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Please note that you will need to retain the control number printed on your proxy card to attend the virtual 2021 Annual Meeting.
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| | | Constance H. Lau President and Chief Executive Officer |
Table of ContentsTABLE OF CONTENTS
Board Oversight of Strategy and Risk Management: Investing in Hawaii's Sustainable Future
Sustainability, oradvance important environmental, social and governance (ESG), considerations issues and ensure the vitality of HEI for all who rely on our company.
The
This past year,impact long-term value creation. As a result, we deliberately composed our Board prioritized integrating sustainability even further into our governance structures, decision-making processes and reporting. We focused our strategic retreat onto ensure we have directors who have direct experience related to ESG topics, including renewable energy, climate change strategy, environmental management and other ESG factors relevant tosustainable investing.
While HEI has been reporting on key ESG metrics for some time, particularly with respect to our role in Hawaii's transition to 100% renewable energy, we are working to expand our ESG disclosures to give shareholders and other stakeholders even more visibility to our ESGoversight of management activities. We look forwardexpanded the responsibilities of the Nominating & Corporate Governance Committee to issuing our first Sustainability Accounting Standards Board-aligned report in 2020include overseeing human capital management and ensuring all material ESG areas have appropriate board oversight.
To further align management incentives with our strategic goals. In addition to existing goals related to the renewable transition, safety, reliability and customer satisfaction, beginning in 2020 we have increased the proportion ofCompensation Committee added renewable portfolio standard (RPS) achievement goals to HEI and utility executiveexecutives’ long-term incentive metrics. We’re expanding on this for HEI and utility executives in 2021 with the addition of diversity, equity and inclusion and electrification goals.
Our strategiesenergy, facilitating customer participation in the clean energy transition, modernizing our grid and advancing affordability and customer equity. In doing so, PBR offers the utility the opportunity to earn additional revenue if it achieves performance targets – directly linking our financial performance continuewith stakeholder outcomes.
In each10% are Native Hawaiian. At our utility, 90% of 2019all employees and early 2020 we increased65% of executives are racially diverse, and 29% of employees and 47% of executives are female. At our quarterly dividend by 3% givenbank, 88% of our strong financial performanceemployees and the Board's confidence in our future prospects. These recent increases enhance our record70% of uninterrupted dividends since 1901.
employees and 40% of executives are female.
OurThe Board is committed to ensuring we havecontinuing to strengthen HEI’s practices, including hiring and promoting individuals from diverse backgrounds, to ensure a diverse and inclusive culture throughout the diversityHEI family of perspective, skillscompanies.
We also continuecontinued to refresh our boardBoard and committee leadership and composition. In 2019, Peggy Fowlerleadership. I was appointed Board Chair following the retirement of our Nominating & Corporate Governance Committee, Jim ScilacciJeff Watanabe. In addition, Richard Dahl was appointed Chair of the Audit & Risk Committee and Admiral Thomas Fargo was named Vice Chair of the Board. More recently, Mary Powell and Eva Zlotnicka have joined the Compensation Committee and Celeste Connors has joined the Audit & Risk Committee.
Ongoing Management Succession Planning
We are committed
As part of our ongoing succession process, in February 2020, Scott Seu succeeded Alan Oshima as President and CEO of our utility. Scott has a deep understanding of our utility and the importance of stakeholder engagement In addition, potential leaders are given frequent exposure to the company's success. Over the course of his careerBoard to further familiarize directors with our utility he has led several different areas of utility operations, including environmental management, customer programs, renewable energy development and system operations, and has overseen its regulatory, government and community affairs and corporate relations departments. We're confident Scott will continue our utility's leading-edge work in collaborating with our stakeholders to achieve Hawaii's ambitious energy goals.
We would like to thank Alan for his tremendous leadership during a time of great change, as he led our utility through a major transformation initiative.
In part
TABLE OF CONTENTSRemembering Barry Taniguchi
Finally, we fondly remember our fellow Board member, Barry Taniguchi, who passed away last September. In addition to being a valued friend and colleague, Barry was a thoughtful leader and integral member of the Board. Barry built a strong legacy in Hawaii and at our companies and we will forever be grateful for his many contributions — both on a professional and personal level.
In conclusion, we
continued support.
Admiral Thomas B. Fargo, | | | |
| | Constance H. Lau | |
Celeste A. Connors | | | Mary G. Powell |
Richard J. Dahl | | | Keith P. Russell |
Peggy Y. Fowler | | | William James Scilacci, Jr. |
Micah A. Kane | | | Eva T. Zlotnicka |
Table of ContentsTABLE OF CONTENTS
NOTICE OF MEETING OF SHAREHOLDERS | | |   |
When: | | ||
Friday, May | |||
Where: | | The 2021 Annual Meeting will be virtual, conducted entirely via live audio webcast. You will be able to attend, submit questions and vote during the 2021 Annual Meeting by visiting www.virtualshareholdermeeting.com/HE2021. | |
Items of Business: | | | Proposal 1 — Election of three |
| | Proposal 2 — Advisory vote to approve the compensation for | ||
| | Proposal 3 | ||
| | Transaction of such other business as may properly come before the | ||
Record Date: | | March 1, 2021 | |
Annual Report: | | | The |
Who Can Attend: | | Shareholders of record as of the close of business on the record date are entitled to receive notice of, attend, submit questions and vote at the | |
Date of Mailing: | | | On or about March 26, |
In Person:Attend our annual meeting andYou can vote by ballot.your shares online at www.virtualshareholdermeeting.com/HE2021."street name"“street name”) should follow the voting instruction card provided by such intermediary."Voting“Voting Procedures — Changing your vote"vote” section of the accompanying Proxy Statement.internet.Internet. Mailing your proxy card or voting by telephone or over the internetInternet does not preclude you from changing your vote in person atonline during the 20202021 Annual Meeting of Shareholders (the 20202021 Annual Meeting).
Important Notice Regarding the Internet Availability of Proxy Materials for the 2020 Annual Meeting of Shareholders to be held on May 5, 2020
The accompanying Proxy Statement, 2019 Annual Report to Shareholders and 2019 Annual Report on Form 10-K are available at http://www.hei.com
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Name Class III Directors Peggy Y. Fowler Keith P. Russell Eva T. Zlotnicka Class I Director Micah A. Kane ARC - Audit & Risk Committee The lack of a mark for a particular item does not mean that the director does not possess that experience or is unable to contribute to the decision-making process in that area. We look to each director to be knowledgeable in these areas; however, the mark indicates that the item is a particularly prominent area of expertise that the director brings to the Board. our state. Recent highlights include: Hawai‘i campuses. Source: S&P Global Inc. and Deepening our Sustainability Focus Disclosure-aligned content. and operational results. The compensation program also balances the importance of achieving long-term strategic COMPENSATION COMMITTEE DECISION-MAKING In accordance with 2022. TABLE OF CONTENTS 69 TABLE OF CONTENTS 38 2020 of the Board. Admiral Fargo has served on the Board since 2005, and has never been employed by HEI or any HEI subsidiary. The Board has determined that he is Chairperson, or an independent Lead Director if the Chairperson is not independent, is appropriate and effective (iii) establishing procedures for direct reporting of potential accounting and auditing issues to the Audit & Risk Committee. The Audit & Risk Committee reports to the Board each quarter regarding these matters. director (or 10%) who is Asian American and one director (or 10%) who is such correspondence in order to facilitate communications to the Board. In addition, the HEI Corporate Secretary has the authority and discretion to handle any director communication that With respect to Messrs. Fargo The Board has four standing committees: Audit & Risk, Compensation, Executive and Nominating and Corporate Governance. Members of these committees are appointed annually by the Board, taking into consideration the recommendations of the Nominating and Corporate Governance Committee. The table below shows the current members of each such committee and the number of meetings each committee held in Celeste A. Connors Richard J. Dahl Thomas B. Fargo Peggy Y. Fowler Micah A. Kane Constance H. Lau1 Mary G. Powell Keith P. Russell William James Scilacci, Jr. Jeffrey N. Watanabe2 Eva T. Zlotnicka Number of meetings in 2019 The primary functions of An independent member of the board of directors of Hawaiian Electric attends meetings of the Executive Committee as a nonvoting representative of such director’s subsidiary board of directors. Based on the 2018 analysis, the Compensation Committee recommended, and the Board approved, certain changes to director compensation for 2019. Cash retainer. HEI nonemployee directors received the cash amounts shown below as retainer for their The table below shows the detail of cash retainers paid to HEI nonemployee directors for Board and committee service (including subsidiary committee service) in Until reaching the applicable stock ownership target, directors must retain all shares received under their annual stock retainer. The Compensation Committee has the authority to approve hardship exceptions to these retention requirements. COMPENSATION DISCUSSION AND ANALYSIS 2020 (HEI’s 2020 Form 10-K), which is incorporated by reference herein. Our guiding principles shape our program design and pay decisions Publicly traded, US-based electric Market cap and location as secondary considerations Regional banks and thrifts Revenue balanced in a range of approximately 0.75x to 2x Total assets balanced in a range of approximately 0.5x to 2x Secondary consideration of 2 of proportion of loan portfolio composed of over 30% single family and less than 85% located on the west coast or ratio of noninterest income to operating revenue from 10%-40% What we pay and why: Compensation elements and The total compensation program for named executive officers is made up of the five standard components summarized below. Each component fulfills important objectives that reflect our focus on pay for performance, competitive programs to attract and retain talented executives and aligning executive decisions with the interests of the Company and our shareholders. These elements are described in further detail in the pages that follow. On an annual basis, the Compensation Committee reviews and recommends each named executive Constance H. Lau Gregory C. Hazelton Alan M. Oshima Richard F. Wacker Base salaries for our named executive officers are reviewed and determined annually. In establishing base salaries for the year, the Compensation Committee considers competitive market data, internal equity and each HEI named executive officers and other executives are eligible to earn an annual cash incentive award under ” achievement required to attain the threshold, target and maximum levels for each metric, the results for A. Constance H. Lau Gregory C. Hazelton Alan M. Oshima Richard F. Wacker Long-term incentives include performance-based opportunities under at risk. ” TABLE OF CONTENTS Constance H. Lau Gregory C. Hazelton Alan M. Oshima Richard F. Wacker Constance H. Lau Gregory C. Hazelton Alan M. Oshima Richard F. Wacker deemed it to be appropriate to take into consideration in determining 2018-20 LTIP performance. See also “Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments,” attached as Exhibit A. for retirement on a tax-deferred (or Roth) basis through 2020. 2020. weeks of vacation in Messrs. Murao and Seu have not yet reached their respective compliance dates. which the compensation is deductible. The Compensation Committee recognizes the impact of Section 162(m) and its significance to the 10-K. Constance H. Lau HEI President & CEO ASB Chair Hawaiian Electric Chair Gregory C. Hazelton* HEI Executive Vice President and CFO Alan M. Oshima Hawaiian Electric President & CEO Richard F. Wacker ASB President & CEO opportunities under the Additional narrative disclosure about salary, stock awards, nonequity incentive plan compensation, change in pension benefits and nonqualified deferred compensation earnings and all other compensation can be found in the Compensation Discussion and Analysis above. Constance H. Lau Gregory C. Hazelton Alan M. Oshima Richard F. Wacker Constance H. Lau Gregory C. Hazelton Alan M. Oshima Richard F. Wacker Constance H. Lau Gregory C. Hazelton Alan M. Oshima Richard F. Wacker Constance H. Lau Gregory C. Hazelton Alan M. Oshima Richard F. Wacker7 Constance H. Lau1 Gregory C. Hazelton Alan M. Oshima2 Richard F. Wacker3 Note: All Salary Stock Awards Nonequity Incentive Plan Compensation All Other Compensation Change in Pension Value1 TOTAL CEO Pay to Median Employee Pay Ratio OTHER RELATIONSHIPS AND RELATED PERSON There are no family relationships between any HEI executive officer, director or nominee for director. PROPOSAL NO. 2021 Pursuant to its charter, the Audit & Risk Committee preapproves all audit and permitted Internet. by intermediary) 2021. 7, 2022. your household, the cost to HEI of preparing and mailing duplicate materials, HEI CONSOLIDATED NET INCOME GAAP (as reported) Excluding special items (after-tax): Bonus related to enactment of federal tax reform2 Federal tax reform impacts3 Non-GAAP (core) net income HEI CONSOLIDATED DILUTED EARNINGS PER SHARE GAAP (as reported) Excluding special items (after-tax): Bonus related to enactment of federal tax reform2 Federal tax reform impacts3 Non-GAAP (core) diluted earnings per share HEI CONSOLIDATED RETURN ON AVERAGE COMMON EQUITY (ROACE) (simple average) Based on GAAP Based on non-GAAP (core)4 the purpose of measuring HEI CONSOLIDATED NET INCOME GAAP (as reported) Excluding special items (after-tax) for EICP and LTIP purposes: Sale of former headquarters, net of campus transition costs Non-GAAP (adjusted) net income for 2019 EICP purposes Excluding special items (after-tax) for LTIP purposes only: Ongoing impacts relating to the termination of merger2 Consulting fees Federal tax reform and related impacts3 Rate adjustment mechanism reversion to lagged method4 Income related to terminated merger with NextEra Energy Costs related to the terminated LNG contract ASB pension defeasement Non-GAAP (adjusted) net income for 2017-19 LTIP purposes (EPS growth goal) Less: Rate adjustment mechanism reversion to lagged method4 Non-GAAP (adjusted) net income for 2017-19 LTIP purposes (ROACE goal) HEI CONSOLIDATED BASIC EARNINGS PER SHARE Based on GAAP Based on non-GAAP (adjusted) for 2017-19 LTIP purposes HEI CONSOLIDATED Return on Average Common Equity (%) Based on GAAP Based on non-GAAP (adjusted) for 2017-19 LTIP purposes5 UTILITY NET INCOME GAAP (as reported) Excluding special items (after-tax) for LTIP purposes only: Ongoing impacts relating to the termination of merger2 Federal tax reform and related impacts3 Rate adjustment mechanism reversion to lagged method4 Costs related to terminated merger with NextEra Energy Costs related to the terminated LNG contract Non-GAAP (adjusted) net income for 2017-19 LTIP purposes (EPS growth goal) Less: Rate adjustment mechanism reversion to lagged method4 Non-GAAP (adjusted) net income for 2017-19 LTIP purposes (ROACE goal) UTILITY BASIC EARNINGS PER SHARE Based on GAAP Utility net income6 Based on non-GAAP Utility net income (adjusted) for 2017-19 LTIP purposes6 UTILITY Return on Average Common Equity (%) Based on GAAP Based on non-GAAP (adjusted) for 2017-19 LTIP purposes5 ASB NET INCOME GAAP (as reported) Excluding special items (after-tax) for EICP and LTIP purposes: Sale of former headquarters, net of campus transition costs Non-GAAP (adjusted) net income for 2019 EICP purposes Excluding special items (after-tax) for LTIP purposes only: Federal tax reform and related impacts3 Pension defeasement Non-GAAP (adjusted) net income for 2017-2019 LTIP purposes ASB Return on Average Common Equity (%) Based on GAAP Based on non-GAAP (adjusted) for 2017-19 LTIP purposes5 ASB EFFICIENCY RATIO (%) Based on GAAP Adjustment for pre-tax ASB items above Based on non-GAAP (adjusted) for 2017-19 LTIP purposes7 TABLE OF CONTENTS20202021 Annual Meeting of Shareholders. This summary does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully prior to voting. Management ProposalsBoard Vote RecommendationPage 1. Election of Three Class III Directors and One Class I Director
FOR Each Nominee1 HEI'sHEI’s Named Executive OfficersFOR26 3. Amendment of Amended and Restated Articles of Incorporation to Declassify the Board of DirectorsFOR64 4. Amendment of Amended and Restated Articles of Incorporation to Adopt a Majority Voting Standard in Uncontested Director ElectionsFOR65 5.2020FOR67 2021 —- three Class III Directors and one Class I Director of Hawaiian Electric Industries, Inc. (HEI or the Company). Additional information about all of HEI’s directors, including thethese nominees, may be found beginning on page 2.2. Age Director
Since
Primary Occupation Independent Committee
Membership
Other
Public
Boards
68 2011 Former Chief Executive Officer, Portland General Electric Company CC, NCGC (chair), EC 1 74 2011 President, Russell Financial ARC, EC 1 37 2020 Managing Director, ValueAct Spring Fund; Head of Stewardship, ValueAct Capital CC 1 51 2019 President & Chief Executive Officer, Hawaii Community Foundation NCGC — HEI's YES 10/11 Percentage or from diverse ethnic backgrounds63%* YES 2019YES 2020 YES YES YES YES * see pages 15-16iTable of ContentsTABLE OF CONTENTSPROXY SUMMARYCURRENT DIRECTORS Experience/ExpertiseTenure(Years)Utility/EnergyIndustryBankingLocal Hawaii CommercialSustainability/ Environmental LeadershipRenewable Energy ExpertiseSenior LeadershipPublic Company Board ExperienceEntrepreneurship/ Business Government & RegulationFinancial/ AccountingLegal & Risk ManagementCorporate Governance Jeffrey N. Watanabe♦Independent Chair33xxxxxxxx Constance H. LauCEO17xxxxxxxxxxx Celeste A. ConnorsIndependent<1xxxxxx Richard J. DahlIndependent3 x xxxx Independent15xxxxxx Peggy Y. FowlerIndependent9 xxxxxx Micah A. KaneIndependent<1xxx Mary G. PowellIndependent<1xxxxxxx Keith P. RussellIndependent9xxxxxxx William James Scilacci, Jr.Independent<1 x x xx Eva T. ZlotnickaIndependent<1xxxxx ♦ Serving a 1-Year Term, to retire as of the 2020 Annual Meetingis a family of three complementaryour companies that provide the energy and financial services ininfrastructure that empowers much of the Stateeconomic and community activity of Hawaii and invest in infrastructure to advance Hawaii's sustainable future.•Hawaii'sHawaii’s 100% renewable energy and carbon neutral economy goals in a way that is affordable, reliable and resilient for our customers•theHawaii’s economic growth, of our state and fostering innovation and entrepreneurship to diversify and expand our economy,•Developed with mission to advance Hawaii'sAdvancing Hawaii’s sustainability goals through investment in clean energy, water, wastewater and agricultureagriculture. Hawaii'sHawaii’s Vibrant Future•At we:•28% of electricity sales from renewable sources in 2019•Are on track to meet or exceed Hawaii's near-term milestone of a 30%34.5% renewable portfolio bystandard (RPS) in 2020,•Integrated exceeding our state’s 2020 mandate of 30%.nation's highest level ofnation’s leaders in rooftop solar penetration in 2019, at 19%integration, with 20% of residential customers•Secured and 36% of O‘ahu single family homes now with rooftop solar.lowestpotential to add 657 MW of solar and approximately 3 GWh of storage by 2023.solar-plus-storage pricescontainment and efficiency plan to datedeliver savings for Hawaiicustomers.•Last year launched and opportunities for the Utility as we continue one of the largest renewablenation’s most ambitious energy procurements undertaken bytransformations.U.S. utility, seeking 900 megawattschallenging economic environment while continuing to deliver exceptional service for customers, including as customers rapidly shifted to online and ATM transactions.renewables, over 500 gigawatt-hourscustomer relationships.storage and over 200 megawatts of grid services•Were named 2019 "Utility$370 million in round one of the Year" by Utility Dive,Paycheck Protection Program in 2020. Further disbursement of round two funding is underway in 2021.prominent industry publication,row, and receiving a WELL Health & Safety rating for advancing many initiatives that are transforming the power sector today, including renewable energy, electric vehicles and performance-based regulation•Completed our "One Company" initiative, restructuring functions across our utilities to improve operational efficiency and better serve our customers•In 2019, American Savings Bank:•Ensured solid performance and profitability despite a challenging interest rate environment for banks thanks to a combination of prudent expense management, operational efficiency and a strong balance sheetiiPROXY SUMMARY•Began to serve customers and communities from our new campus in Honolulu, representing the beginning of an exciting chapter in the bank's history and helping revitalize the campus neighborhoodcampus.•Improved our operating efficiency, achieving an efficiency ratio of 57.8% compared to 59.4% the prior year•Grew total loans by 5.7% and maintained a net interest margin above our peers•Last year Current:•optimize existinggrow its portfolio of sustainable infrastructure facilities, including through the acquisition of a 6 MW solar facility on Kaua‘i and bringing three solar-plus storage projects and pursue additional sustainable investment opportunities•Began using locally produced biodiesel for part of the fuel mix at its Hamakua Energy plant, advancing Hawaii Island's energy independence and energy security•Launched a joint venture with EverCharge to stimulate electric vehicle adoption by facilitating charging stations in high-rise buildings across Oahu•Advanced the construction of five solar + storage projectsonline at University of Hawaii campuses Net Income1 Diluted Earnings per Share (EPS)1 Return on Average Common Equity1 2019 $218M $1.99 9.8% 2018 $202M $1.85 9.5% 2017 $165M ($179M) $1.52 ($1.65) 7.9% (8.6%) 1 Numbers in parentheses are non-GAAP measures, which exclude tax reform and related adjustments for 2017. See Exhibit A for a reconciliation of GAAP to non-GAAP measures. Total Shareholder Return (%) HEI S&P 500 Index Edison Electric
Institute Index KBW Regional Banking Index 2019 31.9% 31.5% 25.8% 23.8% ��� 3-year 57.1% 53.2% 45.7% 3.9% 5-year 68.2% 73.9% 64.4% 53.0% 10-year 245.5% 256.7% 214.0% 197.7% EEI.2019Edison Electric Institute•Outperformed S&P 500 and broader utility index in total shareholder return over one- and three-year periods•11%2019•Achieved 2019 net income and earnings per share growth of 8%•and consolidated return on equity•1901•in 2019 and again in 2020 givenfor the third consecutive year as a result of continued solid financial performance and confidence in our future prospectsStrong Board, Enhanced Corporate Governance, Continued Shareholder EngagementOur board maintains the diversity of experience and expertise necessary to oversee the strategic direction of our companies, and understands our unique operating environment in Hawaii:
prospects.•6 directors from Hawaii, with essential perspectives on serving customers in our local communities•5 directors with energy and utility experience•6 directors with banking experience•63% of directors are women or from diverse ethnic backgrounds, including native HawaiianiiiPROXY SUMMARYSince 2017, we have added six new directors as part of ongoing Board refreshment and decreased our average tenure by 61% to 5.8 years at the time of the Annual Meeting:•Celeste Connors: Expertise in sustainability, energy and economic policy, and Hawaii business, government and non-profit communities; CEO, Hawaii Green Growth•Richard Dahl: Expertise and senior leadership experience in banking and utilities; former President & COO, Bank of Hawaii•Micah Kane: Extensive government and policy experience as leader of Hawaii governmental and non-profit agencies; deep understanding of Hawaii's business and political environment; CEO, Hawaii Community Foundation•Mary Powell: Significant experience in utilities and renewable energy; retired President and CEO, Green Mountain Power, 2008-2019.•Jim Scilacci: Track record of value creation and financial leadership in utilities industry; former CFO, Edison International•Eva Zlotnicka: Significant investment experience in ESG matters and overseeing ambitious sustainability and strategic initiatives; Managing Director, ValueActSpring Fund; Head of Stewardship, ValueAct CapitalCorporate governance enhancements to be voted upon at the 2020 Annual Meeting, include:•Proposal to declassify the Board see Proposal No. 3•Proposal to adopt a majority voting standard in uncontested director elections see Proposal No. 4In 2019, we engaged with shareholders representing more than 50% of our institutional shareholder base. We greatly value the opinions and feedback received from our shareholders, which is collected and shared with the Board and informs the work of both management and the Board.companies' daily actions and drive how we engage with our employees, communities, and shareholders.During the summer of 2019, our board spent most of its strategic retreat on climate change as well as other ESG considerations. We are working to further integrate climate change and ESG risks and opportunities into our strategic planning,governance structures, strategies, risk management and disclosures.reporting. Our efforts include:•Initialmateriality assessmentsmatters integrated into existing governance structures, including full Board review of each HEI company•Further evaluatingESG-related strategies, Audit & Risk Committee oversight of ESG risks, Compensation Committee responsibility for ESG-related compensation matters and formalizing incorporationNominating & Corporate Governance Committee responsibility for human capital management and for ensuring an appropriate Board governance framework for ESG matters.relevant executive compensation program.factorsconsiderations explicitly woven into strategic planning and enterprise risk management processes•Enhancing ESG disclosures, with issuance ofmanagement.planned for 2020 followed byin 2020; future reporting to include ESG materiality assessment and Task Force on Climate-related Financial Disclosures aligned reporting•Greater linkage between HEI and utility executive compensation and achievement of renewable energy goals—- PAYING FOR PERFORMANCEutility executives,Utility management, safety, reliability, customer satisfaction and advancing our utility'sUtility’s transformation to increaseincreased renewable energy have been key goals of annual performance-based compensation for some time. Because of the strategic importance of achieving our state'sstate’s renewable energy goals, beginning in 2020 the Board has made 20% of HEI and utility executives'Utility executives’ long-term performance-based compensation subject to achievement of renewable portfolio goals. See page 28section below entitled “Annual incentive opportunities” for further information.Performance-basedPerformance-Based Compensationandincentives, performance-based long-term incentives earned over three years, and restricted stock units vesting in equal annual installments over four years. We emphasize variable pay over fixed pay, with the majority of the total compensation opportunity at targetopportunities for each named executive officer linked to the Company'sCompany’s financial, marketivPROXY SUMMARYprioritiesobjectives and critical short-term goals that are linked to long-term objectives. 2019 Named Executive Officer (NEO) Pay OpportunityVariable Over Fixed PayOpportunity at TargetBalance of Short- and Long-Term PayOpportunity at Target
HEI'sHEI’s adjusted annual net income, as well as subsidiary performance. Long-term performance-based equity compensation over the respective three-year periods tracked our Relative TSR results.
Annual Net Income and CEO Performance-Based Annual Incentive Payouts3-year Relative TSR Results and PerformanceBased Long-Term Incentive Payouts
of the members of which are independent, directors, establishes pay programs and reviews performance results to ensure that executive officer compensation aligns with shareholder interests. In addition, the Compensation Committee is advised by an independent compensation consultant with respect to the design of the plans, performance results and reasonableness of pay decisions and appropriateness or reasonableness of compensation adjustments.Company'sCompany’s executive officer compensation reflects favorably on the Company'sCompany’s pay-for-performance objective, is aligned with shareholder interests and compares well to the Company'sCompany’s peers.OUR EXECUTIVE COMPENSATION PROGRAM INCORPORATES BEST PRACTICES: 
" trigger"trigger” change-in-control agreements v PROPOSAL NO. 1: ELECTION OF THREE CLASS III DIRECTORS AND ONE CLASS I DIRECTORHEI'sHEI’s Amended and Restated Bylaws (Bylaws), the Board has fixed the size of the Board at 10 directors effective at the 20202021 Annual Meeting, which was divided into three classes with staggered terms. The division of the directors into classes with staggered terms is being terminated in phases commencing at the 2021 Annual Meeting, and will terminate entirely at the 2023 annual meeting of shareholders. The Board proposes that the following nominees be elected at the 20202021 Annual Meeting: Class III directors to serve until the 20232022 Annual Meeting, or until his or her respective successor shall be duly elected and qualified:Peggy Y. FowlerKeith P. RussellEva T. ZlotnickaOne Class I director to serve until the 2021 Annual Meeting, or until his successor shall be duly elected and qualified:Micah A.Ms. Fowler, Mr. Kane, Mr. Russell and Ms. ZlotnickaLau are all incumbent directors of HEI. Effective August 1, 2019, Mr. Kane was appointed by the HEI Board pursuantPursuant to Article III, Section 8 of HEI's Bylaws to fill the vacancy created by the July 31, 2019 retirement of Class I director James K. Scott. On February 12, 2020, Ms. Zlotnicka was appointedamendments to the HEICompany’s Amended and Restated Articles of Incorporation to declassify the Board as a Class III director. Ms. Zlotnicka was nominated for electionof Directors adopted at the 2020 Annual Meeting pursuant toof Shareholders, directors elected at the 2021 Annual Meeting of Shareholders will serve a Cooperation Agreement between HEI and ValueAct Spring Master Fund, L.P. and certain of its affiliates describedone-year term expiring in more detail in the section entitled "Other Relationships and Related Person Transactions".Ms. Fowler,Mr. Dahl and Mr. Kane Mr. Russell and Ms. Zlotnicka are independent under the applicable standards for director independence, as discussed below under "Board“Board of Directors — Independent Directors." Ms. Fowler, Mr. Russell” Messrs. Dahl and Kane and Ms. ZlotnickaLau have each consented to serve for the new three-yearone-year term expiring at the 2023 Annual Meeting if elected, and Mr. Kane has consented to serve for the remainder of the Class I term expiring at the 20212022 Annual Meeting if elected. If a nominee is unable to stand for election at the time of the 20202021 Annual Meeting, the proxy holders listed in the proxy card may vote in their discretion for a suitable substitute.Board'sBoard’s conclusion at the time of this Proxy Statement that each of the nominees and continuing directors should serve on the Board in light of HEI'sHEI’s current business and structure. As described in Proposal No. 3, the Company is submitting a proposal for shareholder approval that, if approved, would phase out the classified structure of the Board. If Proposal No. 3 is approved by shareholders, beginning with our 2021 Annual Meeting, directors who stand for election will be elected to one-year terms, and all directors will stand for election on an annual basis beginning with the 2023 Annual Meeting. 
The Board recommends that you voteFOR each nominee listed above to serve as a Class III or Class I Director. 
