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COMPENSATION
DISCUSSION AND ANALYSIS
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INTRODUCTION
This section of the Proxy Statement provides an overview of the Companys 2016 executive compensation program (the executive compensation program) and an analysis of the decisions made with respect
to the compensation of the Companys Named Executive Officers (as identified by the Company under Securities and Exchange Commission rules). The executive compensation program covers the Companys Named Executive Officers. For 2016, the
Companys Named Executive Officers were:
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John McAvoy, Chairman, President and Chief Executive Officer
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Robert Hoglund, Senior Vice President and Chief Financial Officer
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Craig Ivey, President, Con Edison of New York
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Elizabeth D. Moore, Senior Vice President and General Counsel
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Timothy P. Cawley, President and Chief Executive Officer, Orange & Rockland
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EXECUTIVE SUMMARY
The Companys executive
compensation program is designed to assist in attracting and retaining key executives critical to its long-term success, to motivate these executives to create value for its stockholders, and to promote safe, reliable, and efficient service for its
customers. Each year, the Management Development and Compensation Committee (the Compensation Committee) evaluates the level of compensation, the mix of base salary, performance-based compensation, and retirement and welfare benefits
provided to each Named Executive Officer. The Compensation Committee, with the assistance of its independent compensation consultant, seeks to align pay to performance and provide
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27
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COMPENSATION DISCUSSION AND ANALYSIS
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base salary and performance-based compensation, including target annual cash incentive compensation and target long-term equity-based incentive compensation that are competitive with the median
level of compensation provided by the Companys compensation peer group companies. (See
Executive Compensation Philosophy and ObjectivesCompetitive PositioningAttraction and Retention
on page 29 and
Executive Compensation ActionsCompensation Peer Group
on page 33.) The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officers
target total direct compensation to motivate strong annual and multi-year Company performance.
Additionally, the Compensation Committee believes that
most of the performance-based compensation should be in the form of long-term, rather than annual, incentives to emphasize the importance of sustained Company performance.
Key Features of the Executive Compensation Program
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Type
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Component
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Objective
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Performance-
Based
Compensation
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Annual
Incentive
Compensation
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Achievement of financial and operating objectives for which the Named Executive Officers have individual and collective
responsibility.
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Long-Term
Incentive
Compensation
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Achievement, over a multi-year period, of financial and operating objectives critical to the performance of the Companys business plans and
strategies. Achievement, over a three-year period, of the Companys cumulative total shareholder return relative to the Companys compensation peer group companies.
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Fixed &
Other Compensation
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Base Salary,
Retirement
Programs,
Benefits and
Perquisites
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Differentiate base salary based on individual responsibility and performance. Provide retirement and other benefits that reflect the competitive
practices of the industry and provide limited and specific perquisites.
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Key Compensation Governance Practices
The Company is committed to maintaining strong compensation governance practices to support the
pay-for-performance
philosophy of the executive compensation program and align the executive compensation program with the long-term interests of the Companys
stockholders:
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Pay Practices
. The Company has no employment agreements, no golden parachute excise tax
gross-ups,
and
no individually negotiated equity awards with special treatment upon a change of control.
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Long-Term Incentive Compensation
. The Long Term Incentive Plan: (i) prohibits the repricing of stock options or the buyout of underwater
options without stockholder approval; (ii) prohibits recycling of shares for future awards except under limited circumstances; (iii) prohibits accelerated vesting of outstanding equity awards except if both a change in control occurs
and a participants employment is terminated under certain circumstances; and (iv) caps the maximum number of shares that may be awarded to a director, officer, or eligible employee in a calendar year.
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Long-Term Incentive Mix
. All Named Executive Officer long-term incentive compensation is performance-based. Based on proxy statements filed in
2016, over half of the Companys compensation peer group companies granted some form of
non-performance-based
incentive compensation to their named executive officers. (See
Executive Compensation
Philosophy and
ObjectivesPay-for-Performance
Alignment and Pay Mix
on page 30.)
