — | ||||||||||
3/5/2012 | 96,959 | — | 43.10 | 1/3/2022 | — | — | — | — | ||||||||||
3/1/2013 | 106,414 | — | 48.48 | 1/3/2023 | — | — | — | — | ||||||||||
3/3/2014 | 40,968 | 40,965 | 51.90 | 1/2/2024 | 6,111 | 439,933 | — | — | ||||||||||
3/2/2015 | 20,834 | 62,500 | 63.72 | 1/2/2025 | 5,228 | 376,332 | 9,455 | 680,655 | ||||||||||
3/1/2016 | — | 81,186 | 66.88 | 1/2/2026 | 4,839 | 348,358 | 8,766 | 631,038 |
(1) | Subject to each NEO’s continued employment, each unvested stock option grant becomes vested in equal annual installments over a four-year vesting period, with the first installment vesting on January 2 in the year following the year in which the grant occurs and the following three installments vesting on the next three anniversaries of that date (if January 2 falls on a holiday or weekend, then vesting occurs either on the preceding business day or the next business day on which the New York Stock Exchange is open, depending on the terms applicable to the grant). In accordance with the terms and conditions of the awards, 1/4 of the options granted on March 1, 2016 to Messrs. Craver and Scilacci terminated for no value in connection with their respective retirements. With respect to these options, the amounts shown in the Outstanding Equity Awards Table are presented after taking these forfeitures into account. |
(2) | Subject to each NEO’s continued employment, restricted stock units become vested and payable on January 2 at the end of a three-year vesting period beginning with the year in which the grant occurs (if January 2 falls on a holiday or weekend, then vesting occurs on the preceding business day on which the New York Stock Exchange is open). |
(3) | The values shown in columns (h) and (j) of the table are determined by multiplying the number of shares or units reported in column (g) or (i), respectively, by the closing price of EIX Common Stock on December 30, 2016. |
(4) | Subject to each NEO’s continued employment, approximately half of each NEO’s 2015 and 2016 performance share grants become earned and vested based on EIX’s comparative TSR during the relevant three-year performance period (“TSR Performance Shares”) and the remainder become earned and vested based on EIX’s average annual core earnings per share measured against target levels for the three calendar years in the relevant performance period (“EPS Performance Shares”). The number of performance shares included for each NEO in column (i) of the table above is the maximum number of shares that may become earned (including shares added by reinvestment of dividend equivalents) for the 2015 and 2016 grants. In accordance with the terms and conditions of the stock awards, 1/4 of the performance shares granted on March 1, 2016 to Messrs. Craver and Scilacci terminated for no value in connection with their respective retirements. With respect to these 2016 performance share grants, the amounts shown in the Outstanding Equity Awards Table are presented after taking these forfeitures into account. |
46 | 2017 Proxy Statement |
EXECUTIVE COMPENSATION
SCE Outstanding Equity Awards Table – Fiscal Year-End 2016
Option Awards | Stock Awards | |||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($) | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity | |
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | ||
Kevin M. | 3/1/2013 | 13,790 | 48.48 | 1/3/2023 | — | — | — | — | ||
Payne | 3/3/2014 | 6,580 | 6,579 | 51.90 | 1/2/2024 | 982 | 70,720 | — | — | |
3/31/2014 | 1,160 | 1,159 | 56.61 | 1/2/2024 | 187 | 13,493 | — | — | ||
3/2/2015 | 4,049 | 12,146 | 63.72 | 1/2/2025 | 1,016 | 73,150 | 1,840 | 132,447 | ||
3/1/2016 | — | 16,882 | 66.88 | 1/2/2026 | 1,007 | 72,482 | 1,825 | 131,355 | ||
6/30/2016 | — | 20,795 | 77.67 | 1/2/2026 | 1,254 | 90,242 | 2,258 | 162,523 | ||
Pedro J. | 12/31/2014 | 32,940 | 32,939 | 65.48 | 1/2/2024 | 4,724 | 340,099 | — | — | |
Pizarro | 3/2/2015 | 27,902 | 83,706 | 63.72 | 1/2/2025 | 7,001 | 503,983 | 12,665 | 911,753 | |
3/1/2016 | — | 116,785 | 66.88 | 1/2/2026 | 6,962 | 501,162 | 12,610 | 907,801 | ||
9/30/2016 | — | 75,836 | 72.25 | 1/2/2026 | 4,511 | 324,757 | 8,216 | 591,482 | ||
William M. | 9/30/2014 | — | 4,408 | 55.92 | 1/2/2024 | 647 | 46,563 | — | — | |
Petmecky, III | 3/2/2015 | — | 8,093 | 63.72 | 1/2/2025 | 678 | 48,792 | 1,227 | 88,298 | |
3/1/2016 | — | 12,502 | 66.88 | 1/2/2026 | 746 | 53,696 | 1,352 | 97,333 | ||
9/30/2016 | — | 2,969 | 72.25 | 1/2/2026 | 177 | 12,767 | 322 | 23,212 | ||
Maria Rigatti | 9/30/2014 | 9,194 | 9,192 | 55.92 | 1/2/2024 | 1,349 | 97,109 | — | — | |
3/2/2015 | 5,625 | 16,875 | 63.72 | 1/2/2025 | 1,412 | 101,619 | 2,555 | 183,903 | ||
3/1/2016 | — | 22,103 | 66.88 | 1/2/2026 | 1,318 | 94,892 | 2,390 | 172,034 | ||
9/30/2016 | — | 22,294 | 72.25 | 1/2/2026 | 1,327 | 95,534 | 2,418 | 174,093 | ||
Ronald O. | 6/30/2014 | 5,858 | 5,858 | 58.11 | 1/2/2024 | 928 | 66,821 | — | — | |
Nichols | 3/2/2015 | 3,499 | 10,495 | 63.72 | 1/2/2025 | 879 | 63,255 | 1,590 | 114,483 | |
3/1/2016 | — | 12,984 | 66.88 | 1/2/2026 | 775 | 55,767 | 1,403 | 101,031 | ||
6/30/2016 | — | 8,065 | 77.67 | 1/2/2026 | 487 | 35,045 | 876 | 63,082 | ||
Russell C. | 3/3/2008 | 9,965 | — | 49.95 | 1/2/2018 | — | — | — | — | |
Swartz | 3/3/2009 | 28,624 | — | 24.84 | 1/2/2019 | — | — | — | — | |
3/3/2010 | 20,590 | — | 33.30 | 1/2/2020 | — | — | — | — | ||
3/3/2011 | 27,785 | — | 37.96 | 1/4/2021 | — | — | — | — | ||
3/5/2012 | 31,745 | — | 43.10 | 1/3/2022 | — | — | — | — | ||
3/1/2013 | 30,392 | — | 48.48 | 1/3/2023 | — | — | — | — | ||
3/3/2014 | 11,408 | 11,408 | 51.90 | 1/2/2024 | — | — | — | — | ||
3/2/2015 | 5,387 | 16,161 | 63.72 | 1/2/2025 | — | — | 2,447 | 176,139 | ||
3/1/2016 | — | 20,993 | 66.88 | 1/2/2026 | — | — | 2,268 | 163,307 | ||
Peter T. | 3/1/2013 | 22,389 | — | 48.48 | 1/3/2023 | — | — | — | — | |
Dietrich | 3/3/2014 | 16,640 | 16,638 | 51.90 | 1/2/2024 | 2,483 | 178,752 | — | — | |
3/2/2015 | 7,143 | 21,429 | 63.72 | 1/2/2025 | 1,792 | 129,022 | 3,244 | 233,533 | ||
3/1/2016 | — | 27,836 | 66.88 | 1/2/2026 | 1,659 | 119,447 | 3,008 | 216,559 |
(1) | Subject to each NEO’s continued employment, each unvested stock option grant becomes vested in equal annual installments over a four-year vesting period, with the first installment vesting on January 2 in the year following the year in which the grant occurs and the following three installments vesting on the next three anniversaries of that date (if January 2 falls on a holiday or weekend, then vesting occurs either on the preceding business day or the next business day on which the New York Stock Exchange is open, depending on the terms applicable to the grant). |
(2) | Subject to each NEO’s continued employment, restricted stock units become vested and payable on January 2 at the end of a three-year vesting period beginning with the year in which the grant occurs (if January 2 falls on a holiday or weekend, then vesting occurs |
(3) | The values shown in columns (h) and (j) of the table are determined by multiplying the number of shares or units reported in column (g) or (i), respectively, by the closing price of EIX Common Stock on December |
2017 Proxy Statement | 47 |
EXECUTIVE COMPENSATION
(4) | Subject to each NEO’s continued employment, approximately half of each NEO’s |
|
SCE Outstanding Equity Awards Table – Fiscal Year-End 2014
Option Awards | Stock Awards | ||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($) | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2)(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)(4) ($) | ||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||
Pedro J. | 12/31/2014 | — | 65,879 | 65.480 | 1/2/2024 | 4,468 | 292,565 | 7,296 | 477,742 | ||||||||||
Pizarro | |||||||||||||||||||
Ronald L. | 3/1/2006 | 18,777 | — | 44.295 | 1/4/2016 | — | — | — | — | ||||||||||
Litzinger | 3/5/2007 | 24,107 | — | 47.410 | 1/3/2017 | — | — | — | — | ||||||||||
3/3/2008 | 28,242 | — | 49.950 | 1/2/2018 | — | — | — | — | |||||||||||
6/30/2008 | 32,932 | — | 51.380 | 1/2/2018 | — | — | — | — | |||||||||||
3/3/2009 | 122,215 | — | 24.840 | 1/2/2019 | — | — | — | — | |||||||||||
3/3/2010 | 100,750 | — | 33.300 | 1/2/2020 | — | — | — | — | |||||||||||
3/3/2011 | 77,181 | 25,727 | 37.960 | 1/4/2021 | — | — | — | — | |||||||||||
3/5/2012 | 55,406 | 55,403 | 43.100 | 1/3/2022 | 7,293 | 477,577 | — | — | |||||||||||
3/1/2013 | 26,604 | 79,810 | 48.480 | 1/3/2023 | 6,209 | 406,570 | 11,783 | 771,537 | |||||||||||
3/3/2014 | — | 81,933 | 51.900 | 1/2/2024 | 5,780 | 378,444 | 9,994 | 654,421 | |||||||||||
Maria | 9/30/2014 | — | 18,386 | 55.920 | 1/2/2024 | 1,276 | 83,536 | 2,141 | 140,194 | ||||||||||
Rigatti | |||||||||||||||||||
Stuart R. | 3/3/2011 | — | 6,062 | 37.960 | 1/4/2021 | — | — | — | — | ||||||||||
Hemphill | 3/5/2012 | — | 15,963 | 43.100 | 1/3/2022 | 2,102 | 137,630 | — | — | ||||||||||
3/1/2013 | — | 21,201 | 48.480 | 1/3/2023 | 1,650 | 108,018 | 3,133 | 205,117 | |||||||||||
3/3/2014 | — | 21,221 | 51.900 | 1/2/2024 | 1,497 | 98,036 | 2,590 | 169,615 | |||||||||||
Linda G. | — | — | — | — | — | — | — | — | — | ||||||||||
Sullivan(5) | |||||||||||||||||||
Peter T. | 3/3/2011 | — | 8,616 | 37.960 | 1/4/2021 | — | — | — | — | ||||||||||
Dietrich | 3/5/2012 | 14,078 | 24,078 | 43.100 | 1/3/2022 | 3,170 | 207,583 | — | — | ||||||||||
3/1/2013 | 13,098 | 39,291 | 48.480 | 1/3/2023 | 3,058 | 200,210 | 5,803 | 379,963 | |||||||||||
3/3/2014 | — | 33,278 | 51.900 | 1/2/2024 | 2,348 | 153,768 | 4,061 | 265,905 | |||||||||||
Russell C. | 3/1/2006 | 7,702 | — | 44.295 | 1/4/2016 | — | — | — | — | ||||||||||
Swartz | 3/5/2007 | 6,659 | — | 47.410 | 1/3/2017 | — | — | — | — | ||||||||||
3/3/2008 | 9,965 | — | 49.950 | 1/2/2018 | — | — | — | — | |||||||||||
3/3/2009 | 28,624 | — | 24.840 | 1/2/2019 | — | — | — | — | |||||||||||
3/3/2010 | 20,590 | — | 33.300 | 1/2/2020 | — | — | — | — | |||||||||||
3/3/2011 | 20,841 | 6,944 | 37.960 | 1/4/2021 | — | — | — | — | |||||||||||
3/5/2012 | 15,874 | 15,871 | 43.100 | 1/3/2022 | — | — | — | — | |||||||||||
3/1/2013 | 7,598 | 22,794 | 48.480 | 1/3/2023 | — | — | 3,367 | 220,459 | |||||||||||
3/3/2014 | — | 22,816 | 51.900 | 1/2/2024 | — | — | 2,785 | 182,373 |
|
Option Awards | Stock Awards | ||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable(1) (#) | Option Exercise Price ($) | Option Expiration Date(1) | Number of Shares or Units of Stock That Have Not Vested(2) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2)(3) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3)(4) ($) | ||||||||||||
(a) | (b) | (c) | (e) | (f) | (g) | (h) | (i) | (j) | |||||||||||||
Kevin M. | 3/3/2011 | — | 3,058 | 37.960 | 1/4/2021 | — | — | — | — | ||||||||||||
Payne | 3/5/2012 | — | 7,866 | 43.100 | 1/3/2022 | 1,036 | 67,819 | — | — | ||||||||||||
3/1/2013 | — | 13,790 | 48.480 | 1/3/2023 | 1,073 | 70,284 | 2,039 | 133,519 | |||||||||||||
3/3/2014 | — | 13,159 | 51.900 | 1/2/2024 | 929 | 60,836 | 1,606 | 105,153 | |||||||||||||
3/31/2014 | — | 2,319 | 51.900 | 1/2/2024 | 177 | 11,607 | 291 | 19,079 | |||||||||||||
David L. | 3/3/2011 | — | 2,885 | 37.960 | 1/4/2021 | — | — | — | — | ||||||||||||
Mead | 6/30/2011 | — | 2,677 | 38.750 | 1/4/2021 | — | — | — | — | ||||||||||||
3/5/2012 | — | 12,503 | 43.100 | 1/3/2022 | — | — | — | — | |||||||||||||
3/1/2013 | — | 17,001 | 48.480 | 1/3/2023 | — | — | 2,512 | 164,480 | |||||||||||||
3/3/2014 | 23,6350 | — | 51.900 | 1/2/2024 | — | — | 2,898 | 189,793 | |||||||||||||
Leslie E. | 3/1/2006 | 4,620 | — | 44.295 | 1/4/2016 | — | — | — | — | ||||||||||||
Starck | 3/3/2011 | 2,980 | — | 37.960 | 10/1/2015 | — | — | — | — | ||||||||||||
9/30/2011 | 783 | — | 38.250 | 10/1/2015 | — | — | — | — | |||||||||||||
3/5/2012 | 6,242 | — | 43.100 | 10/1/2015 | 939 | 61,485 | — | — | |||||||||||||
3/1/2013 | 6,079 | — | 48.480 | 10/1/2015 | 811 | 53,118 | 1,418 | 92,882 | |||||||||||||
3/3/2014 | 4,564 | — | 51.900 | 10/1/2015 | 734 | 48,090 | 753 | 49,300 |
|
Option Exercises and Stock Vested |
The following tables present information regarding the exercise of stock options by the EIX and SCE NEOs and vesting of stock awards during 2014.2016. The stock awards listed in the following tables represent the value realized on the vesting of restricted stock units during 2014,2016, and the value realized on the vesting of 20122014 performance share awards payable for the 2012-20142014-2016 performance period. The value realized on the vesting of the 20122014 performance share awards reflects a payout atof approximately 177%170% of the target number of shares. This above-target payout was due to EIX’s TSR ranking in the 8090th percentile of its peer group for the performance period and EIX’s EPS exceeding its target for each year in the performance period by 9%approximately 24%, 6%,5% and over 20%1%, respectively.