DIRECTOR NOMINEES FOR ELECTION 
DIRECTOR NOMINEES FOR ELECTIONNominees for Class III Directors whose terms expire at the 2023 Annual Meeting of Shareholders 
Peggy Y. Fowler (Retired)Committee ChairCompensation
With experience as Chief Executive Officer of a NYSE-listed public utility company, and as director for the Portland Branch of the Federal Reserve Bank of San Francisco and Umpqua Holdings Corporation (a publicly traded bank holding company), Ms. Fowler brings a unique combination of utility and banking knowledge to the Board.Ms. Fowler was recognized as Oregon's Most Admired CEO in a 2005 Portland Business Journal survey, and as Portland's First Citizen in 2007 by the Portland Metropolitan Association of Realtors. Ms. Fowler was awarded the Oregon History Makers recognition in 2015, and the 2016 Joan Austin Lifetime Achievement Award recognizing her as one of Portland, Oregon's most-respected business leaders.Ms. Fowler has deep environmental and renewable energy expertise. She managed PGE's environmental department, overseeing initiatives that improved fish passage on multiple Oregon rivers. During Ms. Fowler's tenure as Chief Executive Officer, PGE made the strategic decision to reduce use of oil and coal and has been ranked #1 on multiple occasions for selling more renewable power to residential customers than any other U.S. utility. Under Ms. Fowler's leadership, wind and solar projects were constructed and integrated into the PGE grid.Under her leadership as HEI's Nominating and Corporate Governance Chair, the company underwent a new director refresh, de-staggering of the board and decreased tenure and provided greater proxy access. PROFESSIONAL EXPERIENCE35 years of executive leadership (including as President and Chief Executive Officer, and Chief Operating Officer), senior officer and operating positions, PGEUmpqua Holdings Corp (since 2009) (bank holding company); Chairman (since 2012)Portland General Electric (2006-2012)Director and committee member, Cambia Health Solutions (not-for-profit health insurer) (since 2005)Director, PGE Foundation (since 1997)Director, Portland Branch of Federal Reserve Bank of San Francisco (2007-2011) 
68EXPERTISE
LEADERSHIP 
ENERGY, UTILITIES 
RENEWABLES 
ENVIRONMENTAL MANAGEMENT 
CORPORATE GOVERNANCE 
FINANCIAL OVERSIGHT 
REGULATORY COMPLIANCE EDUCATIONPublic Utility Executive Program, University of Idaho and University of MichiganBachelor of Science, Chemistry and Bachelor of Science, Math, George Fox University 2 
Table of ContentsTABLE OF CONTENTSDIRECTOR NOMINEES FOR ELECTION 
Keith P. RussellIndependent DirectorExecutive Committee MemberAudit & Risk Committee MemberASB Risk Committee ChairWithin three major financial institutions, Mr. Russell served as an executive and/or Director and held domestic and international positions in all areas of banking, finance, capital markets and risk management. He has served on numerous panels on corporate governance and strategic direction.He has broad and deep expertise in risk management including identification, assessment, and monitoring of current and emerging risks through his prior service as Chief Risk Officer of a large financial institution and as Chief Operating Officer of a major bank. Mr. Russell has been the chair of the American Savings Bank (an HEI subsidiary) risk committee since 2012, during which time he led the implementation of an extensive enterprise risk management system which included development of robust risk governance, monitoring and management systems.Mr. Russell has a keen knowledge of the Hawaii real estate market and hospitality industry from his service on a lodging real estate investment trust with investments in Hawaii.Mr. Russell's years of executive leadership experience in financial service operations, particularly as an executive officer of a major lender to the electric utility industry, contribute invaluable expertise to the Board.Vice Chair/Chief Risk Officer, Mellon Financial Corp (1991-2001)President and Chief Operating Officer, Glendale Federal Bank (1983-1991)Senior Vice President, Security Pacific Corporation (1974-1983)Sunstone Hotel Investors (since 2003)Nationwide Health Properties (2002-2011)Director, KBS Growth and Income REIT (since 2016)Director, American Savings Bank (HEI subsidiary)Director, ASB Hawaii (HEI subsidiary) (2014-2016) 
742011Russell Financial (since 2001)EXPERTISE
RISK MANAGEMENTPROFESSIONAL EXPERIENCE 
FINANCE AND ACCOUNTING 
BANKING LEADERSHIP 
STRATEGIC PLANNING CORPORATE GOVERNANCE Master of Arts, Northwestern UniversityBachelor of Arts, University of Washington3DIRECTOR NOMINEES FOR ELECTION
Eva T. ZlotnickaIndependent DirectorCompensation Committee MemberMs. Zlotnicka's experience as a sustainable investing professional with a background in utilizing markets, policy, and partnership to motivate the private sector to simultaneously improve sustainability, profitability and competitiveness, brings highly valuable perspective to the Board. In her current position as Managing Director for the ValueAct Spring Fund, an investor in HEI, she identifies companies whose technology and products are solving environmental and social issues and actively supports them through various industry, governance or other significant transitions. As ValueAct Capital's Head of Stewardship, Ms. Zlotnicka also leads the firm's engagement with other shareholders and the broader corporate governance community.As director at Unifi, where she serves as a member of the audit committee and the corporate governance and nominating committee, Ms. Zlotnicka has experience in guiding the implementation of ambitious sustainability strategies in addition to other strategic efforts and financial oversight. Recently she was recognized among WomenInc.'s 2019 Most Influential Corporate Board Directors.Prior to joining ValueAct Capital, Ms. Zlotnicka served as the US lead Sustainability and Environmental, Social and Governance (ESG) equity research analyst at Morgan Stanley. During her tenure, Morgan Stanley's Global Sustainability Research team ranked #1 in Sustainable and Responsible Investment Research by the 2017 Extel IRRI survey. Ms. Zlotnicka was also individually ranked as #1 for "Best Understanding of Companies" as voted by corporate participants. Additionally, Ms. Zlotnicka has familiarity with the academic, public and non-profit sectors, most notably having worked with the US Environmental Protection Agency on public-private partnerships and the Environmental Defense Fund on corporate investment in energy efficiency.Over ten years of experience in sell-side research in sustainability, ESG and fixed income, including leading sustainability research teams at Morgan StanleyUnifi, Inc. (since 2018) (innovative textile products)Women Investing for a Sustainable Economy ("WISE"), Co-Founder (since 2012)Board Observer, Arcadia Power, Inc. (since 2018)Investor Advisory Group Member, Sustainability Accounting Standards Board (since 2019)Age:37Independent Director Since:2020Principal Occupation:Managing Director, ValueAct Spring Fund; Head of Stewardship, ValueAct Capital (2018 to present)2020)
EXPERTISE
ENVIRONMENTAL MANAGEMENTSchool, and CORPORATE GOVERNANCE 
INVESTMENT MANAGEMENT FINANCE AND ACCOUNTINGMaster of Business Administration and Master of Environmental Science, Yale UniversityBachelor of Science in Economics, Wharton School, and Bachelor of Science in Computer Science & Engineering, University of Pennsylvania4DIRECTOR NOMINEES FOR ELECTIONNominee for Class I Director whose term expires at the 2021 Annual Meeting of Shareholders 
Micah A. KaneIndependent DirectorNominating and Corporate GovernanceCommittee MemberMr. Kane is a well-respected leader in the State of HawaiiTABLE OF CONTENTS brings extensive leadership and a deep understanding of Hawaii's cultural, business and political environment to the Board.His career has been distinguished by his leadership of significant private and public trusts, including; his current role as Chief Executive Officer of Hawaii Community Foundation, Hawaii's largest and oldest Foundation; his service as a Trustee of the largest land trust in the state of Hawaii, Kamehameha Schools, a private school system established under the will of Princess Bernice Pauahi Bishop to create educational opportunities in perpetuity to improve the capability and well-being of people of Hawaiian ancestry; and his prior role as Chairman/Director of the State of Hawaii Department of Hawaiian Homelands.As an acknowledged Native Hawaiian community leader, Mr. Kane brings invaluable experience in understanding Hawaii's complex cultural and land use history (nearly 27% of the population self-identifies as Native Hawaiian and other Pacific Islander). Mr. Kane has brought to bear this knowledge and his business acumen to bring the community together to address the most important issues of our day including environmental sustainability, homelessness and affordable housing.Mr. Kane also has expertise in state/county government affairs including state/county regulation, policy development, public relations, and crisis management. PROFESSIONAL EXPERIENCEguidelinesPresident and Chief Executive Officer, Hawaii Community Foundation ($675 million in assets)Chief Operating Officer, Pacific Links Hawaii LLC (golf course owner, developer and operator)Principal, the KANE Group LLC (Hawaii-based company focused on land and financing matters for planned community infrastructure and general business development)Trustee, Kamehameha Schools ($11.9 billion endowment and Hawaii's largest private landowner with over 365,000 acres of land on Hawaii island, Maui, Moloka'i, O'ahu and Kaua'i)Director, Na Ku Pa'a O Kuhio, not for profit focused on supporting the beneficiaries of the Hawaiian Homes Commission Act.Chairman, Menlo College Board of Trustees (supporting Hawaii kids to college)Director, Hawaiian Electric Company, Inc. (HE Subsidiary) (2012-2019)Age:51Independent Director Since:2019Principal Occupation:President and Chief Executive Officer, Hawaii Community Foundation, Since 2017EXPERTISELEADERSHIP 
COMMUNITY RELATIONS 
GOVERNMENT AND RELATIONS 
EXECUTIVE MANAGEMENT STRATEGIC AND OPERATIONAL MANAGEMENT 
ORGANIZATIONAL LEADERSHIP Master of Business Administration, University of Hawaii at ManoaBachelor of Arts, Business Administration, Menlo College5CONTINUING DIRECTORSContinuing Class I Directors whose terms expire at the 2021 Annual Meeting of Shareholders
Richard J. DahlIndependent DirectorAudit & Risk Committee MemberCompensation Committee MemberMr. Dahl has significant leadership, strategy, audit and risk management expertise. He has in-depth experience in corporate transformation and restructuring and in driving improved corporate governance and shareholder engagement. His experiences working in Hawaii and on the U.S. mainland, and in banking and the electric utility industry, bring valuable perspective to the Board.He brings with him to the Board in-depth understanding of the two industries in which HEI operates from his senior executive roles at Bank of Hawaii Corporation and his current service as chairman of IDACORP, Inc. and its principal subsidiary, Idaho Power Company.He is an audit, risk management and financial expert from his former chairmanship of the IDACORP, Inc. audit committee, membership on the Dine audit committee, previous work experience with accounting firm Ernst & Young, and prior licensure as a Certified Public Accountant and Certified Bank Auditor.Under Mr. Dahl's leadership, Dole Food Company invested in a number of sustainability initiatives that secured external recognition. Dole was named one of the World's Most Ethical Companies by Ethisphere Magazine and undertook a carbon offset program to secure a carbon neutral operating footprint.Interim Chief Executive Officer, Dine Brands Global, Inc. (formerly known as DineEquity) (3/1/17 — 9/15/17) (franchiser of over 3000 Applebee's and IHOP restaurants)President and Chief Operating Officer (2004-2007) and Chief Finance Officer (2002-2004), Dole Food CompanyPresident and Chief Operating Officer, Bank of Hawaii Corporation (1981-2002)Ernst & Young (1973-1981)Dine Brands Global, Inc. (formerly known as DineEquity) (since 2004); Non-Executive Chairman (since 2017)IDACORP (since 2008) (currently decommissioning/divesting ownership of its coal plants), Chairman (since May 2019)Non-Executive Chairman, International Rectifier Corporation (2008-2015) (leading manufacturer and distributor of power management semi-conductors and researcher in battery storage)Non-Executive Chairman, James Campbell Company, LLC (privately held real estate investment and development company), Executive Chair, President and CEO (2010-2016)Director, Hawaiian Electric Company, Inc (HEI subsidiary)(2017-2019)Age:68Independent Director Since:2017Principal Occupation:Former President and Chief Executive Officer, James Campbell Company LLC (2010-2016)EXPERTISESTRATEGIC & OPERATIONAL MANAGEMENT 
CORPORATE TRANSFORMATION FINANCE AND ACCOUNTING CORPORATE GOVERNANCE BANKING ENERGY, UTILITIES LEADERSHIP RISK MANAGEMENT 
AUDIT Bachelor of Science, University of Idaho6CONTINUING DIRECTORS
Constance H. LauPresident and CEO, HEIExecutive Committee MemberChairman, American Savings Bank(HEI subsidiary)Ms. Lau has deep industry and operational expertise having served in leadership capacities spanning several functions across HEI and its subsidiaries. She is recognized as a transformational leader, having been identified by the US Banker List of Most Powerful Women in Banking in 2004, 2005, 2006 for transforming ASB into a full-service community bank. Signing the groundbreaking Hawaii Clean Energy Initiative with the Governor of State of Hawaii also secured Ms. Lau the Women in Clean Energy & the Environment, Woman of the Year award, 2011.Ms. Lau is a nationally recognized leader in the fields of critical infrastructure, resilience and physical and cyber security, banking, and energy, demonstrated by her appointment by President Obama to chair the National Infrastructure Advisory Council, membership on the federal Electricity Subsector Coordinating Council, prior service on the Federal Reserve Board of San Francisco's 12th District Community Depository Institutions Advisory Council, and her naming as a C3E Clean Energy Ambassador by the U.S. Department of Energy.Chair, National Infrastructure Advisory Council (since 2012)President and Chief Executive Officer, American Savings Bank (2001-2006) Chief Operating Officer, ASB (1999-2001)Treasurer, HEI (1989-1999)Treasurer, Hawaiian Electric and Assistant Treasurer, HEI (1987-1989)Assistant Corporate Counsel, Hawaiian Electric Company (1984-1987)Matson Inc. (since 2012)Alexander & Baldwin (2004-2012)Board Member, Edison Electric InstituteFormer Board Member, Electric Power Research InstituteBoard Member, Associated Electric & Gas Insurance ServicesBoard Member, Hawaii Business RoundtableBoard Member, Foundation for Asia-Pacific Center for Security StudiesBoard Member, Elemental ExceleratorMember, Federal Electricity Subsector Coordinating CouncilChair, Hawaiian Electric Company (2006-2019)Former Member of the Federal Reserve Bank of San Francisco's Twelfth DistrictCommunity Depository Advisory Council (2011-2014)Chair, Consuelo FoundationTrustee, Punahou SchoolChair, Military Affairs Council, Chamber of Commerce of HawaiiAge:68HEI Director Since: 2001 (except from 2004-2006)Principal Occupation: President and Chief Executive Officer, HEI (since 2006)EXPERTISECLEAN ENERGY, UTILITIES 
INFRASTRUCTURE 
CYBER SECURITY FINANCE AND ACCOUNTING BANKING LEADERSHIP CORPORATE TRANSFORMATION STRATEGIC & OPERATIONAL MANAGEMENT CORPORATE GOVERNANCE 
MERGERS AND ACQUISITIONS Master of Business Administration,Stanford Graduate School of BusinessJuris Doctor, Hastings College of the Law, University of CaliforniaBachelor of Science in AdministrativeSciences, Yale College7CONTINUING DIRECTORSContinuing Class II Directors whose terms expire at the 2022 Annual Meeting of Shareholders
Celeste A. ConnorsIndependent DirectorAudit & Risk Committee MemberMs. Connors has considerable experience in environmental sustainability from serving as Executive Director of Hawaii Green Growth Local2030 hub, which was recognized by the United Nations in 2018 as one of the world's first hubs for sustainability solutions.Her deep understanding of the business, government and non-profit communities in the Hawaiian Islands, from serving as Executive Director of Hawaii Green Growth Local2030 Hub and CEO and Co-Founder of c.dots development, contribute significantly to the Board's understanding of Hawaii's unique business environment. While leading c.dots, Ms. Connors worked with local, state and federal governments, the private sector, and philanthropic organizations to help build smart sustainable communities, including green and resilient infrastructure systems and services.Ms. Connors is an expert on climate risk and has significant government, regulatory and policy development experience from serving as Director for Environment and Climate Change at the National Security Council and National Economic Council in the White House, as well as a Foreign Service Officer with the U.S. Department of State. She has advised the President, Vice President, Cabinet members and other government leaders on environment and sustainable development policy.Ms. Connors has a proven track record of working to achieve Hawaii's energy and sustainability goals, which will add significant value to HEI's efforts to accelerate a sustainable future for Hawaii.Practitioner in Residence (Energy, Resources and Environment Program), Johns HopkinsUniversity School of Advanced International Studies (SAIS) (since 2012)Chief Executive Officer and Co-Founder, c.dots development (builds partnerships to deliver sustainable and resilient infrastructure in local communities) (since 2012)Director (Environment and Climate Change), National Security Council and National Economic Council in the White House (2008-2012)Foreign Service Officer, U.S. Department of State (2000-2012)Foreign Affairs Advisor (Office of the Mayor), City of New York (1999-2000)Age:44Independent Director Since:2019Principal Occupation: Executive Director, Hawaii Green Growth Local2030 Hub (public private partnership focused on identifying sustainable growth priorities within an island context) (since 2015)EXPERTISEENERGY, UTILITIES COMMUNITY RELATIONS GOVERNMENT AND REGULATION LEADERSHIP 
ENTREPRENEURSHIPMaster of Science (MSc), Development Studies, University of London, School of Oriental and African Studies (SOAS)Bachelor of Arts, International Relations, Tufts University8CONTINUING DIRECTORS
Admiral Thomas B.Fargo, USN(Retired)Independent DirectorExecutive Committee MemberCompensation Committee ChairNominating and Corporate GovernanceCommittee MemberIn addition to extensive leadership expertise, Admiral Fargo brings to the Board deep knowledge of the U.S. military, a major customer of HEI's electric utility subsidiary and a key driver of Hawaii's economy. Admiral Fargo served as Commander of the U.S. Pacific Command, and in that post, he was responsible for the security of nearly 52% of the world's surface.He has top level management, strategic planning, and financial and non-financial risk assessment skills developed over 40 years of leading nine diverse organizations ranging in size from 130 to 300,000 people and managing budgets up to $8 billion.He has extensive corporate governance experience including audit, compensation and governance committees, from service on several private and public company boards, including as chairman of Huntington Ingalls Industries.Owner, Fargo Associates LLC (since 2005) (defense and homeland/national security consultancy)Commander of the U.S. Pacific Command (retired)The Greenbrier Companies (since 2015) (rail manufacturing & licensing services)Huntington Ingalls Industries (military shipbuilder); Chairman (2011-April 2020)Matson Inc. (since 2012) (transportation & logistics)Northrop Grumman Corporation (2008-2011)Hawaiian Holdings, Inc. (2005-2008) (Hawaiian Airlines holding company)Alexander & Baldwin (2010-2011)Chairman, United Services Automotive AssociationAdvisory Board Member, National Bureau of Asian ResearchDirector, AtHoc (until 2016)Director, GTA Teleguam (until 2017)Senior Advisor, SKAI Ventures (2005-2019)Age:71Independent Director Since:2005Principal Occupation:Chairman,Huntington Ingalls Industries (militaryshipbuilder) (NYSE: HII)EXPERTISE
CRITICAL CUSTOMERS RISK MANAGEMENTCORPORATE GOVERNANCE LEADERSHIP STRATEGIC PLANNING FINANCE AND ACCOUNTING Bachelor of Science, United States Naval AcademyExecutive and business training —Harvard University; Stanford University9CONTINUING DIRECTORS
Mary G. PowellIndependent DirectorCompensation Committee MemberMs. Powell has significant experience in utilities and renewable energy, having served as President and CEO of Green Mountain Power since 2008. Under her leadership, the company became the world's first utility to become a Certified B Corporation (a business that balances purpose and profit). Ms. Powell led an ambitious energy vision to dramatically ramp up local renewable resources in Vermont.Ms. Powell has relevant public board experience, serving as a director at Sunrun Inc., where she is a member of the compensation committee. Ms. Powell's track record of leadership and innovation has received national acclaim; she was named as one of Fast Company's "100 Most Creative People in Business" in 2016 and as one of CEO Connection's "2017 Most Influential Women of the Mid-Market," among other recognitions. Most recently, Ms. Powell was named Utility Dive's 2019 Executive of the Year, recognizing her leadership of Vermont's investor-owned utility to prioritize and deliver on customer-choice distributed energy solutions.Vice President (Human Resources and Organizational Development), then Vice President (Administration), then Senior Vice President (Customer and Organizational Development), then Senior Vice President and Chief Operating Officer, Green Mountain Power (1998-2008)President, HR Works (total solutions provider of human resource management and benefits administration services) (1997-1998)VP Human Resources, VP Retail Banking and SVP of Retail Banking, Key Bank of Vermont (1992-1997)Sunrun Inc. (Since Feb 2018), Compensation Committee and Audit Committee MemberVice Chair, Vermont Chamber of Commerce (2010-2012)Chair, Vermont Business Roundtable (2012-2014)Director, American Savings Bank (HEI Subsidiary)Director, Vermont Electric Power Company (VELCO) (2008-2019)Director, Enegir (largest natural gas company in Quebec, Canada) (since November 2019)Age:59Independent Director Since:2019Principal Occupation: Former President and Chief Executive Officer, Green Mountain Power, 2008-2019EXPERTISELEADERSHIP STRATEGIC AND OPERATIONAL MANAGEMENTCORPORATE TRANSFORMATION FINANCE AND ACCOUNTING BANKING ENERGY, UTILITIES Associate of Science, Keene State College10CONTINUING DIRECTORS
William JamesScilacci, Jr.Independent DirectorExecutive Committee MemberAudit & Risk Committee ChairMr. Scilacci has significant leadership and operational management experience through serving as CFO of Edison International, a publicly-traded company whose market cap increased substantially during Mr. Scilacci's tenure. He has extensive experience communicating with Wall Street analysts, investors and rating agencies and has demonstrated a strong track record of considerable shareholder value creation.He has extensive utility experience through his over 20 years in financial management with Southern California Edison, the primary energy supply company for Southern California. Southern California Edison is a leader in development and implementation of grid modernization, electrification of transportation, renewable energy and energy efficiency.Mr. Scilacci was the CFO of Edison International's competitive generation subsidiary. During his tenure, Edison International made material investments in wind energy and natural gas-fired generation. He also oversaw the subsidiaries energy trading business.Mr. Scilacci has a keen understanding and extensive knowledge of enterprise risk management from his role as Chief Financial Officer of Edison International. For eight years, Mr. Scilacci managed Edison International's enterprise risk management program identifying, monitoring and forecasting new risks to the company including ESG related risks such as the impacts of climate change.Mr. Scilacci's track record of success is highlighted by his recognition as one of the top CFOs in the electric utility sector by a 2017 Institutional Investor survey of investors and sell-side analysts.Over 30 years of experience, and 25 years in executive leadership, for Edison International companies (including CFO of Edison International, Edison Mission Energy and Southern California Edison)Director, Chairman of the Finance Committee, Member of Audit Committee, Loyola High School of Los AngelesPresident (2019) and Director (2017-2019), Belair Bay ClubAge: 64Independent Director Since:2019Principal Occupation: Former Executive Vice President and Chief Financial Officer, Edison International (2008-2016)EXPERTISEFINANCE AND ACCOUNTING STRATEGIC AND OPERATIONAL MANAGEMENT LEADERSHIP ENERGY, UTILITIES RISK MANAGEMENT Master of Business Administration, Santa Clara UniversityBachelor of Arts, University of California, Los Angeles11CORPORATE GOVERNANCEHEI's governance policies and guidelinesHEI'sHEI’s Board and management review and monitor corporate governance trends and best practices on an ongoing basis, including for purposes of reviewing HEI'smaking necessary and advisable updates to HEI’s corporate governance documents and complying with the corporate governance requirements of the New York Stock Exchange (NYSE), rules and regulations of the Securities and Exchange Commission (SEC) and rules and regulations of the BoardAs a result of this review, the Board is proposing to declassify the Board (Proposal 3) and to adopt a majority voting standard in uncontested director elections (Proposal 4). HEI'sHEI’s corporate governance documents (such as the charters for the Audit & Risk, Compensation, Nominating and Corporate Governance and Executive Committees, Corporate Governance Guidelines and Corporate Code of Conduct, as well as other governance documents) are available on HEI'sHEI’s website atwww.hei.com/govdocs.The Board's leadership structureIn December 2019, the HEI Board approved the appointment of Admiral Fargo to the position of nonexecutive Chairperson effectiveto succeed our currentAdmiral Fargo has served as the nonexecutive Chairperson Jeffrey N. Watanabe.independent.independent under applicable standards for director independence, as discussed below under the heading “Board of Directors—Independent Directors”. Among the many skills and qualifications that Admiral Fargo brings to the Board, the Board considered: (i) his extensive experience in corporate governance from serving on a number of other public company, private company and nonprofit boards; (ii) his reputation fortrack record of effective consensus and relationship building and business and community leadership, including serving as Commander of the U.S. Pacific Command; (iii) his willingness to spend time advising and mentoring members of HEI'sHEI’s senior management; and (iv) his dedication to committing the hard work and time necessary to successfully lead the Board.HEI'sHEI’s Chairperson are to:••Board'sBoard’s committees, either as member or observer;••HEI'sHEI’s primary operating subsidiaries, Hawaiian Electric and ASB, chair joint executive sessions of the independent directors of HEI and these subsidiary boards and attend meetings of subsidiary board committees;••Board'sBoard’s Corporate Governance Guidelines provide that if the Chairperson and CEO positions are held by the same person, or if the Board determines that the Chairperson is not independent, the independent directors should designate an independent director to serve as "Lead“Lead Director."” If a Lead Director is designated, the Lead Director'sDirector’s responsibilities are to: (i) preside at Board and shareholder meetings when the Chairperson is not present; (ii) preside at executive sessions of the independent directors; (iii) facilitate communication between the independent directors and the Chairperson or the Board as a whole; (iv) call meetings of the non-management or independent directors in executive session; (v) participate in approving meeting agendas, schedules and materials for the Board; and (vi) perform other functions described in the Corporate Governance Guidelines or as determined by the Board from time to time.CORPORATE GOVERNANCEin light of HEI'sbased on HEI’s current operations, strategic plans and overall corporate governance structure. Several reasons support this conclusion. First, the Board believes that having an independent Chairperson or Lead Director has been important in establishing atone “tone at the toptop” for both the Board and the Company that encourages constructive expression of views that may differ from those of senior management. Second, the Board believes that the presence of an independent Chairperson or Lead Director demonstrates to the Company'sCompany’s regulators and shareholders that the Board is committed to serving the best interests of the Company and its shareholders and not the best interests of management. Third, the Board recognizes that HEI has an uncommon corporate governance structure in that the boards of its two primary The Board's role in risk oversight reputational sustainability related risks.risks, among others. Developing and implementing strategies to manage thesethe Company’s risks is the responsibility of management, and that responsibility is carried out by assignments of responsibility to various officers and other employees of the Company under the direction of HEI'sHEI’s Chief Financial Officer, who also serves as HEI'sthe HEI Chief Risk Officer. The role of the Board is to oversee the management of these risks.Board'sBoard’s specific risk oversight functions are as follows:•Company'sCompany’s risks can be reported to the Board, along with proposed strategies for mitigating and managing these risks. The structure of the ERM system is decentralized, with separate Chief Risk Officers at each of Hawaiian Electric and ASB in addition to HEI's Chief Risk Officer. TheHEI’s Chief Risk Officer (HEI CRO). The ERM function for “other” operations of HEI, such as Pacific Current, are performed by the HEI CRO or HEI employees under the supervision of the HEI CRO. Hawaiian ElectricElectric’s Chief Financial Officer, who also serves as its Chief Risk Officer, is also responsible for identifying, assessing, managing, monitoring and reporting risks at HEI's other electric utilitythe Utility and its subsidiaries that operate on the neighbor islands of Hawaii, Maui, Molokai and Lanai. Each subsidiary Chief Risk Officer reports directly to the respective subsidiary President and functionally to HEI's Chief Risk Officer,the HEI CRO, who reviews such risks on a consolidated basis. The Board believes that this decentralized risk management structure is appropriate and effective for the Company'sCompany’s diverse operations and holding company structure, because it allows for industry-specific risk identification and management at the subsidiary levels while also ensuring an integrated and consolidated view of risk at the holding company level by HEI's Chief Risk Officer.the HEI CRO. In connection with approving this ERM system, the Board reviewed (and continually assesses) a catalog of risks and management'smanagement’s assessment of those risks. As part of the Board'sBoard’s ongoing risk oversight, HEI's Chief Risk Officerthe HEI CRO is responsible formanagement'smanagement’s assessment of those risks, and any other risk management matters that the Board may request from time to time. The Board and Audit & Risk Committee also receive reports from HEI'sHEI’s internal auditor evaluating the effectiveness of management'smanagement’s implementation of the approved ERM system.•committee'scommittee’s discussion and findings so that the entire Board can consider changes (if any) in the Company'sCompany’s risk profile.•Company'sCompany’s major financial risk exposures and the steps management has taken to monitor and controlmanage such exposures; (ii) overseeing HEI'sHEI’s Code of Conduct compliance program; and13CORPORATE GOVERNANCE•Committee'sCommittee’s review and evaluation of ASB'sASB’s compensation practices for compliance with regulatory guidance on sound incentive compensation plans. The Compensation Committee reports the results of its review and any recommendations to the Board. The results of the review are also communicated to the Audit & Risk Committee through HEI's Chief Risk Officer.the HEI CRO. Both the Audit & Risk and Compensation Committees are composed entirely of independent directors.• HEI'sHEI’s primary operating subsidiaries, Hawaiian Electric and ASB, are responsible for overseeing risks at their respective companies. The Hawaiian Electric Board has assigned responsibility for ongoing oversight of risk management to its Audit & Risk Committee and the ASB Board has assigned such responsibility to its Risk Committee. Under the decentralized ERM structure discussed above, risk management activities at the subsidiary level are reported to these committeesthe respective committee and tosubsidiary board through the subsidiary boards through theapplicable subsidiary Chief Risk Officers.Officer. The HEI Board and/or Audit & Risk Committee may also be invited to participate in risk oversight discussions by these subsidiary boards and/or committees. The information from these subsidiary board and committee sessions are reported, on at least a quarterly basis, to the HEI Board by the applicable subsidiary Chief Risk Officers (or their representatives), who functionally report to HEI's Chief Risk Officerthe HEI CRO on risk management matters. These subsidiary boards are composed primarily of nonemployee directors. The subsidiary audit committees are composed primarily of nonemployee directors who meet the independence requirements for audit committee members of companies listed on the NYSE, and with regard to the ASB Audit Committee, comply with FDIC regulations.• sustainability and risk review. As part of this review, the Board reviews fundamental financial and business strategies and sustainability initiatives and assesses the major risks facing the Company, including sustainability-related risks, and optionsavailable alternatives to mitigate those risks. To facilitate strategic planning through constructive dialogue among management and Board members, members of management who are not directors are invited to participate in the review. Based on the review, the Board and senior management, including the HEI Chief Risk Officer,CRO, identify key issues to be addressed during the course of the next calendar year.Selection of nominees for the Board HEI Board membership, the Committee may consider persons who are serving on its subsidiary boards as well as persons suggested by Board members, management and shareholders or may retain a third-party search firm to help identify qualified candidates. The Committee'sCommittee’s evaluation process does not vary based on whether a candidate is recommended by a shareholder, a Board member, a member of management or through self-nomination.14CORPORATE GOVERNANCEpublicly availablepublicly-available information to assess whether the candidate should be further considered. If so, a committee member or designated representative for the committee will contact the person. If the person is willing to be considered for nomination, the person is asked to provide additional information regarding his or her background, his or hercandidate'scandidate’s qualifications and attributes.•candidate'scandidate’s qualifications, consisting of his/her knowledge (including relevant industry knowledge), understanding of the Company'sCompany’s businesses and the environment within which the Company operates, experience, skills, substantive areas of expertise, financial literacy, innovative thinking, business judgment, achievements and other factors required to be considered under applicable laws, rules or regulations;•candidate'scandidate’s attributes, comprising independence, personal and professional integrity, character, reputation, ability to represent the interests of all shareholders, time availability in light of other commitments, dedication, absence of conflicts of interest, diversity, appreciation of multiple cultures, ••••Diversity in identifying nominees for the BoardBoard'sBoard’s fiduciary responsibilities. The Board also believes that having a board composed of members who can collectively contribute a range of perspectives, including perspectives that may arise from a person'sperson’s race, ethnicity, gender, or ethnicity,age, geographic location and cultural background, improves the quality of the Board'sBoard’s deliberations and decisions because it enables the Board to view issues from a variety of perspectives and, thus, more thoroughly and completely. As the Company'sCompany’s operations and strategic plans and the Board'sBoard’s composition may evolve over time, the Nominating and Corporate Governance Committee is charged with identifying and assessing the appropriate mix of knowledge areas, qualifications and personal attributes contributed by Board members that will bring the most strategic and decision-making advantage to HEI. almost exclusively in the State of Hawaii,Hawai‘i, it is advantageousimportant that our Board be composed largely ofincludes members who livecurrently or in the past have lived and workworked in the state and have knowledge of, and experience with, our customer base and the unique cultural, political and regulatory environment. As a result,It is also important that Board members understand and reflect the Board benefits from thecultural, racial and gender diversity that exists in this state.Hawai‘i. If the shareholders vote to elect the fourthree director nominees proposed by the Board for election at the 20202021 Annual Meeting, the resulting composition of the Board would be as follows: eight directors (or 80%) who are Caucasian, one15CORPORATE GOVERNANCEnativeNative Hawaiian and five directors (or 50%) of the ten directors would be female.Hawaii'sHawaii’s geographic isolation from the continental United States and the comparatively small number of publicly traded companies, banks and regulated utilities based in Hawaii, the Board also benefits from having among its members directors who have gained business experience at companies located in other states; those Board members contribute valuable information about experiences they have had working at or serving on the boards of other public companies and companies in similar industries, which also contributes to the breadth of perspectives on the Board.Director resignation policiesdirector'sdirector’s principal employment and at the end of the term during which the director reaches age 75. In addition to the evaluation process, discussed under "Corporate“Corporate Governance — Selection of nominees for the Board,"” requiring a director to submit a letter of resignation in these two circumstances ensures that the Board examines whether a director'sdirector’s skills, expertise and attributes continue to provide value over time.current plurality vote standard for contested elections in which the number of nominees or proposed nominees exceeds the number of directors to be elected (described under "Voting Procedures")Article Fifth of the Company’s Amended and Restated Articles of Incorporation), but does not receive the support of the majority of votes cast. In such an event, the Board will evaluate the reasons for the voting result and determine how best to address the shareholder concerns underlying that result. In some cases, the Board may decide that the best approach is to accept the director's director’s If Proposal 4 is approved by shareholders, the plurality vote standard will change to a majority voting standarduncontested director elections, and our director resignation policy will remain in place for directors who fail to receive the support of a majority of the votes cast.management succession planningThe Board's role in management succession planningCompany'sCompany’s talent pool to enable the Board to select successors for the senior executive positions when appropriate.Shareholder communication with the directors16CORPORATE GOVERNANCEHEI Audit & Risk Committee, which is available for review atwww.hei.com/govdocs, sets forth procedures for submitting complaints or concerns regarding financial statement disclosures, accounting, internal accounting controls or auditing matters on a confidential, anonymous basis.17 Independent directorsHEI'sHEI’s Corporate Governance Guidelines, a majority of Board members must qualify as independent under the listing standards of the NYSE and any additional requirements as determined by the Board from time to time.•Company'sCompany’s external or internal auditor within the last three fiscal years or when the Company has made or received payments for goods or services to entities with which the director or an immediate family member of the director has specified affiliations and the aggregate amount of such payments in any year within the last three fiscal years exceeds the greater of $1 million or 2% of such entity'sentity’s consolidated gross revenues for the fiscal year.•HEI'sHEI’s website atwww.hei.com/govdocs. The HEI Categorical Standards specify circumstances under which a director may not be considered independent. In addition to the circumstances that would preclude independence under the NYSE listing standards, the HEI Categorical Standards provide that a director is not independent if HEI and its subsidiaries have made charitable contributions to a nonprofit organization for which the director serves as an executive officer and the aggregate amount of such contributions in any single fiscal year of the nonprofit organization within the last three fiscal years exceeds the greater of $1 million or 2% of such organization'sorganization’s consolidated gross revenues for the fiscal year.Scilacci and Watanabe (who is retiring as of the 2020 Annual Meeting)Scilacci and Mss. Connors, Fowler, Powell and Zlotnicka) are independent. The remaining and Mr. Watanabe, the Board considered amounts paid in the last three fiscal years to purchase electricity from HEI subsidiary Hawaiian Electric (the sole public utility providing electricity to the island of Oahu)O‘ahu) by the entity employing Mr. Kane and where a family member of Mr. Watanabe is an executive officer.Kane. None of the amounts paid by the entities for electricity (excluding pass-through charges for fuel, purchased power and HawaiiHawai‘i state revenue taxes) exceeded the thresholds in the NYSE listing standards or HEI Categorical Standards that would automatically result in a director not being independent. Because Hawaiian Electric is the sole source of electric power on the island of OahuO‘ahu the rates Hawaiian Electric charges for electricity are fixed by state regulatory authority, and purchasers of electricity from these public utilities have neither a choice as to supplier nor the ability to negotiate rates or other terms, the Board determined that these relationships do not impair the independence of these directors.Withthis director. also considered charitable contributions in the last three fiscal years from HEI and its subsidiaries to the nonprofit organization where he serves as an executive officer. None of the contributions exceeded the threshold in the HEI Categorical Standards that would automatically result in Mr. Kane not being independent. In determining that these donations did not impair the independence of Mr. Kane, the Board also considered the fact that Company policy requires that charitable contributions from HEI or its subsidiaries to entities where an HEI director serves as an executive officer, and where the director has a direct or indirect material interest, and the aggregate amount donated by HEI and its subsidiaries to such organization would exceed $120,000 in any single fiscal year, be preapproved by the Nominating and Corporate Governance Committee.BOARD OF DIRECTORSKane and Watanabe,Kane the Board considered other director or officer positions held by those directors at entities for which an HEI executive officer serves as a director or trustee and determined that none of these relationships affected the independence of these directors. None of these relationships resulted in a compensation committee interlock or would automatically preclude independence under the NYSE listing standards or HEI Categorical Standards. Board meetings in 20192019,2020, there were seveneight regular meetings and one special meeting of the Board. All incumbent directors who served on the Board in 20192020 attended at least 75%93% of theExecutive sessions of the Board2019,2020, these sessions were chaired by Mr. Watanabe who served until May 5, 2020, and thereafter by Admiral Fargo, in each case while servingBoard attendance at annual meetingsHEI'sHEI’s incumbent directors who served on the Board in 20192020 remotely attended the 2019virtual 2020 Annual Meeting of Shareholders. HEI encourages all directors to attend each year'syear’s Annual Meeting.Board evaluations19 Board committee composition and meetings2019. 