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Risk Management
. The relevant features of the Companys compensation programs that mitigate risk are:
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¡
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Annual and long-term incentives under the Companys compensation programs appropriately balanced between annual and long-term financial performance goals that are tied to key goals that are expected to enhance
stockholder value;
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¡
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Annual and long-term incentives tied to multiple performance goals to reduce undue weight on any one goal;
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¡
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Non-financial
performance factors used in determining the actual payout of annual incentive compensation as a counterbalance to financial performance goals;
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¡
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Compensation programs designed to deliver a significant portion of compensation in the form of long-term incentives, discouraging excessive focus on annual results;
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CONSOLIDATED EDISON, INC.
Proxy Statement
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COMPENSATION DISCUSSION AND ANALYSIS
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¡
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Performance-based equity awards based on performance over a three-year period, focusing on sustainable performance over a three-year cycle rather than any one year; and
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¡
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Annual and long-term incentive plans that are subject to payment caps and Compensation Committee discretion to reduce payouts.
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Stock Ownership Guidelines
. Stock ownership guidelines for directors and certain officers, including the Named Executive Officers, encourage a
long-term commitment to the Companys sustained performance through stock ownership. (See
Director Compensation
on page 21 and
Stock Ownership Guidelines
on page 45.)
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No Hedging
Nor Pledging
. To encourage a long-term commitment to the Companys sustained
performance, the Company prohibits all directors, officers, financial personnel, and certain other individuals from shorting, hedging, and pledging Company securities or holding Company securities in a margin account. (See
No Hedging Nor
Pledging
on page 45.)
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Recoupment Policy
. The Companys compensation recoupment policy applies to all officers of the Company and its subsidiaries for
incentive-based compensation and is intended to reduce potential risks associated with its executive compensation program and align the long-term interests of officers and stockholders. (See
Recoupment Policy
on page 45.)
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Stockholder Engagement and Say on Pay
The Company believes that good corporate governance includes proactive stockholder engagement as well as accepting invitations to discuss matters of interest to
stockholders. The Company shared with the Board the feedback it received from institutional investors and stockholders following the 2016 proxy season on issues relating to disclosure practices, corporate governance, and
environmental, health and safety matters. The Companys engagement with institutional investors resulted in the Boards adoption of proxy access, which enables the stockholders of the
Company to include their own director nominees in the Companys Proxy Statement and form of proxy along with candidates nominated by the Board, so long as they meet certain requirements, as set forth in the Companys
By-laws.
In 2016, the Company held its annual say on pay vote to approve Named Executive Officer compensation, as set
forth in the 2016 proxy statement, and 92.15% of the shares voted were voted for the proposal. The Company intends to hold an annual say on pay vote unless stockholders advise the Company to change the frequency of the vote at the
Companys 2017 annual meeting of stockholders.
EXECUTIVE COMPENSATION PHILOSOPHY AND
OBJECTIVES
The Compensation Committees philosophy and objectives governing the development and implementation of the executive compensation
program are to provide competitive, performance-based compensation. There are no material differences in the Companys compensation policies for each Named Executive Officer.
Competitive PositioningAttraction and Retention
The executive
compensation program is designed to attract and retain key executives critical to the Companys long-term success. The Compensation Committee seeks to align pay to performance and provide base salary, target annual cash incentives, and target
long-term equity-based incentives that are competitive with the median level of compensation provided by the Companys compensation peer group companies. (See
Executive Compensation ActionsCompensation Peer Group
on
page 33.) The Company also seeks to provide retirement and other benefits that are competitive with those provided by the industry and to provide limited and specific perquisites.
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COMPENSATION DISCUSSION AND ANALYSIS
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In 2016, the Named Executive Officers target total direct compensation compared
to the Companys compensation peer group median was as follows:
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Company Target Compensation as a Percentage of
Compensation Peer Group Median Target
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Base Salary
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Target Total
Cash
Compensation
(Base Salary +
Target
Annual Incentive)
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Target
Long-Term
Incentive
Compensation
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Target
Total Direct
Compensation
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John McAvoy
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Chairman, President and Chief Executive Officer
(1)
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95
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%
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100
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%
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90
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%
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94
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%
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Other Named Executive Officers (Average)
(2)
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109
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%
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104
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%
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113
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%
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107
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%
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Footnotes:
(1)
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Based on comparisons of compensation for chief executive officers of each of the Companys compensation peer group companies as disclosed in proxy statements filed in 2016.