EIX Option Exercises and Stock Vested Table – Fiscal Year 20142016
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||
Name | Number of Shares Acquired on Exercise(1) (#) | Value Realized on Exercise(1)(2) ($) | Number of Shares Acquired on Vesting(3) (#) | Value Realized on Vesting(3)(4) ($) | Number of Shares Acquired on Exercise(1) (#) | Value Realized on Exercise(1)(2) ($) | Number of Shares Acquired on Vesting(3) (#) | Value Realized on Vesting(3)(4) ($) | ||||
(a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | ||||
Pedro J. Pizarro | — | — | 6,297 | 453,334 | ||||||||
Theodore F. Craver, Jr. | 222,144 | 5,269,270 | 75,331 | 4,932,672 | 698,781 | 22,726,402 | 57,412 | 4,133,078 | ||||
Maria Rigatti | — | — | 1,859 | 133,839 | ||||||||
W. James Scilacci | 143,438 | 4,310,188 | 18,258 | 1,036,122 | 159,970 | 4,519,124 | 24,223 | 1,743,783 | ||||
Robert L. Adler | 269,586 | 5,426,796 | 15,646 | 1,024,494 | ||||||||
Adam S. Umanoff | — | — | — | — | ||||||||
Kevin M. Payne | 10,924 | 293,831 | 1,655 | 119,153 | ||||||||
Ronald L. Litzinger | 21,706 | 509,939 | 18,980 | 1,073,649 | 101,524 | 3,421,952 | 8,734 | 628,770 | ||||
Bertrand A. Valdman | — | — | 10,075 | 539,168 |
(1) | All of the stock options exercised by |
(2) | The value realized on exercise of stock options equals the difference between (i) the market price of EIX Common Stock on the exercise date and (ii) the exercise price of those options, multiplied by the number of shares as to which the options were exercised. |
(3) | |
(4) | With the exception of the restricted stock units discussed in footnote (3) above (which are valued in accordance with footnote (3)), the value for stock awards equals the market price of EIX Common Stock on the vesting date (December 31, 2016 for performance shares granted in 2014) multiplied by the number of shares or units, as applicable, that vested. |
48 | 2017 Proxy Statement |
EXECUTIVE COMPENSATION
SCE Option Exercises and Stock Vested Table – Fiscal Year 20142016
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||
Name | Number of Shares Acquired on Exercise(1) (#) | Value Realized on Exercise(1)(2) ($) | Number of Shares Acquired on Vesting(3) (#) | Value Realized on Vesting(3)(4) ($) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise(1) ($) | Number of Shares Acquired on Vesting(2) (#) | Value Realized on Vesting(2)(3) ($) | ||||
(a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | ||||
Kevin M. Payne | 10,924 | 293,831 | 1,655 | 119,153 | ||||||||
Pedro J. Pizarro | 160,835 | 3,408,958 | 19,257 | 1,103,611 | — | — | 6,297 | 453,334 | ||||
Ronald L. Litzinger | 21,706 | 509,939 | 18,980 | 1,073,649 | ||||||||
William M. Petmecky, III | 7,108 | 69,938 | 891 | 64,147 | ||||||||
Maria Rigatti | 32,962 | 604,789 | 6,893 | 400,152 | — | — | 1,859 | 133,839 | ||||
Stuart R. Hemphill | 47,981 | 670,361 | 5,027 | 289,291 | ||||||||
Linda G. Sullivan | 94,674 | 1,750,211 | 2,217 | 100,708 | ||||||||
Ronald O. Nichols | — | — | 1,297 | 93,380 | ||||||||
Russell C. Swartz | 6,659 | 160,834 | 3,686 | 265,324 | ||||||||
Peter T. Dietrich | 70,992 | 946,253 | 7,408 | 428,430 | 42,039 | 1,133,297 | 3,549 | 255,482 | ||||
Russell C. Swartz | 11,928 | 327,548 | 4,631 | 303,246 | ||||||||
Kevin M. Payne | 26,922 | 451,164 | 2,503 | 143,792 | ||||||||
David L. Mead | 23,388 | 355,703 | 4,049 | 265,154 | ||||||||
Leslie E. Starck | 74,677 | 1,851,902 | 4,636 | 280,200 |
(1) | |
The value realized on exercise of stock options equals the difference between (i) the market price of EIX Common Stock on the exercise date and (ii) the exercise price of those options, multiplied by the number of shares as to which the options were exercised. | |
For | |
With the exception of the restricted stock units discussed in footnote |
|
Pension Benefits |
The following tables present information regarding the present value of accumulated benefits that may become payable to, and payments made to, the EIX and SCE NEOs under the Company’s qualified and non-qualified defined-benefit pension plans.
EIX Pension Benefits Table
Name | Plan Name | Number of Years Credited Service(1) (#) | Present Value of Accumulated Benefit(1) ($) | Payments During Last Fiscal Year ($) | Plan Name | Number of Years Credited Service(1) (#) | Present Value of Accumulated Benefit(2) ($) | Payments During Last Fiscal Year ($) | |||
(a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | |||
Pedro J. Pizarro | SCE Retirement Plan | 18 | 431,430 | — | |||||||
Executive Retirement Plan | 3,015,481 | — | |||||||||
Theodore F. Craver, Jr. | SCE Retirement Plan | 18 | 513,719 | — | SCE Retirement Plan | 20 | 620,203 | — | |||
Executive Retirement Plan | 19,376,135 | 1,294,085 | |||||||||
Maria Rigatti | SCE Retirement Plan | 18 | 688,959 | — | |||||||
Executive Retirement Plan | 18 | 17,789,150 | — | Executive Retirement Plan | 852,200 | — | |||||
W. James Scilacci | SCE Retirement Plan | 31 | 1,003,793 | — | SCE Retirement Plan | 33 | 1,184,453 | — | |||
Executive Retirement Plan | 31 | 8,945,218 | — | Executive Retirement Plan | 10,237,105 | — | |||||
Robert L. Adler | SCE Retirement Plan | 7 | 169,383 | — | |||||||
Adam S. Umanoff | SCE Retirement Plan | 2 | 36,477 | — | |||||||
Executive Retirement Plan | 298,228 | — | |||||||||
Kevin M. Payne | SCE Retirement Plan | 30 | 816,364 | — | |||||||
Executive Retirement Plan | 7 | 1,636,973 | — | Executive Retirement Plan | 2,002,343 | — | |||||
Ronald L. Litzinger | SCE Retirement Plan | 29 | 887,546 | — | SCE Retirement Plan | 31 | 1,172,447 | — | |||
Executive Retirement Plan | 29 | 6,951,513 | — | Executive Retirement Plan | 8,241,487 | — | |||||
Bertrand A. Valdman | SCE Retirement Plan | 4 | 60,077 | — | |||||||
Executive Retirement Plan | 4 | 528,916 | — |
(1) | The years of credited service |
(2) | The amounts reported in column (d) for “Present Value of Accumulated Benefit” (“PVAB”) are actual retirement benefits for those who retired during 2016 or actuarial estimates of the present value of each NEO’s accumulated benefits |
2017 Proxy Statement | 49 |
EXECUTIVE COMPENSATION
SCE Pension Benefits Table
Name | Plan Name | Number of Years Credited Service(1) (#) | Present Value of Accumulated Benefit(1) ($) | Payments During Last Fiscal Year ($) | Plan Name | Number of Years Credited Service(1) (#) | Present Value of Accumulated Benefit(2) ($) | Payments During Last Fiscal Year ($) | |||
(a) | (b) | (c) | (d) | (e) | (b) | (c) | (d) | (e) | |||
Pedro Pizarro | SCE Retirement Plan | 16 | 258,119 | — | |||||||
Kevin M. Payne | SCE Retirement Plan | 30 | 816,364 | — | |||||||
Executive Retirement Plan | 16 | 2,289,762 | Executive Retirement Plan | 2,002,343 | — | ||||||
Ronald L. Litzinger | SCE Retirement Plan | 29 | 887,546 | — | |||||||
Pedro J. Pizarro | SCE Retirement Plan | 18 | 431,430 | — | |||||||
Executive Retirement Plan | 3,015,481 | — | |||||||||
William M. Petmecky, III | SCE Retirement Plan | 22 | 442,510 | — | |||||||
Executive Retirement Plan | 29 | 6,951,513 | — | Executive Retirement Plan | 454,088 | — | |||||
Maria Rigatti | SCE Retirement Plan | 16 | 515,828 | SCE Retirement Plan | 18 | 688,959 | — | ||||
Executive Retirement Plan | 16 | 651,066 | — | Executive Retirement Plan | 852,200 | — | |||||
Stuart R. Hemphill | SCE Retirement Plan | 29 | 559,134 | — | |||||||
Ronald O. Nichols | SCE Retirement Plan | 3 | 61,092 | — | |||||||
Executive Retirement Plan | 29 | 2,367,765 | — | Executive Retirement Plan | 195,149 | — | |||||
Linda G. Sullivan | SCE Retirement Plan | 24 | 497,488 | — | |||||||
Russell C. Swartz | SCE Retirement Plan | 24 | 868,327 | — | |||||||
Executive Retirement Plan | 24 | 2,533,251 | — | Executive Retirement Plan | 2,758,634 | — | |||||
Peter T. Dietrich | SCE Retirement Plan | 4 | 61,111 | — | SCE Retirement Plan | 6 | 126,690 | — | |||
Executive Retirement Plan | 4 | 618,780 | — | Executive Retirement Plan | 925,776 | — | |||||
Russell C. Swartz | SCE Retirement Plan | 22 | 698,701 | — | |||||||
Executive Retirement Plan | 22 | 2,860,479 | — | ||||||||
Kevin M. Payne | SCE Retirement Plan | 28 | 579,167 | — | |||||||
Executive Retirement Plan | 28 | 1,703,780 | — | ||||||||
David L. Mead | SCE Retirement Plan | 33 | 2,007,699 | — | |||||||
Executive Retirement Plan | 33 | 1,823,635 | — | ||||||||
Leslie E. Starck | SCE Retirement Plan | 37 | 86,570 | 1,859,801 | |||||||
Executive Retirement Plan | 37 | 1,822,014 | — |
(1) | The years of credited service |
(2) | See footnote (2) under “EIX Pension Benefits Table” above for information regarding the |
SCE Retirement Plan and the Executive Retirement Plan and that benefits are paid in accordance with the terms of each plan described below. For a description of the material assumptions used to calculate the present value of accumulated benefits shown above, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Pensions and Postretirement Benefits Other than Pensions” and Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, each included as part of the Company’s 2014 Annual Report.
|
SCE Retirement Plan
The SCE Retirement Plan is a non-contributory defined-benefit pension plan subject to the provisions of ERISA. The Retirement Plan was a traditional final average pay plan with a Social Security offset until April 1, 1999, when for most participants a transition to cash balance features was adopted. Employees hired on or after December 31, 2017 will not be eligible to participate in the plan.