= Chair = Member1 Ms. Lau is an employee director. All other directors have been determined to be independent. See “Board of Directors - Independent Directors” above. Name Audit &
Risk Compensation Executive Nominating
and
Corporate
Governance 
6 4 — 10 
1Ms. Lau is an employee director. All other directors have been determined to be independent. See "Board of Directors — Independent Directors" above.2Admiral Fargo will succeed Mr. Watanabe as Chairperson of the Executive Committee as of May 5, 2020.Functions of the Board's standing committeesHEI'sHEI’s standing committees are described below. Each committee operates and acts under written charters adopted and approved by the Board and available for review on HEI'sHEI’s website at www.hei.com/govdocs. Each of the Audit & Risk, Compensation and Nominating and Corporate Governance Committees may form subcommittees of its members and delegate authority to its subcommittees.HEI'sHEI’s financial reporting processes and internal controls; (ii) the performance of HEI'sHEI’s internal auditor; (iii) risk assessment and risk management policies set by management; and (iv) the Corporate Code of Conduct compliance program for HEI and its subsidiaries. In addition, this committee is directly responsible for the appointment, compensation and oversight of the independent registered public accounting firm that audits HEI'sHEI’s consolidated financial statements. The Audit & Risk Committee operates and acts under a written charter, which was adopted and approved by the Board and is available for review at www.hei.com/govdocs. The Audit & Risk Committee also maintains procedures for receiving and reviewing"Audit“Audit & Risk Committee Report"Report” below for additional information about the Audit & Risk Committee. Messrs. Dahl, Russell and Scilacci have been determined by the Board to be “audit committee financial experts”.COMMITTEES OF THE BOARDCompany'sCompany’s compensation policies and practices, if any, may have a material adverse effect on the Company and recommending changes to address any such risks; (iii) evaluating the compliance of ASB'sASB’s incentive compensation practices under the principles for sound incentive compensation plans for banking organizations; and (iv) assessing the independence of any compensation consultant involved in determining or recommending "Compensation“Compensation Discussion and Analysis —- How We Make Compensation Decisions"Decisions” and "Compensation“Compensation Committee Interlocks and Insider Participation"Participation” below for additional information about the Compensation Committee."nonemployee directors"“nonemployee directors” as defined in Rule 16b-3 promulgated under the Exchange Act. An independent member of the board of directors of each of Hawaiian Electric and ASB attends meetings of the Compensation Committee as a nonvoting representative of such director'sdirector’s subsidiary board.HEI'sHEI’s subsidiaries; (ii) recommending to the Board the director nominees to be submitted to shareholders for election at the next Annual Meeting; (iii) assessing the independence of directors and nominees; (iv) recommending the slate of executive officers to be appointed by the Board and subsidiary boards; (v) advising the Board with respect to matters of Board and committee composition and procedures; (vi) overseeing the annual evaluation of the Board, its committees and director nominees; (vii) overseeing human capital management, including talent development and succession planning for senior executive positions; (viii) ensuring all Environmental, Social and (viii)Governance (ESG) risks and opportunities have appropriate Board oversight, and (ix) making recommendations to the Board and the boards of HEI'sHEI’s subsidiaries regarding corporate governance and board succession planning matters. The Nominating and Corporate Governance Committee operates and acts under a written charter, which was adopted and approved by the Board and is available for review at www.hei.com/govdocs. See "Corporate Governance"“Corporate Governance” above for additional information regarding the activities of the Nominating and Corporate Governance Committee.21 An independent member of the board of directors of Hawaiian Electric attends meetings of the Nominating and Corporate Governance Committee as a nonvoting representative of such director’s subsidiary board of directors. How director compensation is determinedwithoperating in a unique blend of highly regulated industries. Nonemployee director compensation is composed of a mix of cash and HEIshares of HEI’s common stock (HEI Common StockStock) to align the interests of directors with those of HEI shareholders. Only nonemployee directors are compensated for their service as directors. Ms. Lau, the only employee director of HEI, does not receive separate or additional compensation for serving as a director. Although Ms. Lau is a member of the HEI Board, neither she nor any other executive officer participates in the determination of nonemployee director compensation.HEI Compensation Committee asked its independentHEI'sHEI’s nonemployee director compensation practices. FW Cook assessed the structure of HEI'sHEI’s nonemployee director compensation program and its value compared to competitive market practices of utility peer companies, similar to the assessments used in its executive compensation review. The 2018 analysis took into consideration the duties and scope of responsibilities of directors. The HEI Compensation Committee reviewed the analysis in determining its recommendations concerning the appropriate nonemployee director compensation, including cash retainers, stock awards and meeting fees for HEI directors.recommended that the Board approve thedid not recommend any changes to director compensation program reflected in the FW Cook analysis and, at its October 31, 2018 meeting, the Board approved an increase in the annual cash retainer for the chairpersons2020.HEI's Audit & Risk Committee, Compensation Committee and Nominating and Corporate Governance Committee to $20,000 and an increase in the annual cash retainer for the members of those committees to $10,000 in recognition of the increased workload of such committees. These increases were effective January 1, 2019.director compensationComponents of director compensation2019 HEI2020 Board service and for their 20192020 service on HEI and subsidiary board committees. No separate fees are paid to HEI directors for service on subsidiary company boards, except to the extent that they serve on any committee of a subsidiary board. Cash retainers were paid in quarterly installments. 2019 Annual Retainer DirectorNonexecutive Chairperson of the Board (effective May 5, 2020) 75,000 10,000 * No additional retainer is paid for service on the HEI Executive Committee. *No additional retainer is paid for service on the HEI Executive Committee.DIRECTOR COMPENSATION 28, 2019,30, 2020, each HEI nonemployee director received shares of HEI Common Stock with a value equal to $100,000 as an annual grant under HEI'sHEI’s 2011 Nonemployee Director Stock Plan (2011 Director Plan), which was approved by HEI shareholders on May 10, 2011 for the purpose of further aligning directors'directors’ and shareholders' interests, amended on May 7, 2019 to extend the term and increase the number of shares available for issuance, further amended and restated effective October 31, 2019.shareholders’ interests. The number of shares issued to each HEI nonemployee director was determined based on the closing sales price of HEI Common Stock on the NYSE on June 28, 2019.30, 2020. Stock grants to nonemployee directors under the 2011 Director Plan are made annually on the last business day in June and vest immediately. HEI considers the 2011 Director Plan to be an important vehicle for the appropriate compensation of its nonemployee directors.Compensation.compensation. At its October 29, 2018 meeting, the Compensation Committee recommended, and the Board approved, a maximum annual compensation limit of $600,000 for any nonemployee director, to includewhich includes the aggregate grant date fair value of all awards granted to any nonemployee director during any single calendar year plus the aggregate amount of all cash earned and paid or payable to such director for services rendered for the same year.HEI'sHEI’s Nonemployee Director Retirement Plan, which provides retirement benefits to nonemployee directors, was terminated in 1996. Directors who were retired from their primary occupation at that time remained eligible to receive benefits under the plan based on years of service as a director at the time of the plan'splan’s termination. All benefits payable under the plan cease upon the death of the nonemployee director."Compensation“Compensation Discussion and Analysis — Benefits — Deferred Compensation Plans"Plans” below. Under the plan, deferred amounts are credited with gains/losses of deemed investments chosen by the participant from a list of publicly traded mutual funds and other investment offerings. Earnings are not above-market or preferential. Participants may elect the timing upon which distributions are to begin following separation from service (including retirement) and may choose to receive such distributions in a lump sum or in installments over a period of up to 15 years. Lump sum benefits are payable in the event of disability or death. Mr. TaketaNo nonemployee director participated in this plan in 2019, but no other nonemployee director did so.2020. Nonemployee directors are also eligible to participate in the prior HEI Nonemployee Directors'Directors’ Deferred Compensation Plan, as amended January 1, 2009, although no nonemployee director deferred compensation under such plan in 2019.2020.2019.2020.23Table of ContentsTABLE OF CONTENTSDIRECTOR COMPENSATION 2019 2019.2020. 1 Represents cash retainers for Board and committee service (as detailed below). 2 For all HEI nonemployee directors other than Ms. Zlotnicka, this amount represents an HEI stock award in the value of $100,000, as described above under “Stock Awards.” Due to Ms. Zlotnicka’s appointment on February 12, 2020, she also received a new director stock grant pro-rated to cover the period from the date of her appointment to the 2020 annual meeting. 3 Includes fees Adm. Fargo earned as Chairperson of the Board beginning on May 5, 2020. Adm. Fargo’s responsibilities as HEI Charperson are described above under “Corporate Governance —The Board’s leadership structure.” 4 Mr. Watanabe’s fees were for service as director and Chairperson of the Board from January 1 - May 5, 2020. He also served on the HEI Executive Committee during the timeframe noted. Mr. Watanabe’s responsibilities as HEI Chairperson are described above under “Corporate Governance — The Board’s leadership structure.” Name* Fees Earned
or Paid in Cash
($)1 Stock Awards
($)2 Changes in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) All Other
Compensation
($) Total
($) Celeste A. Connors 48,832 100,000 — — 148,832 Richard J. Dahl 94,128 100,000 — — 194,128 Thomas B. Fargo 111,000 100,000 — — 211,000 Peggy Y. Fowler 109,726 100,000 — — 209,726 Micah A. Kane3 39,722 76,561 — — 116,283 Mary G. Powell 48,832 100,000 — — 148,832 Keith P. Russell 112,500 100,000 — — 212,500 William J. Scilacci, Jr. 57,870 100,000 — — 157,870 James K. Scott 49,660 100,000 — — 149,660 Kelvin H. Taketa4 30,828 — — — 30,828 Barry K. Taniguchi 76,484 100,000 — — 176,484 Jeffrey N. Watanabe, Chairperson5 331,978 100,000 — — 431,978 1Represents cash retainers for board and committee service (as detailed below).2For all HEI nonemployee directors, this amount represents an HEI stock award in the value of $100,000, as described above under "Stock awards".3Mr. Kane was appointed to the HEI Board effective August 1, 2019 and his stock award was pro-rated.4In 2019, Mr. Taketa elected to defer $24,662 of his fees under the 2011 Deferred Compensation Plan. Mr. Taketa did not have above-market or preferential earnings on nonqualified deferred compensation in 2019. Mr. Taketa did not stand for election at the 2019 Annual meeting and therefore his term ended on May 7, 2019.5Mr. Watanabe's fees were for service as director and Chairperson of the HEI Board and as a member of the Compensation Committee. He also served on the HEI Executive Committee and the ASB Board and Executive Committee from January 1 — May 6, 2019, as well as the Hawaiian Electric Board and ASB Risk Committee from January 1 — May 6, 2019. Mr. Watanabe's HEI Chairperson responsibilities are described above under "Corporate Governance — The Board's leadership structure."2019. 1 Represents extra meeting fees earned for attending Board and committee meetings in excess of the number of meetings specified in “Director Compensation — Components of director compensation — Extra meeting fees.” 2 Adm. Fargo’s fees include fees earned as Chairperson beginning on May 5, 2020. 3 Mr. Watanabe’s fees include fees earned as Chairperson of the Board from January 1, 2020 - May 5, 2020. Name* HEI
Board
Retainer
($) HEI
Committee
Retainer
($) HEI
Chairman
Retainer
($) HEI
Extra
Meeting
Fees1
($) HECO
Audit &
Risk
Committee
Retainer
($) HECO
Extra
Meeting
Fees
($) ASB
Audit
Committee
Retainer
($) ASB
Risk
Committee
Retainer
($) Total
($) Celeste A. Connors 48,832 — — — — — — — 48,832 Richard J. Dahl 75,000 16,511 — — 2,617 — — — 94,128 Thomas B. Fargo 75,000 30,000 — 6,000 — — — — 111,000 Peggy Y. Fowler 75,000 28,726 — 6,000 — — — — 109,726 Micah A. Kane2 31,182 4,158 — — 4382 — — — 39,722 Mary G. Powell 48,832 — — — — — — — 48,832 Keith P. Russell 75,000 10,000 — — — — 7,500 20,000 112,500 William J. Scilacci, Jr. 48,832 9,038 — — — — — — 57,870 James K. Scott 43,818 5,842 — — — — — — 49,660 Kelvin H. Taketa 26,168 4,660 — — — — — — 30,828 Barry K. Taniguchi 56,250 15,000 — — — — 5,234 — 76,484 Jeffrey N. Watanabe, HEI Chairperson 75,000 3,489 250,000 — — — — 3,489 331,978 1Represents extra meeting fees earned for attending Board and committee meetings in excess of the number of meetings specified in "Director Compensation — Components of director compensation — Extra meeting fees."2Mr. Kane was a director of Hawaiian Electric, a subsidiary of HEI, for part of 2019 and received $26,291 as Hawaiian Electric Board Retainer.24Table of ContentsTABLE OF CONTENTSDIRECTOR COMPENSATION 2xthe number of shares that are equal in value to two times the Chairperson’s annual cash retainer; otherretainer5xthe number of shares that are equal in value to five times the director’s annual cash retainer. retainer2019,2021, each director who had reached his or her compliance date had achieved his or her stock ownership target.25PROPOSAL NO. 2: ADVISORY VOTE TO APPROVE HEI'S EXECUTIVE COMPENSATION "say-on-pay"“say-on-pay” proposal, gives shareholders the opportunity to express their views on the overall compensation of our named executive officers and the policies and practices described in this Proxy Statement.HEI'sHEI’s executive compensation program is effective in achieving our goals of promoting long-term value for shareholders and attracting, motivating and retaining the talent necessary to create such value. Accordingly, the Board recommends that you vote FOR the following resolution:ana non-binding advisory vote, the compensation of HEI'sHEI’s named executive officers as disclosed in the Compensation Discussion and Analysis and Executive Compensation Tables sections of the Proxy Statement for the 20202021 Annual Meeting of Shareholders.Company'sCompany’s executive compensation policies and practices and the compensation of our named executive officers.HEI'sHEI’s executive compensation. üFORThe Board recommends that you voteFOR the advisory resolution approving the compensation of HEI's Named Executive Officers as disclosed in this Proxy Statement.20192020 named executive officers. For 2019,2020, we have fourfive named executive officers,officers: our Chief Executive Officer, our Chief Financial Officer, our General Counsel and our two other executive officers during 2019,2020, the chief executives at each of Hawaiian Electric (our electric utility subsidiary) and ASB (our bank subsidiary): NameTitleEntity Alan M. Oshima* Bank subsidiary *Mr. Oshima completed the transition from President and CEO to Senior Executive Advisor* Mr. Seu assumed the role of President and CEO of Hawaiian Electric effective February 15, 2020. For more information please see the applicable Forms 8-K filed with the SEC on December 10, 2019 and February 13, 2020. this transition please see the applicable Forms 8-K filed with the SEC on December 10, 2019 and February 13, 2020.For more information regarding HEI'sHEI’s executive officers, see the paragraph entitled "Information“Information About Our Executive Officers (HEI)"” in Part I of HEI'sHEI’s annual report on Form 10-K for the fiscal year ending December 31, 2019.2019 Executive summaryHEI'sHEI’s executive compensation program and making pay decisions, the Compensation Committee follows these guiding principles:••executives'executives’ interests with those of our shareholders and other stakeholders;••elements —elements: base salary, performance-based annual incentives, performance-based long-term incentives earned over three years, and time-based restricted stock units (RSUs) that vest in equal annual installments over four years.•three of our four named executive officers and approximately half of the target compensation opportunity for the remaining named executive officer,being linked to the Company'sCompany’s financial, market and operating results.•Table of ContentsTABLE OF CONTENTSCOMPENSATION DISCUSSION AND ANALYSIS don'tdon’t do: What We Do ü
ü
ü
ü
ü
ü
ü
ü
"double-trigger"“double-trigger” change-in-control agreements
ü
ü
ü
ü
What We Don't Do 
No employment contracts
20192020 Annual Meeting of Shareholders, approximately 90%94% of votes cast approved our executive compensation program through the advisory say-on-pay vote. Over the past year, we reached out to or engaged with shareholders representing more than 50% of our institutional shareholder base. These meetings covered our financial and operational performance, our progress toward renewable energy goals, our ESG reporting and Board oversight of ESG matters, executive compensation and Board and management succession planning, and involved our independent directors as appropriate.utilityUtility executive compensation and achievement of Hawaii'sHawaii’s ambitious renewable energy goals. As a result, fortwenty percent20% of HEI and Hawaiian Electric executives'executives’ performance-based pay opportunity is based on achievement of the following: MinimumTargetMaximum Hawaii32% RPS40% RPS50% RPS HawaiiHawai‘i RPS law requires Hawaiian Electric to achieve 40% RPS by 2030. By incentivizing executives to achieve 40%-50% - 50% RPS by 2022, this compensation metric incentivizes executives to continue their hard work to achieve higher levels of RPS ahead of state requirements.28Table of ContentsTABLE OF CONTENTSCOMPENSATION DISCUSSION AND ANALYSIS Our roles in determining compensation are well-defined•••Company'sCompany’s long-term strategy and nearer-term goals to effect such strategy in setting performance metrics and goals••••••CEO'sCEO’s performance, consider Compensation Committee recommendations concerning her pay and determine her compensation. The Board and subsidiary boards alsoThean HEI director,a member of the Board, assesses and reports on the performance of the other named executive officers and makes recommendations to the Compensation Committee with respect to their levels of compensation and mix of pay elements. She also participates in Board deliberations regarding the Compensation Committee'sCommittee’s recommendations on the other named executive officers. She does not participate in the deliberations of the Compensation Committee to recommend, or of the Board to determine, her own compensation.29Table of ContentsTABLE OF CONTENTSCOMPENSATION DISCUSSION AND ANALYSIS Committee'sCommittee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (FW Cook), is retained by, and reports directly to, the Compensation Committee. FW Cook provides the Compensation Committee with independent expertise on market practices and developments in executive compensation, compensation program design, peer group composition and competitive pay levels, and provides related research, data and analyses. FW Cook also advises the Compensation Committee regarding analyses and proposals presented by management related to executive compensation. A representative of FW Cook generally attends Compensation Committee meetings, participates in Compensation Committee executive sessions and communicates directly with the Compensation Committee.2019,2021, as in prior years, the Compensation Committee evaluated FW Cook'sCook’s independence, taking into account all factors it considered relevant, including the factors specified in the NYSE listing standards and the absence of other relationships between FW Cook and the Company, its directors or executive officers. Based on such factors and FW Cook'sCook’s independence policy, which was shared with the Compensation Committee, the Compensation Committee concluded that FW Cook is independent and that the work of FW Cook has not raised any conflict of interest.Compensation benchmarkingofficers'officers’ pay components and target compensation opportunity (composed of base salary, performance-based annual incentive, performance-based long-term incentive and time-vested RSUs). The Compensation Committee may decide that an executive'sexecutive’s compensation opportunity should be higher or lower in relation to peers based on considerations including internal equity, the executive'sexecutive’s level of responsibility, experience, expertise and past performance, as well as retention and succession objectives.20192020 compensation for all named executive officers. Data from the Willis Towers Watson Energy Services Survey was also used in establishing 20192020 compensation. The data was regressed based on HEI'sHEI’s and Hawaiian Electric'sElectric’s revenues for appropriate size comparisons. 20192020 compensation, the Compensation Committee determined,20182019 compensation peer groups remained appropriate and that no changes were necessary for 2019.2020. The selection criteria and resulting 20192020 peer groups are set forth below.30COMPENSATION DISCUSSION AND ANALYSIS 20192020 Peer Group (applies toHazelton)Murao) 20192020 PeerOshima)Bank Subsidiary 2019 Peer Group(applies to Mr. Wacker) Seu) Selection Criteria• HEI's• •Electric and multi-utility companies from HEI's peer group•Revenue balanced in a range of approximately 0.5x to 2x Hawaiian Electric's revenue•Market cap and location as secondary considerations••ASB's ASB’s•ASB's ASB’s•
3 of the following:•• Hawaii• Peer Group for 2019 Compensation
NiSource Inc.CorpCorp.SCANA Corp.Vectren Corp.ALLETTE, Inc.Alliant Energy Corp.Avista Corp.Black Hills Corp.IDACORP, Inc.MDU Resources Group Inc.NiSource Inc.Northwestern Corp.OGE Energy Corp.Pinnacle West Capital Corp.PNM Resources Inc.Portland General ElectricSCANA Corp.Vectren Corp.Ameris BancorpBerkshire Hills BancorpCentral Pacific FinancialCommunity Bank SystemCVB FinancialFirst BuseyFirst Financial BankHomeStreetIndependent BankOpus BankPark NationalRepublic BancorpRenasant CorpSandy Spring BancorpSeacoast BankingSouth StateTompkins FinancialTriCo BancsharesUnited FinancialWestamerica Bancorp "What“What we pay and why: Compensation elements and 20192020 pay decisions — Long-termLong-TermLong-Term Incentive Plan Relative TSR MetricEEI'sEEI’s members serve virtually all of the ultimate customers in the shareholder-owned segment of the industry. The following companies comprise the 20192020 EEI Index used for HEI'sHEI’s Relative TSR metric:
PG&E Corp. 1After peer data was established for 2020 compensation, El Paso Electric Co. was acquired and is no longer publicly traded. 31COMPENSATION DISCUSSION AND ANALYSIS20192020 pay decisionsEach element of compensation supports important objectives SummaryObjectives Benefits retirement savingsdefined contribution plan (for HEI/utilityUtility employees) and defined contribution plan (for bankBank employees); deferred compensation plans; double-trigger change-in-control agreements; minimal perquisites; and an executive death benefit plan (frozen since 2009). Changes to elements in 2019officer'sofficer’s target compensation opportunity, which is composed of: base salary, target annual cash and target long-term equity opportunities. Target annual cash and long-term equity opportunities are established as a percentage of the named executive officer’s base salary. The Compensation Committee made the changes to compensation for 20192020 shown in the table below. 1 Base salary increases for 2019 for Ms. Lau and Messrs. Hazelton, Murao and Seu became effective March 1, 2019. Base salary increases for 2020 for Ms. Lau and Mr. Hazelton became effective March 1, 2020. Base salaries that became effective March 1, 2019 and 2020 are prorated amounts to include two months of 2018 and 2019 base salary, respectively, and ten months of 2019 and 2020 base salary, respectively. Mr. Seu’s 2020 base salary increase became effective upon his promotion to President and Chief Executive Officer of the Utility on February 15, 2020. Accordingly his 2020 base salary is prorated to include one month and a half of 2019 and ten and one-half months of 2020. 2 The threshold and maximum opportunities are 0.5 times target and 2 times target, respectively. 3 Includes special grant of 25% of base salary in 2020 in connection with Mr. Seu’s promotion to President and CEO of Hawaiian Electric. Base Salary1
($) Performance-based
Annual Incentive
(Target Opportunity2
as % of
Base Salary) Performance-based
Long-term Incentive
(Target Opportunity2
as % of
Base Salary) RSUs
(Value as % of