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(2)
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Based on comparisons of compensation for functionally comparable positions at the Companys compensation peer group companies as disclosed in proxy statements filed in 2016.
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Pay-for-Performance
Alignment and Pay Mix
The executive compensation program is designed to motivate the Companys key executives to create sustainable stockholder value and promote
safe, reliable and efficient service for its customers. The Compensation Committee seeks to balance the target total direct compensation of each Named Executive Officer between base salary (fixed compensation) and annual cash incentive compensation
and long-term equity-based incentive compensation (performance-based compensation).
The Compensation Committee believes that fixed compensation should
recognize each Named Executive Officers individual responsibility and performance. The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officers
target total direct compensation and should be in the form of long-term, rather than annual, incentives to emphasize the importance of sustained Company performance.
Target annual cash incentive and target long-term equity-based incentive awards reflect the Compensation Committees
desired balance between these elements, relative to the base salary paid to each Named Executive Officer. Awards under the Companys annual incentive plan are based on the achievement of
financial and operating objectives for which the Named Executive Officers have individual and collective responsibility. Awards under the Companys long term incentive plan are based on the achievement of financial and operating objectives
critical to the Companys business plans and strategies and the achievement, over a three-year period, of the Companys cumulative total shareholder return relative to the total shareholder return for the Companys compensation peer
group companies.
For 2016, the mix of target total direct compensation for the Named Executive Officers meets the Compensation Committees
objectives: each is weighted heavily toward performance-based compensation, with the largest portion delivered in long-term incentives, and the target total direct compensation mix of the Named Executive Officers is in line with that of the
Companys compensation peer group companies (except that the Company does not provide
non-performance
based incentive compensation).
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CONSOLIDATED EDISON, INC.
Proxy Statement
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COMPENSATION DISCUSSION AND ANALYSIS
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The following charts illustrate the average mix of target total direct compensation for
Mr. McAvoy and for chief executive officers in the Companys compensation peer group companies for 2016:
The following charts illustrate the average mix of target total direct compensation for the other Named Executive Officers and
other named executive officers in the Companys compensation peer group companies for 2016 (see footnote 2 to the table in
Executive Compensation Philosophy and ObjectivesCompetitive PositioningAttraction and
Retention
on page 30):
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COMPENSATION DISCUSSION AND ANALYSIS
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The following charts illustrate that all Named Executive Officer long-term incentive
compensation is performance-based and that, based on proxy statements filed in 2016, over half of the Companys compensation peer group companies granted some form of
non-performance-based
incentive
compensation to their named executive officers:
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Determining Performance Goals
The Compensation Committee chooses performance goals under the annual incentive and long-term incentive plans to support the Companys short- and long-term
business plans and strategies. In setting the performance goals, the Compensation Committee considers the Companys annual and long-term business plans and certain other factors, including
pay-for-performance
alignment, economic and industry conditions, and the pay practices of the compensation peer group companies. The Compensation Committee sets challenging, but achievable, goals for the
Company and its key executives to drive the achievement of short- and long-term objectives.
ROLE OF COMPENSATION COMMITTEE AND OTHERS IN DETERMINING EXECUTIVE COMPENSATION
Compensation Committees Role
The role of the Compensation Committee is to establish and oversee the Companys executive compensation and retirement and welfare benefit plans and policies, administer its equity plans and annual incentive
plan and review and approve annually all compensation relating to the Named Executive
Officers. All of the decisions with respect to determining the amount or form of compensation of the Named Executive Officers under the executive compensation program are made by the Compensation
Committee.
Managements Role
The role of the Companys chief executive officer in determining the amount and form of the other Named Executive Officers compensation is to provide recommendations to the Compensation Committee. The
chief executive officer is not present when the Compensation Committee determines his compensation. The chief executive officer considers the following in making his recommendations for the other Named Executive Officers compensation:
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Individual performance of each of the other Named Executive Officers;
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Each of the other Named Executive Officers contribution toward the Companys long-term performance;
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The scope of each of the other Named Executive Officers individual responsibilities; and
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CONSOLIDATED EDISON, INC.