Form of Payment
Eligible participants may elect a lump sum, life annuity, joint and survivor annuity (if married), or a contingent annuity. Participants also may choose to defer benefit payments until age 70-1/2. For married participants, payment in the form of a joint and 50% survivor annuity is the automatic form of benefit, absent an alternative election. The Company pays the full cost of the spousal survivor annuity benefit. For single participants, the single life annuity option is the automatic payment method. Participants can choose to start receiving benefit payments after separation from service or can effectively defer commencement of payments until age 70-1/2.
Cash Balance Benefits
Eligible employees have cash balance accounts that earn interest monthly based on the third segment rate of a corporate bond yield curve specified by the Internal Revenue Service for the month of August preceding the plan year.
Eligible employees of participating companies also earn a monthly pay credit ranging from 3% to 9% of base pay, depending on the number of age plus service “points” the participant has earned. The pay credits are received for each month the participant has an hour of service with the participating company. An additional credit of $150 per month is applied each month to the cash balance account of each participant who is eligible to receive a pay credit for that month.
Grandfathered Benefits
Eligible participants (at least age 50 or with 60 combined age and service points as of the date the individual’s cash balance account was established)March 31, 1999) are considered “grandfathered” and accrue benefits under prior plan formulas.
Upon separation, the grandfathered participant will be eligible to receive the greater of the benefit calculated under the prior plan formulas (offset by any profit sharing account balance in the 401(k) Plan) or the value of the new cash balance account.
An actuarial reduction of the normal age 65 benefit applies if a grandfathered participant either terminates prior to age 55 and commences benefits prior to age 65, or retires and commences benefits after attaining age 55 but prior to age 61. The pension benefit commencing at age 55 for an employee terminating prior to age 55 with at least five years of service is 53.6% of the normal age 65 benefit, while the pension benefit commencing at age 55 for an employee retiring at age 55 with at least five years of service is 77% of the normal age 65 benefit. Lesser early retirement reductions are applied for benefit commencement after age 55 but prior to age 61.
An unreduced early retirement benefit is available at age 61 and above. Mr. MeadNo NEO is eligible to receive an unreduced early retirement benefit.for grandfathered benefits under the SCE Retirement Plan.
Vesting
Full vesting occurs after three years of service, upon attainment of age 65, or upon death while employed.
Executive Retirement Plan
The Executive Retirement Plan is an unfunded benefit equalization plan permitted by ERISA designed to allow NEOs and other employees to receive the full amount of benefits that would be paid under the SCE Retirement Plan but for limitations under ERISA and the Internal Revenue Code, and certain additional benefits. As part of the 2008 Internal Revenue Code Section 409A amendments, the Executive Retirement Plan was separated into two different plan documents. The grandfathered plan document applies to benefits that were accrued, determined and vested prior to January 1, 2005, while the 2008 plan document applies to benefits that were accrued, determined or vested on or after January 1, 2005.
50 | 2017 Proxy Statement |
EXECUTIVE COMPENSATION
Eligibility and Benefit Formula
Company executives, including the NEOs, are eligible to participate in the Executive Retirement Plan. Benefits areThe normal age 65 benefit is calculated using the following formula:
1.75% x Total Compensation up to 30 years + 1% x Total Compensation for each year over 30 years.
Total Compensation is the NEO’s base salary and annual incentive award earned in the 36 consecutive months when the total of these payments was the highest (the 36 months need not be consecutive for those grandfathered in the provisions effective prior to 2008).
Because they were senior executives prior to January 1, 2006, Ms. Sullivan and Messrs. Craver, Scilacci, Pizarro, and Litzinger receive an additional service percentage of 3/4%0.75% per year for the first ten years of service, which results in an additional 7 1/2%7.5% upon completion of ten years of service.
The actual benefit payable is reduced and offset by (i) all amounts payable under the SCE Retirement Plan described above, (ii) up to 40% of the executive’s primary Social Security benefits and (iii) the value of 401(k) Plan accounts derived from the Company’s profit sharing contributions, if any.
Effective January 1, 2018, a participant’s benefit under the plan will be the lesser of: (i) the lump sum value of the final average pay benefit determined as described above; or (ii) the sum of (x) the lump sum value of the final average pay benefit determined as described above but substituting 1% for 1.75% and 0.5% for 1% in the benefit formula described above as to years of service accrued after 2017 and (y) the amount in the participant’s Executive Retirement Account. For an individual who first participates in the plan on or after January 1, 2018, the participant’s benefit under the plan will be the amount in the participant’s Executive Retirement Account. The aggregate retirement benefit under the plan (i.e., totaling the final average pay benefit, if applicable, and the Executive Retirement Account benefit) is expected to be reduced for most executives and will be unchanged for the rest. Executive Retirement Accounts will be established under the plan effective January 1, 2018, and will be credited annually in an amount equal to 12% of the sum of (i) the differential between the participant’s actual salary that year and the participant’s earnings taken into account for purposes of determining deferrals under the Edison 401(k) Savings Plan that year, and (ii) the participant’s annual incentive for that year. Interest will be credited on Executive Retirement Account balances at a rate based on the average monthly Moody’s Corporate Bond Yield for Baa Public Utility Bonds over a sixty-month period preceding September 1 of the prior year. EIX established this interest rate for all plan participants, and may change the interest rate on a prospective basis.
If an NEO becomes entitled to severance benefits under the EIX 2008 Executive Severance Plan (the “Severance Plan”), or any successor plan, the NEO will receive additional service and age credits for purposes of calculatingto calculate the NEO’s benefit under the Executive Retirement Plan as described under “Potential“Potential Payments Upon Termination or Change in Control”Control” below. The Company makes these additional yearsEffective, January 1, 2018, enhanced contributions to the participant’s Executive Retirement Account will also be made in such circumstances equal to (i) a multiplier (one two, or three, determined based on the multiplier used to determine the participant’s severance benefits under the Severance Plan), times (ii) 12% of servicethe sum of the participant’s target annual incentive amount plus the differential between the participant’s annual salary rate and age credits available in orderannualized earnings taken into account for purposes of determining deferrals under the Edison 401(k) Savings Plan (determined immediately prior the participant’s separation from service). These severance benefit protections are provided to attract and retain qualified executives.
|
Vesting
Benefits vest under the Executive Retirement Plan after five years of service, upon death or disability, or upon becoming eligible for severance benefits under the Severance Plan. Mr. Valdman’s Executive Retirement Plan benefits were forfeited when he terminated employment on February 21, 2015 with less than five years of service.
Payment
Benefits that become payable under the grandfathered plan document are generally payable as follows. Upon a vested participant’s retirement at or after age 55 or death, the normal form of benefit is a life annuity, paid monthly, with a 50% spousal survivor benefit following the death of the participant that is paid monthly (if the surviving spouse is more than five years younger than the participant, the spousal benefit will be reduced to an amount less than 50% of the pre-death benefit to account for the longer projected payout period). The Company pays the full cost of this spousal survivor benefit. A contingent annuity benefit for a survivor other than a spouse is also available, but without company subsidy.
Participants may elect to receive an alternative form of benefit, such as a lump-sum payment or monthly payments over 60 or 120 months. If the participant’s employment terminates for any reason other than death, retirement, permanent and total disability, or involuntary termination not for cause, vested benefits will be paid after the participant attains age 55 in an annuity only. If a participant’s employment is terminated for cause, all benefits will be forfeited.
Benefits that become payable under the 2008 plan document are generally payable as follows. Participants have sub-accounts for each annual accrual for which the following forms of payment may be elected: single lump-sum; two to fifteen annual installments; monthly installments for 60, 120, or 180 months; a life annuity with a 50% spousal survivor benefit following the participant’s death; or a contingent annuity. Participants may elect to have their designated formofform of payment triggered by their retirement, death, disability or other separation from service; however, payment will not occur before a participant reaches age 55 other than in the case of death or disability.
Payments triggered by retirement, death, disability or other separation from service may begin upon the applicable triggering event, the later of the applicable triggering event and a specific month and year, or a specified number of months and/or years, following the applicable triggering event; however, payments generally may not begin later than the participant’s 75th birthday unless the participant is still employed. Payments may be delayed or accelerated in accordance withunder the 2008 plan document if permitted or required under Section 409A of the Internal Revenue Code; if payments are delayed after the later of the applicable triggering event or age 55, interest is credited at a rate equal to that credited to cash balance accounts under the SCE Retirement
2017 Proxy Statement | 51 |
EXECUTIVE COMPENSATION
Plan described above.above or, as to any valuation date after 2017, at a rate based on the average monthly Moody’s Corporate Bond Yield for Baa Public Utility Bonds over a sixty-month period preceding September 1 of the prior year. EIX established this interest rate for all plan participants, and may change the interest rate on a prospective basis.
The annuity options available under the 2008 plan document have the same features as the annuity options available under the grandfathered plan document. Account balances payable in installments under the 2008 plan document earn interest at a rate equal to that credited to cash balance accounts underof interest determined in the SCE Retirement Plansame manner as described above.in the preceding paragraph for delayed payments.
The benefit formula includes benefit reductions for termination prior to age 55, or early retirement after attaining age 55 but prior to age 61, similar to the formula for the SCE Retirement Plan discussed above. If an NEO terminates prior to age 55 but with a total of 68 years of age and service, the benefit formula includes a special early retirement benefit reduction based on the SCE Retirement Plan formula for early retirement. An unreduced early retirement benefit is available at age 61 and above. Mr. Scilacci will receive unreduced early retirement benefits in connection with his retirement. As of December 31, 2014,2016, Messrs. Craver, SwartzPizarro and MeadPetmecky and Ms. Rigatti were eligible for an unreduced early retirement benefit, and Ms. Sullivan and Messrs. Scilacci, Litzinger, Hemphill, Payne and Starck were eligible for reduced early retirement or special early retirement benefits.
|
Non-Qualified Deferred Compensation |
The following tables present information regarding the contributions to and earnings on the EIX and SCE NEOs’ deferred compensation balances during 2014,2016, and the total deferred amounts for the NEOs at the end of 2014.2016. All deferrals are under the Executive Deferred Compensation Plan (EDCP), except for (1) restricted stock units (RSUs) that vested or are considered to have been vested for certain purposes at the end of 20142016 as a result of the retirement vesting provisions applicable to the RSUs, but were not yet payable, and (2) deferrals by Mr. Litzinger under the Affiliate Option Deferred Compensation Plan (AODCP).