Base Salary) Name 2018 2019 2018 2019 2018-20 2019-21 2018 2019 921,800 926,300 100 same 160 175 75 same 512,500 527,917 60 same 80 same 50 same 686,750 707,350 75 same 95 same 65 same 679,800 700,200 80 same 80 same 20 same 1.For all named executive officers other than Mr. Wacker, base salary increases for 2018 became effective as of March 1, 2018 and base salary increases for 2019 became effective as of March 1, 2019. Accordingly, unless otherwise indicated, amounts referenced as 2018 and 2019 base salary are prorated amounts to include two months of 2017 and 2018 base salary, respectively, and ten months of 2018 and 2019 base salary, respectively.2.The threshold and maximum opportunities are 0.5 times target and 2 times target, respectively.COMPENSATION DISCUSSION AND ANALYSISBase salaryexecutive'sexecutive’s level of responsibility, experience, expertise and performance, as well as retention and succession considerations. The Compensation Committee considers the competitive median as a reference point in setting base salaries, but may determine that the foregoing factors justify a higher or lower salary.2019,2020, in order to recognize their performance and maintain the market competitiveness of their pay, Messrs.Ms. LauOshimareceived a base salary increase of 3.0% and Mr. Wacker received a base salary increase of 3.0%2.5%. The Compensation Committee decided not to increase Ms. Lau'sMr. Murao received a base salary increase of 13% in 2019, choosing insteadrecognition of Mr. Murao’s promotion to Executive Vice President, General Counsel and Chief Administrative Officer of the Company. Additionally, Mr. Seu received a base salary increase her long-term performance-based opportunityof 58% in recognition of Mr. Seu’s promotion to President and Chief Executive Officer of Hawaiian Electric. The foregoing base salary increases were calculated as of March 1 of each year for the 2019-2021 LTIP. The resulting 2019 base salaries are shown in the table above.Ms. Lau and Messrs Hazelton, Murao and Seu, and as of January 1 for Mr. Wacker.Annual incentiveHEI'sHEI’s Executive Incentive Compensation Plan (EICP) based on the achievement of performance goals for the year. Each year, the Compensation Committee determines the target annual incentive opportunity, performance metrics and the applicable goals for each executive."Base“Base salary."20192020 target annual incentive opportunities for the named executive officers are shown in the table above. For 2019,2020, the Compensation Committee recommended, and20192020 target opportunity (as a percentage of base salary) the same as the 20182019 target opportunity for each of our named executive officers. 2019Ms. Lau and Messrs. Hazelton and Wacker. In recognition of Mr. Murao’s promotion to Executive Vice President, General Counsel and Chief Administrative Officer of the Company, the Board approved increasing Mr. Murao’s target opportunity from 40% to 55% of his base salary. In recognition of Mr. Seu’s promotion to President and Chief Executive Officer of Hawaiian Electric, the Board of the Utility approved increasing Mr. Seu’s target opportunity from 45% to 75% of his base salary.Company'sCompany’s strategic priorities and correlate with creating shareholder value. The 20192020 performance metrics for Ms. Lau and Mr.Messrs. Hazelton and Murao related to the holding company and its subsidiaries, while the metrics for Mr. OshimaSeu related to the utilityUtility and the metrics for Mr. Wacker related to the bank.Bank. The rationale for each metric is shown in the chart below.Committee'sCommittee’s belief that incentive pay should be motivational — that is, the goals should be challenging but achievable — and that such pay should be balanced with reinvestment in the Company and return to shareholders. Consistent with this approach, the Compensation Committee believes the threshold shouldtruly exceptional performance.20192020 annual incentive metrics, the objective each measure serves, the level of33COMPENSATION DISCUSSION AND ANALYSIS20192020 and the percentage of target achieved. Differences in the 1 HEI Consolidated Adjusted Net Income and ASB Adjusted Net Income represent HEI consolidated and ASB GAAP net income for 2020, adjusted for the items described further below, respectively. These Adjusted Net Income metrics are non-GAAP measures. For a reconciliation of the GAAP and non-GAAP results, see “Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments” attached as Exhibit A. 2 Utility Operations is a composite of seven utility operational goals weighted in the same proportion for which they are weighted for Utility executives. Utility Operations includes the seven operational goals that applied to Mr. Seu in 2020 (Utility Consolidated Operation and Maintenance Expense, Utility Consolidated Customer Satisfaction, Utility Consolidated Reliability/SAIDI, Utility Consolidated Safety: Severity Rate and TCIR, Utility Resilience, Reliability and Climate Change, Utility Grid Modernization and Utility Leadership and Workforce Development). For Ms. Lau and Messrs. Hazelton and Murao, the weightings of the components of Utility Operations were as follows: Utility Consolidated Operation and Maintenance Expense — 5.36%, Utility Consolidated Customer Satisfaction — 5.36%,Utility Consolidated Reliability/SAIDI — 1.79%, Utility Consolidated Safety: Severity Rate and TCIR — 1.78%, Utility Resilience, Reliability and Climate Change — 3.57%, Utility Grid Modernization — 3.57% and Utility Leadership and Workforce Development — 3.57%. 3 ASB ROA is ASB’s Adjusted Net Income divided by its average total assets for the period. Average total assets is calculated by averaging the total assets for each day in the period. Weighting
(other than
HEI CEO) Goals Total
Achieved as a
% of Target
Opportunity2019 Annual Incentive Performance
Metrics & Why We Use Them HEI CEO
Weighting Threshold Target Maximum Result Lau and Hazelton
HEI Consolidated Adjusted Net Income1 focuses on fundamental earnings, which correlates to shareholder value
60%
60%
$187.7M
$210.0M
$223.1M
$212.3M
Utility Operations2 supports effective utility operations for all stakeholders
20%
25%
See note 2 below
See note 2 below
See note 2 below
See note 2 below
CEO 103%
ASB Return on Assets (ROA)3 measures how efficiently the bank deploys its assets by comparing return to total assets
10%
15%
1.08%
1.18%
1.28%
1.18%
CFO 102%
Personal Goal4
10%
Target
Target
Oshima
Utility Consolidated Adjusted Net Income1 focuses on fundamental earnings, which correlates to shareholder value
30%
$148.0M
$155.8M
$166.7M
$156.8M
Utility Consolidated Operation and Maintenance Expense5 measures operational efficiency
15%
$473.1M
$462.6M
$452.2M
$475.7M
Utility Consolidated Customer Satisfaction6 focuses on improving the customer experience through all points of contact with the utility
15%
Consolidated score of 70 in 2 of 4 quarters
Consolidated score of 70 in 3 of 4 quarters
Consolidated score of 70 in 4 of 4 quarters
Consolidated score of 70 in 3 of 4 quarters
Utility Consolidated Reliability/System Average Interruption Duration Index (SAIDI)7 promotes system reliability for customers
5%
117.56 minutes
108.56 minutes
99.57 minutes
122.49 minutes
78%
Utility Consolidated Safety/Total Cases Incident Rate (TCIR)8 rewards improvements in workplace safety, promoting employee well-being and reducing expense
2%
1.37 TCIR
1.03 TCIR
0.92 TCIR
2.17 TCIR
Utility Consolidated Safety/Severity Rate9 rewards improvements in workplace safety, promoting employee well-being and reducing expense
3%
18.53
16.00
13.46
24.19
Transformation Metrics promote achievement of utility transformation initiatives
30%
Threshold
Target
Maximum
Target
Wacker
ASB ROA3
40%
1.08%
1.18%
1.28%
1.18%
ASB Adjusted Net Income1 focuses on fundamental earnings, which correlates to shareholder value
50%
$77M
$86M
$93M
$83M
93%
Individual Metric10
10%
Target
Target
N/A — Not Applicable1HEI Consolidated, Utility Consolidated and ASB Adjusted Net Income represent HEI consolidated, Utility consolidated and ASB GAAP net income for 2019, adjusted for the items described further below, respectively. These Adjusted Net Income metrics are non-GAAP measures. For a reconciliation of the GAAP and non-GAAP results, see "Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments" attached as Exhibit B.2Utility Operations is a composite of six utility operational goals weighted in the same proportion for which they are weighted for utility executives. Utility Operations includes the six operational goals that applied to Mr. Oshima in 2019 (Utility Consolidated Operation and Maintenance Expense, Utility Consolidated Customer Satisfaction, Utility Consolidated SAIDI, Utility Consolidated Safety/TCIR, Utility Consolidated Safety/Severity Rate and Utility Transformation Metrics). Utility Transformation Metrics focuses on achievement of the utility's transformation goals. The Compensation Committee approves the Transformation milestones under this metric and determines the aggregate performance at the end of the performance period. For 2019, the Utility Transformation milestones focused on the areas of PSIP execution, electrification of transportation, stakeholder & community engagement, grid modernization implementation, integrated grid planning, one company initiative, regulatory/policy, pole infrastructure enterprise, resilience and leadership & workforce development. The Utility Transformation goal was achieved at target for 2019, meaning that all milestones were achieved. For Ms. Lau, the weightings of the components of Utility Operations were as follows: Utility Consolidated Operation and Maintenance Expense — 4.29%, Utility Consolidated Customer Satisfaction — 4.29%,Utility Consolidated SAIDI — 1.43%, Utility Consolidated Safety/TCIR — 0.57%, Utility Consolidated Safety/Severity Rate — 0.86% and Utility Transformation Metrics — 8.56%. For Mr. Hazelton, the weightings of the components of Utility Operations were as follows: Utility Consolidated Operation and Maintenance Expense — 5.36%, Utility Consolidated Customer Satisfaction — 5.36%,Utility Consolidated SAIDI — 1.79%, Utility Consolidated Safety/TCIR — 0.71%, Utility Consolidated Safety/Severity Rate — 1.07% and Utility Transformation Metrics — 10.71%.34Table of ContentsTABLE OF CONTENTSCOMPENSATION DISCUSSION AND ANALYSIS3ASB ROA is ASB's adjusted net income divided by its average total assets for the period. Average total assets is calculated by averaging the total assets for each day in the period.4Personal Goal focused on the achievement of certain leadership development and succession planning objectives determined by the Compensation and Nominating and Corporate Governance Committees.5Utility Consolidated Operation and Maintenance Expense represents non-fuel expenses of the consolidated utilities and excludes expenses covered by surcharges or otherwise neutral to net income.6Utility Consolidated Customer Satisfaction is based on quarterly results of customer surveys conducted by an outside vendor.7Utility Consolidated Annual Normalized T&D System Average Interruption is a reliability metric based upon weighted consolidation of T&D caused outages normalized major events (does not include generation-caused outages).8 4 Utility Consolidated Operation and Maintenance Expense represents non-fuel expenses of the consolidated utilities and excludes expenses covered by surcharges or otherwise neutral to net income. 5 Utility Consolidated Customer Satisfaction is based on quarterly results of customer surveys conducted by an outside vendor. 6 Utility Consolidated Reliability/SAIDI is measured by the average outage duration for each customer served, exclusive of catastrophic events and outages caused by independent power producers, over whose plant maintenance and reliability the Utility has limited real-time control. 7 Utility Consolidated Safety/Severity Rate is a measure of the significance of the safety incidents a company experienced based on the number of lost workdays incurred. Lost workdays occur when an occupational injury or illness prevents an employee from working a full, assigned work shift. Severity rate is calculated by taking the number of days away from work due to a workplace injury (maximum of 180 days) multiplied by 200,000 and divided by the number of hours worked by all employees. 19 ×20 x 200,000 productive hours divided by productive hours for the year. Lower TCIR scores reflect better safety performance.8 Utility Resilience, Reliability and Climate Change is based on reaching defined milestones for specific projects developed to improve system reliability and resilience and/or reduce reliance on fossil fuels. 9 Utility Grid Modernization is based on reaching defined milestones in phases 1 and 2 of the Utility’s grid modernization initiative. 10 Utility Leadership and Workforce Development is based on the completion of specified projects that advance the development of an effective workforce, including development of workforce plans in targeted operational areas and succession plans, and clear pathways to career advancement. 9Utility Consolidated Safety/Severity Rate is a measure of the significance of the safety incidents a company experienced based on the number of lost work days incurred. Lost work days occur when an occupational injury or illness prevents an employee from working a full, assigned work shift. Severity rate is calculated by taking the number of days away from work due to a work place injury (maximum of 180 days) multiplied by 200,000 and divided by the number of hours worked by all employees.10Individual Metric focused on the achievement of certain leadership development and succession planning objectives.35Table of ContentsTABLE OF CONTENTSCOMPENSATION DISCUSSION AND ANALYSIS 20192020 Annual IncentiveConsolidated's and ASB'sASB. HEI Consolidated Adjusted Net Income metricsand ASB Adjusted Net Income performance for 2019purposes of 2020 annual incentive compensation were calculated on a non-GAAP basis, becauseconsistent with prior years. Pursuant to the EICP, the Compensation Committee determined thatmay exclude items from the positive impacts relatedcalculation of net income to the ASB campus transition,extent they arose from extraordinary or nonrecurring events or from changes to applicable accounting rules or practices. In 2020, the COVID-19 pandemic presented extraordinary and nonrecurring challenges that impacted the Company’s operations and financial performance in a variety of ways, some of which included the gain on the sales of former ASB properties, net of ASB campus transition costs, should not be considered in determining performance under those metrics. The Compensation Committee deemed thisappropriate to take into consideration in determining EICP performance. Specifically, the Compensation Committeesince such amount wasto exclude the items of expense/(gain) set forth in the table below (and explained further in the accompanying footnotes), including an extraordinary provision for credit losses and certain COVID-19 related expenses, as well as a portion of the gain from a nonrecurring event unrelatedsale of securities. As it relates to ongoing business operations and, thus, would be inconsistent with the original intent andprovision for credit losses, the Committee considered the extraordinary nature of the award. The exclusionexpected credit deterioration and the severe accounting effect of such expected deterioration that was beyond the reasonable control of management to manage or offset. As it relates to COVID-19 related expenses, the Committee considered the extraordinary and unforeseeable nature of the amount described above resulted in a negative adjustment of $5.6 millionexpense. the 2019 GAAP net income for each of HEI Consolidated and ASB in determining adjusted net income. rounding1 ASB expense/(gain) 2 Extraordinary provision for credit losses arose primarily from an unforeseen increase in reserves for the commercial, commercial real estate and consumer loan portfolios for expected credit deterioration due to the COVID-19 pandemic. 3 Unforeseen and extraordinary COVID-19 related expenses included the purchase of safety protection equipment and cleaning supplies, additional compensation to frontline employees and payment for excess leave employees were not able to use in 2020. "Reconciliation“Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments,"” attached as Exhibit B.%percentage of Target Opportunity from the table above is converted into a dollar value for each named executive officer. The payout amounts are also shown in the "Nonequity“Nonequity Incentive Plan Compensation"Compensation” column of the "2019“2020 Summary Compensation Table"Table” in the "Executive“Executive Compensation Tables"Tables” section below. The range of possible annual incentive payouts for 20192020 is shown in the "2019“2020 Grants of Plan-Based Awards"Awards” table in the "Executive“Executive Compensation Tables"Tables” section below. 1 Figures may not calculate to the amount shown in 2020 Actual Annual Incentive Payout due to rounding of the Total Achieved as a percentage of Target. Total Achieved as a percentage of Target was rounded for ease of presentation. Name Target
Opportunity
(% of base
salary) Base
Salary
($) Target
Opportunity
($) Total
Achieved as a
% of Target
Opportunity
(%) 2019
Actual
Annual
Incentive
Payout
($)1 100 × 926,300 = 926,300 × 103 = 957,886 60 × 527,917 = 316,750 × 102 = 321,724 75 × 707,350 = 530,513 × 78 = 412,527 80 × 700,200 = 560,160 × 93 = 519,548 1Figures may not calculate to the amount shown in 2019 Actual Annual Incentive Payout due to rounding of the Total Achieved as a % of Target. Total Achieved as a % of Target was rounded for ease of presentation.Long-term incentivesHEI'sHEI’s LTIP, which is based on achievement of performance goals over rolling three-year periods, and time-based RSUs, which vest over a four-year period. The performance-based LTIP represents theLong-term performance-based incentiveaffected by current performance."Base“Base salary."2019-212020-22 period, the Compensation Committee made no changes torecommended, and the Board approved, keeping the target incentive opportunities assalarysalary) the same as the 2019-21 target opportunity for each of Ms. Lau and Messrs. Hazelton Oshima and Wacker, as it determined that theirWacker. In recognition of Mr. Murao’s promotion to Executive Vice President and Chief Administrative Officer of the Company, the Board approved increasing Mr. Murao’s target long-term incentive opportunitiesopportunity from the prior performance period remained appropriate at 80%, 95% and 80%, respectively. For Ms. Lau, the Compensation Committee decided45% to instead60% of increasing Ms. Lau's base salary in 2019, as was done for the other NEOs, increase her target long-term incentive opportunity for the 2019-2021 performance period from 160% to 175% ofhis base salary. 2019-21 In recognition of Mr. Seu’s promotion to President and CEO of Hawaiian Electric, the Board of the Utility approved increasing Mr. Seu’s target opportunity from 45% to 80% of his base salary.Committee'sCommittee’s belief that incentive pay should be motivational — that is, the goals should be challenging but achievable — and that such pay should be balanced with reinvestment in the Company and return to shareholders. Consistent with this approach, the Compensation Committee believes threshold should represent solid performance with positive financial/operating results, target should denote challenging but achievable goals and maximum should signify truly exceptional performance.2019-212020-22 period, the Compensation Committee chose the metrics and goals in the following chart to encourage long-term achievement of earnings and growth in shareholder value.37COMPENSATION DISCUSSION AND ANALYSIS Goals 2019-21 Long-Term Incentive
Performance Metrics & Why We Use Them Weighting Threshold Target Maximum Lau and Hazelton HEI 3-year Average Annual EPS Growth1 promotes shareholder value by focusing on EPS growth over a three-year period. 30% 4.0% 6.0% 8.0% HEI ROACE2 measures profitability based on net income returned as a % of average common equity. 50% 9.0% 9.5% 10.0% HEI Relative TSR3 compares the value created for HEI shareholders to that created by other investor-owned electric companies (EEI Index). 20% 30th
percentile 50th
percentile 70th
percentileOshima Utility 3-year Average Annual Net Income Growth4 promotes shareholder value by focusing on net income growth based on the years included in the plan. 30% 6.0% 8.0% 10.0% Utility 3-year ROACE as a % of Allowed Return5 measures the performance of the utility and its subsidiaries in attaining the level of ROACE they are permitted to earn by their regulator. The focus on ROACE encourages improved return compared to the cost of capital. 50% 82% 84% 87% HEI Relative TSR3 compares the value created for HEI shareholders to that created by the EEI Index. 20% 30th
percentile 50th
percentile 70th
percentileWacker ASB Return on Equity6 measures profitability based on net income returned as a % of average common equity based on the average of the last two years of the plan. 40% 12.30% 13.60% 14.95% ASB Efficiency Ratio7 promotes expense control based on the average of the last two years of the plan. 40% 59.2% 57.2% 54.2% HEI Relative TSR3 compares the value created for HEI shareholders to that created by the EEI Index. 20% 30th
percentile 50th
percentile 70th
percentile 1HEI 3-year Average Annual EPS Growth is calculated by taking the sum of each full calendar year's (2019, 2020 and 2021, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by 3.2HEI ROACE is calculated as the simple average of HEI ROACE calculated on an annual basis (2019, 2020 and 2021), with net income adjusted for exclusions the Compensation Committee allows.3HEI Relative TSR compares HEI's TSR to that of the companies in the EEI Index. For LTIP purposes, TSR is the sum of the growth in price per share of HEI Common Stock as measured at the beginning of the performance period to the end, calculated using the share price on the last trading day of December at the end of the performance period, plus dividends during the period, assuming reinvestment, divided by the share price on the last trading day of December immediately prior to the beginning of the performance period.4Utility 3-year Average Annual Net Income Growth is calculated by taking the sum of each full calendar year's (2019, 2020 and 2021, respectively) net income percentage growth over the net income of the prior year and dividing that sum by 3.5Utility 3-year ROACE as a % of Allowed Return is the utility's consolidated average ROACE for the performance period compared to the weighted average of the allowed ROACE for the utility and its subsidiaries as determined by the Hawaii Public Utilities Commission for the same period.6ASB ROE is calculated as the simple average of ASB ROE calculated on an annual basis (2020 and 2021), with net income adjusted for any exclusions the Compensation Committee allows. ASB ROE is calculated as net income divided by average common equity.7ASB Efficiency Ratio is equal to the simple average of ASB's 2020 and 2021 efficiency ratios adjusted for any exclusions the Compensation Committee allows. Efficiency ratio is equal to total noninterest expense divided by the sum of net interest income and total noninterest income. 1 HEI 3-year Average Annual EPS Growth is calculated by taking the sum of each full calendar year’s (2020, 2021 and 2022, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by 3. 2 HEI ROACE is calculated as the simple average of HEI ROACE calculated on an annual basis (2020, 2021 and 2022), with net income subject to any adjustments the Compensation Committee may approve in its discretion. 3 Utility Renewable Portfolio Standards measures the Utility’s percentage of electric energy sales that is represented by renewable electrical energy created to diversify its energy resource mix. The State of Hawaii’s RPS targets are 30% by 2020, 40% by 2030, 70% by 2040 and 100% by 2045. 4 HEI Relative TSR compares HEI’s TSR to that of the companies in the EEI Index. For LTIP purposes, TSR is the sum of the growth in price per share of HEI Common Stock as measured at the beginning of the performance period to the end, calculated using the share price on the last trading day of December at the end of the performance period, plus dividends during the period, assuming reinvestment, divided by the share price on the last trading day of December immediately prior to the beginning of the performance period. 5 Utility 3-year Average Annual Net Income Growth is calculated by taking the sum of each full calendar year’s (2020, 2021 and 2022, respectively) net income percentage growth over the net income of the prior year and dividing that sum by 3. 6 Utility 3-year ROACE as a percentage of Allowed Return is the Utility’s consolidated average ROACE for the performance period compared to the weighted average of the allowed ROACE for the Utility and its subsidiaries as determined by the Hawai‘i Public Utilities Commission for the same period. 7 ASB ROE is calculated as the simple average of ASB ROE calculated on an annual basis (2021 and 2022), with net income subject to any adjustments the Compensation Committee may approve in its discretion. ASB ROE is calculated as net income divided by average common equity. 8 ASB Efficiency Ratio is equal to the simple average of ASB’s 2021 and 2022 efficiency ratios adjusted for any exclusions the Compensation Committee may approve in its discretion. Efficiency ratio is equal to total noninterest expense divided by the sum of net interest income and total noninterest income. utilityUtility and the bankBank stronger financially, enabling HEI to raise capital at favorable rates for reinvestment in the operating companies and supporting dividends to shareholders. From a historical perspective, long-term incentive payouts are not easy to achieve, nor are they guaranteed. HEI and its utilityUtility and bankBank subsidiaries face significant external challenges in the 2019-212020-22 period. Strong leadership on the part of the named executive officers will be needed to achieve the long-term objectives required for them to earn the incentive payouts. 2017-19 HEI Board and HEI Compensation Committee established the 2017-192018-20 long-term incentive opportunities, performance metrics and goals in January 2017.2018. Those decisions were20182019 HEI Proxy Statement and are summarized again below to provide context for the results and payouts for the 2017-192018-20 period.COMPENSATION DISCUSSION AND ANALYSIS2017,2018 the Compensation Committee established the following 2017-192018-20 target incentive opportunities as a percentage of named executive officer base salary. Name 2017-19 Target Opportunity
(as % of Base Salary) 2017-19 Target Opportunity
(in shares) 160% 42,702 80% 10,753 95% 18,602 80% 15,771 2017-192018-20 performance metrics, goals, results & payouts2017-192018-20 performance metrics and goals below in January 2017.2018. The Compensation Committee selected the metrics for their correlation with long-term shareholder value and alignment with the multi-year strategic plans of HEI and its utilityUtility and bankBank subsidiaries. The chart below identifies the 2017-192018-20 LTIP metrics, the objective each measure serves, the level of achievement required to attain the threshold, target and maximum levels for each metric, the results for 2017-192018-20 and the corresponding payout as a percentage of target.Committee'sCommittee’s decision to exclude the impact of the unusual events that affected HEI, Hawaiian Electric and ASB during the 2017-192018-20 period. These adjustments are described below under "Adjustments for unusual events — 2017-19 LTIP."“Non-GAAP Net Income Metrics - 2018-20.” Total
Achieved
as a
% of Target
Opportunity Goals 2017-19 Long-Term Incentive Performance
Metrics & Why We Use Them Weighting Threshold Target Maximum Result
Lau and Hazelton
HEI 3-year Average Annual EPS Growth1 promotes shareholder value by focusing on EPS growth over a three-year period.
30%
1.0%
3.0%
5.0%
3.0%
HEI ROACE2 measures profitability based on net income returned as a % of average common equity. 50% 8.5% 9.4% 10.1% 9.2% 106% HEI Relative TSR3 compares the value created for HEI shareholders to that created by other investor-owned electric companies (EEI Index). 20% 30th
percentile 50th
percentile 75th
percentile 64th
percentile
Oshima
Utility 3-year Average Annual EPS Growth4 promotes shareholder value by focusing on EPS growth over a three-year period.
30%
1.0%
3.0%
5.0%
2.5%
Utility 3-year ROACE as a % of Allowed Return5 measures the performance of the utility and its subsidiaries in attaining the level of ROACE they are permitted to earn by their regulator. The focus on ROACE encourages improved return compared to the cost of capital. 50% 70% 80% 90% 79% 105% HEI Relative TSR3 compares the value created for HEI shareholders to that created by the EEI Index. 20% 30th
percentile 50th
percentile 75th
percentile 64th
percentile
Wacker
ASB Return on Equity6 is ASB's adjusted net income divided by its average equity for the period.