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COMPENSATION DISCUSSION AND ANALYSIS
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Compensation peer group company proxy statement data provided by the Compensation Committees independent compensation consultant.
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The Companys Human Resources department also supports the Compensation Committee in its work.
Compensation Consultants Role
The Compensation Committee has the authority under its charter to hire advisors to assist it in its compensation decisions. It has retained Mercer as its independent compensation consultant to provide information,
analyses, and objective advice regarding executive compensation. The Compensation Committee periodically meets with Mercer in executive session to discuss compensation matters. The Compensation Committees decisions reflect factors and
considerations in addition to the information and advice provided by Mercer. A discussion of Mercers role as the Compensation Committees independent compensation consultant is set forth in the section titled
The Board of
DirectorsStanding Committees of the BoardManagement Development and Compensation Committee
on page
19.
EXECUTIVE COMPENSATION ACTIONS
Compensation Peer Group
For 2016, the Compensation Committee used a
compensation peer group of publicly-traded utility companies of comparable size and scope to that of the Company. The purpose of the compensation peer group is to provide benchmark information on compensation levels provided to the Companys
officers, as well as to measure relative total shareholder returns for the vesting of performance-based equity awards. The Compensation Committee annually reviews the composition of the compensation peer group companies and the impact of
acquisitions. For 2016, the Compensation Committee made the following change to the compensation peer group: WEC Energy Group (a company formed by the June 2015 merger between Wisconsin Energy Corporation and Intergrys Energy Group) was added
because of its mix of business and size. The Companys 2015 revenues approximated the 66th percentile of the compensation peer group.
For 2016, the Companys compensation peer group consisted of the following companies:
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Company Name
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2015 Revenue
(1)
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(in millions)
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Duke Energy Corporation
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$
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23,459
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The Southern Company
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$
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17,489
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NextEra Energy, Inc.
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$
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17,486
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PG&E Corporation
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$
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16,833
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American Electric Power Company, Inc.
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$
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16,453
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FirstEnergy Corp.
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$
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15,031
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Dominion Resources, Inc.
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$
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11,683
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Edison International
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$
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11,524
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Entergy Corporation
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$
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11,513
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Xcel Energy Inc.
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$
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11,024
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DTE Energy Company
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$
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10,337
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Sempra Energy
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$
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10,231
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Eversource Energy
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$
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7,955
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PPL Corporation
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$
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7,669
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CenterPoint Energy, Inc.
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$
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7,386
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Ameren Corporation
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$
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6,098
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WEC Energy Group, Inc.
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$
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5,926
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NiSource Inc.
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$
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4,652
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Median
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$
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11,269
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Consolidated Edison, Inc.
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$
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12,554
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Percentile Rank
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66
th
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Footnote:
(1)
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Source: Standard & Poors Research Insight (represents net revenues, restated if applicable).
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For 2017, the Compensation Committee made no change to the compensation peer group.
Base Salary
A portion of each Named Executive Officers annual cash
compensation is paid in the form of base salary. Base salary is reviewed annually to recognize individual performance, as well as at the time of a promotion or other change in responsibilities.
In setting base salary for the Named Executive Officers, including the chief executive officer, the Compensation Committee considers various factors, including:
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Recommendations from the chief executive officer for each of the other Named Executive Officers;
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A general assessment of each Named Executive Officers performance of his or her responsibilities; and
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The level of base salary compared to key executives holding equivalent positions in the Companys compensation peer group companies.
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COMPENSATION DISCUSSION AND ANALYSIS
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Effective February 1, 2016, base salary merit increases for the Named Executive Officers as a group increased by
an average of 3.0%. The 2016 base salary of each Named Executive Officer is set forth in the
Salary
column of the Summary Compensation Table on page 48.
Annual Incentive Compensation
Awards
A significant portion of the annual cash incentive compensation paid to the Named Executive Officers directly relates to the Companys financial and operating performance, factors that the Compensation
Committee believes influence stockholder value.