EIX Non-Qualified Deferred Compensation Table – Fiscal Year 20142016
Name(1) | Executive Contributions in Last Fiscal Year(2) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year(3) ($) | Aggregate Withdrawals/ Distributions(4) ($) | Aggregate Balance at Last Fiscal Year End ($) | ||||||
(a) | (b) | (c) | (d) | (e) | (f) | ||||||
Theodore F. Craver, Jr. | EDCP | 188,547 | 120,673 | 983,755 | — | 18,069,823 | |||||
RSUs | — | 1,746,646 | 1,678,505 | 1,640,099 | 5,875,417 | ||||||
W. James Scilacci | EDCP | 769,088 | 37,410 | 335,555 | — | 6,314,931 | |||||
Robert L. Adler | EDCP | 62,393 | 38,364 | 35,755 | — | 689,175 | |||||
RSUs | — | 367,096 | 350,151 | 351,656 | 1,226,398 | ||||||
Ronald L. Litzinger(5) | EDCP | 408,121 | 37,641 | 151,521 | — | 2,863,055 | |||||
AODCP | — | — | 22,829 | — | 561,242 | ||||||
Bertrand A. Valdman | EDCP | 227,376 | 25,567 | 77,723 | — | 1,498,408 |
|
|
|
|
|
|
|
|
|
|
|
SCE Non-Qualified Deferred Compensation Table – Fiscal Year 2014
Name(1) | Executive Contributions in Last Fiscal Year(2) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year(3) ($) | Aggregate Withdrawals/ Distributions(4) ($) | Aggregate Balance at Last Fiscal Year End ($) | Executive Contributions in Last Fiscal Year(2) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year(3) ($) | Aggregate Withdrawals/ Distributions(4) ($) | Aggregate Balance at Last Fiscal Year End ($) | |||||||
(a) | (b) | (c) | (d) | (e) | (f) | (b) | (c) | (d) | (e) | (f) | |||||||
Pedro J. Pizarro | EDCP | 4,154 | 249 | 145,382 | 3,461,092 | 345,455 | EDCP | 310,219 | 49,482 | 19,509 | — | 507,813 | |||||
Theodore F. Craver, Jr. | EDCP | 157,277 | 91,585 | 988,578 | 175,638 | 20,495,440 | |||||||||||
RSUs | — | 1,231,178 | 758,633 | 1,790,977 | 5,033,869 | ||||||||||||
Maria Rigatti | EDCP | 131,520 | 13,696 | 9,319 | 4,792 | 245,236 | |||||||||||
W. James Scilacci | EDCP | 945,011 | 27,668 | 451,254 | 27,649 | 9,541,561 | |||||||||||
RSUs | — | 1,115,013 | — | 1,115,013 | |||||||||||||
Adam S. Umanoff | EDCP | 709,756 | 30,635 | 39,324 | — | 1,051,495 | |||||||||||
Kevin M. Payne | EDCP | 24,716 | 14,073 | 56,233 | — | 1,187,081 | |||||||||||
Ronald L. Litzinger(5) | EDCP | 408,121 | 37,641 | 151,521 | — | 2,863,055 | EDCP | 596,976 | 34,590 | 224,060 | — | 4,758,615 | |||||
AODCP | — | — | 22,829 | — | 561,242 | AODCP | — | — | 22,070 | — | 605,987 | ||||||
Maria Rigatti | EDCP | 11,101 | 666 | 16,926 | 356,455 | 47,467 | |||||||||||
Stuart R. Hemphill | EDCP | 250,322 | 15,019 | 51,492 | — | 1,032,331 | |||||||||||
Linda G. Sullivan | EDCP | 34,777 | 8,863 | 43,769 | 1,204,390 | — | |||||||||||
Peter T. Dietrich | EDCP | 54,461 | 26,030 | 79,757 | — | 1,487,727 | |||||||||||
Russell C. Swartz | EDCP | 160,404 | 8,870 | 167,671 | — | 3,089,277 | |||||||||||
RSUs | — | 105,422 | 102,495 | 103,496 | 358,442 | ||||||||||||
Kevin M. Payne | EDCP | 5,474 | 328 | 56,134 | — | 1,028,574 | |||||||||||
David L. Mead | EDCP | 18,904 | 7,698 | 26,509 | — | 490,920 | |||||||||||
RSUs | — | 109,182 | 68,305 | 79,767 | 303,658 | ||||||||||||
Leslie E. Starck | EDCP | 301,019 | 12,838 | 108,234 | 482,598 | 1,658,830 |
(1) | The balances shown represent compensation already reportable in the Summary Compensation Tables in this and prior Proxy Statements, except for the portion of interest not considered above-market under SEC rules. Although the contributions to the EDCP and AODCP reflect compensation that was earned, the officers chose not to have the compensation paid, but instead deferred it, essentially lending to the Company as unsecured general creditors, in return for interest paid at a rate commensurate with or less than EIX’s cost of capital. |
(2) | The amounts reported as executive and registrant contributions in |
(3) | Only the portion of earnings on deferred compensation that is considered to be at above-market rates under SEC rules is included as compensation in column (h) of the |
(4) | For Mr. |
(5) | Mr. Litzinger is a participant in both the EDCP and the AODCP, which is a predecessor plan under which the proceeds from the exchange of EME options for cash awards in 2000 could be deferred. Accounts under this plan are credited with interest at a rate based on 120% of the 120-month average of the 10-year Treasury Note yield as of October 15 of the prior year. Payment terms are substantially the same as those under the EDCP grandfathered plan document described below. |
52 | 2017 Proxy Statement |
EXECUTIVE COMPENSATION
SCE Non-Qualified Deferred Compensation Table – Fiscal Year 2016
Name(1) | Executive Contributions in Last Fiscal Year(2) ($) | Registrant Contributions in Last Fiscal Year(2) ($) | Aggregate Earnings in Last Fiscal Year(3) ($) | Aggregate Withdrawals/ Distributions(4) ($) | Aggregate Balance at Last Fiscal Year End ($) | ||
(a) | (b) | (c) | (d) | (e) | (f) | ||
Kevin M. Payne | EDCP | 24,716 | 14,073 | 56,233 | — | 1,187,081 | |
Pedro J. Pizarro | EDCP | 310,219 | 49,482 | 19,509 | — | 507,813 | |
William M. Petmecky, III | EDCP | — | — | — | — | — | |
Maria Rigatti | EDCP | 131,520 | 13,696 | 9,319 | 4,792 | 245,236 | |
Ronald O. Nichols | EDCP | 85444 | 5,127 | 7,862 | — | 179,423 | |
Russell C. Swartz | EDCP | 166,279 | 6,585 | 185,073 | — | 3,871,787 | |
RSUs | — | 90,085 | 43,860 | 108,113 | 309,929 | ||
Peter T. Dietrich | EDCP | 44,600 | 20,800 | 84,993 | — | 1,798,742 |
(1) | The balances shown represent compensation already reportable in the Summary Compensation Tables in this and prior Proxy Statements, except for the portion of interest not considered above-market under SEC rules. Although the contributions to the EDCP reflect compensation that was earned, the officers chose not to have the compensation paid, but instead deferred it, essentially lending to the Company as unsecured general creditors, in return for interest paid at a rate commensurate with or less than EIX’s cost of capital. |
(2) | The amounts reported as executive and registrant contributions in 2016 also are included as compensation in the appropriate columns of the SCE Summary Compensation Table above, except that the restricted stock units awarded in 2016 to Mr. Swartz are reported as of their grant date fair value in the Stock Awards column of the SCE Summary Compensation Table above, while in this SCE Non-Qualified Deferred Compensation Table they are reported as registrant contributions based on the closing price of EIX Common Stock on December 31, 2016 and include dividend equivalents accrued as of December 31, 2016. The restricted stock units awarded to Mr. Swartz in 2016 (and the dividend equivalents thereon) are considered to have become vested for certain purposes during 2016 as a result of the retirement vesting provisions applicable to these awards. In accordance with applicable SEC rules, these units are reflected in this table because, while the units are considered to have been vested for certain purposes at the end of 2016, they had not yet become payable. |
(3) | Only the portion of earnings on deferred compensation that is considered to be at above-market rates under SEC rules is included as compensation in column (h) of the SCE Summary Compensation Table above. |
(4) | For Mr. Swartz, the amount reported as aggregate withdrawals/distributions reflects 2016 payments in EIX Common Stock for restricted stock units awarded in 2013 that are considered to have become vested for certain purposes but not payable prior to 2016 as a result of the retirement vesting provisions applicable to the award; the amount reported is based on the closing price of EIX Common Stock on December 31, 2015. |
Executive Deferred Compensation Plan
As part of the 2008 Internal Revenue Code Section 409A amendments, the Executive Deferred Compensation Plan was separated into two different plan documents. The grandfathered plan document applies to deferrals that were earned, determined and vested prior to January 1, 2005, while the 2008 plan document applies to deferrals that were earned, determined or vested on or after January 1, 2005.
Contributions
Each NEO may elect to defer up to 75% of base salary. Each NEO may also elect to defer up to 100% (less the amount of tax withholding due in connection with the deferral) of: any annual incentive award earned; anycertain special retention, recognition, or other special cash award;awards; the cash portion of performance share payouts; and certain other qualifying equity awards (other than stock options).
The Company makes a matching contribution of up to 3% of each NEO’s annual incentive award, 6% of the portion of each NEO’s base salary that is deferred and up to 6% of the portion, if any, of non-deferred salary that exceeds 401(k) Plan Internal Revenue Code limits. NEOs vest in their matching contributions and earnings thereon after five years of service, upon death or disability, or a separation from service where the NEO becomes entitled to severance benefits under the Severance Plan. The Company’sCompany has terminated matching contributions (and earnings thereon) for Mr. Valdman were forfeited when he terminated employment on February 21, 2015 with less than five years of service.to the Executive Deferred Compensation Plan effective January 1, 2018.
Interest
Amounts deferred (including earnings and matching contributions) accrue interest until paid. The interest crediting rate on each NEO’s account balance is the average monthly Moody’smonthlyMoody’s Corporate Bond Yield for Baa Public Utility Bonds
|
over a sixty-month period ending November 1, 2013 for 2014 interest credits and ending September 1, 2014 for 2015 interest credits.1. EIX established this interest rate for all plan participants, and has discretion to change the applicable interest rate on a prospective basis.
Payment of Grandfathered Benefits
Benefits under the grandfathered plan document may be deferred until a specified date, retirement, death or termination of employment. At the participant’s election, compensation deferred until retirement or death may be paid as a lump sum, in monthly installments over 60, 120, or 180 months, or in a combination of a partial lump sum and installments. Deferred compensation is paid as a single lump sum or in three annual installments upon any other termination of employment. However, if a participant’s employment is terminated without cause, the participant may elect to receive payment at such time or a later date when the participant turns age 55, and the same payment options available for retirement will generally be applicable.
Each NEO was permitted to elect at the time of deferral to receive payment of such deferral on a fixed date in accordance with procedures established under the grandfathered plan document, and deferred amounts may also be paid in connection with a change in control of EIX or SCE in certain circumstances.
Certain amounts deferred under the grandfathered plan document may be withdrawn at any time upon the election of an NEO; however, any amounts withdrawn are subject to a 10% early withdrawal penalty. Emergency hardship withdrawals without penalty also may be permitted at EIX’s discretion.
2017 Proxy Statement | 53 |
EXECUTIVE COMPENSATION
Payment of 2008 Plan Benefits
Benefits under the 2008 plan document may be deferred until a specified date no later than the date the participant turns age 75, retirement, death, disability or other separation from service. Participants have sub-accounts for each annual deferral for which the following forms of payment may be elected: single lump-sum; two to fifteen annual installments; or monthly installments for 60, 120 or 180 months.
Payments triggered by retirement, death, disability or other separation from service may begin upon the applicable triggering event or a specified number of months and/or years following the applicable triggering event; however, payments generally may not begin later than the participant’s 75th birthday unless the participant is still employed. Payments are subject to certain administrative earliest payment date rules, and may be delayed or accelerated in accordance withunder the 2008 plan document if permitted or required under Section 409A of the Internal Revenue Code.
Potential Payments Upon Termination or Change in Control |
The following plans provide benefits that may become payable to NEOs, depending on the circumstances surrounding their termination of employment with the Company. When listing the potential payments to the NEOs under the plans described below, it is assumed that the applicable triggering event (retirement or other termination of employment) occurred on December 31, 20142016 and that the price per share of EIX Common Stock is equal to the closing price as of the last NYSE trading day in 2014.2016.
2008 Executive Severance Plan
EIX provides severance benefits and change-in-control benefits to executives, including all of the NEOs, under the 2008 Executive Severance Plan (the “Severance Plan”). In addition, severance benefits are provided through other plans or agreements included in the following description of severance benefits.
To receive any severance benefits, an NEO must agree to release EIX and its affiliates from all claims arising out of the officer’s employment relationship and agree to certain confidentiality and non-solicitation restrictions in favor of the Company.
Severance Benefits – No Change in Control
Under the Severance Plan, an eligible executive is generally entitled to severance benefits if his or her employment is involuntarily terminated without “cause” and other than due to the executive’s “disability” (as these terms are defined in the Severance Plan).
Severance Plan benefits payable upon an involuntary termination without cause include:
● | A lump sum cash payment equal to the total of (i) a year’s base salary at the highest rate in effect during the preceding 24 months, (ii) an amount equal to the executive’s base salary at the highest rate in effect during the preceding 24 months multiplied by the executive’s highest target annual incentive percentage in effect during the preceding 24 months, and (iii) an amount equal to a pro-rata portion, based on the weekdays employed in the year of severance, of the executive’s base salary at the highest rate in effect during the preceding 24 months multiplied by the executive’s highest target annual incentive percentage in effect during the preceding 24 months (or such lesser pro-rata annual incentive amount payable under the terms of the 162(m) Program); |
|
● | Eligibility for early retiree health care coverage if the NEO would have been eligible for early retiree health care coverage under the terms of an applicable non-executive severance plan, and if not, then an additional 12 to 18 months of health benefits (no additional health benefits are provided if the NEO is eligible for retiree health care under the terms applicable to non-executive non-severed employees); |
● |
|
| Reimbursement of up to $20,000 for outplacement costs incurred within two years following separation from service; and |
● | Reimbursement for educational costs up to $5,000 or $10,000, whichever is the applicable maximum amount allowed under the applicable non-executive severance plan. |
In addition to Severance Plan benefits, other benefits payable to an eligible executive upon an involuntary termination without cause generally include:
● | Vesting in a pro-rata portion of outstanding stock options and restricted stock units with one additional year of vesting credit applied under the award terms; |
● | Vesting in a pro-rata portion of outstanding performance shares that become earned based on Company performance with one additional year of vesting credit applied under the award terms; |
● | A period of up to one year to exercise any vested stock options; |
● | Full vesting and an additional year of service and age credits for purposes of calculating the executive’s benefit under the Executive Retirement Plan; and |
● | Vesting in any unvested amounts under the Executive Deferred Compensation Plan. |
In connection with Mr. Starck’s October 2014 separation from the Company and pursuant to the terms of the Severance Plan, Mr. Starck entered into an agreement with the Company to receive the Severance Plan and other benefits described above.