40%
9.0%
10.0%
11.0%
11.5%
ASB Efficiency Ratio, for Year-End 20197 promotes expense control. 40% 63% 60% 58.5% 57.6% 191% HEI Relative TSR3 compares the value created for HEI shareholders to that created by the EEI Index. 20% 30th
percentile 50th
percentile 75th
percentile 64th
percentile 1HEI 3-year Average Annual EPS Growth is calculated by taking the sum of each full calendar year's (2017, 2018 and 2019, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by 3. Non-GAAP adjusted net income, upon which EPS used for LTIP purposes is calculated, differs from what is reported under GAAP because it excludes the impact of the unusual events in 2016 through 201939Table of ContentsTABLE OF CONTENTSCOMPENSATION DISCUSSION AND ANALYSIS 1 HEI Average Annual EPS Growth is calculated by taking the sum of each full calendar year’s (2019 and 2020, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by two. Non-GAAP Adjusted Net Income, upon which EPS used for LTIP purposes is calculated, differs from what is reported under GAAP because it excludes the impact of the unusual events in 2018 through 2020 described below under “Non-GAAP Net Income Metrics — 2018-20 LTIP.” For a reconciliation of the GAAP and non-GAAP results, see “Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments” attached as Exhibit A. 2 HEI ROACE is calculated as the simple average of HEI ROACE calculated on an annual basis (2019 and 2020), with net income adjusted for exclusions approved by the Compensation Committee in its discretion. Non-GAAP Adjusted Net Income used in the calculation of ROACE differs from what is reported under GAAP because it excludes the impact of the unusual events in 2019 through 2020 described below under “Non-GAAP Net Income Metrics — 2018-20 LTIP.” For a reconciliation of the GAAP and non-GAAP results, see “Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments” attached as Exhibit A. 3 HEI Relative TSR compares HEI’s TSR to that of the companies in the EEI Index. For LTIP purposes, TSR is the sum of the growth in price per share of HEI Common Stock as measured at the beginning of the performance period to the end, calculated using the share price on the last trading day of December at the end of the performance period, plus dividends during the period, assuming reinvestment, divided by the share price on the last trading day of December immediately prior to the beginning of the performance period. 4 Utility Average Annual EPS Growth is calculated by taking the sum of each full calendar year’s (2019 and 2020, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by two. For purposes of this goal, Utility EPS is calculated using Utility net income divided by weighted average HEI Common Stock outstanding. 5 6 ASB ROE is calculated as the simple daily average of ASB ROE calculated on an annual basis (2019 and 2020), with net income and equity adjusted for exclusions approved by the Compensation Committee in its discretion. ASB ROE is calculated as net income divided by average common equity. Non-GAAP Adjusted Net Income differs from what is reported under GAAP because it excludes the impact of the unusual events in 2019 through 2020 described below under “Non-GAAP Net Income Metrics — 2018-20 LTIP.” For a reconciliation of the GAAP and non-GAAP results, see “Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments” attached as Exhibit A. described below under "Adjustments for unusual events — 2017-19 LTIP." For a reconciliation of the GAAP and non-GAAP results, see "Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments" attached as Exhibit B.TABLE OF CONTENTS2HEI ROACE is calculated as the simple average of HEI 3-year ROACE calculated on an annual basis (2017, 2018 and 2019), with net income and common equity adjusted for exclusions the Compensation Committee allows. Non-GAAP adjusted net income used in the computation of ROACE differs from what is reported under GAAP because it excludes the impact of the unusual events in 2017 through 2019 described below under "Adjustments for unusual events — 2017-19 LTIP." For a reconciliation of the GAAP and non-GAAP results, see "Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments" attached as Exhibit B.3HEI Relative TSR compares HEI's TSR to that of the companies in the EEI Index. For LTIP purposes, TSR is the sum of the growth in price per share of HEI Common Stock as measured at the beginning of the performance period to the end, calculated using the share price on the last trading day of December at the end of the performance period, plus dividends during the period, assuming reinvestment, divided by the share price on the last trading day of December immediately prior to the beginning of the performance period.4Utility 3-year Average Annual EPS Growth is calculated by taking the sum of each full calendar year's (2017, 2018 and 2019, respectively) EPS percentage growth over the EPS of the prior year and dividing that sum by three. For purposes of this goal, Utility EPS is calculated using Utility net income divided by weighted average HEI Common Stock outstanding. Non-GAAP adjusted net income, upon which EPS used for LTIP purposes is calculated, differs from what is reported under GAAP because it excludes the impact of the unusual events in 2016 through 2019 described below under "Adjustments for unusual events — 2017-19 LTIP." For a reconciliation of the GAAP and non-GAAP results, see "Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments" attached as Exhibit B.5Utility 3-year ROACE as a % of Allowed Return is the utility's consolidated average ROACE for the performance period compared to the weighted average of the allowed ROACE for the utility and its subsidiaries as determined by the Hawaii Public Utilities Commission for the same period. Non-GAAP adjusted net income used in the computation of ROACE differs from what is reported under GAAP because it excludes the impact of the unusual events in 2017 through 2019 described below under "Adjustments for unusual events — 2017-19 LTIP." For a reconciliation of the GAAP and non-GAAP results, see "Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments" attached as Exhibit B.6ASB adjusted net income and average equity are averages over the performance period, adjusted for exclusions allowed by the Compensation Committee. Non-GAAP adjusted net income differs from what is reported under GAAP because it excludes the impact of the unusual events in 2017 through 2019 described below under "Adjustments for unusual events — 2017-19 LTIP." For a reconciliation of the GAAP and non-GAAP results, see "Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments" attached as Exhibit B.7ASB Efficiency Ratio for 2019 is equal to ASB's total noninterest expense for the year ended December 31, 2019 divided by the sum of the net interest income and noninterest income for the year ended December 31, 2019, adjusted for exclusions the Compensation Committee allows. See "Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments" attached as Exhibit B. 7 ASB Efficiency Ratio is equal to the simple average of ASB’s 2019 and 2020 efficiency ratio. Efficiency ratio is equal to total noninterest expense divided by the sum of net interest income and total noninterest income, adjusted for exclusions approved by the Compensation Committee. See “Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments” attached as Exhibit A. %percentage of Target Opportunity from the table above is converted into a number of shares earned (plus dividend equivalents on earned shares) for each named executive officer. The payout amounts are also shown in the "2019“2020 Option Exercises and Stock Vested"Vested” table. 2017-19 Incentive Payout1 Name Target
Opportunity
(in shares) Total
Achieved as a
% of Target
(%) (shares) (dividend
equivalents
paid as a
share number) 42,702 × 106 = 45,113 4,782 10,753 × 106 = 11,360 1,204 18,602 × 105 = 19,523 2,069 15,771 × 191 = 30,152 3,196 1 1 Figures may not calculate to the number of shares shown in 2018-20 Incentive Payout column due to rounding of the Total Achieved as a percentage of Target, which was rounded for ease of presentation. number of shares shown in 2017-19 Incentive Payout column due to rounding ofLTIP, the Total Achieved as a % of Target, which was rounded for ease of presentation.Adjustments for unusual events — 2017-19 LTIPThe Compensation Committee considers adjustmentsmay exclude items from the calculation of net income to the extent they arose from extraordinary or nonrecurring events or from changes in applicable accounting rules or practices. In 2020, the COVID-19 pandemic presented extraordinary and nonrecurring challenges that impacted the Company’s operations and financial performance results with caution and only in circumstances that are unforeseen and/or unique or extraordinary. Thea variety of ways, some of which the Compensation Committee recognizes that the two operating subsidiaries are heavily regulated and external forces can impact incentive plans significantly. The Compensation Committee is mindful of only considering adjustments that are warranted and will also serve the long-term interests of shareholders.2016, 2017, 2018, 2019 and 20192020 for purposes of calculating HEI 3-year average annual EPS growth and HEI 3-yearconsolidated net income for 2019 and 2020 for purposes of calculating HEI consolidated ROACE under the 2017-20192018-20 LTIP, the Compensation Committee considereddetermined that certain items recorded during the impact of certain itemsperformance period should be excluded from the calculation because such adjustmentsHEI, Hawaiian Electric or ASB management'smanagement’s actions regarding ongoing business operations including the positive impacts related to tax reform and the ASB campus transition, and negative impacts related to the terminated merger with NextEra Energy, extraordinary consulting expenses and ASB pension defeasement (see discussion of ASB adjustments below). For 2019, the exclusion from HEI's net income of $4.7 million40COMPENSATION DISCUSSION AND ANALYSISpositive impact related to tax reform legislation, $1.6 million negative impact of certain unanticipated extraordinary consulting expenses, $0.5 million positive impact related to ASB pension defeasement and $5.6 million positive impact related to the ASB campus transition had the net effect of reducing HEI's 2019 net income by $9.2 million for purposes of determining performance under the 2017-2019 LTIP. The Compensation Committee deemed it appropriate to exclude the impact of these unusual items because they were unrelated to management's actions regarding ongoing business operations in 2019. Additionally, the adjustments made with respect to years 2018 and 2017 described on pages 41-43 of HEI's 2019 Proxy Statement and pages 39-40 of HEI's 2018 Proxy Statement, respectively, for purposes of determining performance as it relates to the 2016-2018 LTIP and 2015-2017 LTIP, respectively, were also applied for purposes of determining performance under the 2017-2019 LTIP. For purposes of calculating HEI 3-year consolidated ROACE, these adjustments include, (i) for 2018, exclusion of the $5.7 million negative impact related to tax reform legislation and related impacts and certain unanticipated extraordinary consulting expenses, and (ii) for 2017, exclusion of the $6.0 million negative impact related to tax reform legislation. For purposes of calculating HEI 3-year average annual EPS growth, the adjustments in (i) and (ii) above were applied in addition to a $58.2 million adjustment to 2016 for the positive impact related to income from the terminated merger with NextEra Energy, net of certain other costs related to the terminated merger. The Compensation Committee deemed it appropriate to carry forward these adjustments made with respect to 2016, 2017 and 2018 for purposes of determining performance under the 2017-19 LTIP because such adjustments equitably compensate for extraordinary events unrelated to management's actions regarding ongoing business operations that were not contemplated at the time the performance goals were established. established, and that excluding those items was consistent with the original intent and objectives of the award. Specifically, the Compensation Committee determined it to be appropriate to exclude the items of expense/(gain) set forth in the table below (and explained further in the accompanying footnotes), including an extraordinary provision for credit losses and certain COVID-19 related expenses, as well as a portion of the gain from a nonrecurring sale of securities. As it relates to the provision for credit losses, the Committee considered the extraordinary nature of the expected credit deterioration and the severe accounting effect of such expected deterioration that was beyond the reasonable control of management to manage or offset. As it relates to COVID-19 related expenses, the Committee considered the extraordinary and unforeseeable nature of the expense. 1 ASB expense (gain). 2 Extraordinary provision for credit losses arose primarily from an unforeseen increase in reserves for the commercial, commercial real estate and consumer loan portfolios for expected credit deterioration due to the COVID-19 pandemic. 3 Unforeseen and extraordinary COVID-19 related expenses included the purchase of safety protection equipment and cleaning supplies, additional compensation to frontline employees and payment for excess leave employees were not able to use in 2020. 4 Hawaiian Electric expense. Primarily reflects certain expenses related to the termination of the proposed merger with NextEra Energy, including Hawaiian Electric’s liquid natural gas (LNG) project costs and adjustments to test year revenue requirements for customer benefit adjustments in the Hawaiian Electric and Maui Electric rate case decisions. 5 Hawaiian Electric expense. Reflects various tax adjustments for tax reform and related impacts. 6 HEI expense. Reflects certain extraordinary and nonrecurring consulting and legal expenses. 7 Pension defeasement refers to ASB’s initiative to manage risk associated with the pension liability and volatility of pension expense for its frozen pension plan through a liability-driven investment strategy which is designed to mitigate funding status changes and reduce pension expense volatility caused by interest rate movements. Because the Company calculates net periodic pension cost using a market-related value of plan assets, the impact of a change in the fair value of the pension assets for purposes of computing pension expense is reduced as the change in value is recognized over a period of years, as compared to a more significant impact related to an immediate change in the fair value of the pension liability. The Compensation Committee deemed it appropriate to exclude these pension amounts for purposes of determining net income for the 2018-20 LTIP because the Company’s consolidated market-related value of plan asset valuation method, which smooths changes in asset value in the computation of pension expense, may not be fully reflective, in any given period, of the full economic hedge accomplished with the liability-driven investment strategy. 41-4340-42 of HEI's 2019HEI’s 2020 Proxy Statement and pages 39-4041-43 of HEI's 2018HEI’s 2019 Proxy Statement for a more detailed discussion of the respective 2018, 20172019 and 20162018 adjustments. See the ASB and Hawaiian Electric sections below for additional discussion and for all other items impacting HEI consolidated net income.ASB's 2017, 2018ASB’s 2019 and 20192020 net income and common equity for purposes of calculating ASB’s ROE under the 2018-20 LTIP (as well as ASB’s 2018, 2019 and 2020 net income for purposes of calculating HEI 3-year average annual EPS growth and 2019 and 2020 net income for 3-year consolidated ROACE (in each case noted above)), the Compensation Committee considered the impact of certain items that were unrelated to management’s actions regarding ongoing business operations. The Compensation Committee deemed it to be appropriate to exclude these items for purposes of determining performance under the 2018-20 LTIP because such exclusions equitably compensate for extraordinary and/or nonrecurring events that were unrelated to management’s actions regarding ongoing business operations and were not contemplated at the time the performance goals were established. Specifically, the Compensation Committee determined it to be appropriate to exclude the items of expense/(gain) set forth in the table below (and explained further in the accompanying ASB'sa portion of the gain from a nonrecurring sale of securities. As it relates to the provision for credit losses, the 1 See footnote 2 in the table above regarding provision for credit losses. 2 See footnote 3 in the table above regarding COVID-19 related expenses. 3 See footnote 7 in the table above regarding pension defeasement. and 2019adjustments. See also “Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments,” attached as Exhibit A.and common equityfor 2018 for purposes of calculating ASB's ROEHawaiian Electric average annual EPS growth under the 2017-20192018-2020 LTIP, the Compensation Committee considered the impact of certain items that were unrelated to management'smanagement’s actions regarding ongoing business operations, includingoperations. Specifically, the effects in 2019Compensation Committee determined it to be appropriate to exclude the items of the 2017 tax-reform legislation and items related to the ASB campus transition.expense/(gain) set forth below. The Compensation Committee also considered the effect of ASB's initiativedid not make any adjustments to eliminate risk associated with the pension liability and volatility of pension expense for its frozen pension plan through a liability-driven investment strategy, or in substance pension "defeasement," which is designed to mitigate funding status changes and reduce pension expense volatility caused by interest rate movements. However, because the Company calculates2020 net periodic pension cost using a market-related value of plan assets, the impact of a change in the fair value of the pension assets for purposes of computing pension expense is reduced as the change in value is recognized over a period of years, as compared to a more significant impact related to an immediate change in the fair value of the pension liability. Pension defeasement had a positive (negative) impact on ASB's net income of $0.3 million, ($0.7 million) and $0.5 million for 2017, 2018 and 2019, respectively. The Compensation Committee deemed it appropriate to exclude these pension amounts for purposes of determining ASB's net income for the 2017-19 LTIP because the Company's consolidated market-related value of plan asset valuation method, which smooths changes in asset value in the computation of pension expense,income. be fully reflective, in any given period,foot due to rounding1 Primarily reflects certain expenses related to the termination of the proposed merger with NextEra Energy, including Hawaiian Electric’s liquid natural gas (LNG) project costs and adjustments to test year revenue requirements for customer benefit adjustments in the Hawaiian Electric and Maui Electric rate case decisions. 2 Reflects various tax adjustments for tax reform and related impacts. the full economic hedge accomplished with the liability-driven investment strategy. ForHEI’s 2019 the tax reform and related net positive impact amounting to $10.1 million and net positive impact of $5.6 million related to ASB's sales of its former properties, net of campus transition costs, were excluded in the calculation of the 2017-2019 HEI 3-year average annual EPS growth, HEI 3-year consolidated ROACE and ASB's 2018-2019 ROE. In addition, the adjustments in years 2018 and 2017 described on page 42 of HEI's 2019 Proxy Statement and page 39 of HEI's 2018 Proxy Statement, respectively, for purposes of determining performance as it relates to the respective 2016-2018 and 2015-2017 LTIPs, were correspondingly applied for purposes of determining performance under the 2017-2019 LTIP. These adjustments include, (i) for 2018, exclusions of (x) $11.2 million net positive impact related to tax reform and (y) $0.7 million negative impact from one-time expenses related to the ASB campus transition; and (ii) for 2017, the exclusion of $1.0 million positive impact related to tax reform legislation. The Compensation Committee deemed it appropriate to carry forward these adjustments made with respect to 2018 and 2017 for purposes of determining performance under the 2017-2019 LTIP because such adjustments equitably compensate for extraordinary41COMPENSATION DISCUSSION AND ANALYSISevents unrelated to management's actions regarding ongoing business operations that were not contemplated at the time the performance goals were established. See page 42 of HEI's 2019 Proxy Statement and page 39 of HEI's 2018 Proxy Statement for a more detailed discussion of the respective 2018 and 2017 adjustments.Hawaiian Electric. The adjustments described on pages 41-43 of HEI's 2019 Proxy Statement and pages 39-40 of HEI's 2018 Proxy Statement, respectively, that were made in determining performance as it relates to the 2016-2018 LTIP and 2015-2017 LTIP, were correspondingly applied for purposes of determining performance under the 2017-2019 LTIP. These adjustments in the calculation of ROACE as a % of Allowed Return, HEI 3-year consolidated ROACE, HEI 3-year average annual EPS growth and Hawaiian Electric 3-year average annual EPS growth include, (i) for 2018, the exclusion of the negative impact of $7.6 million related to the 2017 tax reform legislation and certain expenses related to the termination of the proposed merger with NextEra Energy, and (ii) for 2017, the elimination of the negative impacts of $9.2 million related to tax reform legislation. For purposes of calculating HEI 3-year average annual EPS growth and Hawaiian Electric 3-year average annual EPS growth, in addition to (i) and (ii) above, $13.9 million for 2017 related to the effect of the reversion to the lagged method of recognizing rate adjustment mechanism (RAM) revenues and $2.2 million for 2016 related to merger-related after-tax expenses, including costs related to the terminated liquified natural gas (LNG) contract, which was conditioned on PUC approval of the NextEra Energy merger, were excluded for purposes of calculating EPS growth. The Compensation Committee deemed it appropriate to carry forward these adjustments made with respect to 2018, 2017 and 2016 for purposes of determining performance under the 2017-2019 LTIP because such adjustments equitably compensate for extraordinary events unrelated to management's actions regarding ongoing business operations that were not contemplated at the time the performance goals were established. See pages 41-43 of HEI's 2019 Proxy Statement, pages 39-40 of HEI's 2018 Proxy Statement and page 44 of HEI's 2017 Proxy Statement for a more detailed discussion of the respective 2018, 2017 and 2016 adjustments.See "Reconciliationalso “Reconciliation of GAAP to Non-GAAP Measures: Incentive Compensation Adjustments,"” attached as Exhibit B.2018-20 Long-TermA.HEI's 2018-20HEI’s 2019-21 long-term incentive plan was described on pages 38-3937-38 of the 20192020 Proxy Statement.Restricted stock unitsexecutive'sexecutive’s base salary. These awards are designed to focus executives on creating long-term value for the Company's42COMPENSATION DISCUSSION AND ANALYSISHEI'sHEI’s Retirement Savings Plan, a tax-qualified defined contribution 401(k) plan.Messrs.Mr. Hazelton and Oshima each joined the Company after May 1, 2011 and areis eligible to receive matching contributions under the amended HEI Retirement Savings Plan. Ms. Lau isand Messrs. Murao and Seu are not eligible for and did not receive matching contributions under that plan, since shethey joined the Company prior to May 1, 2011. The HEI Retirement Savings Plan does not provide employer contributions, other than matching contributions, to any participant.ASB'semployee'semployee’s contributions on a dollar-for-dollar basis up to 4% of eligible compensation deferred. In 2019,2020, eligible compensation was capped at $280,000.$285,000. ASB also provides discretionary, nonelective profit-sharing contributions to the accounts of employees who are employed on the last day of the plan year or terminate employment during the plan year because of retirement, death or disability. Mr. Wacker received matching contributions and a profit-sharing contribution under the plan in 2019,2020, in each case limited to the amount permitted based on eligible compensation."2019“2020 Pension Benefits"Benefits” table and related notes in the "Executive“Executive Compensation Tables"Tables” section below. participants'participants’ cash compensation, with certain limitations, and provides investment opportunities that are substantially similar to those available under HEI'sHEI’s Retirement Savings Plan. In 2019,2020, there were no matching or other employer contributions under this plan for employees of HEI, Hawaiian Electric or ASB. HEI and Hawaiian Electric named executive officers are also eligible to defer payment of annual and long-term incentive awards and the resulting tax liability under a prior nonqualified deferred compensation plan, although noplan. No named executive officer deferred compensation under that planeither of these plans in 2019.2019, but he did receive a profit-sharing contribution to his account under the plan for the amount that could not be contributed to his 401(k) Plan account due to Internal Revenue Code limits on eligible compensation. Such profit-sharing contribution is included in the "All Other Compensation" column of the "2019 Summary Compensation Table"."2019“2020 Nonqualified Deferred Compensation"Compensation” table and related notes in the "Executive“Executive Compensation Tables"Tables” section below.43COMPENSATION DISCUSSION AND ANALYSISexecutive'sexecutive’s beneficiaries following the executive'sexecutive’s death while employed or after retirement. As part of the freeze, HEI closed the plan to new participants and ceased all benefit accruals for current participants (i.e., there will be no increase in death benefits due to salary increases after September 9, 2009).traditionallyhistorically, life insurance proceeds have been excluded from income for federal tax purposes. Ms. Lau isand Mr. Seu are covered under the Executive Death Benefit Plan. Messrs. Hazelton and OshimaMurao are not covered under the plan because they joined the Company after the plan was frozen. Mr. Wacker also joinedis not covered because ASB after the plan was frozen, and ASB wasis not a participating employer in the plan in any event.plan. Death benefits are discussed in further detail in the "2019“2020 Pension Benefits"Benefits” table and related notes.2019, Ms. Lau and Messrs. Hazelton and Wacker2020, each of the named executive officers had a change-in-control agreement.executives'executives’ employment following a change in control. In determining the amount an executive is eligible to receive in such an event, the Compensation Committee takes intoexecutive'sexecutive’s expected role in a potential transaction, value to the organization and internal equity. The agreements approved by the Compensation Committee provide for a cash lump sum payment of three times base salary plus annual incentive for Ms. Lau and two times base salary plus annual incentive for Messrs. Hazelton Murao, Seu and Wacker. The annual incentive pay used in calculating the severance payment is the greater of the current annual incentive target or the largest actual annual incentive payout during the preceding three fiscal years. Aggregate payments under these agreements are limited to the maximum amount deductible under Section 280G of the Internal Revenue Code and there are no tax gross ups with respect to payments under these agreements. Payment of the severance benefits is conditioned on the Company receiving a release of claims by the executive.days'days’ notice of nonrenewal HEI'sHEI’s securities or a change in the majority of the composition of the Board following consummation"Potential“Potential Payments Upon Termination or Change in Control"Control” section and related notes in the "Executive“Executive Compensation Tables"Tables” section below.2019,2020, each named executive officer had a Company-paid club membership for the primary purpose of business entertainment expected of executives in their positions. Mr. Hazelton received fourCOMPENSATION DISCUSSION AND ANALYSIS2019,2020, which was more than other employees with similar length of service typically receive. Mr. Wacker received 28 days of paid time off in 2019, which is one day more than ASB employees with similar length of service."Benefits“Benefits — Executive Death Benefit Plan" on the previous page,Plan” above, tax gross ups of death benefits only apply to executives who participated in the Executive Death Benefit Plan before it was frozen in 2009.Our programs are designed to guard against excessive riskHEI'sHEI'sCompany'sCompany’s ERM function. Based on its review of the risk assessment of compensation programs in place in 20192020 and consultation with FW Cook, the Compensation Committee believes that the Company'sCompany’s compensation plans do not encourage risk-takingrisk taking that is reasonably likely to have a material adverse effect on the Company.••HEI'sHEI’s financial statements.•••HEI'sHEI’s long-term performance.•••• Share ownership and retention are required throughout employment with the Company(compliance date)(Compliance Date) to reach the following ownership levels: Position 2x base salary WackerHazelton and OshimaWacker each exceeded the specified level of stock ownership for their positions by the time of their respective compliance dates. Mr. Hazelton has until January 1, 2022 to reach the specified level of ownership.Hedging and pledging are prohibitedCompany'sCompany’s Insider Trading Policy, among other prohibitions, prohibits all directors, officers and employees of HEI and its subsidiaries from holding Company securities in margin accounts or pledging Company securities or engaging (directly or indirectly) in hedging transactions, or otherwise engaging in transactions thatClawback policy applies to performance-based payThe Compensation Committee considers tax and accounting impacts on compensation46COMPENSATION DISCUSSION AND ANALYSIScompany'scompany’s compensation programs but retains the flexibility and discretion to structure compensation appropriately, whether or not deductible. Company'sCompany’s compensation programs is compliance with the requirements of Section 409A of the Internal Revenue Code, for which noncompliance can result in additional taxes on participants in deferred compensation arrangements.47Table of ContentsTABLE OF CONTENTSCOMPENSATION DISCUSSION AND ANALYSIS HEI's Annual Report onHEI’s 2020 Form 10-K for the year ended December 31, 2019 (HEI's 2019 Form 10-K). ChairpersonRichard J. Dahl"Compensation“Compensation Committee Report."” No member of the Compensation Committee during 20192020 was an employee or former employee of HEI. During 2019,2020, no member of the Compensation Committee had a relationship that must be described under SEC rules regarding disclosure of related2019,2020, none of HEI'sHEI’s executive officers served on the compensation committee (or its equivalent) or board of directors of another entity (excluding tax-exempt organizations) where an executive officer of such an entity served on HEI'sthe Compensation Committee or Board of Directors.48EXECUTIVE COMPENSATION 2017-19years ended December 31, 2018 through 2020 for all of the named executive officers (NEOs) other than Messrs. Murao and Seu, and for 2020 for Messrs. Murao and Seu (who were not NEOs in 2018 and 2019).•"Salary," "Nonequity“Salary,” “Nonequity Incentive Plan Compensation"Compensation” and "All“All Other Compensation"Compensation” columns (except see explanation in the paragraph below regarding the 2015-17 LTIP and 2016-18 LTIP awards).•2017 and 2018 are notably higher than, and not comparable to, the reported amount for 2019 and 2020, and are not reflective of 2017 and 2018 NEO target compensation. This is because LTIP awards made in 2015 and 2016 (settled in 2017 and 2018, respectively)2018) were2017 and 2018 amounts in the table includeboth (i) cash settlement of LTIP awards granted in 2015 and 2016 (with respect to the 2015-2017 LTIP and 2016-20182016-18 LTIP), and (ii) equity-based LTIP grants made in 2017 and 2018 (with respect to the 2017-2019 LTIP and 2018-20202018-20 LTIP).•"Stock Awards"“Stock Awards” column reflects: (i) the opportunity to earn shares of HEI Common Stock under the 2017-19 LTIP, 2018-20 LTIP, 2019-21 LTIP and 2019-20212020-22 LTIP, respectively, if performance metrics are achieved and (ii) RSUs that vest over the respective 2017-20, 2018-21, 2019-22 and 2019-2022 periods2020-23, respectively, and may be forfeited in whole or in part if the executive leaves before the vesting period ends. 1 2 Name and 2019
Principal Positions Year Salary
($)1 Stock
Awards
($)2 Nonequity
Incentive Plan
Compensation
($)3 Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)4 All Other
Compensation
($)5 Total
Without
Change
in Pension
Value
($)6 Total
($) 2019 926,300 2,344,943 957,886 660,533 13,239 4,242,368 4,902,901 2018 921,800 2,201,594 2,602,037 — — 5,725,431 5,725,431 2017 893,533 2,151,295 2,337,155 531,763 — 5,381,983 5,913,746 2019 527,917 693,866 321,724 184,099 26,057 1,569,564 1,753,663 2018 512,500 676,069 623,082 86,716 33,231 1,844,882 1,931,598 2017 487,500 597,967 327,163 86,449 39,096 1,451,726 1,538,175 2019 707,350 1,143,849 412,527 165,887 14,160 2,277,886 2,443,773 2018 686,750 1,114,464 1,012,797 91,578 13,635 2,827,646 2,919,224 2017 655,583 1,071,359 847,170 187,506 13,230 2,587,342 2,774,848 2019 700,200 710,286 519,548 — 37,857 1,967,891 1,967,891 2018 679,800 692,855 1,893,928 — 47,371 3,313,954 3,313,954 2017 660,000 679,044 1,699,252 — 52,796 3,091,092 3,091,092 *Mr. Hazelton joined HEI as Senior Vice President, Finance on October 24, 2016 and was promoted to HEI Executive Vice President & CFO on April 2, 2017.1Salary. This column represents cash base salary received for the year.2Stock Awards. These amounts represent the aggregate grant date fair value of stock awards granted in the years shown computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (FASB ASC Topic 718). For 2017, 2018 and 2019, these amounts are composed of: (i) the opportunity (based on probable outcome of performance conditions (in this case, target) as of the grant date) to earn shares of HEI Common Stock in the future pursuant to the 2017-19, 2018-20 and 2019-21 LTIPs, respectively, if pre-established performance goals are achieved and (ii) RSUs vesting in installments over a four-year period. Since the 2015-17 and 2016-18 LTIPs are denominated in cash rather than in stock, in accordance with SEC rules, the cash payouts are reported in the "Nonequity Incentive Plan Compensation" column in this Summary Compensation Table for 2017 and 2018, respectively. See the 2019 Grants of Plan-Based Awards table below for the portion of the amount in the Stock Awards column above that is composed of 2019 EXECUTIVE COMPENSATION2019-212020-22 LTIP. Assuming achievement of the highest level of performance conditions, the maximum value of the performance awards payable in 20222023 under the 2019-212020-22 LTIP would be: Ms. Lau $3,300,398;$3,332,385; Mr. Hazelton $859,870;$871,721; Mr. Oshima $1,368,154Murao $423,223; Mr. Seu $672,941 and Mr. Wacker $1,140,458.For a discussion of the assumptions underlying the amounts set out for the RSUs and 2019-2021 LTIP, see Note 11 to the Consolidated Financial Statements in HEI's 2019 Form 10-K.3Nonequity Incentive Plan Compensation. These amounts represent cash payouts to named executive officers under the annual incentive plan, the EICP, earned for the years shown. For 2017 and 2018, the amounts in this column also include the cash payouts from the 2015-17 and 2016-18 LTIPs, respectively.4Change in Pension Value and Nonqualified Deferred Compensation Earnings. These amounts represent the change in present value of the accrued pension and executive death benefits from beginning of year to end of year for 2017, 2018 and 2019. These amounts are not current payments; pension and executive death benefits are only paid after retirement or death, as applicable. The amounts in this column depend heavily on changes in actuarial assumptions, such as discount rates, and also are impacted by years of service and age. In accordance with SEC rules, the negative change in value in 2018 for Ms. Lau is shown as no change in the table above. For a further discussion of the applicable plans, see the 2019 Pension Benefits table and related notes below. No named executive officer had above-market or preferential earnings on nonqualified deferred compensation for the periods covered in the table above.5All Other Compensation. The following table summarizes the components of "All Other Compensation" with respect to 2019:NameContributions