Individual performance is considered in setting annual cash incentive compensation through the
establishment by the Compensation Committee of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility.
Potential Awards
For 2016, the Compensation Committee set the range of the award that each Named Executive Officer was eligible to receive under the annual incentive plan after considering various factors, including:
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Recommendations from the chief executive officer for each of the other Named Executive Officers;
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A general assessment of each Named Executive Officers performance of his or her responsibilities; and
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The level of annual incentive compensation compared to key executives in the Companys compensation peer group companies. (See footnote 2 to the table in
Executive Compensation Philosophy and ObjectivesCompetitive PositioningAttraction and Retention
on page 29.)
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The range of awards included threshold, target and maximum levels reflecting differing levels of achievement of the various financial and operating objectives. Awards are scaled to reflect relative levels of
achievement of the objectives between the threshold, target and maximum levels. The range of each Named Executive Officers potential award is set forth in the Grants of Plan-Based Awards Table on page 50. Awards under the annual incentive plan
are designed to provide a competitive level of compensation if the Named Executive Officers achieve the target financial and operating objectives. Pursuant to the terms of the annual incentive plan, the Compensation Committee has discretion to
adjust (upward or
downward) the annual incentive award to be paid to each Named Executive Officer.
Awards under the
annual incentive plan are calculated as follows:
Base Salary X Target Percentage
X Weighting Earned
Target Percentage
is a percentage of Base Salary that varies based on the Named Executive Officers position as
follows:
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Target Percentage
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John McAvoy
Chairman, President and
Chief Executive Officer
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125
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%
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Robert Hoglund
Senior Vice President and
Chief Financial Officer
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50
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%
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Craig Ivey
President, Con Edison of New York
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80
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%
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Elizabeth D. Moore
Senior Vice President and
General Counsel
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50
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%
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Timothy P. Cawley
President and Chief Executive Officer,
Orange &
Rockland
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80
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%
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Weighting Earned
is the sum of the weightings earned for the following components:
adjusted net income, other financial performance, and operating objectives. For each Named Executive Officer, target weightings, totaling 100%, are assigned for each component as follows: 50% for adjusted net income, 20% for other financial
performance, and 30% for operating objectives. For 2017, target weightings for adjusted net income will be 50%, other financial performance will be increased to 25%, and operating objectives will be decreased to 25%. The change in target weightings
reflects the importance of the Companys financial objectives in driving performance. Weightings earned vary from zero to 200% for adjusted net income and other financial performance, and from zero to 175% for operating objectives, reflecting
achievement of the applicable objectives. For 2017, weightings earned for operating objectives will vary from zero to 200%. This increase in weightings is competitive with practices at the companies in the compensation peer group. In addition, for
2017, weightings earned for the capital budget component of other financial performance will be reduced from 200% to 120%.
Financial Objectives
The financial objectives under the annual incentive plan are
key performance measures that support the Companys short- and long-term business plans and strategies and create value
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COMPENSATION DISCUSSION AND ANALYSIS
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for the Companys stockholders. For 2016, the financial objectives consisted of adjusted net income and other financial performance components.
The
adjusted net income
component, reflecting the financial results of the Companys business for which its Named Executive Officers
are responsible and accounting for 50% of each Named Executive Officers potential annual incentive award, as shown on the
Executive Compensation Actions
Annual Incentive CompensationAchievement of 2016 Financial and
Operating Objectives
table on page 38, was comprised of Adjusted Company Net Income and Adjusted Regulated Net Income.
Adjusted Company Net Income
is the Companys net income as
reported under generally accepted accounting principles (GAAP) in the Companys financial statements excluding the impact of certain items. (See footnote (1) to the following table.)
Adjusted Regulated Net Income
is net income as reported under GAAP in the financial statements of Con Edison of New York and Orange & Rockland.