Severance Benefits – Change in Control
The severance benefits described above would be enhanced if the NEO’s employment is terminated for a qualifying reason during a period that started six months before and ended two years after a change in control of EIX. Qualifying reasons are defined to include an involuntary termination of the NEO’s employment for any reason other than cause or disability, or the NEO’s voluntary termination of employment for a “good reason” (as this term is defined in the Severance Plan). Except as noted below, these benefits are not triggered automatically by a change in control absent an actual or constructive termination of the NEO’s employment by the Company without cause.
54 | 2017 Proxy Statement |
EXECUTIVE COMPENSATION
Upon a qualifying termination, outstanding stock options, restricted stock units and performance shares and related dividend equivalents would become fully vested, with performance shares and related dividend equivalents only becoming earned if actual performance during the performance period results in a payout, and with stock options remaining exercisable for up to three years. Absent a qualifying termination, stock options and performance shares would continue to vest on their normal schedule unless the awards were not continued or assumed.
The EIX 2007 Performance Incentive Plan and terms and conditions of awards under the plan provide for special rules that would apply if outstanding equity awards were not continued or assumed in connection with any dissolution, sale of all or substantially all of the assets or stock, merger or reorganization, or other event where EIX is not the surviving corporation. Following such a transaction, and regardless of whether aan NEO’s employment were terminated, outstanding stock options and performance shares and any related dividend equivalents would become fully vested. Options that became vested in connection with a change in control generally would be exercised prior to the change in control or “cashed-out” in connection with the change-incontrolchange-in-control transaction.
Performance shares and related dividend equivalents would be earned based on a shortened performance period. The performance period applicable to the performance shares would be deemed to end on the day before the change in control, and performance shares would vest and become payable, if at all, based on EIX’s TSR ranking or achievement of EPS target, as applicable, during the shortened performance period. Any performance shares that became payable during the shortened performance period associated with a change in control would be paid in cash within 74 days after the change in control, and any performance shares that did not become payable would terminate for no value on the date of the change in control.
In such a change in control transaction described above, the restricted stock units would generally continue to vest and become payable according to their original vesting schedule, unless the restricted stock units are terminated in accordance with special rules under Code Section 409A, in which case they would become fully vested.
For Messrs. Craver, Scilacci, Litzinger, and Pizzaro,the EIX NEOs who were employed on December 31, 2016 by EIX or its subsidiaries, the enhanced change-in-control severance benefits would be:
● | Three times the cash severance amount payable for involuntary termination absent a change in control (except that the pro-rated annual incentive payment amount for the year of termination would not be trebled); |
● | Health benefits for the maximum period the NEO would be entitled to continuation coverage under COBRA (unless eligible for retiree health care); |
● |
|
|
Three years of service and age credits under the Executive Retirement Plan; and | |
● | Reimbursement of up to $50,000 for outplacement costs. |
For allthe SCE NEOs other NEOs,than Messrs. Pizarro and Payne and Ms. Rigatti, the enhanced change-in-control severance benefits would be:
● | Two times the cash severance amount payable for involuntary termination absent a change in control (except that the pro-rated annual incentive payment amount for the year of termination would not be doubled); |
● | Health benefits for the maximum period the NEO would be entitled to continuation coverage under COBRA (unless eligible for retiree health care); |
● | |
Two years of service and age credits under the Executive Retirement Plan; and | |
● | Reimbursement of up to $30,000 for outplacement costs. |
Executive Survivor Benefit Plan
The EIX 2008 Executive Survivor Benefit Plan providesprovided beneficiaries of participants with income continuation benefits in the event ofif the participant’s death occurred while employed. TheIf an NEO had died in 2016 while employed, the after-tax benefit for senior officers such as the participating NEOs iswould have been equal to one or two year’s cash compensation (annual salary rate plus average annual incentive percentage). However, officers who were senior officers at any time during 2007 are generally grandfathered in an after-tax benefit equal to two times the executive’s cash compensation. As of
The Executive Survivor Benefit Plan was terminated effective December 31, 2014, all of the participating NEOs except Messrs. Adler, Valdman, Dietrich, Swartz and Hemphill were eligible for grandfathered benefits. The normal form of payment for benefits is a lump sum at the time of death.2016.
Deferred Compensation Plans
Upon an NEO’s retirement or other termination of employment, the NEO generally will generally receive a payout of any non-qualified deferred compensation balances under the Executive Deferred Compensation Plan and, for Mr. Litzinger, the AODCP. The “Non-QualifiedNon-Qualified Deferred Compensation”Compensation table and related discussion above describe these deferred compensation balances and payment terms. In the event of involuntary termination not for cause or qualifying termination in a change in control, unvested amounts derived from Company contributions would vest. Only Mr. ValdmanMessrs. Umanoff and Mr. DietrichNichols had such unvested amounts as of December 31, 2014,2016, which would have totaled $75,574$49,287 and $1,248,294,$10,739, respectively.
The Executive Deferred Compensation Plan provides that, if a participant eligible to participate in the plan prior to January 1, 2009 dies within ten years of initial eligibility to participate in the plan, the account balance will be doubled and paid out on the schedule previously elected by the participant. Only Mr. Adler was eligible for this benefit as of December 31, 2014, as the other NEOs have either been participants in the plan for more than ten years or began participating on or after January 1, 2009.
SCE Retirement Plan and Executive Retirement Plan
In connection with an NEO’s termination of employment, the NEO will generally receive a payout of his or her vested retirement benefits under the SCE Retirement Plan and the Executive Retirement Plan. See “Pension Benefits”“Pension Benefits” above for a discussion of these retirement payments and associated survivor benefits.
| 55 |
EXECUTIVE COMPENSATION
EIX Potential Payments Upon Termination or Change in Control
The following table presents the estimated payments and benefits that would have been payable as of December 31, 20142016 to the EIX NEOswho remainwere employed on that date by the CompanyEIX or its subsidiaries, in the event of involuntary termination of employment without cause (severance), separation due toin connection with a change in control of the Company (enhanced severance), and separation due to death. The value shown doesamounts reported in the table do not include benefits that would have been payable to the NEO if the triggering event had not occurred.
Name | Severance | Enhanced Change in | Death(2) ($) | Severance ($) | Enhanced Change in Control Severance(1) ($) | Death(2) ($) | |||||
Theodore F. Craver, Jr. | |||||||||||
Lump sum cash | 3,960,000 | 9,120,000 | |||||||||
Health care coverage(3) | — | — | |||||||||
Retirement plan benefits(4) | 820,199 | 2,460,778 | |||||||||
Equity acceleration(5) | — | — | |||||||||
Reimbursable expenses(6) | 30,000 | 60,000 | |||||||||
Survivor benefits(7) | — | — | 10,792,456 | ||||||||
W. James Scilacci | |||||||||||
Pedro J. Pizarro | |||||||||||
Lump sum cash | 1,440,000 | 3,480,000 | 3,630,000 | 8,360,000 | |||||||
Health care coverage(3) | — | — | 186,790 | 186,790 | |||||||
Retirement plan benefits(4) | 165,508 | 496,174 | 690,888 | 1,473,580 | |||||||
Equity acceleration | 2,453,111 | 3,132,431 | 1,991,040 | 2,790,202 | |||||||
Reimbursable expenses(6) | 30,000 | 60,000 | |||||||||
Survivor benefits(7) | — | — | 3,978,686 | ||||||||
Reimbursable expenses(5) | 30,000 | 60,000 | |||||||||
Survivor benefits | — | — | 4,074,549 | ||||||||
Maria Rigatti | |||||||||||
Lump sum cash | 1,375,000 | 3,300,000 | |||||||||
Health care coverage(3) | 108,177 | 108,177 | |||||||||
Retirement plan benefits(4) | 245,593 | 580,906 | |||||||||
Equity acceleration | 454,911 | 683,499 | |||||||||
Reimbursable expenses(5) | 30,000 | 60,000 | |||||||||
Survivor benefits | — | — | 892,976 | ||||||||
Adam S. Umanoff | |||||||||||
Lump sum cash | 1,375,000 | 3,300,000 | |||||||||
Health care coverage | 18,558 | 27,837 | |||||||||
Retirement plan benefits(4) | 629,598 | 1,099,757 | |||||||||
Equity acceleration | 1,108,368 | 1,581,194 | |||||||||
Reimbursable expenses(5) | 25,000 | 55,000 | |||||||||
Survivor benefits | — | — | 1,694,453 | ||||||||
Kevin M. Payne | |||||||||||
Lump sum cash | 1,200,000 | 2,900,000 | |||||||||
Health care coverage(3) | — | — | |||||||||
Retirement plan benefits(4) | 372,891 | 740,061 | |||||||||
Equity acceleration | 479,100 | 565,424 | |||||||||
Reimbursable expenses(5) | 30,000 | 60,000 | |||||||||
Survivor benefits | — | — | 839,584 | ||||||||
Ronald L. Litzinger | |||||||||||
Lump sum cash | 1,440,000 | 3,480,000 | 1,440,000 | 3,480,000 | |||||||
Health care coverage(3) | — | — | — | — | |||||||
Retirement plan benefits(4) | 235,093 | 507,663 | 1,323,719 | 2,540,839 | |||||||
Equity acceleration | 2,433,867 | 3,113,187 | 1,956,984 | 2,449,714 | |||||||
Reimbursable expenses(6) | 30,000 | 60,000 | |||||||||
Survivor benefits(7) | — | — | 3,881,282 | ||||||||
Reimbursable expenses(5) | 30,000 | 60,000 | |||||||||
Survivor benefits | — | — | 4,302,712 |
(1) | The benefits in the table for a hypothetical change-in-control severance would be in lieu of (not in addition to) the severance benefits as disclosed for an involuntary termination without cause. This presentation assumes that equity awards would be continued following the change-in-control transaction. If equity awards were to be terminated in connection with a change-in-control transaction, triggering accelerated vesting of the awards in connection with the termination of the awards, then the same equity award acceleration value included in the table above would have been triggered had such a change in control and termination of the awards occurred on December 31, 2016. In such circumstances, that equity acceleration value would not also be included in severance benefits for the NEO as the benefit would have already been provided in connection with the change in control. |
(2) | |
(3) | Messrs. |
|
SCE Potential Payments Upon Termination or Change in Control
The following table presents the estimated payments and benefits that would have been payable as of December 31, 2014 to the SCE NEOs who remain employed by SCE in the event of involuntary termination of employment without cause (severance), separation due to a change in control of the Company (enhanced severance), and separation due to death. The value shown does not include benefits that would have been payable to the NEO if the triggering event had not occurred.
Name | �� | Severance | Enhanced Change in | Death(2) ($) | ||
Pedro J. Pizarro | ||||||
Lump sum cash | 1,440,000 | 3,480,000 | ||||
Health care coverage | 18,197 | 27,295 | ||||
Retirement plan benefits(4) | 195,314 | 325,444 | ||||
Equity acceleration | 195,043 | 292,565 | ||||
Reimbursable expenses(6) | 25,000 | 55,000 | ||||
Survivor benefits(7) | — | — | 2,029,134 | |||
Maria Rigatti | ||||||
Lump sum cash | 661,500 | 1,638,000 | ||||
Health care coverage(3) | 149,356 | 149,356 | ||||
Retirement plan benefits(4) | 104,903 | 181,609 | ||||
Equity acceleration | 143,247 | 258,799 | ||||
Reimbursable expenses(6) | 25,000 | 35,000 | ||||
Survivor benefits(7) | — | — | 532,648 | |||
Stuart R. Hemphill | ||||||
Lump sum cash | 707,070 | 1,750,840 | ||||
Health care coverage(3) | 242,488 | 242,488 | ||||
Retirement plan benefits(4) | 100,994 | 160,046 | ||||
Equity acceleration | 657,005 | 832,942 | ||||
Reimbursable expenses(6) | 30,000 | 40,000 | ||||
Survivor benefits(7) | — | — | 1,000,439 | |||
Peter T. Dietrich | ||||||
Lump sum cash | 1,008,000 | 2,496,000 | ||||
Health care coverage | 18,197 | 27,295 | ||||
Retirement plan benefits(4) | 2,030,243 | 2,193,412 | ||||
Equity acceleration | 1,117,378 | 1,393,305 | ||||
Reimbursable expenses(6) | 25,000 | 55,000 | ||||
Survivor benefits(7) | — | — | 1,362,578 | |||
Russell C. Swartz | ||||||
Lump sum cash | 760,200 | 1,882,400 | ||||
Health care coverage(3) | — | — | ||||
Retirement plan benefits(4) | 161,632 | 323,446 | ||||
Equity acceleration(5) | — | — | ||||
Reimbursable expenses(6) | 30,000 | 40,000 | ||||
Survivor benefits(7) | — | — | 1,076,593 | |||
Kevin M. Payne | ||||||
Lump sum cash | 560,000 | 980,000 | ||||
Health care coverage(3) | 211,486 | 211,486 | ||||
Retirement plan benefits(4) | 1,785,257 | 1,866,879 | ||||
Equity acceleration | 407,775 | 531,037 | ||||
Reimbursable expenses(6) | 30,000 | 40,000 | ||||
Survivor benefits(7) | — | — | 693,204 |
|
(4) | Includes the actuarial value of additional years of age and service credit under the Executive Retirement Plan and, for Mr. |
(5) | Includes outplacement and educational assistance benefits. |
56 | 2017 Proxy Statement |
EXECUTIVE COMPENSATION
SCE Potential Payments Upon Termination or Change in Control
The following table presents the estimated payments and benefits that would have been payable as of December 31, 2016 to the SCE NEOs in the event of involuntary termination of employment without cause (severance), separation in connection with a change in control of the Company (enhanced severance), and separation due to death. The amounts reported in the table do not include benefits that would have been payable to the NEO if the triggering event had not occurred.