For a discussion of the assumptions underlying the amounts set out for the RSUs and 2020-22 LTIP, see Note 11 to DefinedContributionPlans($)aOther($)bTotal AllOtherCompensation($) Constance H. Lau—13,23913,239Gregory C. Hazelton8,40017,65726,057Alan M. Oshima8,4005,76014,160Richard F. Wacker18,00419,85337,857 the Consolidated Financial Statements in HEI’s 2020 Form 10-K.3 4 5 a Mr. Wacker received matching contributions to his account in the ASB 401(k) Plan up to the amount permitted based on eligible compensation ($285,000 in 2020). Mr. Hazelton received matching contributions to his account in the HEI Retirement Savings Plan up to the amount permitted based on eligible compensation ($285,000 in 2020). b Messrs. Hazelton and Wacker received club membership dues. Mr. Hazelton also had one more week of vacation than employees with similar length of service would usually receive. 6 aMr. Wacker received matching contributions to his account in the ASB 401(k) Plan up to the amount permitted based on eligible compensation ($280,000 in 2019) and the portion of his 2019 profit-sharing contribution based on eligible compensation. Messrs. Hazelton and Oshima received matching contributions to their accounts in the HEI Retirement Savings Plan up to the amount permitted based on eligible compensation ($280,000 in 2019).bMs. Lau and Messrs. Hazelton, Oshima and Wacher received club membership dues. Mr. Hazelton also had one more week of vacation than employees with similar length of service would usually receive. Mr. Wacker also had one more day of paid time off than ASB employees with similar length of service below the Senior Vice President level receive, and a profit-sharing contribution to his account under the ASB Select Deferred Compensation Plan in the amount of his profit-sharing contribution that could not be included in his ASB 401(k) Plan account due to limits on eligible compensation.6Total Without Change in Pension Value. Total Without Change in Pension Value represents total compensation as determined under SEC rules, minus the change in pension value and executive death benefits amount reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. We include this column because the magnitude of the change in pension value and death benefits in a given year is largely determined by actuarial assumptions, such as discount rates and mortality assumptions set by the Society of Actuaries, and does not reflect decisions made by the Compensation Committee for that year or the actual benefit necessarily to be received by the recipient. The amounts reported in the Total Without Change in Pension Value column may differ substantially from the amounts reported in the Total column and are not a substitute for the Total column.50EXECUTIVE COMPENSATION cash-performancecash performance award opportunities under the 20192020 EICP, equity-based performance award opportunities granted under the LTIP for performance over the 2019-212020-22 period and payable in 2022,2023 and RSUs granted in 20192020 and vesting in installments over four years.PLAN-BASEDPLAN-BASED AWARDS All Other
Stock
Awards:
Number of
Shares of
Stock or Units
(#)3 Estimated Future Payouts
Under Nonequity Incentive
Plan Awards1 Estimated Future Payouts
Under Equity Incentive Plan
Awards2 Grant Date
Fair Value
of Stock
Awards
($)4 Name Grant Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) 2/14/19 EICP 463,150 926,300 1,852,600 — — — — — 2/14/19 LTIP — — — 21,510 43,021 86,042 — 1,650,199 2/14/19 RSU — — — — — — 18,438 694,744 2/14/19 EICP 158,375 316,750 633,500 — — — — — 2/14/19 LTIP — — — 5,604 11,208 22,417 — 429,918 2/14/19 RSU — — — — — — 7,005 263,948 2/14/19 EICP 265,256 530,513 1,061,025 — — — — — 2/14/19 LTIP — — — 8,917 17,834 35,668 — 684,078 2/14/19 RSU — — — — — — 12,202 459,771 2/14/19 EICP 280,080 560,160 1,120,320 — — — — — 2/14/19 LTIP — — — 7,433 14,866 29,732 — 570,229 2/14/19 RSU — — — — — — 3,717 140,057 EICPEICP: Executive Incentive Compensation Plan (annual incentive)LTIP Long-Term(2019-21(2020-22 period)RSU1Estimated Future Payouts Under Nonequity Incentive Plan Awards. Shows possible cash payouts under the 2019 EICP based on meeting performance goals set in February 2019 at threshold, target and maximum levels. Actual payouts for the 2019 EICP are reported in the 2019 Summary Compensation Table above.2Estimated Future Payouts Under Equity Incentive Plan Awards. Represents number of shares of stock that may be issued under the 2019-21 LTIP based upon the achievement of performance goals set in February 2019 at threshold, target and maximum levels and vesting at the end of the three-year performance period. LTIP awards are forfeited for terminations of employment during the vesting period, except for terminations due to death, disability or retirement, which allow for pro-rata participation based upon completed months of service after a minimum number of months of service in the performance period. Dividend equivalent shares, not included in the chart, are compounded over the period at the actual dividend rate and are paid at the end of the performance period based on actual shares earned.3All Other Stock Awards: Number of Shares of Stock or Units. Represents number of RSUs awarded in 2019 that will vest and be issued as unrestricted stock in four equal annual installments on the grant date anniversaries. Unvested awards are forfeited for terminations of employment during the vesting period, except for terminations due to death, disability or retirement, which allow for pro-rata vesting up to the date of termination. Receipt of RSU awards is generally subject to continued employment and expiration of the applicable vesting period. Dividend equivalent shares, not included in the chart, are compounded over the period at the actual dividend rate and are paid in HEI Common Stock on RSUs vesting in a given year.4Grant Date Fair Value of Stock Awards. Grant date fair value for shares under the 2019-21 LTIP is estimated in accordance with the fair-value based measurement of accounting, as described in FASB ASC Topic 718 based upon the probable (in this case, target) outcome of the performance conditions as of the grant date. For a discussion of the assumptions and methodologies used to calculate the amounts reported, see the discussion of performance awards contained in Note 11 (Share-based compensation) to the Consolidated Financial Statements in HEI's 2019 Form 10-K. Grant date fair value for RSUs is based on the closing price of HEI Common Stock on the NYSE on the date of the grant of the award.1 2 3 4 Table of ContentsTABLE OF CONTENTSEXECUTIVE COMPENSATION 1 2 3 Stock Awards Equity Incentive Plan Awards Shares or Units of
Stock That Have
Not Vested1 Number of
Unearned
Shares,
Units or Other
Rights That
Have Not
Vested (#)3 Market or
Payout Value of
Unearned Shares,
Units or Other
Rights That
Have Not
Vested ($)2 Name Grant
Year Number
(#) Market
Value
($)2 2016 5,421 254,028 — — 2017 10,008 468,975 — — 2018 15,201 712,319 86,478 4,052,359 2019 18,438 864,005 86,042 4,031,928 Total 49,068 2,299,327 172,520 8,084,287 2016 908 42,549 — — 2017 3,360 157,450 — — 2018 5,634 264,009 24,040 1,126,514 2019 7,005 328,254 22,417 1,050,461 Total 16,907 792,262 46,457 2,176,975 2016 3,172 148,640 — — 2017 6,364 298,217 — — 2018 9,815 459,931 38,253 1,792,536 2019 12,202 571,786 35,668 1,671,402 Total 31,553 1,478,574 73,921 3,463,938 2016 1,070 50,140 — — 2017 1,971 92,361 — — 2018 2,989 140,065 31,887 1,494,225 2019 3,717 174,179 29,732 1,393,242 Total 9,747 456,745 61,619 2,887,467 �� 1Shares or Units of Stock That Have Not Vested. The remaining installments of the 2016 RSUs for Ms. Lau and Messrs. Oshima and Wacker vested on February 5, 2020. Of the remaining installments of the 2017 RSUs, one installment vested on January 31, 2020 and the remainder will vest on January 31, 2021. Of the remaining installments of the 2018 RSUs, one installment vested on January 31, 2020 and the remainder will vest in equal annual installments on January 31, 2021 and 2022. For the 2019 RSUs, one installment vested on February 14, 2020 and the remainder will vest in equal annual installments on February 14, 2021, 2022 and 2023. For Mr. Hazelton's HEI RSUs granted to replace the unvested portion of his prior employer RSUs granted in 2016, the remaining installment vested on February 5, 2020.2Market Value. Market value is based upon the closing per-share trading price of HEI Common Stock on the NYSE of $46.86 as of December 31, 2019.3Number of Unearned Shares, Units or Other Rights That Have Not Vested. Represents number of shares of HEI Common Stock that would be issued under the 2018-20 and 2019-21 LTIPs if performance goals are met at the maximum level at the end of the respective three-year performance periods.52Table of ContentsTABLE OF CONTENTSEXECUTIVE COMPENSATION 20192020 Option Exercises and Stock Vested Stock Awards Name Number of Shares
Acquired on Vesting
(#) Value Realized
on Vesting
($) 22,105 1 839,548 49,895 2 2,338,080 3 10,202 1 387,472 12,564 2 588,749 3 12,788 1 485,688 21,592 2 1,011,801 3 4,361 1 165,631 33,348 2 1,562,687 3 1Represents the number of shares acquired (and dividend equivalents paid in stock based on number of shares vested) upon the 2019 vesting of installments of RSUs granted on February 6, 2015, February 5, 2016, October 24, 2016, January 31, 2017 and January 31, 2018. Value realized on vesting includes dividend equivalents.NameNumber of SharesAcquired on VestingCompoundedDividendEquivalentsTotal SharesAcquired onVesting Constance H. Lau20,1591,94622,105Gregory C. Hazelton9,1381,06410,202 Alan M. Oshima11,7231,06512,788Richard F. Wacker3,9773844,361 2Represents the number of shares acquired (and dividend equivalents paid in stock based on earned shares) upon vesting of performance share awards under the 2017-19 LTIP, which were payable in stock at the end of the performance period. Value realized on vesting includes dividend equivalents. The Compensation Committee certified the achievement of the applicable performance measures on February 11, 2020.NameNumber of Shares CompoundedDividendEquivalentsTotal SharesAcquired onVesting Constance H. Lau45,1134,78249,895Gregory C. Hazelton11,3601,20412,564 Alan M. Oshima19,5232,06921,592Richard F. Wacker30,1523,19633,348 1 Represents the number of shares acquired (and dividend equivalents paid in stock based on number of shares vested) upon the 2020 vesting of installments of RSUs granted on February 5, 2016, October 24, 2016, January 31, 2017, January 31, 2018 and February 14, 2019. Value realized on vesting includes dividend equivalents. 2 Represents the number of shares acquired (and dividend equivalents paid in stock based on earned shares) upon vesting of performance share awards under the 2018-20 LTIP, which were payable in stock at the end of the performance period. Value realized on vesting includes dividend equivalents. The Compensation Committee certified the achievement of the applicable performance measures on February 9, 2021. 3 3Represents vested 2017-19 LTIP shares at 2019 year-end closing price of HEI Common Stock on the NYSE of $46.86 per share on December 31, 2019. Actual settlement of the performance share awards under the 2017-19 LTIP occurred on February 14, 2020 (after the February 11, 2020 certification of the applicable performance results) based on the closing price of HEI Common Stock on the NYSE of $50.40 per share. The actual settlement amounts were: Ms. Lau $2,514,708; Mr. Hazelton $633,226; Mr. Oshima $1,088,237 and Mr. Wacker $1,680,739.53EXECUTIVE COMPENSATION20192020 of accumulated benefits for each of the named executive officers and the number of years of service credited to each executive under the applicable pension plan and, for Ms. Lau and Mr. Seu, the executive death benefit plan, determined using the interest rate, mortality table and other assumptions described below, which are consistent with those used in HEI'sHEI’s financial statements (see Note 10 to the Consolidated Financial Statements in HEI's 2019HEI’s 2020 Form 10-K): 1 Ms. Lau and Messrs. Hazelton, Murao and Seu are vested in retirement benefits under the HEI Retirement Plan. 2 Ms. Lau is a participant in the ASB Retirement Plan. She is currently eligible to retire with full normal retirement benefits (limited to her years of credited service) under the plan. No other named executive officer is a participant in the plan or entitled to benefits under the plan. At the time of Ms. Lau’s promotion to HEI President and CEO on May 2, 2006, her credited service under the plan was frozen and she resumed participation in the HEI Retirement Plan. Future benefit accruals for all participants under the ASB Retirement Plan were frozen effective December 31, 2007. As a result, credited service and compensation after December 31, 2007 are not recognized in calculating retirement benefits under the plan. Normal retirement benefits under the frozen plan are calculated based on a formula of 1.5% × Credited Service to December 31, 2007 (maximum 35 years) × Final Average Compensation at December 31, 2007 (averaged over the highest paying five consecutive calendar years out of the last ten calendar years prior to 2008). Compensation is primarily gross earnings but excludes commissions, stock options and other equity compensation, LTIP payments, deferrals to and distributions from the ASB Select Deferred Compensation Plan and other “fringe benefits” as defined in the plan. Early retirement benefits are available for participants who retire after attaining age 55 with a minimum of ten years of service. Beginning at age 60 the benefits are subsidized. The accrued normal retirement benefit is reduced by an applicable percentage which ranges from 59.8% for early retirement at age 55 to 2% at age 64. The early retirement subsidies are not available to employees who terminate employment with vested benefits but prior to satisfying the age and service requirements for the early retirement subsidies. Name Plan Name Number of
Years of
Credited Service
(#) Present Value of
Accumulated
Benefit ($)6 Payments
During the
Last
Fiscal
Year ($) HEI Retirement Plan1 28.8 2,561,882 — ASB Retirement Plan2 6.4 276,984 — HEI Supplemental Executive Retirement Plan3 24.3 7,853,804 — HEI Excess Pay Plan4 8.6 1,742,984 — HEI Executive Death Benefit5 — 735,521 — HEI Retirement Plan1 5.1 235,987 — HEI Excess Pay Plan4 5.1 199,936 — HEI Retirement Plan1 8.2 382,511 — HEI Excess Pay Plan4 8.2 567,862 — — — — — 1The HEI Retirement Plan is the standard retirement plan for HEI and Hawaiian Electric employees. Normal retirement benefits under the HEI Retirement Plan for management employees hired before May 1, 2011, including Ms. Lau, are calculated based on a formula of 2.04% × Credited Service (maximum 67%) × Final Average Compensation (average monthly base salary for highest thirty-six consecutive months out of the last ten years). Credited service is generally the same as the years of service with HEI and other participating companies (Hawaiian Electric and its subsidiaries). Credited service is also provided for limited unused sick leave and for the period a vested participant is on long-term disability. The normal form of benefit is a joint and 50% survivor annuity for married participants and a single life annuity for unmarried participants. Actuarially equivalent optional forms of benefit are also available. Participants who qualify to receive retirement benefits immediately upon termination of employment may also elect a single sum distribution of up to $100,000 with the remaining benefit payable as an annuity. Single sum distributions are not eligible for early retirement subsidies, and so may not be as valuable as an annuity at early retirement. Retirement benefits are increased by an amount equal to approximately 1.4% of the initial benefit every twelve months following retirement. The plan provides benefits at early retirement (prior to age 65), normal retirement (age 65), deferred retirement (over age 65) and death. Subsidized early retirement benefits are available for participants who meet certain age and service requirements at ages 50-64. The accrued normal retirement benefit is reduced by an applicable percentage, which ranges from 30% for early retirement at age 50 with at least 15 years of service to 1% at age 59. Accrued benefits are not reduced for eligible employees who retire at age 60 and above. The early retirement subsidies are not available to employees who terminate employment with vested benefits but prior to satisfying the age and service requirements for the early retirement subsidies.HEI and Hawaiian Electric management employees who commenced employment on or after May 1, 2011, such as Messrs. Hazelton and Oshima, receive reduced benefits under the HEI Retirement Plan (e.g., reduced benefit formula, more stringent requirements for subsidized early retirement benefits, reduced early retirement subsidies and no post-retirement cost-of-living adjustment). Normal retirement benefits for these employees are calculated based on a formula of 1.5% × Credited Service × Final Average Compensation (average monthly base salary for highest thirty-six consecutive months out of the last ten years). These employees are eligible for a limited match under the HEI Retirement Savings Plan (50% match on the first 6% of compensation deferred).Ms. Lau and Messrs. Hazelton and Oshima are vested in retirement benefits under the HEI Retirement Plan.2Ms. Lau is a participant in the ASB Retirement Plan. She is currently eligible to retire with full normal retirement benefits (limited to her years of credited service) under the plan. No other named executive officer is a participant in the plan or entitled to benefits under the plan. At the time of Ms. Lau's promotion to HEI President and CEO on May 2, 2006, her credited service under the plan was frozen and she resumed participation in the HEI Retirement Plan. Future benefit accruals for all participants under the ASB Retirement Plan were frozen effective December 31, 2007. As a result, credited service and compensation after December 31, 2007 are not recognized in calculating retirement benefits under the plan. Normal retirement benefits under the frozen plan are calculated based on a formula of 1.5% × Credited Service to December 31, 2007 (maximum 35 years) × Final Average Compensation at December 31, 2007 (averaged over the highest paying five consecutive calendar years out of the last ten calendar years prior to 2008). Compensation is primarily gross earnings but excludes commissions, stock options and other equity compensation, LTIP payments, deferrals to and distributions from the ASB Select Deferred Compensation Plan and other "fringe benefits" as defined in the plan. Early retirement benefits are available for participants who retire after attaining age 55 with a minimum of ten years of service. Beginning at age 60 the benefits are subsidized. The accrued normal retirement benefit is reduced by an applicable percentage which ranges from 59.8% for early retirement at age 55 to 2% at age 64. The early retirement subsidies are not available to employees who terminate employment with vested benefits but prior to satisfying the age and service requirements for the early retirement subsidies.Table of ContentsTABLE OF CONTENTSEXECUTIVE COMPENSATION3Ms. Lau is a participant in the HEI Supplemental Executive Retirement Plan, which was frozen effective December 31, 2008. She is currently eligible to retire with full normal retirement benefits (limited to benefits accrued before 2009) under the plan. No other named executive officer is a participant in the plan or entitled to benefits under the plan. Benefits under the plan are determined based on a formula of 2.04% × Credited Service to December 31, 2008 (maximum 60%) × Final Average Compensation at December 31, 2008 (average monthly base salary plus annual incentive awards for the three highest calendar years out of the last sixty months prior to 2009). Credited service is based on actual years of service through December 31, 2008 with any HEI-affiliated company, including ASB and Hawaiian Electric and its subsidiaries. Although Ms. Lau has more than 30 years of actual service with HEI-affiliated companies, she receives only 24.3 years of credited service for purposes of the HEI Supplemental Executive Retirement Plan. Benefits under the plan are reduced by benefits accrued as of December 31, 2008 under the HEI Retirement Plan, ASB Retirement Plan and social security. Early retirement and death benefits similar to those available under the HEI Retirement Plan are available under the plan. Distributions will be delayed for a 6-month period to the extent necessary to comply with Internal Revenue Code Section 409A. 3 Ms. Lau is a participant in the HEI Supplemental Executive Retirement Plan, which was frozen effective December 31, 2008. She is currently eligible to retire with full normal retirement benefits (limited to benefits accrued before 2009) under the plan. No other named executive officer is a participant in the plan or entitled to benefits under the plan. Benefits under the plan are determined based on a formula of 2.04% × Credited Service to December 31, 2008 (maximum 60%) × Final Average Compensation at December 31, 2008 (average monthly base salary plus annual incentive awards for the three highest calendar years out of the last sixty months prior to 2009). Credited service is based on actual years of service through December 31, 2008 with any HEI-affiliated company, including ASB and Hawaiian Electric and its subsidiaries. Although Ms. Lau has more than 30 years of actual service with HEI-affiliated companies, she receives only 24.3 years of credited service for purposes of the HEI Supplemental Executive Retirement Plan. Benefits under the plan are reduced by benefits accrued as of December 31, 2008 under the HEI Retirement Plan, ASB Retirement Plan and social security. Early retirement and death benefits similar to those available under the HEI Retirement Plan are available under the plan. Distributions will be delayed for a 6-month period to the extent necessary to comply with Internal Revenue Code Section 409A. 4 As of December 31, 2020, all of the named executive officers, except for Mr. Wacker, were participants in the HEI Excess Pay Plan. Ms. Lau and Messrs. Hazelton, Murao and Seu are vested in retirement benefits under such plan. Benefits under the HEI Excess Pay Plan are determined using the same formula as the HEI Retirement Plan, but are not subject to the Internal Revenue Code limits on the amount of annual compensation that can be used for calculating benefits under qualified retirement plans ($285,000 in 2020 as indexed for inflation) and on the amount of annual benefits that can be paid from qualified retirement plans (the lesser of $230,000 in 2020 as indexed for inflation, or the participant’s highest average compensation over three consecutive calendar years). Benefits payable under the HEI Excess Pay Plan are reduced by the benefit payable from the HEI Retirement Plan. Early retirement, death benefits and vesting provisions are similar to the HEI Retirement Plan. 5 Ms. Lau and Mr. Seu are covered by the Executive Death Benefit Plan of HEI and Participating Subsidiaries. The plan was amended effective September 9, 2009 to close participation to new participants and freeze the benefit for existing participants. Under the amendment, death benefits will be paid based on salaries as of September 9, 2009. The plan provides death benefits equal to two times the executive’s base salary as of September 9, 2009 if the executive dies while actively employed or, if disabled, dies prior to age 65, and one times the executive’s base salary as of September 9, 2009 if the executive dies following retirement. The amounts shown in the table above assume death following retirement. Death benefits are grossed up by the amount necessary to pay income taxes on the grossed-up benefit amount as an equivalent to the tax exclusion for death benefits paid from a life insurance policy. Messrs. Hazelton, Murao and Wacker were not employed by the companies at the time the plan was frozen and therefore are not entitled to any benefits under the plan. 6 The present value of accumulated benefits for the named executive officers included in the 2020 Pension Benefits table was determined based on the following: Assumptions: a. Discount Rate — The discount rate is the interest rate used to discount future benefit payments in order to reflect the time value of money. The discount rates used in the present value calculations are 2.92% for HEI retirement benefits, 2.76% for ASB retirement benefits and 2.83% for executive death benefits as of December 31, 2020. b. c. Retirement Age — A named executive officer included in the table is assumed to remain in active employment until, and assumed to retire at, the later of (a) the earliest age when unreduced pension benefits would be payable or (b) attained age as of December 31, 2020. d. e. Unused Sick Leave — Each named executive officer who participates in the HEI Retirement Plan is assumed to have accumulated 1,160 unused sick leave hours at retirement age. 7 Mr. Wacker is not eligible to participate in any of the plans in the above 2020 Pension Benefits table because such plans either (i) are not open to employees of ASB or (ii) were frozen to new participants before Mr. Wacker joined ASB. 4As of December 31, 2019, all of the named executive officers, except for Mr. Wacker, were participants in the HEI Excess Pay Plan. Ms. Lau and and Messrs. Hazelton and Oshima are vested in retirement benefits under such plan. Benefits under the HEI Excess Pay Plan are determined using the same formula as the HEI Retirement Plan, but are not subject to the Internal Revenue Code limits on the amount of annual compensation that can be used for calculating benefits under qualified retirement plans ($280,000 in 2019 as indexed for inflation) and on the amount of annual benefits that can be paid from qualified retirement plans (the lesser of $225,000 in 2019 as indexed for inflation, or the participant's highest average compensation over three consecutive calendar years). Benefits payable under the HEI Excess Pay Plan are reduced by the benefit payable from the HEI Retirement Plan. Early retirement, death benefits and vesting provisions are similar to the HEI Retirement Plan.5Ms. Lau is covered by the Executive Death Benefit Plan of HEI and Participating Subsidiaries. The plan was amended effective September 9, 2009 to close participation to new participants and freeze the benefit for existing participants. Under the amendment, death benefits will be paid based on salaries as of September 9, 2009. The plan provides death benefits equal to two times the executive's base salary as of September 9, 2009 if the executive dies while actively employed or, if disabled, dies prior to age 65, and one times the executive's base salary as of September 9, 2009 if the executive dies following retirement. The amounts shown in the table above assume death following retirement. Death benefits are grossed up by the amount necessary to pay income taxes on the grossed up benefit amount as an equivalent to the tax exclusion for death benefits paid from a life insurance policy. Messrs. Hazelton, Oshima and Wacker were not employed by the companies at the time the plan was frozen and therefore are not entitled to any benefits under the plan.6The present value of accumulated benefits for the named executive officers included in the 2019 Pension Benefits table was determined based on the following:Methodology: The present values are calculated as of December 31, 2019 based on the credited service and pay of the named executive officer as of such date (or the date of benefit freeze, if earlier).Assumptions:a.Discount Rate — The discount rate is the interest rate used to discount future benefit payments in order to reflect the time value of money. The discount rates used in the present value calculations are 3.61% for HEI retirement benefits, 3.49% for ASB retirement benefits and 3.52% for executive death benefits as of December 31, 2019.b.Mortality Table — The PRI-2012 Mortality Table (separate male and female rates) with generational projection using scale MP-2019 from base year 2012 is used to discount future pension benefit payments in order to reflect the probability of survival to any given future date. For the calculation of the executive death benefit present values, the mortality table rates are multiplied by the death benefit to capture the death benefit payments assumed to occur at all future dates. Mortality is applied post-retirement only.c.Retirement Age — A named executive officer included in the table is assumed to remain in active employment until, and assumed to retire at, the later of (a) the earliest age when unreduced pension benefits would be payable or (b) attained age as of December 31, 2019.d.Pre-Retirement Decrements — Pre-retirement decrements refer to events that could occur between the measurement date and the retirement age (such as withdrawal, early retirement and death) that would impact the present value of benefits. No pre-retirement decrements are assumed in the calculation of pension benefit table present values. Pre-retirement decrements are assumed for financial statement purposes.e.Unused Sick Leave — Each named executive officer who participates in the HEI Retirement Plan is assumed to have accumulated 1,160 unused sick leave hours at retirement age.7Mr. Wacker is not eligible to participate in any of the plans in the above 2019 Pension Benefits table because such plans either (i) are not open to employees of ASB or (ii) were frozen to new participants before Mr. Wacker joined ASB.55EXECUTIVE COMPENSATION 20192020 Nonqualified Deferred Compensation 1 While employed by ASB, Ms. Lau was eligible to defer compensation under the ASB Select Deferred Compensation Plan, a contributory nonqualified deferred compensation plan. She elected to defer $100,000 each year from bonuses awarded to her in 2004 and 2005. These amounts are reflected in the “Aggregate Balance at Last FYE” column of the table above and were previously reported as compensation to Ms. Lau in the 2004 and 2005 Summary Compensation Tables in the proxy statements for such years. Since 2008, Ms. Lau no longer earns any compensation from ASB that is eligible for deferral under the plan. The ASB Deferred Compensation Plan allows select ASB employees to defer up to 100% of current salary, bonus and commissions. Pursuant to a 2009 amendment, the plan provides for employer matching contributions and profit-sharing contributions for plan years beginning January 1, 2010. These matching and profit-sharing contributions take into account compensation which is excluded from consideration under the ASB 401(k) Plan, including on account of being contributed to the ASB Deferred Compensation Plan or being in excess of limits on eligible compensation imposed by the Internal Revenue Code. The deferred amounts are credited with gains/losses of deemed investments chosen by the participant from a designated list of publicly traded mutual funds and other investment offerings. Earnings are not above-market or preferential and therefore are not included in the 2020 Summary Compensation Table above. Under the plan, a participant may receive an interim distribution while employed, but no earlier than the first day of the fourth plan year following the effective date of the initial election to defer. A participant may also request a withdrawal of a portion of his or her account to satisfy an unforeseeable emergency. The distribution of accounts from the plan is triggered by disability, death or separation from service (including retirement) and will be delayed for a 6-month period to the extent necessary to comply with Internal Revenue Code Section 409A. A participant may elect to receive such distributions in a lump sum or in substantially equal payments spread over a period not to exceed 15 years. 2 Mr. Wacker has not deferred any amounts under the ASB Deferred Compensation Plan. In 2020 he received a profit-sharing contribution to his account under such plan for the portion of his profit-sharing contribution that could not be made to his ASB 401(k) Plan account due to Internal Revenue Code limits on eligible compensation for 401(k) plans. The amount of such profit-sharing contribution is included in the “All Other Compensation” column of the 2020 Summary Compensation Table for the year 2019. 3 Amounts in this column include contributions reported in the Summary Compensation Table for each year in which each executive listed above was a named executive officer. Name Executive
Contributions
in Last FY
($) Registrant
Contributions
in Last FY
($) Aggregate
Earnings/(Losses)
in Last FY
($) Aggregate
Withdrawals/
Distributions
($) Aggregate
Balance at
Last FYE
($)4 — — 135,072 — 599,985 — — — — — — — 169,264 — 852,954 — 13,750 26,763 — 136,314 1While employed by ASB, Ms. Lau was eligible to defer compensation under the ASB Select Deferred Compensation Plan, a contributory nonqualified deferred compensation plan. She elected to defer $100,000 each year from bonuses awarded to her in 2004 and 2005. These amounts are reflected in the "Aggregate Balance at Last FYE" column of the table above and were previously reported as compensation to Ms. Lau in the 2004 and 2005 Summary Compensation Tables in the proxy statements for such years. Since 2008 she no longer earns any compensation from ASB that could be deferred to the plan. The ASB Deferred Compensation Plan allows select ASB employees to defer up to 100% of current salary, bonus and commissions. Pursuant to a 2009 amendment, the plan provides for employer matching contributions and profit-sharing contributions for plan years beginning January 1, 2010. These matching and profit-sharing contributions take into account compensation which is excluded from consideration under the ASB 401(k) Plan, including on account of being contributed to the ASB Deferred Compensation Plan or being in excess of limits on eligible compensation imposed by the Internal Revenue Code. The deferred amounts are credited with gains/losses of deemed investments chosen by the participant from a designated list of publicly traded mutual funds and other investment offerings. Earnings are not above-market or preferential and therefore are not included in the 2019 Summary Compensation Table above. Under the plan, a participant may receive an interim distribution while employed, but no earlier than the first day of the fourth plan year following the effective date of the initial election to defer. A participant may also request a withdrawal of a portion of his or her account to satisfy an unforeseeable emergency. The distribution of accounts from the plan is triggered by disability, death or separation from service (including retirement) and will be delayed for a 6-month period to the extent necessary to comply with Internal Revenue Code Section 409A. A participant may elect to receive such distributions in a lump sum or in substantially equal payments spread over a period not to exceed 15 years.2Represents salary and incentive compensation deferrals under the HEI Deferred Compensation Plan, a contributory nonqualified deferred compensation plan implemented in 2011. The plan allows certain HEI and Hawaiian Electric executives to defer up to 100% of annual base salary in excess of the compensation limit set forth in Internal Revenue Code Section 401(a)(17) ($280,000 in 2019, as indexed for inflation) and up to 80% of any incentive compensation paid in cash. In 2019, there were no matching or other employer contributions under the plan. The deferred amounts are credited with gains/losses of deemed investments chosen by the participant from a designated list of publicly traded mutual funds and other investment offerings. Earnings are not above-market or preferential and therefore are not included in the 2019 Summary Compensation Table above. The distribution of accounts from the plan is triggered by disability, death or separation from service (including retirement) and will be delayed for a 6-month period to the extent necessary to comply with Internal Revenue Code Section 409A. A participant may elect to receive distributions triggered by separation from service in a lump sum or in substantially equal payments spread over a period not to exceed 15 years. Lump sum benefits are payable in the event of disability or death.3Mr. Wacker has not deferred any amounts under the ASB Deferred Compensation Plan. In 2019 he received a profit-sharing contribution to his account under such plan for the portion of his profit-sharing contribution that could not be made to his ASB 401(k) Plan account due to Internal Revenue Code limits on eligible compensation for 401(k) plans. The amount of such profit-sharing contribution is included in the "All Other Compensation" column of the 2019 Summary Compensation Table for the year 2018.4Amounts in this column include contributions reported in the Summary Compensation Table for each year in which each executive listed above was a named executive officer.EXECUTIVE COMPENSATION 2019.2020. The amounts listed below are estimates; actual amounts to be paid would depend on the actual date of termination and circumstances existing at that time.CHANGE-IN-CONTROLCHANGE-IN-CONTROL PAYMENT TABLE Name/