For 2016, target adjusted
net income and actual adjusted net income were as follows:
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Target
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Actual
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Performance
Relative to
Target
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(in millions)
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Adjusted Company Net Income
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$
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1,150
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$
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1,189.2
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(1)
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103.4
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%
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Adjusted Regulated Net Income
|
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$
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1,123
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$
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1,115.3
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99.3
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%
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Adjusted Con Edison of New York Net Income
|
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$
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1,063
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$
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1,056.1
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99.4
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%
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Adjusted Orange & Rockland Net Income
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$
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60
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$
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59.2
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98.7
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%
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Footnote:
(1)
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Excludes the effects of the gain on the sale of Con Edison Clean Energy Businesses, Inc.s retail supply businesses, the goodwill impairment related to its energy service
business and its net
mark-to-market
effects. Also reflects the timing of the sale as compared to target.
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If actual adjusted net income for 2016 had been less than 90% of the target adjusted net income, no annual incentive awards would have been made.
The weightings earned for the 50% adjusted net income component were determined based on the following
scale:
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Performance
Relative to
Performance
Goal
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Weighting Earned
(1)
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Payout
Relative to
Target
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³
110%
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100%
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200%
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(Target) 100%
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50%
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100%
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< 90%
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0%
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0%
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(1)
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The weightings earned, which were interpolated for actual performance between performance goals, are shown on the
Executive Compensation ActionsAnnual Incentive
CompensationAchievement of 2016 Financial and Operating Objectives
table on page 38.
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The
other financial
performance
component, reflecting the Companys business for which its Named Executive Officers are responsible and accounting for 20% of each Named Executive Officers potential annual incentive award, as shown on the
Executive Compensation ActionsAnnual Incentive CompensationAchievement of 2016 Financial and Operating Objectives
table on page 38, was comprised of one or more of the Con Edison of New York and Orange &
Rockland budgets, or objectives for Con Edison Clean Energy Businesses, Inc. and its subsidiaries (the Clean Energy Businesses, which were formerly referred to as the competitive energy businesses) relating to compliance with financial
reporting requirements, level of bad debt, and financial risk exposure. For 2017, other financial performance will account for 25% of each Named Executive Officers potential annual incentive award. The change in target weightings
reflects the importance of the Companys financial objectives in driving performance.
Con Edison of New Yorks other financial
performance component is allocated 10% for capital budget performance and up to 10% for operating budget performance (up to 15% for operating budget performance in 2017), subject to a maximum 25% upward or downward adjustment based on the
achievement of
pre-established
targets for 25 capital projects and 12 operating and maintenance programs, respectively. The targets for the capital projects consist of completing milestones within specified
budget targets, and, for the operating and maintenance programs, completing a number of units within specified per unit budget targets. Orange & Rocklands and the Clean Energy Businesses other financial performance
component is up to 20% (up to 25% for 2017) and up to 1%, respectively.
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COMPENSATION DISCUSSION AND ANALYSIS
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The target budgets and actual expenditures for 2016 were as follows:
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Target
(in millions)
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Actual
(in millions)
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Performance
Relative to
Target
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|
Con Edison of
New York
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|
|
|
|
|
|
|
Operating Budget
|
|
$
|
1,505.0
|
|
|
$
|
1,477.3
|
|
|
|
98.2
|
%
|
Capital Budget
|
|
$
|
2,776.9
|
|
|
$
|
2,702.2
|
|
|
|
97.3
|
%
|
Orange &
Rockland
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Budget
|
|
$
|
205.1
|
|
|
$
|
197.2
|
|
|
|
96.1
|
%
|
The weightings earned for Con Edison of New Yorks and
Orange & Rocklands other financial performance component were determined based on the following scales:
|
|
|
|
|
|
|
Con
Edison of
New York
Performance
Relative to
Operating
Budget Goal
|
|
Weighting
Earned for
McAvoy,
Hoglund,
and
Moore
(1)
|
|
Weighting
Earned for
Ivey
(1)
|
|
Payout
Relative
to
Target
|
£
89%
|
|
16%
|
|
20%
|
|
200%
|
(Target)
99-101%
|
|
8%
|
|
10%
|
|
100%
|
³
111%
|
|
0%
|
|
0%
|
|
0%
|
Footnote:
(1)
|
|
The weightings earned, which were interpolated for actual performance between performance goals, are shown on the
Executive Compensation ActionsAnnual Incentive
CompensationAchievement of 2016 Financial and Operating Objectives
table on page 38. In 2016, Con Edison of New York achieved
pre-established
performance goals for 11 out of 12 operating and
maintenance programs, as a result of which the weighting earned was subject to a 110% upward adjustment.