Name | Severance ($) | Enhanced Change in Control Severance(1) ($) | Death(2) ($) | ||
Kevin M. Payne | |||||
Lump sum cash | 1,200,000 | 2,900,000 | |||
Health care coverage(3) | — | — | |||
Retirement plan benefits(4) | 372,891 | 740,061 | |||
Equity acceleration | 479,100 | 565,424 | |||
Reimbursable expenses(6) | 30,000 | 60,000 | |||
Survivor benefits | — | — | 839,584 | ||
Pedro J. Pizarro | |||||
Lump sum cash | 3,630,000 | 8,360,000 | |||
Health care coverage(3) | 186,790 | 186,790 | |||
Retirement plan benefits(4) | 690,888 | 1,473,580 | |||
Equity acceleration | 1,991,040 | 2,790,202 | |||
Reimbursable expenses(6) | 30,000 | 60,000 | |||
Survivor benefits | — | — | 4,074,549 | ||
William M. Petmecky, III | |||||
Lump sum cash | 630,000 | 1,095,000 | |||
Health care coverage(3) | 23,198 | 27,837 | |||
Retirement plan benefits(4) | 126,567 | 208,969 | |||
Equity acceleration | 236,845 | 312,731 | |||
Reimbursable expenses(6) | 30,000 | 40,000 | |||
Survivor benefits | — | — | 633,344 | ||
Maria Rigatti | |||||
Lump sum cash | 1,375,000 | 3,300,000 | |||
Health care coverage(3) | 108,177 | 108,177 | |||
Retirement plan benefits(4) | 245,593 | 580,906 | |||
Equity acceleration | 454,911 | 683,499 | |||
Reimbursable expenses(6) | 30,000 | 60,000 | |||
Survivor benefits | — | — | 892,976 | ||
Ronald O. Nichols | |||||
Lump sum cash | 880,000 | 2,160,000 | |||
Health care coverage | 11,718 | 17,576 | |||
Retirement plan benefits(4) | 418,670 | 527,498 | |||
Equity acceleration | 291,404 | 383,110 | |||
Reimbursable expenses(6) | 25,000 | 55,000 | |||
Survivor benefits | — | — | 819,195 | ||
Russell C. Swartz | |||||
Lump sum cash | 760,200 | 1,321,300 | |||
Health care coverage(3) | — | — | |||
Retirement plan benefits(4) | 137,307 | 292,444 | |||
Equity acceleration(5) | — | — | |||
Reimbursable expenses(6) | 30,000 | 40,000 | |||
Survivor benefits | — | — | 1,142,097 |
2017 Proxy Statement | 57 |
EXECUTIVE COMPENSATION
Name | Severance ($) | Enhanced Change in Control Severance(1) ($) | Death(2) ($) | ||
Peter T. Dietrich | |||||
Lump sum cash | 1,008,000 | 1,752,000 | |||
Health care coverage | 18,558 | 27,837 | |||
Retirement plan benefits(4) | 356,000 | 631,376 | |||
Equity acceleration | 723,056 | 892,004 | |||
Reimbursable expenses(6) | 30,000 | 40,000 | |||
Survivor benefits | — | — | 1,461,520 |
(1) | The benefits in the table for a hypothetical change-in-control severance would be in lieu of (not in addition to) the severance benefits as disclosed for an involuntary termination without cause. This presentation assumes that equity awards would be continued following the change-in-control transaction. If equity awards were to be terminated in connection with a change-in-control transaction, triggering accelerated vesting of the awards in connection with the termination of the awards, then the same equity award acceleration value included in the table above would have been triggered had such a change in control and termination of the awards occurred on December 31, 2016. In such circumstances, that equity acceleration value would not also be included in severance benefits for the NEO as the benefit would have already been provided in connection with the change in control. |
(2) | The amounts shown for separation due to death on December 31, 2016 are benefits that would have been payable under the Executive Survivor Benefit Plan, which was terminated effective the end of the day on December 31, 2016. |
(3) | Messrs. Payne and Swartz would have each been eligible for retiree health care benefits if the NEO retired regardless of whether he was eligible to receive severance benefits. Mr. Pizarro and Ms. Rigatti would have become eligible for retiree health care benefits as a result of eligibility for severance benefits. |
(4) | Includes the actuarial value of additional years of age and service credit under the Executive Retirement Plan and, for Mr. Nichols, the value of his Executive Retirement Plan benefit and Company contributions under the Executive Deferred Compensation Plan that vest due to severance. |
(5) | Mr. Swartz’s equity would have vested due to retirement regardless of eligibility to receive severance benefits. |
(6) | Includes outplacement and educational assistance benefits. |
58 |
|
ITEM 5: SHAREHOLDER PROPOSAL REGARDING SHAREHOLDER PROXY ACCESS REFORM |
To Be Voted On By EIX Shareholders Only
John Chevedden, whose address is 2215 Nelson Ave., No. 205, Redondo Beach, CA 90278, has notified EIX that he beneficially owns at least 100 shares of EIX and intends to present Item 45 for action at the Annual Meeting. The text oftheof the shareholder proposal is included below as submitted by the proponent, and has not been endorsed or verified by EIX. The EIX Board response to the shareholder proposal follows under “EIX Board Recommendation ‘Against’ Item 4.”follows.
Proposal |
RESOLVED,Shareholders request that our board of directors take the steps necessary to allow up to 50 shareholders requestto aggregate their shares to equal 3% of our stock owned continuously for 3-years in order to make use of shareholder proxy access.
Even if the Compensation Committee20 largest public pension funds were able to aggregate their shares, they would not meet the 3% criteria for a continuous 3-years at most companies examined by the Council of Institutional Investors. Additionally many of the Boardlargest investors of Directorsmajor companies are routinely passive investors who would be unlikely to adopt an incentive compensation recoupment policy to providebe part of the proxy access shareholder aggregation process.
Under this proposal it is unlikely that the Committee will (a) review, and determine whether to seek recoupmentnumber of incentive compensation paid, granted or awarded to a senior executive if,shareholders who participate in the Committee’s judgment, (i) there has been misconduct resulting in a violation of law or company policy, that causes significant financial or reputational harmaggregation process would reach an unwieldy number due to the company and (ii) the senior executive either committed the misconduct or failed in his or her responsibilityrigorous rules our management adopted for a shareholder to manage or monitor conduct or risks; and (b) disclosure to shareholders the circumstances of any recoupment, and of any Committee decision not to pursue recoupment in instances that meet criteria (i) and (ii). The policy should mandate that the above recoupment provisions be included in all future incentive plans and award agreements and that the policy be posted on the company website.
Recoupment includes (a) recovery of compensation already paid and (b) forfeiture, recapture, reduction or cancellation of amounts awarded or granted to an executive over which the company retains control. The Policy should operate prospectively, soqualify as not to affect any compensation paid, awarded or granted before it takes effect.
Compensation policies should promote sustainable value creation. Former GE general counsel Ben Heineman Jr. said that recoupment policies with business-related misconduct triggers are “a powerful mechanism for holding senior leadership accountable to the fundamental mission of thecorporation: proper risk taking balanced with proper risk management and the robust fusion of high performance with high integrity.” (http://blogs.law.harvard.edu/ corpgov/2010/08/13/making-sense-out-of-clawbacks/) Such policies allow boards to recoup incentive payouts that may have been the undeserved result of erroneous or fraudulent financial reporting.
An added incentive to vote for this proposal is our Company’s clearly improvable corporate governance and performance as reported in 2014:
GMI ratings gave Edison an F in environmental issues and executive pay. GMI said there was $11 million in 2013 Total Realized Pay for Theodore Craver. Mr. Craver’s perks were also excessive relative to peers. Shareholders meanwhile had a potential stock dilution of 12%.
Linda Gillespie Stuntz was an inside-related director who received by far our highest negative votes. Thomas Sutton (on nomination committee) and Luis Nogales (on audit and executive pay committees) each had tenure of more 19-years which can result in a low level of independence. Directors with 12 to 21-years tenure (with risk of low independence) held 50%one of the seats onaggregation participants. Plus it is easy for our 3 most important board committees.management to screen aggregating shareholders because management simply needs to find one item lacking from a list of typical proxy access requirements.
Returning to the core topic of this proposal from the context of our clearly improvable corporate governance, pleasePlease vote to protectenhance shareholder value:
Recovery of Unearned Management BonusesShareholder Proxy Access Reform – Proposal 45
|
EIX Board Recommendation “Against” Item |
The EIX Board of Directors has considered the shareholder proposal requesting that the Compensation and Executive Personnel Committee of theEIX Board (the “Committee”) adopt the incentive compensation recoupment policya proxy access bylaw as described in the proposal(Item 4 (Item 5 on your proxy card)Proxy Card) and recommends that you vote“Against” the proposal for the following reasons.
The Company already has an effective incentive compensation clawback policy.
The Committee has already adopted an incentive compensation clawback policy. ItBylaws that give shareholders a meaningful and appropriate proxy access right.
The shareholder proposal is based,unnecessary because our shareholders already have a meaningful and appropriate proxy access right. In 2015, after engaging with a number of our shareholders, the EIX Board adopted proxy access for director elections at annual meetings. The EIX Bylaws provide the Company will include in large part, onits Proxy Statement up to two nominees (or nominees for up to 20% of the guidance providedBoard, whichever is greater) submitted by Congressa shareholder or group of up to 20 shareholders owning at least 3% of EIX common stock continuously for at least three years, if the shareholder group and nominee satisfy the requirements in the Dodd-Frank Act. It allowsEIX Bylaws. These parameters have become standard among companies that have adopted proxy access.
The EIX Board believes the Committee orcurrent proxy access Bylaws strike an appropriate balance between promoting shareholder nomination rights and protecting the interests of all shareholders.
The shareholder proposal would require the Board to recoup incentive compensationamend the EIX Bylaws to increase the number of shareholders who may aggregate shares to reach the 3% ownership requirement from 20 to 50 shareholders. However, the Board believes increasing the group aggregation limit does not reflect current best practices and is not in the eventbest interests of an accounting restatement.our shareholders.
Before adopting proxy access, we obtained feedback from major shareholders holding approximately 30% of EIX Common Stock, including each of our top five holders. These shareholders supported the 20 shareholder limit. In contrastfact, 311 of the 342 companies (91%) that adopted proxy access in 2015 and 2016 have a group aggregation limit of exactly 20 shareholders.
The proponent’s supporting statement implies that the current group aggregation limit would prevent pension funds from reaching the 3% ownership requirement. Based on publicly available data, the Company’s ten largest pension fund shareholders held more than 3% of EIX Common Stock as of December 31, 2016. We believe increasing the group aggregation limit from 20 to 50 shareholders would not meaningfully enhance the shareholder proposal, our policy allows recoupmentwhetherornot misconduct occurred. Other key elements include:
Our policy is described in more detail in the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement and is available atwww.edison.com/corpgov.
As explained in the CD&A, many aspects of our executive compensation program, including our clawback policy, mitigate compensation-related risk. The policy does so by establishing serious consequences for intentional or unintentional accounting errors. The CD&A also describes how our executive compensation program achieves the proposal’s objectives of promoting sustainable, long-term value creation and holding management accountable for corporate performance.
The Company also has policies that prevent and penalize misconduct.
The proponent requests a clawback policy triggered by misconduct unrelated to an accounting restatement. The Committee considered the merits of this approach, butdecided to more closely follow the direction adopted by Congress in the Dodd-Frank Act, which mandates that the SEC adopt rules related to the recoupment of executive compensation after an accounting restatement.(1) Also, the Committee believes that the policy should allow recoupment from all executive officers who receive overpayments, not just those whose misconduct or oversight failure caused the accounting restatement.
The Company has other effective policies and means to address misconduct generally, whether or not resulting in an accounting restatement. Under the Company’s Employee Code of Conduct (available atwww.edison.com/corpgov), the Company has the ability to take disciplinary action, up to and including termination, for violation of the Code, other Company policies or law. The compensation consequences of termination can include elimination of the annual incentive award, forfeiture of unvested long-term incentives, and forfeiture of vested executive retirement plan benefits. In addition, depending on the type of misconduct, the Company may be able to recoup gain arising from the misconduct.pension fund holders.
The current disclosure requirements are appropriate.
The Company is required by SEC disclosure rules to disclose in the Proxy Statement the recoupment of compensation from an NEO and the amount recouped. The Company also is required to disclose the reasons for the recoupment and how the amount to be recouped was determined if the information is material and necessary to an understanding of the compensation provided to NEOs.