Benefit Plan or Program Retirement
on 12/31/19
($)1 Termination due
to death or
disability
on 12/31/19
($)2 Voluntary
termination,
termination for
and without cause
on 12/31/19
($)3 Termination
after change
in control
on 12/31/19
($)4 Constance H. Lau Executive Incentive Compensation Plan5 — — — — Long-Term Incentive Plan6 2,133,442 2,133,442 — — Restricted Stock Units7 984,104 984,104 — — Change-in-Control Agreement4 — — — 10,506,190 TOTAL 3,117,546 3,117,546 — 10,506,190 Gregory C. Hazelton Executive Incentive Compensation Plan5 — — — — Long-Term Incentive Plan6 — 580,970 — — Restricted Stock Units7 — 303,149 — — Change-in-Control Agreement4 — — — 2,793,289 TOTAL — 884,119 — 2,793,289 Alan M. Oshima* Executive Incentive Compensation Plan5 — — — — Long-Term Incentive Plan6 924,548 924,548 — 1,817,115 Restricted Stock Units7 619,972 619,972 — 1,580,494 TOTAL 1,544,520 1,544,520 — 3,397,609 Richard F. Wacker Executive Incentive Compensation Plan5 — — — — Long-Term Incentive Plan6 770,659 770,659 — — Restricted Stock Units7 194,827 194,827 — — Change-in-Control Agreement4 — — — 4,769,225 TOTAL 965,486 965,486 — 4,769,225 *Mr. Oshima did not have a change-in-control agreement as of December 31, 2019.stock-stock–based award amounts were valued using the 20192020 year–-end closing price of HEI Common Stock on the NYSE of $46.86$35.39 per share on December 31, 2019.2020. Other benefits that are available to all salaried employees on a nondiscriminatory basis and perquisites aggregating less than $10,000 in value have not been listed.1Retirement payments & benefits. In addition to the amounts shown in this column, retired executives are entitled to receive their vested retirement plan and deferred compensation benefits under all termination scenarios. See the 2019 Pension Benefits and 2019 Nonqualified Deferred Compensation tables above. Because Mr. Hazelton has not worked a total of five continuous years with the Company, he is not fully vested under the 2010 Equity and Incentive Plan, as amended (EIP), which includes the Long-Term Incentive Plan and Restricted Stock Units. Accordingly no amounts are shown in this column for him.2Termination due to death or disability payments & benefits. All named executive officers were eligible for death or disability payments & benefits as of December 31, 2019.3Voluntary termination payments & benefits. If the executive voluntarily terminates employment, he or she could lose any annual or long-term incentives based upon the Compensation Committee's right to amend, suspend or terminate any incentive award or any portion of it at any time. Voluntary termination results in the forfeiture of unvested RSUs and participation in incentive plans. The executive's entitlement to rights under his or her change-in-control agreement would also end.Termination for cause payments & benefits. If the executive is terminated for cause, he or she could lose any annual or long-term incentives based upon the Compensation Committee's right to amend, suspend or terminate any incentive award or any portion of it at any time. "Cause" generally means a violation of the HEI Corporate Code of Conduct or, for purposes of awards under the EIP, has the meaning set forth in such plan. Termination for cause results in the forfeiture of all unvested RSUs and participation in incentive plans. The executive's entitlement to rights under his or her change-in-control agreement would also end.1 Retirement payments & benefits.In addition to the amounts shown in this column, retired executives are entitled to receive their vested retirement plan and deferred compensation benefits under all termination scenarios. See the 2020 Pension Benefits and 2020 Nonqualified Deferred Compensation tables above. Messrs. Hazelton and Murao have not met the requirements for retirement eligibility under the 2010 Equity and Incentive Plan, as amended (EIP), which includes the Long-Term Incentive Plan and Restricted Stock Units. Accordingly, no amounts are shown in this column for Messrs. Hazelton and Murao. 2 Termination due to death or disability payments & benefits. All named executive officers were eligible for death or disability payments & benefits as of December 31, 2020. Table of ContentsTABLE OF CONTENTSEXECUTIVE COMPENSATIONTermination without cause payments & benefits. If the executive is terminated without cause, he or she could lose any annual or long-term incentives based upon the Compensation Committee's right to amend, suspend or terminate any incentive award or any portion of it at any time. Termination without cause results in the forfeiture of unvested RSUs. As discussed in footnote [4] below, different benefits would be payable to the named executive officers if their termination without cause were to follow a change in control under the terms of their change-in-control agreements.4Termination after change-in-control payments & benefits. Ms. Lau and Messrs. Hazelton and Wacker had change-in-control agreements as of December 31, 2019. 3 Voluntary termination payments & benefits. If the executive voluntarily terminates employment, he or she could lose any annual or long–term incentives based upon the Compensation Committee’s right to amend, suspend or terminate any incentive award or any portion of it at any time. Voluntary termination results in the forfeiture of unvested RSUs and participation in incentive plans. The executive’s entitlement to rights under his or her change–in–control agreement would also end. 4 In addition, under the change–in–control agreements executives would receive continued life, disability, dental, accident and health insurance benefits for the severance period (i.e., the number of years equal to the applicable severance multiplier). Executives would receive a lump sum payment equal to the present value of the additional benefit the executives would have earned under their respective retirement and savings plans during the severance period. Executives would also receive the greater of current target or actual projected EICP and cash-based LTIP compensation, pro–rated if termination occurs during the first half of the applicable performance period and the full value if termination occurs in the second half of the applicable performance period. For RSUs not granted under the LTIP, in the event of a change in control as defined by the EIP, either (i) the surviving or acquiring entity will assume all outstanding RSUs not granted under LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested. For the named executive officers who are eligible to participate in the HEI Retirement Plan, additional age and service credit is received for the severance period for purposes of determining retiree welfare benefit eligibility. Executives would receive outplacement services, capped at 15% of annual base salary. Payment would generally be delayed for six months following termination of employment to the extent required to avoid an additional tax under Section 409A of the Internal Revenue Code. Interest would accrue during any six–month delay period at the prevailing six–month certificate of deposit rate and payments would be set aside during that period in a grantor (rabbi) trust. There are no tax gross ups provided for in the agreements and, as provided in the change-in-control agreements, the total severance amount shown is limited to the maximum amount deductible under Section 280G of the Internal Revenue Code with respect to each named executive officer. Payment of the foregoing benefits is subject to a release of claims by the applicable named executive officer. 5 Executive Incentive Compensation Plan (EICP). Excludes amounts payable under the 2020 EICP because those amounts would have vested without regard to termination because the applicable performance period ended on December 31, 2020. Upon death, disability or retirement, executives continue to participate in the EICP on a pro–rata basis if the executive has met applicable minimum service requirements, with a lump sum payment to be made by the Company if the applicable performance goals are achieved. The plan documents provide that in the event of a change in control as defined by the EIP, the EICP award would be immediately paid out in cash at target level, pro-rated for completed months of service in the performance period. For the remaining unvested portion of the award, the EIP provides that: (i) the surviving entity or acquiring entity will assume all awards outstanding under the EICP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested (with all performance goals deemed achieved at 100% of target levels). Annual incentive compensation payments for NEOs in the event of a change in control are further described in footnote 4 above. 6 Long–Term Incentive Plan (LTIP). Excludes amounts payable under the 2018–20 LTIP because those amounts would have vested without regard to termination because the applicable performance period ended on December 31, 2020. Upon death, disability or retirement, executives continue to participate in each ongoing LTIP cycle on a pro–rata basis if the executive has met applicable minimum service requirements, with a lump sum payment to be made by the Company if performance goals are achieved. The amounts shown are at target for all applicable plan years, pro-rated based upon service through December 31, 2020; actual payouts will depend upon performance achieved at the end of the plan cycle. The plan documents provide that, in the event of a change in control as defined by the EIP, the LTIP award would be immediately paid out in cash at target level, pro-rated for completed months of service in the performance period. For the remaining unvested portion of the award, the EIP provides that: (i) the surviving entity or acquiring entity will assume all awards outstanding under the LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested (with all performance goals deemed achieved at 100% of target levels). Long–term incentive compensation payments for NEOs in the event of a change in control are further described in footnote 4 above and quantified as part of the Change–in–Control Agreement payment in the table above. 7 Restricted Stock Units (RSUs) not granted under LTIP. Termination for or without cause results in the forfeiture of unvested RSUs not granted under the LTIP. Termination due to death, disability or retirement results in pro–rata vesting of RSUs not granted under the LTIP. The EIP provides that in the event of a change in control as defined by the EIP, either (i) the surviving or acquiring entity will assume all outstanding RSUs not granted under LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested. The vesting of RSUs in the event of a qualifying termination of employment for NEOs following a change in control is further described in footnote 4 above and quantified as part of the Change–in–Control Agreement payment in the table above. "Change in control" generally means a change in ownership of HEI, a substantial change in the voting power of HEI's securities or a change in the majority of the composition of the Board following the consummation of a merger, tender offer or similar transaction. Mr. Wacker's change-in-control agreement defines "change in control" to also mean a sale of (or equivalent transaction involving) ASB. The change-in-control agreements are double trigger, which means that they provide for cash severance and other benefits only upon a qualifying termination of the executives' employment following a change in control. Ms. Lau has a lump sum severance multiplier of three times and Messrs. Hazelton and Wacker have a lump sum severance multiplier of two times, in each case applied to the sum of the executive's base salary and annual incentive compensation (determined to be the greater of the current target or the largest actual annual incentive compensation during the preceding three years).In addition, under the change-in-control agreements executives would receive continued life, disability, dental, accident and health insurance benefits for the severance period (i.e., the number of years equal to the applicable severance multiplier). Executives would receive a lump sum payment equal to the present value of the additional benefit the executives would have earned under their respective retirement and savings plans during the severance period. Executives would also receive the greater of current target or actual projected EICP and cash-based LTIP compensation, pro-rated if termination occurs during the first half of the applicable performance period and the full value if termination occurs in the second half of the applicable performance period. For RSUs not granted under the LTIP, in the event of a change in control as defined by the EIP, either (i) the surviving or acquiring entity will assume all outstanding RSUs not granted under LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested. For the named executive officers who are eligible to participate in the HEI Retirement Plan, additional age and service credit is received for the severance period for purposes of determining retiree welfare benefit eligibility. Executives would receive outplacement services, capped at 15% of annual base salary. Payment would generally be delayed for six months following termination of employment to the extent required to avoid an additional tax under Section 409A of the Internal Revenue Code. Interest would accrue during any six-month delay period at the prevailing six-month certificate of deposit rate and payments would be set aside during that period in a grantor (rabbi) trust. There are no tax gross ups provided for in the agreements and, as provided in the change-in-control agreements, the total severance amount shown is limited to the maximum amount deductible under Section 280G of the Internal Revenue Code with respect to each named executive officer. Payment of the foregoing benefits is subject to a release of claims by the applicable named executive officer.5Executive Incentive Compensation Plan (EICP). Excludes amounts payable under the 2019 EICP because those amounts would have vested without regard to termination because the applicable performance period ended on December 31, 2019. Upon death, disability or retirement, executives continue to participate in the EICP on a pro-rata basis if the executive has met applicable minimum service requirements, with a lump sum payment to be made by the Company if the applicable performance goals are achieved. The plan documents provide that in the event of a change in control as defined by the EIP, the EICP award would be immediately paid out in cash at target level, pro-rated for completed months of service in the performance period. For the remaining unvested portion of the award, the EIP provides that: (i) the surviving entity or acquiring entity will assume all awards outstanding under the EICP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested (with all performance goals deemed achieved at 100% of target levels). Annual incentive compensation payments for Ms. Lau and Messrs. Hazelton and Wacker in the event of a change in control are further described in footnote [4] above.6Long-Term Incentive Plan (LTIP). Excludes amounts payable under the 2017-19 LTIP because those amounts would have vested without regard to termination because the applicable performance period ended on December 31, 2019. Upon death, disability or retirement, executives continue to participate in each ongoing LTIP cycle on a pro-rata basis if the executive has met applicable minimum service requirements, with a lump sum payment to be made by the Company if performance goals are achieved. The amounts shown are at target for all applicable plan years, pro-rated based upon service through December 31, 2019; actual payouts will depend upon performance achieved at the end of the plan cycle. The plan documents provide that, in the event of a change in control as defined by the EIP, the LTIP award would be immediately paid out in cash at target level, pro-rated for completed months of service in the performance period. For the remaining unvested portion of the award, the EIP provides that: (i) the surviving entity or acquiring entity will assume all awards outstanding under the LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested (with all performance goals deemed achieved at 100% of target levels). Long-term incentive compensation payments for Ms. Lau and Messrs. Hazelton and Wacker in the event of a change in control are further described in footnote [4] above and quantified as part of the Change-in-Control Agreement payment in the table above.7Restricted Stock Units (RSUs) not granted under LTIP. Termination for or without cause results in the forfeiture of unvested RSUs not granted under the LTIP. Termination due to death, disability or retirement results in pro-rata vesting of RSUs not granted under the LTIP. The EIP provides that in the event of a change in control as defined by the EIP, either (i) the surviving or acquiring entity will assume all outstanding RSUs not granted under LTIP or will substitute similar awards and such awards would vest in full upon a termination within 24 months following the change in control without cause or by the participant with good reason, as each term is defined by the EIP or (ii) to the extent the surviving entity refuses to assume or substitute such awards, such awards shall become fully vested. The vesting of RSUs in the event of a qualifying termination of employment for Ms. Lau and Messrs. Hazelton and Wacker following a change in control is further described in footnote [4] above and quantified as part of the Change-in-Control Agreement payment in the table above.58Table of ContentsTABLE OF CONTENTSEXECUTIVE COMPENSATION employee'semployee’s annual total compensation to the annual total compensation of our CEO.In accordance with Item 402(u) of Regulation S-K, we are using the same median employee we used to calculate our 2017 CEO pay ratio because there have been no changes in our employee population or employee compensation arrangements that we believe would significantly impact our pay ratio disclosure. 20162019 Form W-2sW–2s for all individuals, excluding our CEO, who were employed by us on October 1, 2017.2020. We included all employees, whether employed on a full-time, part-time,full–time, part–time, or seasonal basis and assumed no compensation earned in 20162019 for employees hired in 2017.2020. We believe that the use of Form W-2W–2 compensation for all employees is an appropriate compensation measure for this purpose because it reasonably reflects annual compensation for our employees.We20192020 Summary Compensation Table above. The SEC rules allow for varying methodologies for companies to identify their median employee. Other companies may have different employment and compensation practices and may utilize different methodologies, estimates and assumptions in calculating their own pay ratios. Therefore, the pay ratios reported by other companies may not be relevant for purposes of comparison to our pay ratio.CEO to Median Employee Pay Ratio President &
CEO Median
Employee $ 926,300 $ 93,684 2,344,943 — 957,886 — 13,239 — 660,533 57,996 $ 4,902,901 $ 151,680 32:1 1 These amounts are attributable to a change in the value of each individual’s defined benefit pension account balance and do not represent earned or paid compensation. Despite the fact that these amounts are not paid, they are required to be taken into account for purposes of calculating total annual compensation for SEC reporting purposes. Pension values fluctuate over time — they can rise or fall year–to–year and are dependent on many variables including market conditions, years of service, earnings, and actuarial assumptions such as discount rates. 1These amounts are attributable to a change in the value of each individual's defined benefit pension account balance and do not represent earned or paid compensation. Despite the fact that these amounts are not paid, they are required to be taken into account for purposes of calculating total annual compensation for SEC reporting purposes. Pension values fluctuate over time — they can rise or fall year-to-year and are dependent on many variables including market conditions, years of service, earnings, and actuarial assumptions such as discount rates.59STOCK OWNERSHIP INFORMATION Security ownership of certain beneficial owners14, 202010, 2021 (or such other date as indicated below) by (a) each person known by HEI to own beneficially more than five percent of the outstanding shares of HEI Common Stock, (b) each director who is a current director or is a director nominee and each named executive officer and (c) all directors and executive officers as a group, based in part on informationHEI'sHEI’s wholly-owned subsidiary, Hawaiian Electric. Unless otherwise indicated, the address of each person named in the table below is c/o Hawaiian Electric Industries, Inc., 1001 Bishop Street, Honolulu, HawaiiHawai‘i 96813. Name of Individual or Group Sole Voting or
Investment
Power1 Shared Voting or
Investment
Power2 Other Beneficial
Ownership3 Restricted
Stock Units4 Total Percent
of Class BlackRock, Inc.5 10,510,167 10,510,167 9.64 The Vanguard Group, Inc.6 11,554,847 78,856 11,633,703 10.67 Nonemployee directors Celeste A. Connors 2,296 2,296 * Richard J. Dahl 11,570 11,570 * Thomas B. Fargo 25,843 25,843 * Peggy Y. Fowler 1,491 37,890 39,381 * Micah A. Kane 8,913 8,913 * Mary G. Powell 2,313 2,313 * Keith P. Russell 25,376 25,376 * William J. Scilacci, Jr. 2,328 2,328 * Jeffrey N. Watanabe 44,749 13 44,762 * Eva T. Zlotnicka 468 7 1,548,756 8 1,549,224 1.42 Employee director and Named Executive Officer Constance H. Lau 622,617 4,186 626,803 * Other Named Executive Officers �� Gregory C. Hazelton 22,105 22,105 * Alan M. Oshima 20,742 57,315 2,298 80,355 * Richard F. Wacker 100,841 830 101,671 * All directors and executive officers as a group (16 persons) 780,596 221,889 1,549,164 7,314 2,558,963 2.35 1Includes the following shares held as of February 14, 2020 in the Participant's HEI Retirement Savings Plan: approximately 120 shares for Ms. Lau and 120 shares for all directors and executive officers as a group.2For individuals, includes (i) shares registered in name of the individual and spouse and/or (ii) shares registered in trust with the individual and spouse serving as co-trustees.3Shares in which the director or officer disclaims beneficial ownership.4Includes the number of shares that the individuals named above had a right to acquire as of or within 60 days after February 14, 2020 pursuant to Restricted Stock Units and related dividend equivalent rights thereon, including shares which retirement eligible individuals have a right to acquire upon retirement. These shares are included for purposes of calculating the percentage ownership of each individual named above and all directors and executive officers as a group, but are not deemed to be outstanding as to any other person.5Based solely on information provided in a Schedule 13G report filed on February 5, 2020 by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.1 Includes the following shares held as of February 10, 2021 in the Participant’s HEI Retirement Savings Plan: approximately 124 shares for Ms. Lau and 124 shares for all directors and executive officers as a group. 2 For individuals, includes (i) shares registered in name of the individual and spouse and/or (ii) shares registered in trust with the individual and spouse serving as co-trustees. 3 Shares in which the director or officer disclaims beneficial ownership. 4 Includes the number of shares that the individuals named above had a right to acquire as of or within 60 days after February 10, 2021 pursuant to Restricted Stock Units and related dividend equivalent rights thereon, including shares which retirement eligible individuals have a right to acquire upon retirement. These shares are included for purposes of calculating the percentage ownership of each individual named above and all directors and executive officers as a group, but are not deemed to be outstanding as to any other person. 5 Table of ContentsTABLE OF CONTENTSSTOCK OWNERSHIP INFORMATION6Based solely on information provided in a Schedule 13G report filed on February 12, 2020 by The Vanguard Group, Inc., 100 Vanguard Blvd., Malvern, PA 19355.7Under an agreement with ValueAct Capital, Eva T. Zlotnicka is deemed to hold 468 shares for the benefit of the limited partners of ValueAct Spring Master Fund, L.P. and indirectly for (i) VA Partners I, LLC as General Partner of ValueAct Spring Master Fund, L.P., (ii) ValueAct Capital Management, L.P. as the manager of ValueAct Spring Master Fund, L.P., (iii) ValueAct Capital Management, LLC as General Partner of ValueAct Capital Management, L.P., (iv) ValueAct Holdings, L.P. as the majority owner of the membership interests of VA Partners I, LLC, (v) ValueAct Holdings II, L.P. as the sole owner of the membership interests of ValueAct Capital Management, LLC and as the majority owner of the limited partnership interests of ValueAct Capital Management, L.P., and (vi) ValueAct Holdings GP, LLC as General Partner of ValueAct Holdings, L.P. and ValueAct Holdings II, L.P.8Consists of 1,548,756 shares held by ValueAct Spring Master Fund, L.P. and ValueAct Spring Master Fund A, L.P., which may be deemed to be indirectly beneficially owned by (i) VA Partners I, LLC as General Partner of ValueAct Spring Master Fund, L.P.; (ii) ValueAct Capital Management, L.P. as the manager of ValueAct Spring Master Fund, L.P.; (iii) ValueAct Capital Management, LLC as General Partner of ValueAct Capital Management, L.P.; (iv) ValueAct Holdings, L.P. as the majority owner of the membership interests of VA Partners I, LLC; (v) ValueAct Holdings II, L.P. as the sole owner of the limited partnership interests of ValueAct Capital Management, L.P. and the membership interests of ValueAct Capital Management, LLC; and (vi) ValueAct Holdings GP, LLC as General Partner of ValueAct Holdings, L.P. and ValueAct Holdings II, L.P. (the foregoing entities, collectively, the 'ValueAct Entities'). Ms. Zlotnicka and each of the ValueAct Entities disclaim beneficial ownership of the reported securities except to the extent of her or its pecuniary interest therein. 6 Based solely on information provided in a Schedule 13G report filed on February 10, 2021 by The Vanguard Group, Inc., 100 Vanguard Blvd., Malvern, PA 19355. 7 1,234,416 shares reported herein are directly beneficially owned by Inclusive Capital Partners Spring Master Fund, L.P. Eva Zlotnicka is a Co-Founder of Inclusive Capital Partners, LP, which is the Investment Manager to Inclusive Capital Partners Spring Master Fund, L.P. Ms. Zlotnicka has no control over Inclusive Capital Partners, L.P. or Inclusive Capital Partners Spring Master Fund, L.P. 8 2,012,252 shares reported herein are directly beneficially owned by Inclusive Capital Partners Spring Master Fund A, L.P. Eva Zlotnicka is a Co-Founder of Inclusive Capital Partners, LP, which is the Investment Manager to Inclusive Capital Partners Spring Master Fund A, L.P. Ms. Zlotnicka has no control over Inclusive Capital Partners, L.P. or Inclusive Capital Partners Spring Master Fund A, L.P. HEI'sHEI’s executive officers, directors and persons who own more than ten percent of a registered class of HEI'sHEI’s equity securities to file reports of ownership and changes in ownership with the SEC. Such reporting persons are also required by SEC2019, except that on one occasion, a report for one transaction for Mr. Wacker was inadvertently filed in an untimely fashion relating to shares withheld for tax payment. The report was subsequently filed.612020. Table of ContentsTRANSACTIONRelated person transaction policyHEI'sHEI’s Corporate Code of Conduct, which is available for review at www.hei.com/govdocs. The related person transaction policy is specific to transactions between the Company and related persons such as executive officers and directors, their immediate family members or entities with which they are affiliated in which the amount involved exceeds $120,000 and in which anyHEI'sHEI’s Corporate Code of Conduct.Family relationships between any HEI executive officer, director and nominee for directorArrangements or understandings between any HEI executive, director or director nominee and another person pursuant to which such executive, director or director nominee was selectedEffectiveHEI entered into a(Original Cooperation Agreement), as amended by that Joinder to Cooperation Agreement dated July 22, 2020 (Cooperation Agreement) with ValueAct Spring Master Fund,between HEI and Inclusive Capital Partners, L.P. and certain of its affiliates (collectively, ValueAct) pursuant to which HEI's(ICP), HEI’s Board appointed Eva T. Zlotnicka to serve as a Class III member of the Board (with a term expiring at HEI'sHEI’s 2020 annual meetingAnnual Meeting of shareholders (2020 Annual Meeting)), appointed Ms. Zlotnicka as a member of the Compensation Committee and included Ms. Zlotnicka as a nominee for election at the 2020 Annual Meeting as a Class III member of the Board to serve a three-year term expiring at the 2023 annual meeting of shareholders (2023 Annual Meeting). In addition, pursuant to the Cooperation Agreement, ValueAct agreed to vote all its shares of Common Stock at the 2020 Annual Meeting in favor of the Board's recommended slate of directors and in accordance with the Board's recommendation for all other company proposals. ValueActICP also agreed to certain customary standstill provisions, effective until the first anniversary of the date of the Cooperation Agreement. The Cooperation Agreement will terminate upon the earliest ofValueActICP materially breaches an obligation under the Cooperation Agreement or (iii) mutual written agreement of HEI and ValueAct.ICP. The foregoing description of the Cooperation Agreement is qualified in its entirety by reference to the full text of the original Cooperation Agreement which was filed as an exhibit to the Form 8-K HEI filed with the SEC on February 14, 2020 and the full text of the Joinder to Cooperation Agreement filed as an exhibit to the Company’s quarterly report on Form 10-Q for the period ending June 30, 2020.OTHER RELATIONSHIPS AND RELATED PERSON TRANSACTIONRelated person transactions with HEI or its subsidiariesPROPOSAL NO. 3: APPROVALTABLE OF THE ARTICLES OF INCORPORATION (DECLASSIFICATION AMENDMENT)CONTENTSPROPOSAL NO. 3: APPROVE AN AMENDMENT TO THE HEI AMENDED AND RESTATED ARTICLES OF INCORPORATION TO DECLASSIFY THE BOARD OF DIRECTORSHEI's Bylaws provide that, so long as there are at least nine directors, the Board of Directors shall be divided into three classes, with each class consisting of approximately one-third of the total number of directors constituting the entire Board, and one class of directors being elected each year for a three-year term.After considering the advantages and disadvantages of a classified board, as well as engaging in dialogue with our shareholders on this topic, and based on the recommendation of our Nominating and Corporate Governance Committee, the Board approved recommending to shareholders an amendment to the Amended and Restated Articles of Incorporation (Articles of Incorporation) to phase out the classified structure of the Board on a rolling basis. As such, the Board of Directors recommends to shareholders that they approve the proposed amendment to the Articles of Incorporation in the form attached as Appendix A to this Proxy Statement to declassify the Board of Directors (Declassification Amendment). The full text of the combined Declassification Amendment and the Majority Voting Amendment (Proposal No. 4), assuming both proposals were approved by the shareholders, is attached as Appendix C. The summary set forth below is qualified in its entirety by reference to the full text of the Declassification Amendment, which is incorporated herein by reference.If approved by shareholders, the Declassification Amendment would phase out the classification of the Board over a three-year period. Beginning with the 2021 Annual Meeting of Shareholders, each director up for election would be elected to a one-year term following the expiration of such director's existing term. As a result, beginning with the 2023 Annual Meeting of Shareholders, all directors would be elected annually.The Declassification Amendment, if approved, would not change the unexpired three-year terms of directors elected prior to the effectiveness of the amendment (including directors elected at this 2020 Annual Meeting).To be approved, the Declassification Amendment requires an affirmative vote of the holders of two-thirds of the shares entitled to vote on this proposal. If approved, the Declassification Amendment will become effective upon the accepted filing of the Declassification Amendment with the State of Hawaii's Department of Commerce and Consumer Affairs' Business Registration Division, which would be filed promptly after the annual meeting. Additionally, if the Declassification Amendment is approved, the Board of Directors would adopt conforming changes to the Bylaws. üFORThe Board recommends that you voteFOR approving the Declassification Amendment to declassify the Board of Directors.PROPOSAL NO. 4: APPROVAL OF THE AMENDED ARTICLES OF INCORPORATION (MAJORITY VOTING AMENDMENT)PROPOSAL NO. 4: APPROVE AN AMENDMENT TO THE HEI AMENDED AND RESTATED ARTICLES OF INCORPORATION TO ADOPT A MAJORITY VOTING STANDARD IN UNCONTESTED DIRECTOR ELECTIONSThe Company's Bylaws provide that directors are elected by a plurality of the votes cast by the shares entitled to vote in an election at which a quorum is present. In addition, HEI's Corporate Governance Guidelines (Guidelines) provide that in an uncontested election, any director who receives more "withhold" votes than votes "for" his or her election must tender his or her resignation from the Board for consideration by the Nominating and Corporate Governance Committee (Resignation Policy).Following engagement with our shareholders on this topic and based upon the recommendation of the Nominating and Corporate Governance Committee, the Board approved recommending to shareholders an amendment to the Articles of Incorporation to provide for a majority voting standard in uncontested elections. As such, the Board of Directors recommends to shareholders that the shareholders approve the proposed amendment to the Company's Articles of Incorporation in the form attached as Appendix B to this Proxy Statement to adopt a majority voting standard in uncontested director elections (Majority Voting Amendment). The full text of the combined Majority Voting Amendment and the Declassification Amendment (Proposal No. 3), assuming both proposals were approved by the shareholders, is attached as Appendix C. The summary set forth below is qualified in its entirety by reference to the full text of the Majority Voting Amendment, which is incorporated herein by reference.If approved by the shareholders, upon becoming effective as described below, the Majority Voting Amendment will replace the plurality voting standard with a majority voting standard in uncontested elections. In the event a director nominee fails to receive more "for" votes than "against" votes in an uncontested election, such director will not be elected. If the director is an incumbent director, the director will be required, pursuant to the Guidelines, to tender his or her resignation to the Nominating and Corporate Governance Committee. A plurality voting standard will continue to apply in elections where the number of nominees or proposed nominees exceeds the number of directors to be elected (a contested election).To be approved, the Majority Voting Amendment requires an affirmative vote of the holders of two-thirds of the shares entitled to vote on this proposal. If approved, the Majority Voting Amendment will become effective upon the accepted filing of the Majority Voting Amendment with the State of Hawaii's Department of Commerce and Consumer Affairs' Business Registration Division, which would be filed promptly after the annual meeting. Additionally, if approved, the Board of Directors would adopt conforming changes to the Bylaws and Guidelines.