If the Company recoups compensation under the clawback policy from an executive officer who is not an NEO, the Company intends to disclose the occurrence of such recoupment in the Proxy Statement, even though such disclosure is not required. The Committee may decide that additional disclosure regarding a recoupment should be made, but it is advisable for the Committee to have the ability to exercise judgment, taking the facts and circumstances into consideration.
Decisions to disclose or not disclose recoupment deliberations and outcomes will be made on a case-by-case basis, taking into account the materiality of the information for investors and confidentiality, liability, and other considerations.
|
ITEM 5: SHAREHOLDER PROPOSAL REGARDING SHAREHOLDER PROXY ACCESS REFORM
The Company has a strong corporate governance practices.structure and record of accountability.
The proponent cites the Company’s corporate governance as a reason to support the shareholder proposal. Our current corporate governance structure reflects a significant and ongoing commitment to strong and effective governance practices are strong. These include:and a willingness to be responsive and accountable to shareholders. We regularly assess and refine our corporate governance policies and procedures to take into account evolving best practices and to address shareholder feedback.
In addition to adopting a meaningful and appropriate proxy access right, we have implemented numerous other corporate governance measures to ensure the Board remains accountable to shareholders, to provide our shareholders with a meaningful voice in the nomination and election of directors, and to provide our shareholders with the ability to communicate with directors and promote the consideration of shareholder views. For example:
● | Each director serves a one-year term and stands for |
● | Directors must be elected by a majority vote in uncontested elections. |
● | All directors are independent, except for Mr. |
● | We have an independent |
● | Board committees are composed solely of independent |
● | Shareholders have the ability to: |
- | Call special meetings upon request of |
Act by written consent; | |
Recommend director candidates to | |
Directly nominate director candidates and solicit proxies for the election of those candidates in accordance with our Bylaws and federal securities laws; | |
- | Submit proposals for inclusion in the Company’s Proxy Statement for consideration at each Annual Meeting, subject to SEC rules and regulations; |
- | Communicate directly with the Board or individual directors by following the procedures described on our website at www.edison.com/corpgov; and |
- | Express their views on executive compensation |
Our Board also has shown an ongoing commitment to Board refreshment and diversity. Seven of our nine director nominees have served on the Board for less than six years, including five new independent directors elected to the Board since 2014. Three of our director nominees are women and four of our director nominees reflect ethnic diversity.
For the foregoing reasons, the EIX Board recommends you vote “AGAINST” Item |
|
Thursday, April 23, 2015What is included in the proxy materials?
The proxy materials include the Proxy Statement (which includes a letter to shareholders and a Notice of Annual Meeting), the Annual Report, the Proxy Card, and the Notice of Internet Availability.
9:Why did the Company mail a Notice of Internet Availability instead of a printed copy of the materials?
Providing the proxy materials to shareholders via the Internet saves us the cost of printing and mailing documents and reduces the impact of the Annual Meeting on the environment.
If you received only a Notice of Internet Availability, you will not receive a printed copy of the proxy materials unless you request them. The Notice includes instructions on how to access and review the proxy materials, submit your proxy via the Internet, and request a printed copy of proxy materials by mail.
Why did some shareholders receive printed or email copies of the proxy materials?
We are distributing printed copies of the proxy materials to shareholders who have previously requested printed copies. We are providing shareholders who have previously requested electronic delivery of proxy materials with an email containing a link to the website where the materials are available via the Internet.
Who can vote?
All owners of voting stock at the close of business on March 3, 2017 (the record date) may vote.
On each Item of EIX business, holders of EIX Common Stock are entitled to one vote per share. On each Item of SCE business, holders of SCE Cumulative Preferred Stock are entitled to six votes per share and EIX, as the holder of SCE Common Stock, is entitled to one vote per share. All shares of SCE Common and Cumulative Preferred Stock vote together as one class.
Who can attend the Annual Meeting?
All shareholders on the record date, or their duly appointed proxies, may attend the meeting. All shareholders will be required to pass through a security inspection area (where all packages will be subject to search) and check in at the registration desk at the meeting. The registration desk will open at 8:00 a.m. and meeting room doors will open at 8:30 a.m., Pacific Time
Time. For your protection, purses, briefcases, backpacks, and packages may be subject to inspection. Shareholders may not bring signs, banners, handouts, or similar items into the meeting room. Photography and video/audio recording of the Annual Meeting are not permitted.
If you are a Registered Shareholder or a 401(k) Plan Shareholder, we can verify your share ownership from the share register with proper identification. No admission pass is required. To be admitted as a proxy for a Registered Shareholder, you must provide a written authorization from the Registered Shareholder.
If your shares are held in Street Name, you will need to bring proper identification and a letter or an account statement from your broker or other nominee reflecting your stock ownership as of the record date. To be admitted as a proxy for a broker, you must provide a written authorization from the broker with a letter or account statement reflecting the broker’s ownership as of the record date. If a nominee holds the shares, you must provide a written authorization from the nominee to the broker that is assignable, a written authorization from the broker, and a letter or account statement reflecting the nominee’s ownership as of the record date.
Individual shareholders may bring one guest to the Annual Meeting. A shareholder that is a corporation, partnership, association or other entity is limited to three authorized representatives at the Annual Meeting.
Where is the Annual Meeting Located?Hilton Los Angeles/San Gabriel Hotel225 West Valley BoulevardSan Gabriel, California 91776
The Hilton Los Angeles/San Gabriel Hotel is located just north of Interstate 10, approximately ten miles east of Downtown Los Angeles. From Interstate 10, take the Del Mar Ave. exit north (towards San Gabriel) to Valley Blvd. Turn left at Valley Blvd. to 225 West Valley Blvd.
How do I vote?
Your vote is important. You can save us the expense of additional solicitations by voting promptly. Please follow the instructions described below:
By Internet – Shareholders who received a Notice of Internet Availability may vote via the Internet by following the instructions on the Notice. Shareholders who received a Proxy Card by mail may vote via the Internet by following the instructions on the Proxy Card. When voting via the Internet, all shareholders must have available the control number on their Notice of Internet Availability or Proxy Card. Under California law, you may transmit a proxy via the Internet.
By Telephone – Registered or 401(k) Plan Shareholders may vote by telephone by calling 1-866-883-3382 and following the recorded instructions. Most shareholders who hold their shares in
2017 Proxy Statement | 61 |
MEETING AND VOTING INFORMATION
Street Name may vote by phone by calling the number provided by their broker. When voting by telephone, all shareholders must have available the control number on their Notice of Internet Availability or Proxy Card.
By Mail – Shareholders who received a printed copy of these proxy materials may vote by mail by completing, signing, dating and returning their Proxy Card as indicated.
In Person – Registered Shareholders may vote in person by attending the Annual Meeting and completing a ballot distributed at the meeting. Shareholders who hold their shares in Street Name may vote in person by attending the Annual Meeting only if they have requested and received a legal proxy from their broker or other nominee, and deliver the proxy to the inspector of election before or at the meeting. 401(k) Plan Shareholders may not cast votes in person at the Annual Meeting.
What is the deadline to vote and how do I change my vote?
If you are a Registered Shareholder, the inspector of election will accept your proxy by telephone or via the Internet until 9:00 p.m., Pacific Time, on April 26, 2017, and by mail if it is received by the inspector of election before the polls close at the Annual Meeting. Registered Shareholders may change their vote prior to the deadline by writing to the Corporate Secretary at the address above (so it is received prior to the deadline), voting again by mail, telephone or the Internet, or voting in person at the Annual Meeting.
If you hold shares in Street Name, most brokers will accept your proxy by telephone or the Internet until 9:00 p.m., Pacific Time, on April 26, 2017, and by mail if it is received by your broker’s designated agent by 9:00 a.m., Pacific Time, on April 27, 2017. Contact your broker or other nominee before the Annual Meeting to determine the actual deadline and whether and how you can change your vote.
If you are a 401(k) Plan Shareholder, your proxy must be received by 9:00 p.m., Pacific Time, on April 25, 2017 for the 401(k) Plan trustee to vote your shares. 401(k) Plan Shareholders may change their vote prior to this deadline by voting again. The last vote received within this timeframe will be the vote counted.
What does it mean if I get more than one Notice of Internet Availability or Proxy Card?
It indicates that your shares are held in more than one account, such as two brokerage accounts, or you hold both registered and Street Name shares, or you hold shares in both EIX and SCE. Use the control numbers provided on each Notice of Internet Availability or Proxy Card and vote each Notice or Proxy Card to ensure that all of your shares are voted.
What shares are covered by the Proxy Card?
This depends on how you hold your shares, and whether you hold shares in EIX, SCE, or both EIX and SCE.
Registered and 401(k) Plan Shareholders – For EIX registered and 401(k) Plan Shareholders, you will receive or have Internet access to a single Proxy Card that covers all shares of EIX Common Stock in your registered and 401(k) Plan accounts,including fractional shares held in the 401(k) Plan but excluding fractional shares held in the Dividend Reinvestment and Direct Stock Purchase Plan.
For SCE Registered Shareholders, you will receive or have Internet access to separate Proxy Cards for each series of preferred stock registered in your name.
If you hold registered shares in both EIX and SCE, you will receive or have Internet access to separate Proxy Cards for each Company.
Street Name Shareholders – If you hold shares of EIX and/or SCE in Street Name, you will receive or have Internet access to separate Proxy Cards from each broker or other nominee.
What happens if I submit my Proxy Card but do not indicate my voting preference?
The proxies and 401(k) Plan trustee will vote “FOR” election of all nominees for director (Item 1), “FOR” ratification of the appointment of the independent registered public accounting firm (Item 2), “FOR” approval of executive compensation (Item 3), to hold the advisory vote on the frequency of Say-on-Pay votes every year (Item 4), and “AGAINST” the shareholder proposal regarding shareholder proxy access reform (Item 5, EIX only).
What happens if I submit my Proxy Card but do not sign or date my card?
Those shares will be treated as unvoted shares on all matters and will not be considered as present and part of the quorum.
What happens if I do not vote?
If you are a Registered Shareholder, your shares will not be voted.
If you hold your shares in Street Name, most brokers or other nominees will only have authority to vote your shares on ratification of the appointment of the independent registered public accounting firm (Item 2). Regarding each of the other Items, most brokers or other nominees will not have authority to vote your shares, and the shares will instead be treated as “broker non-votes.”
If you are a 401(k) Plan Shareholder, the 401(k) Plan trustee will vote your shares in the same proportion to the 401(k) Plan shares voted by other 401(k) Plan Shareholders, unless contrary to ERISA.
How many votes do you need to hold the meeting?
A quorum is required for the Company to conduct business at the Annual Meeting. The presence at the Annual Meeting, in person or by proxy, of shareholders entitled to cast a majority of the votes that all shareholders may cast constitutes a quorum. All shares represented by a properly signed proxy will be considered as present and part of the quorum, even if you or your broker or other nominee doesn’t vote or abstains on any or all matters.
As of the record date, EIX had 325,811,206 shares of Common Stock outstanding,325,800,887of which may cast 325,800,887 votes. Therefore, a quorum for EIX is 162,900,444 shares. SCE had 4,800,198 shares of Cumulative Preferred
62 | 2017 Proxy Statement |
MEETING AND VOTING INFORMATION
Stock outstanding and entitled to cast 28,801,188 votes, and 434,888,104 shares of Common Stock outstanding and entitled to cast 434,888,104 votes. Voting together as a class, the SCE shareholders may cast 463,689,292 votes. Therefore, a quorum for SCE is 231,844,647 shares.
What vote is required to adopt each Item at the meeting?
Shareholders may vote “for,” “against” or “abstain” with respect to each proposal. A director nominee will be elected and a proposal will be approved if the following votes are obtained:
● | The affirmative vote of at least a majority of the votes cast on the director or proposal. Abstentions and broker non-votes are not treated as votes cast, and therefore will not affect the vote; and |
● | The affirmative vote of at least a majority of the votes required to constitute a quorum. Abstentions and broker non-votes are not treated as votes cast and therefore will have the effect of votes cast against the director or proposal for these votes. |
Who will count the votes?
Wells Fargo Bank, N.A., will tabulate the votes and is expected to act as the inspector of election. To protect the confidentiality of votes cast under the 401(k) Plan, 401(k) Plan Shareholders’ voting instructions are given directly to Wells Fargo. Wells Fargo will tabulate those votes and provide aggregate voting results directly to the 401(k) Plan trustee. EIX will not have access to any of the 401(k) Plan Shareholders’ voting instructions, and 401(k) Plan voting results are only reported to EIX in the aggregate.
How much will this proxy solicitation cost?
We have retained D.F. King & Co., Inc. to assist us with the solicitation of proxies and will pay an aggregate fee of $22,500 (EIX $20,000 and SCE $2,500) plus expenses. This fee does not include the costs of printing and mailing the proxy materials. Some of the directors, officers and other employees of the Company also may solicit proxies personally, by mail, by telephone or by other electronic means for no additional compensation. We will also reimburse brokers and other nominees for their reasonable out-of-pocket and other actual expenses for forwarding proxy materials to beneficial owners and obtaining voting instructions.
Whom may I call with questions about the meeting or voting?
You may call Wells Fargo at 1-800-347-8625 or visit their Internet website atwww.shareowneronline.com.
What happens if additional matters are presented at the Annual Meeting?
The Board is not aware of, and does not intend to present, any business to be acted upon at the Annual Meeting other than the Items described in this Proxy Statement. If you submit a proxy and any other matters properly come before the Annual Meeting, including matters incident to the conduct of the Annual Meeting, the persons named as proxy holders will have the discretionary authority to vote your shares under their best judgment. If any of the nominees for election to the Board become unavailable to stand for election as a director, the proxies will also have the authority to vote for substitute nominees chosen by the Board.
What is the deadline to submit shareholder proposals or other business for the 2017 Annual Meeting?
The deadline to submit shareholder proposals for the Company’s 2017 Annual Meeting was November 18, 2016. To be considered for inclusion in the 2018 Proxy Statement, shareholder proposals for the Company’s 2018 Annual Meeting must be received by November 17, 2017.
Shareholders intending to bring any other business before an Annual Meeting, including director nominations, must give written notice to the Corporate Secretary of the business to be presented. The notice must be received at our office within the periods, and with the information and documents, specified in the Bylaws.
Assuming that the 2018 Annual Meeting is held on April 26, 2018, as specified by the Bylaws, and does not change by more than 30 days earlier or later, the period for the receipt by the Corporate Secretary of written notice of other business to be brought by shareholders before the 2018 Annual Meeting, including director nominations presented for inclusion in the 2018 Proxy Statement or otherwise, will begin on September 18, 2017 and end on November 17, 2017.
2017 Proxy Statement | 63 |
TERMS USED IN THIS PROXY STATEMENT
401(k) Plan | The employee benefit plan known as the Edison 401(k) Savings Plan through which participants may hold interests in EIX shares through the EIX Stock Fund | |
401(k) Plan Shareholders | Participants in the 401(k) Plan who hold interests in EIX shares through the EIX Stock Fund | |
Annual Meeting | The EIX and SCE annual meetings of shareholders, which are held jointly | |
Annual Report | The EIX and SCE 2016 combined annual report on Form 10-K, which is prepared and filed with the SEC jointly | |
Board | Both the EIX and SCE Boards of Directors, unless otherwise indicated | |
Committee | The applicable Board committees of both EIX and SCE, unless otherwise indicated | |
Company | Both EIX and SCE, unless otherwise indicated | |
Compensation Committee | The Compensation and Executive Personnel Committees of both EIX and SCE, unless otherwise indicated | |
Edison Energy Group or EEG | Edison Energy Group, Inc., a wholly-owned subsidiary of EIX and the holding company for EIX’s competitive businesses in emerging sectors of the electric industry | |
EIX | Edison International | |
EME | Edison Mission Energy, an indirect wholly-owned subsidiary of EIX | |
ERISA | The Employee Retirement Income Security Act of 1974 | |
FOSO Committee | The Finance, Operations and Safety Oversight Committees of both EIX and SCE, unless otherwise indicated | |
Governance Committee | The Nominating/Corporate Governance Committees of both EIX and SCE, unless otherwise indicated | |
Notice of Internet Availability, or Notice | The notice regarding the availability on the Internet of the Company’s proxy materials, which was mailed to most shareholders in lieu of printed copies of the proxy materials, as permitted under SEC rules | |
Proxy Card | Either a proxy card, which you may receive if you are a Registered Shareholder, or a voting instruction form, which you may receive if you hold shares in Street Name or are a 401(k) Plan Shareholder | |
Proxy Statement | The EIX and SCE proxy statements, which are prepared and filed with the SEC jointly | |
Registered Shareholder | Your shares are registered in your own name on the Company’s records Shares held in your Dividend Reinvestment and Direct Stock Purchase Plan account are included | |
SCE | Southern California Edison Company | |
Street Name | Your shares are held in a brokerage account or through a trustee, custodian or other third party (referred to as a nominee), and you are the beneficial owner of those shares Your name does not appear on the Company’s records as a shareholder |
64 | 2017 Proxy Statement |
| Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945 |
| |
SOUTHERN CALIFORNIA ANNUAL MEETING OF SHAREHOLDERS
Directions to the Southern California Edison |
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to be Held on April 23, 2015.27, 2017.
Notice is hereby given that the Annual Meeting of Shareholders of Southern California Edison Company will be held at the Hilton Los Angeles/San Gabriel Hotel, 225 West Valley Blvd., San Gabriel, California 91776.
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting.
The Proxy Statement and the 20142016 Annual Report are available atwww.edison.com/annualmeeting. ..
If you want to receive a paper or email copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed on the reverse side of this notice on or before April 10, 201512, 2017 to facilitate timely delivery.
Matters intended to be acted upon at the meeting are listed below.
The Board of Directors recommends that you vote “FOR” Items 1, 2 and 3: | |||||||||||
1. | Election of Directors: | ||||||||||
01 | Jagjeet S. Bindra | 05 | Richard T. Schlosberg, III | 08 | Ellen O. Tauscher | ||||||
02 | Vanessa C.L. Chang | 06 | Linda G. Stuntz | 09 | Peter J. Taylor | ||||||
03 | Theodore F. Craver, Jr. | 07 | William P. Sullivan | 10 | Brett White | ||||||
04 | Pedro J. Pizarro |
The Board of Directors recommends that you vote “FOR” Items 1, 2 and 3, and “1 YEAR” for Item 4: | |||||||||||
1. | Election of Directors: | ||||||||||
01 | Vanessa C.L. Chang | 05 | Pedro J. Pizarro | 08 | Ellen O. Tauscher | ||||||
02 | Louis Hernandez, Jr. | 06 | Linda G. Stuntz | 09 | Peter J. Taylor | ||||||
03 | James T. Morris | 07 | William P. Sullivan | 10 | Brett White | ||||||
04 | Kevin M. Payne |
2. | Ratification of the Appointment of the Independent Registered Public Accounting Firm | ||
3. | Advisory Vote to Approve the Company’s Executive Compensation | ||
4. | Advisory Vote on the Frequency of Say-on-Pay Votes |
THIS IS NOT A FORM FOR VOTING
You may immediately vote your proxy on the Internet at:
www.proxypush.com/sce
● | Use the Internet to vote your proxy 24 hours a day, 7 days a week, until 9:00 p.m. Pacific Time on April | ||
● | Please have this Notice available and follow the instructions to vote your proxy. |
Your Internet vote authorizes the Named Proxies to vote your shares in the same manner as if you marked, signed and returned a proxy card.
To request paper copies of the proxy materials, please contact us via:
Internet– Access the Internet and go towww.proxydocs.com/sce. Follow the instructions to log in, and order copies. | ||
Telephone – Call us free of charge at1-866-870-3684 from the U.S. or Canada, using a touch-tone phone, and follow the instructions to log in and order copies. | ||
Email – Send us an email atpaper@investorelections.com with “SCE Materials Request” in the subject line. The email must include: |
● | The 11-digit control # located in the box in the upper right hand corner on the front of this notice. | |
● | Your preference to receive printed materials via mail-or-an email with links to the electronic materials. | |
● | If you choose email delivery, you must include the email address. | |
● | If you would like this election to apply to delivery of material for all future meetings, write the word “Permanent” in the email. |
This Important Notice Regarding the Availability of Proxy Materials is provided to shareholders in place of printed materials for the upcoming Annual Meeting of Shareholders. You will not receive a printed copy of the proxy materials unless you request one by following the instructions above.
In 2007, the Securities and Exchange Commission adopted a rule permitting companies to send shareholders a notice regarding the Internet availability of proxy materials rather than distribute printed proxy materials. Distributing these proxy materials via the Internet saves us the cost of printing, mailing and storing documents, and reduces the impact of the Annual Meeting on the environment.
This Notice contains specific information regarding the Annual Meeting, the proposals to be voted on at the Annual Meeting, and the Internet site where the proxy materials may be found. It is not a form for voting and should not be returned to the Company or Wells Fargo Shareowner Services. Please use the company and control numbernumbers provided on the first page of this Notice to vote your shares atwww.proxypush.com/sce. ..
Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945 | |||
Address Change? Mark box, sign, and indicate changes below: ☐ |
| ||||
Vote by Internet, Telephone or Mail 24 Hours a Day, 7 Days a Week Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card. | ||||
INTERNET–www.proxypush.com/sce Use the Internet to vote your proxy until 9:00 p.m. (Pacific Time) on April | ||||
PHONE–1-866-883-3382 Use a touch-tone telephone to vote your proxy until 9:00 p.m. (Pacific Time) on April | ||||
Mail– Mark, sign and date your proxy card and return it in the postage-paid envelope provided. | ||||
If you vote your proxy by Internet or by Telephone, please do NOT mail your Proxy Card. |
TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL ITEMS BELOW,
SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD.
⇩Please fold here – Do not separate ⇩ |
The Board of Directors Recommends a Vote “FOR” Items 1, 2 and 3.3, and “1 Year” for Item 4.
1. | Election of directors: | ||||||||||
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | ||||||
01 | ☐ | ☐ | ☐ | 06 Linda G. Stuntz | ☐ | ☐ | ☐ | ||||
02 | ☐ | ☐ | ☐ | 07 William P. Sullivan | ☐ | ☐ | ☐ | ||||
03 | ☐ | ☐ | ☐ | 08 Ellen O. Tauscher | ☐ | ☐ | ☐ | ||||
04 | ☐ | ☐ | ☐ | 09 Peter J. Taylor | ☐ | ☐ | ☐ | ||||
05 | ☐ | ☐ | ☐ | 10 Brett White | ☐ | ☐ | ☐ |
2. | Ratification of the Appointment of the Independent Registered Public Accounting Firm | ☐ | For | ☐ | Against | ☐ | Abstain | |||||
3. | Advisory Vote to Approve the Company’s Executive Compensation | ☐ | For | ☐ | Against | ☐ | Abstain | |||||
4. | Advisory Vote on the Frequency of Say-on-Pay Votes | ☐ | 1 Year | ☐ | 2 Years | ☐ | 3 Years | ☐ | Abstain | |||
WHEN PROPERLY EXECUTED, THIS PROXY CARD WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED “FOR” ITEMS 1, 2 AND |
Date | I plan to attend the meeting. ☐ |
Signature(s) in Box | ||||
Please sign exactly as your name(s) appears on this card. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing this card. | ||||
20152017 ANNUAL MEETING OF SHAREHOLDERS
Thursday, April 23, 201527, 2017
9:00 a.m. Pacific Time
Hilton Los Angeles/San Gabriel Hotel
225 West Valley Blvd.
San Gabriel, California 91776
SOUTHERN CALIFORNIA EDISON COMPANY | proxy card |
Annual Meeting — April 23, 201527, 2017
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THEODORE F. CRAVER, JR.PEDRO J. PIZARRO and W. JAMES SCILACCIMARIA RIGATTI are hereby appointed proxies of the undersigned with full power of substitution to vote allsharesall shares of stock the undersigned is entitled to vote at the annual meeting of shareholders of Southern California Edison Company to be held at the Hilton Los Angeles/San Gabriel Hotel, 225 West Valley Blvd., San Gabriel, California 91776, on April 23, 2015,27, 2017, at 9:00 a.m., Pacific Time, or at any adjournment or postponement of the meeting, with all the powers and discretionary authority the undersigned would possess if personally present at the meeting on the matters listed on the other side.
The shares will be voted as indicated on this card.WHERE NO INDICATION IS SHOWN, THE SHARES REPRESENTED BY THIS CARD WILL BE VOTED “FOR” ITEMS 1, 2 AND 3.3, AND 1 YEAR FOR ITEM 4. In addition, the appointed proxies may vote in their discretion on such other matters as may properly come before the meeting.
IF YOU RECEIVE MORE THAN ONE SET OF PROXY MATERIALS, PLEASE MARK, SIGN, DATE AND RETURN ALL CARDS YOU RECEIVE PROMPTLY USING THE ENCLOSED ENVELOPES. TO VOTE BY PHONE OR THE INTERNET, PLEASE SEE THE REVERSE SIDE OF THIS CARD.
See reverse for voting instructions.
The following email was sent on March 13, 201517, 2017 to Southern California EdisonCompanyEdison Company registered shareholders who previously requested email delivery of their proxy materials:
Dear Southern California Edison Company Shareholder:
The 20152017 Annual Meeting of Shareholders will be held at 9:00 a.m. on Thursday, April 23, 201527, 2017 at the Hilton Los Angeles/San Gabriel Hotel, San Gabriel, CA, 91776.
Our records indicate that you consented to receive your proxy materials over the Internet. This email provides the information you need to view the proxy materials online and vote your shares.
The Proxy Statement and 20142016 Annual Report are available at www.edison.com/annualmeeting.
The Notice of Annual Meeting is included in the Proxy Statement.
You may use the Internet to vote your proxy 24 hours a day, 7 days a week, through 9:00 p.m. Pacific time on April 22, 2015.26, 2017. You will need the following important number to access the Internet voting site and vote your shares:
Your personal eleven-digit control number: 00000000000
If you receive more than one email, it means that your shares are held in more than one account. Use the control numbers provided on each email to ensure that all of your shares are voted.
Thank you for your attention to this important matter.
Barbara E. Mathews
Vice President, Associate General Counsel,
Chief Governance Officer and Corporate Secretary