üFORThe Board recommends that you voteFOR approving the Majority Voting Amendment to adopt a majority voting standard in uncontested elections.AUDIT COMMITTEE REPORTHEI'sHEI’s accounting functions and internal controls. It operates and acts under a written charter, which was adopted and approved by the Board and is available for review at www.hei.com/govdocs. The Board has determined that the four directors currently serving on the Audit & Risk Committee (Messrs. Dahl, Russell and Scilacci and Ms. Connors) meet the independence and other qualification requirements of the NYSE Listed Company Manual and applicable securities laws. Messrs. Dahl, Russell and Scilacci have also been determined by the Board to be "audit“audit committee financial experts"experts” on the Audit & Risk Committee. In addition, the Audit & Risk Committee has authority to retain its own independent legal counsel and accounting advisers at HEI'sHEI’s expense.Company'sCompany’s risk assessment and risk management framework, including discussions regarding significant risks and management plans to address these risks. Management has the primary responsibility for HEI'sHEI’s consolidated financial statements and reporting process, including the systems of internal control. The independent registered public accounting firm has the responsibility for expressing opinions on HEI'sHEI’s consolidated financial statements and on the Company'sCompany’s internal control over financial reporting based on its integrated audits.sixeight regular meetings and noone special meetingsmeeting in 20192020 with management and Deloitte & Touche LLP (Deloitte), HEI'sHEI’s independent registered public accounting firm. In its meetings with management and Deloitte, the Audit & Risk Committee'sCommittee’s review and discussion included the audited consolidated financial statements, audit plan and the quality and adequacy of internal controls. Discussions with Deloitte included the matters required by the applicable requirements of the Public Company Accounting Oversight Board and the SEC, such as the audit strategy and results of the audit.Deloitte'sDeloitte’s representations and disclosures, the Audit & Risk Committee recommended to the Board of Directors that HEI'sHEI’s audited consolidated financial statements be included in HEI's 2019HEI’s 2020 Form 10-K. Table of Contents5:3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020PROPOSAL NO. 5: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 202020202021 Annual Meeting, the shareholders will be asked to ratify the appointment of Deloitte as HEI'sHEI’s independent registered public accounting firm for the year ending December 31, 20202021 and thereafter until its20202021 Annual Meeting and will have the opportunity to make statements if they desire to do so and to respond to appropriate questions.Company'sCompany’s independent registered public accounting firm for 2019 and 2018:2020: 2018 2019 Fees % Fees % Audit fees (principally consisted of fees associated with the audits of HEI, Hawaiian Electric, and ASB consolidated financial statements and internal control over financial reporting (Sarbanes-Oxley Act of 2002, Section 404), quarterly reviews, issuances of letters to underwriters, review of registration statements and issuance of consents), and procedures related to the adoption of the new credit loss standard and the new lease standard in 2019 $ 2,405,000 61 $ 3,316,000 96 Audit-related fees, primarily consisted of fees associated with consultation on financial statement and reporting standards and agreed upon procedures in 2018 and 2019, the implementation of SAP in 2018, Department of Energy compliance audits in 2018, and audit of internal control over transfer agent and registrar duties in 2018 1,455,000 37 92,000 3 Tax fees (consisted of tax return review and technical support in 2018 and 2019, and cost segregation study and strategic tax review in 2018) 108,907 2 54,000 1 All other fees — — — — $ 3,968,907 100 $ 3,462,000 100 nonauditnon-audit services to be performed by the independent registered public accounting firm. The Audit & Risk Committee may delegate this responsibility to one or more of its members, provided that such member or members report any such preapprovals to the full Audit & Risk Committee at its next regularly scheduled meeting. All of the amounts set forth in the table above were preapproved. In addition, the Audit & Risk Committee reviewed the professional fees billed by Deloitte and determined that the provision of nonauditnon-audit services was compatible with the maintenance of the auditor'sauditor’s independence.HEI'sHEI’s shareholders. üFORYour Audit & Risk Committee and Board recommend that you voteFOR the ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2020.ABOUT THE 2020 ANNUAL MEETING 20202021 Annual Meeting of Shareholders scheduled for Tuesday,Friday, May 5, 2020,7, 2021, at 10:00 a.m., Hawaii time, at the American Savings Bank Tower, 1001 Bishop Street, 8th floor, Room 805, Honolulu, Hawaii 96813.Hawai‘i Time. The 2021 Annual Meeting will be conducted, entirely by audio webcast. The mailing address of the principal executive offices of HEI is P.O. Box 730, Honolulu, HawaiiHawai‘i 96808-0730.20192020 Annual Report to Shareholders is March 26, 2020.2021. The 20192020 Annual Report to Shareholders accompanying this Proxy Statement is not considered part of the proxy soliciting material.AttendanceAttendancelimited to:•shareholders of record (i.e., shareholders who ownvirtual, conducted entirely via live audio webcast. You will be able to attend the virtual 2021 Annual Meeting by visiting www.virtualshareholdermeeting.com/HE2021. You also will be able to submit questions and vote your shares registered in their own name on the books of HEI) on the record date;•beneficial owners of HEI Common Stock having evidence of ownership as of the record date and entitlement to voteelectronically at the meeting;•authorized representatives of absent shareholders; and•invited guests of HEI management.If you own shares of HEI Common StockAnnual Meeting.name of a bank, brokerage firm or other holder of record, you must show proof of ownership. This may be in the form of a letter from the holder of record or a recent statement from the bank or broker showing ownership of HEI Common Stock.If you are representing an entity that is a shareholder, you must also present documentation showing your authority to attend and act on behalf of the entity (such as a power of attorney, written proxy to vote, or letter of authorization on the entity's letterhead). Only one authorized representative may attend per absent shareholder.In order to be admitted to the 2020virtual 2021 Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, your proxy card, or if your shares are held in street name, on the instructions that accompanied your proxy materials. The live audio webcast will begin promptly at 10:00 AM, Hawai‘i Time. We encourage you to present government-issued photo identification (such as a driver's licenseaccess the meeting prior to the start time. Online check in will begin at 9:45 AM, Hawai‘i Time, and you should allow ample time for the check in procedures.passport) at registration.To ensuremeeting time, please call the technical support number that we can accommodatewill be posted on the greatest numberVirtual Shareholder Meeting log in page. A recording of shareholders at our 2020the 2021 Annual Meeting we reserve the right to limit the number of authorized representatives for any shareholder who may attend the meeting and to restrict the admission of guests or other attendees who are not shareholders.No cameras, recording equipment, large bags or packages will be permitted inavailable at www.virtualshareholdermeeting.com for 12 months following the 2020date of the 2021 Annual Meeting. The use of cell phones, smart phones, tablets and other personal communication devices during the 2020 Annual Meeting is strictly prohibited.Table of ContentsTABLE OF CONTENTS Electronic access to proxy materials2020,2021, a Notice of Internet Availability of Proxy Materials (Notice) will be mailed to certain shareholders and our proxy materials will be posted on the website referenced in the Notice (www.proxyvote.com). As more fully describedHEI'sHEI’s proxy materials in printed form and would like to receive them electronically in the future, please so indicate on the enclosed proxy, if voting by mail, or by following the instructions provided when using the telephone or Internet voting options described below.Eligibility to voteFebruary 28, 2020March 1, 2021 (the proxy recordShares outstanding and entitled to voteFebruary 28, 2020, 109,145,492March 1, 2021, 109,281,216 shares of HEI Common Stock were outstanding. Each shareholder is entitled to one vote for each share held on the record date. The Bylaws ofQuorum requirements20202021 Annual Meeting. A majority of the shares of HEI Common Stock outstanding on February 28, 2020March 1, 2021 and entitled to vote, and present in person or by proxy at the 20202021 Annual Meeting, constitutes a quorum. Shareholders attending the 2021 Annual Meeting via the Internet are deemed to be present in person. Abstentions and broker nonvotes of20202021 Annual Meeting.Voting shares held directly with the Company20202021 Annual Meeting, please take the time to vote. You may vote before the 2021 Annual Meeting via the Internet, by touchtone telephone or by mail, beforeor during the 20202021 Annual Meeting or in person atvia the 2020 Annual Meeting.69VOTING PROCEDURES1.BY INTERNET: You may vote on-line by following the instructions in the Notice or by accessing the Internet atwww.proxyvote.com. Instructions regarding how to record and confirm your vote will be available on the website.2.BY TELEPHONE: You may vote by touchtone telephone by following the instructions in the Notice or by calling 1-800-690-6903. Once connected, you will be prompted to record and confirm your vote.3. 1. 2. 3. proxy card in the postage-paid envelope provided. If you return the signed proxy card in the postage-paid envelope provided. If you return the signed proxy cardBoard'sBoard’s recommendations on all proposals. If you wish to have someone other than the individuals listed on the enclosed proxy card vote your shares at the meeting, cross out all three names and insert the name of the person you designate as your proxy to vote your shares at the meeting.1. 4.IN PERSON: Youyour proxy may vote your shares by attending the 2020 Annual Meeting and voting in person.other holder of record)Voting shares held in street name (e.g., through a broker, trustee or other holder of record)"street name"“street name” (that is, through a broker, trustee or other holder of record), you will receive a voting instruction card or other information from your broker or other holder of record seeking instruction from you as to how your shares should be voted.If you do not provide such instruction, your broker or nominee may vote your shares at its discretion on your behalf on routine matters, but not on nonroutine matters. The ratification of the appointment of HEI'sHEI’s independent registered public accounting firm is considered a routine matter. The election of directors approval of the Declassification Amendment, approval of the Majority Voting Amendment and the advisory vote on executiveYou may not If your shares are held in street name, and you want to vote your shares during the 2021 Annual Meeting, you must have the 16-digit control number from the proxy materials sent to you by your broker or other holder of record and follow the instructions above for voting via the Internet during the meeting."street name" at the 2020 Annual Meeting unless you obtain a legal proxy from your brokerHEI Dividend Reinvestment and Stock Purchase Plan, the HEI Retirement Savings Plan or holder of record.the American Savings Bank 401(k) PlanVoting shares held in the HEI Dividend Reinvestment and Stock Purchase Plan, the HEI Retirement Savings Plan or the American Savings Bank 401(k) Plan70VOTING PROCEDURESChanging your vote20202021 Annual Meeting in one of three ways:•••in person atvia the 2020Internet during the 2021 Annual Meeting (if(you will need the 16-digit control number on your shares are registered inNotice of Internet Availability of Proxy Materials or your name on HEI's booksproxy card or, if yourfor shares are held in "street name" and you have a legalstreet name, from the proxy frommaterials sent by your broker or other holder of record). Vote requirements20202021 Annual Meeting, then:•by a plurality ofif the director nominee receives more “FOR” votes cast. Plurality means that the persons receiving the highest number of votes are elected. Your options are to vote either "FOR" or to "WITHHOLD" your vote for a nominee.than “AGAINST” votes. Although the election of directors is considered a nonroutine matter, broker nonvotes (i.e., when your broker or other holder of record does not vote your shares on a nonroutine matter because you have not provided instructions regarding how to vote on that matter) will not affect the outcome of this matter if a quorum is present.In Similarly, abstentions will also not affect the eventoutcome of this matter if a directorquorum is elected under the plurality standard described above but does not receive the support of a majority of the votes cast, such director is requiredpresent. For this proposal, your options are to submit hisvote “FOR,” “AGAINST,” or her resignation to the Board for consideration. The Board would then analyze the shareholder concerns that drove the vote result and determine the most appropriate way to address those concerns, possibly by accepting the director's resignation.•However, the Board and its Compensation Committee value input from shareholders and will consider the vote outcome when making future compensation decisions. However, the Board and its Compensation Committee value input from shareholders and will consider the vote outcome when making future compensation decisions. HEI'sHEI’s named executive officers, your options are to vote "FOR," "AGAINST"“FOR,” “AGAINST” or "ABSTAIN."•The Declassification Amendment to declassify the Board will be approved upon receiving an affirmative vote of the holders of two-thirds of the shares entitled to vote on such proposal. Brokers may not vote on this proposal without your instruction because the amendment of articles of incorporation is considered a nonroutine matter. Abstentions and broker nonvotes will have the same effect as voting against the proposal. For this proposal, your options are to vote "FOR," "AGAINST" or "ABSTAIN."•The Majority Voting Amendment to adopt a majority voting standard for uncontested elections of directors will be approved upon receiving an affirmative vote of the holders of two-thirds of the shares entitled to vote on such proposal. Brokers may not vote on this proposal without your instruction because the amendment of articles of incorporation is considered a nonroutine matter. Abstentions and broker nonvotes will have the same effect as voting against the proposal. For this proposal, your options are to vote "FOR," "AGAINST" or "ABSTAIN."•HEI'sHEI’s independent registered public accounting firm will be ratified if more votes are cast in favor“FOR” than against“AGAINST” such ratification. This is a routine matter, and your broker may vote your shareshares at its discretion if no instruction is provided on this proposal. Abstentions will not affect the outcome of this matter if a quorum is present. For this proposal, your options are to vote "FOR," "AGAINST"“FOR,” “AGAINST” or "ABSTAIN."71VOTING PROCEDURESCounting the votes and confidentiality••Other matters to be decided at the 2020 Annual Meeting20202021 Annual Meeting other than the items set forth in this Proxy Statement. If other business is properly brought before the 20202021 Annual Meeting, or any adjournment orPostponement or adjournment of Annual Meeting20202021 Annual Meeting is postponed or adjourned, your proxy will remain valid and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted at the 20202021 Annual Meeting.72OTHER INFORMATION $8,500Deadline for submitting a proposal to be included in the proxy statement for next year's Annual Meeting20212022 Annual Meeting of Shareholders (2021(2022 Annual Meeting) mustNominating directors for inclusion in the proxy statement for next year's Annual Meeting (proxy access)20212022 Annual Meeting must deliver such nominations to the Corporate Secretary no later than 120 days, nor earlier than 150 days, prior to the anniversary of the date that the Company first distributed its proxy statement to shareholders for the 20202021 Annual Meeting.20212022 Annual Meeting, Eligible Shareholders must deliver the nomination to the Corporate Secretary no later than November 26, 2020,2021, and no earlier than October 27, 2020.2020,2021, whichever is greater. For instructions on how to provide a Notice of Proxy Access Nomination (as that term is defined in Article IIIA, Section 2 of the Bylaws) in proper written form, please refer to Article IIIA, Section 6 of the Bylaws.Recommend persons as potential nominees to serve on BoardThe Nominating and Corporate Governance Committee will also consider informal recommendations by shareholders for director candidates recommended by shareholders.candidates. Shareholders may send such recommendations to the Nominating and Corporate Governance Committee in care of the Corporate Secretary, Hawaiian Electric Industries, Inc., P.O. Box 730, Honolulu, HawaiiHawai‘i 96808-0730. Recommendations must20202021 for consideration by the Nominating and Corporate Governance Committee for the 20212022 Annual Meeting. The recommendation must include (a) a resumerésumé and other relevant biographical information regarding the person'sperson’s skills and qualifications to serve on the Board, (b) such person'sperson’s consent to serve as a director and (c) the number of shares of HEI Common Stock owned by the shareholder.Table of ContentsTABLE OF CONTENTSOTHER INFORMATION Bringing other business matters or nominations before the 2021 Annual Meeting20212022 Annual Meeting (other than through Rule 14a-8 of the Exchange Act) or nominate a director for the 20212022 Annual Meeting (other than through proxy access) must provide a written notice to the Corporate Secretary that is received no later than 90 days, nor earlier than 120 days, prior to the anniversary date of the 20202021 Annual Meeting.20212022 Annual Meeting, shareholders must deliver written notice to the Corporate Secretary no later than February 4, 2021,6, 2022, and no earlier than January 5, 2021.20212022 Annual Meeting: a brief description of the business desired to be brought before the 20212022 Annual Meeting (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend the Bylaws, the text of the proposed amendment) and the reasons for conducting such business at the 20212022 Annual Meeting; and (ii) as to the shareholder giving notice and the beneficial owner, if any, on whose behalf the proposal is being made: (a) the name and address of such person, (b) such person'sperson’s Ownership Information, (as that term is defined in Article II, Section 2 of the Bylaws), (c) a description of all arrangements or understandings between such shareholder and any other person or persons (including their names) in connection with the proposal of such business by such shareholder and any material interest of such shareholder in such business, (d) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies by such person with respect to the proposed business to be brought before the annual meeting pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder, and (e) a representation that such shareholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.person'sperson’s Ownership Information, and (d) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (ii) as to the shareholder giving the notice, and the beneficial owner, if any, on whose behalf the nomination is being made: (a) the name and address of such shareholder, (b) the Ownership Information, (c) a description of all arrangements or understandings between such shareholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such shareholder, (d) a description of any material interest of such person or any affiliates of such person in the nomination, including any anticipated benefit therefrom to such person or any affiliates of such person, (e) a representation that such shareholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice, and (f) any other information relating to such shareholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder."Householding" and provision of additional copies of proxy materials upon request"householding,"“householding,” under which only one annual report to shareholders will be delivered to shareholders sharing the same address, unless contrary instructions are received. Householding reduces the volume of duplicate information received at74OTHER INFORMATIONand the environmental burden of excess paper usage.usage and carbon emissions associated with "street“street name,"” please contact your bank, broker or other holder of record to request information about householding.20202021 Annual Meeting.Kurt K. MuraoExecutive Vice President, General Counsel, ChiefAdministrative Officer and Corporate Secretary 2020752021EXHIBIT A Reported Core Earnings and Other Financial MeasuresHEI uses certain non-GAAP measures to evaluate the performance of HEI and its subsidiaries. Management believes these non-GAAP measures provide useful information and are a better indicator of HEI's core operating activities. Core earnings and other financial measures as presented here may not be comparable to similarly titled measures used by other companies. The accompanying tables provide a reconciliation of reported GAAP earnings to non-GAAP core earnings and the adjusted return on average common equity (ROACE) for HEI consolidated.The 2017 reconciling adjustments from GAAP earnings to core earnings exclude the impact of the federal tax reform act due to the adjustment of the deferred tax balances and the $1,000 employee bonuses paid by the bank related to federal tax reform. Management does not consider these items to be representative of the company's fundamental core earnings. Hawaiian Electric Industries, Inc. and Subsidiaries (HEI)Unaudited($ in millions, except per share amounts) 2019 2018 2017 $ 217.9 $ 201.8 $ 165.3 — — 0.7 — — 13.4 $ 217.9 $ 201.8 $ 179.5 $ 1.99 $ 1.85 $ 1.52 — — 0.01 — — 0.12 $ 1.99 $ 1.85 $ 1.65 9.8% 9.5% 7.9% 9.8% 9.5% 8.6% Note: Columns may not foot due to rounding1Accounting principles generally accepted in the United States of America2Employee bonus paid by American Savings Bank related to enactment of federal tax reform3Reflects the lower rates enacted by federal tax reform, primarily the adjustments to reduce the unregulated net deferred tax asset balances4Calculated as core net income divided by average GAAP common equityEXHIBIT BEXHIBIT BReconciliation of GAAP1 to Non-GAAP Measures:
Incentive Compensation AdjustmentsHEI'sHEI’s management may use certain non-GAAP measures to evaluate the performance of HEI and its subsidiaries for compensation purposes. Management believes these EICP and LTIP non-GAAP measures provide useful information and are a better indicator of management'smanagement’s performance regarding ongoing business operations forEXHIBIT B Years ended December 31 2019 2018 2017 2016 $ 217.9 $ 201.8 $ 165.3 $ 248.3 (5.6 ) 0.7 212.3 — 12.4 — — 1.6 1.0 — — (4.7 ) (11.2 ) 14.2 — — — 13.9 — — — — (60.3 ) — — — 2.1 (0.5 ) 0.7 (0.3 ) — 208.7 205.3 193.0 $ 190.1 (13.9 ) $ 208.7 $ 205.3 $ 179.1 $ 2.00 $ 1.85 $ 1.52 $ 2.30 1.92 1.89 1.77 1.76 9.8 9.5 7.9 9.3 9.6 8.6 $ 156.8 $ 143.7 $ 120.0 $ 142.3 — 12.4 — — — (4.7 ) 9.2 — — — 13.9 — — — — 0.1 — — — 2.1 156.8 151.3 143.0 $ 144.5 (13.9 ) $ 156.8 $ 151.3 $ 129.1 $ 1.44 $ 1.32 $ 1.10 $ 1.32 1.44 1.39 1.31 1.34 7.8 7.6 6.6 7.8 7.9 7.1 $ 89.0 $ 82.5 $ 67.0 (5.6 ) 0.7 83.4 (10.1 ) (11.2 ) (1.0 ) (0.5 ) 0.7 (0.3 ) $ 72.8 $ 72.7 $ 65.7 12.6 13.5 11.0 11.9 58.4 (0.8 ) 57.6 B-2Table of ContentsTABLE OF CONTENTSEXHIBIT B 1Accounting principles generally accepted in the United States of America1 Accounting principles generally accepted in the United States of America. 2 Primarily reflects certain expenses related to the termination of the proposed merger with NextEra Energy, including Hawaiian Electric’s liquid natural gas (LNG) project costs and adjustments to test year revenue requirements for customer benefit adjustments in the Hawaiian Electric and Maui Electric rate case decisions. 3 For 2018 LTIP purposes, reflects various tax adjustments for tax reform and related impacts. 4 Calculated as non-GAAP adjusted net income divided by average adjusted GAAP common equity. For HEI and ASB ROACE goal, average 2019 and 2020 return on average common equity. 5 Calculated using Utility net income divided by HEI weighted average common shares. 6 Calculated as non-GAAP adjusted noninterest expense divided by the sum of net interest income and noninterest income. 2Primarily reflects certain expenses related to the termination of the proposed merger with NextEra Energy, including the Hawaiian Electric's liquid natural gas (LNG) project costs and adjustments to test year revenue requirements for customer benefit adjustments in the Hawaiian Electric and Maui Electric rate case decisions3For 2017, primarily reflects the impacts of lower rates enacted by federal tax reform on the net deferred tax asset balances. For 2018 and 2019 LTIP purposes, reflects various tax adjustments for tax reform and related impacts.4Reflects reversion of the rate adjustment mechanism (RAM) to the lagged method of revenue recognition5Calculated as non-GAAP adjusted net income divided by average adjusted GAAP common equity. For ASB ROACE goal, average 2018 and 2019 return on average common equity.6Calculated using Utility net income divided by HEI weighted average common shares7Calculated as non-GAAP adjusted noninterest expense divided by sum of net interest income and noninterest incomeB-3APPENDIX-AHawaiian Electric Industries, Inc.Proposed Declassification Amendment to theAmended and Restated Articles of IncorporationFifth: (a) There shall be a board of directors of the corporation to consist of not less than five nor more than eighteen members. The directors need not be stockholders of the corporation.(b) Prior to the 2021 annual meeting of stockholders (the "2021 Annual Meeting"), the directors shall be divided into three classes, designated Class I, Class II and Class III. Each such class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire board of directors. Commencing with the 2021 Annual Meeting, each director elected at an annual meeting of stockholders shall be elected for a one-year term expiring at the next annual meeting of stockholders; provided, however, that each director elected prior to the 2021 Annual Meeting shall continue to serve for the remainder of the original term for which he or she was originally elected. The division of the directors into classes shall terminate at the 2023 annual meeting of stockholders. In each case, a director shall hold office until the annual meeting for the year in which his or her term expires and until his orher successor shall be elected and shall qualify, subject, however, to such director's prior death, resignation, retirement, disqualification or removal from office.(c) The board of directors shall have full power to control and direct the business and affairs of the corporation, subject, however, to instructions by the stockholders and to any limitations which may be set forth in statutory provisions and in these Articles of Incorporation and in any resolutions authorizing the issuance of shares of preferred stock, and in the By-laws of the corporation. The board of directors of the corporation, without the approval of the stockholders of the corporation, or of any percentage thereof, may authorize the borrowing of money or the incurring of debts, even though as a result thereof the amount of the corporation's indebtedness may exceed its capital stock. The board of directors, without the approval of the stockholders of the corporation, or of any percentage thereof, may authorize the making of donations referred to in subparagraph (m) of Article Third.APPENDIX-BAPPENDIX-BHawaiian Electric Industries, Inc.Proposed Majority Voting Amendment to theAmended and Restated Articles of IncorporationFifth: (a) There shall be a board of directors of the corporation to consist of not less than five nor more than eighteen members. Except in the case of a director appointed by the remaining directors to fill a vacancy on the board, a nominee for director shall be elected to the board of directors if the votes cast "for" such nominee's election at a stockholder meeting at which a quorum is present exceed the votes cast "against" such nominee's election; provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders for which the secretary of the corporation determines, as of the date that is ten (10) days prior to the date the corporation files its definitive proxy statement for such meeting with the Securities and Exchange Commission (regardless of whether or not thereafter revised or supplemented), that the number of nominees or proposed nominees exceeds the number of directors to be elected. There shall be no cumulative voting in the election of directors. The directors need not be stockholders of the corporation.(b) The board of directors shall have full power to control and direct the business and affairs of the corporation, subject, however, to instructions by the stockholders and to any limitations which may be set forth in statutory provisions and in these Articles of Incorporation and in any resolutions authorizing the issuance of shares of preferred stock, and in the By-laws of the corporation. The board of directors of the corporation, without the approval of the stockholders of the corporation, or of any percentage thereof, may authorize the borrowing of money or the incurring of debts, even though as a result thereof the amount of the corporation's indebtedness may exceed its capital stock. The board of directors, without the approval of the stockholders of the corporation, or of any percentage thereof, may authorize the making of donations referred to in subparagraph (m) of Article Third.APPENDIX-CAPPENDIX-CHawaiian Electric Industries, Inc.Combined Proposed Majority Voting and DeclassificationAmendments to the Amended and RestatedArticles of IncorporationFifth: (a) There shall be a board of directors of the corporation to consist of not less than five nor more than eighteen members. Except in the case of a director appointed by the remaining directors to fill a vacancy on the board, a nominee for director shall be elected to the board of directors if the votes cast "for" such nominee's election at a stockholder meeting at which a quorum is present exceed the votes cast "against" such nominee's election; provided, however, that directors shall be elected by a plurality of the votes cast at any meeting of stockholders for which the secretary of the corporation determines, as of the date that is ten (10) days prior to the date the corporation files its definitive proxy statement for such meeting with the Securities and Exchange Commission (regardless of whether or not thereafter revised or supplemented), that the number of nominees or proposed nominees exceeds the number of directors to be elected. There shall be no cumulative voting in the election of directors. The directors need not be stockholders of the corporation.(b) Prior to the 2021 annual meeting of stockholders (the "2021 Annual Meeting"), the directors shall be divided into three classes, designated Class I, Class II and Class III. Each such class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire board of directors. Commencing with the 2021 Annual Meeting, each director elected at an annual meeting of stockholders shall be elected for a one-year term expiring at the nextannual meeting of stockholders; provided, however, that each director elected prior to the 2021 Annual Meeting shall continue to serve for the remainder of the original term for which he or she was originally elected. The division of the directors into classes shall terminate at the 2023 annual meeting of stockholders. In each case, a director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to such director's prior death, resignation, retirement, disqualification or removal from office.(c) The board of directors shall have full power to control and direct the business and affairs of the corporation, subject, however, to instructions by the stockholders and to any limitations which may be set forth in statutory provisions and in these Articles of Incorporation and in any resolutions authorizing the issuance of shares of preferred stock, and in the By-laws of the corporation. The board of directors of the corporation, without the approval of the stockholders of the corporation, or of any percentage thereof, may authorize the borrowing of money or the incurring of debts, even though as a result thereof the amount of the corporation's indebtedness may exceed its capital stock. The board of directors, without the approval of the stockholders of the corporation, or of any percentage thereof, may authorize the making of donations referred to in subparagraph (m) of Article Third.
VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 05/04/2020 for shares held directly and by 11:59 P.M. ET on 04/30/2020 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. BROADRIDGE CORPORATE ISSUER SOLUTIONS HAWAIIAN ELECTRIC INDUSTRIES, INC. PO BOX 1342 EDGEWOOD, NY 11717 ELECTRONIC DELIVERYTABLE OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 05/04/2020 for shares held directly and by 11:59 P.M. ET on 04/30/2020 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. For Withhold For All Except To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the AllAll The Board of Directors recommends you vote FOR the following: nominee(s) on the line below. 0 0 0 1. Elect Three Class III Directors: Peggy Y. Fowler, Keith P. Russell, Eva T. Zlotnicka; and One Class I Director: Micah A. Kane Nominees 01) Peggy Y. Fowler 02) Keith P. Russell 03) Eva T. Zlotnicka 04) Micah A. Kane The Board of Directors recommends you vote FOR proposals 2, 3, 4 and 5. For 0 0 0 0 Against 0 0 0 0 Abstain 0 0 0 0 2. Advisory vote to approve the compensation of HEI's named executive officers. 3. Amendment of the HEI Amended and Restated Articles of Incorporation to declassify the Board of Directors. 4. Amendment of the HEI Amended and Restated Articles of Incorporation to adopt a majority voting standard in uncontested director elections. Ratification of the appointment of Deloitte & Touche LLP as HEI's independent registered public accountant for 2020. 5. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000447862_1 R1.0.1.18CONTENTS
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement are available at www.proxyvote.com HAWAIIAN ELECTRIC INDUSTRIES, INC. Annual Meeting of Shareholders May 5, 2020 10:00 AM This proxy is solicited by the Board of Directors The undersigned hereby constitutes and appoints Constance H. Lau, Kurt K. Murao and Thomas B. Fargo and each of them the proxy of the undersigned, with full power of substitution, to vote all the Common Stock of Hawaiian Electric Industries, Inc. which the undersigned may be entitled to vote at the Annual Meeting of Shareholders to be held on May 5, 2020, or at any adjournment or postponement thereof. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 5, 2020, AT 10:00 A.M., IN THE AMERICAN SAVINGS BANK TOWER, 8TH FLOOR, 1001 BISHOP STREET, HONOLULU, HAWAII 96813. If no direction is indicated, said proxies will vote FOR all Nominees in proposal 1, FOR proposals 2, 3, 4 and 5. Said proxies are also authorized to vote in their discretion with respect to any other matters that may come before the Annual Meeting or at any adjournment or postponement thereof. Continued and to be signed on reverse side 0000447862_2 R1.0.1.18