|
|
|
|
|
|
Con Edison of
New York
Performance
Relative to
Capital
Budget
Target
|
|
Weighting Earned for
McAvoy, Hoglund,
Ivey,
and
Moore
(1)
|
|
Payout
Relative to
Target
|
£
89.00%
|
|
20%
|
|
200%
|
(Target) 99-101%
|
|
10%
|
|
100%
|
³
110.00%
|
|
0%
|
|
0%
|
Footnote:
(1)
|
|
The weightings earned, which were interpolated for actual performance between performance goals, are shown on the
Executive Compensation ActionsAnnual Incentive
CompensationAchievement of 2016 Financial and Operating Objectives
table on page 38. In 2016, Con Edison of New York achieved 24 out of 25
pre-established
performance goals for capital
projects, as a result of which the weighting earned was subject to a 120% upward adjustment.
|
|
|
|
|
|
|
|
Orange &
Rockland
Performance
Relative
to
Operating
Budget Target
|
|
Weighting
Earned
for McAvoy,
Hoglund,
and
Moore
(1)
|
|
Weighting
Earned for
Cawley
|
|
Payout
Relative to
Target
|
£
89.00%
|
|
2%
|
|
40%
|
|
200%
|
(Target)
99-101%
|
|
1%
|
|
20%
|
|
100%
|
³
111.00%
|
|
0%
|
|
0%
|
|
0%
|
Footnote:
(1)
|
|
The weightings earned, which were interpolated for actual performance between performance goals, are shown on the
Executive Compensation ActionsAnnual Incentive
CompensationAchievement of 2016 Financial and Operating Objectives
table on page 38.
|
Operating Objectives
The
operating objectives
component, reflecting the responsibilities of the Named Executive Officer and accounting for 30% of each Named Executive Officers potential annual incentive
award, as shown on the
Executive Compensation ActionsAnnual Incentive CompensationAchievement of 2016 Financial and Operating Objectives
table on page 38, was comprised of a number of key indicators that guide Con
Edison of New York, Orange & Rockland, and the Clean Energy Businesses to serve their customers in a safe, reliable, and efficient manner. Each of the operating objectives include specific,
pre-established
targets that encourage superior performance in multiple areas that impact the
day-to-day
operations of the
Companys businesses. For 2017, operating objectives will account for 25% of each Named Executive Officers potential annual incentive award.
|
|
|
36
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Con Edison of New Yorks and Orange & Rocklands operating objectives for 2016, each accounting
for up to 30% (up to 25% in 2017), are shown in the following tables. Operating objectives for the Clean Energy Businesses (accounting for up to 1%) include those that are important to the success of their business: (i) renewable capacity
installed; (ii) retail electric commodity volume; and (iii) employee business development objectives.
|
|
|
|
|
|
|
|
|
|
|
Con Edison of
New York Operating
Objectives
(1)
|
|
Unit of
Measure
|
|
Target
|
|
|
Actual
|
|
Electric Network System Availability
|
|
%
|
|
|
³
99.999
|
|
|
|
99.999
|
|
Electric
Non-Network
System Availability
|
|
%
|
|
|
³
99.99
|
|
|
|
99.99
|
|
Electric Reliability Performance Measure
|
|
#
|
|
|
0
|
|
|
|
0
|
|
Respond to Gas Odor Complaints within 30 Minutes
|
|
%
|
|
|
³
75.0
|
|
|
|
89.1
|
|
Total Gas Leak
Year-End
Inventory
|
|
#
|
|
|
< 750
|
|
|
|
211
|
|
Steam OperationsNormal Pressure Operations
|
|
%
|
|
|
³
99.77
|
|
|
|
100.0
|
|
Generation StationForced Outages
|
|
%
|
|
|
£
4.0
|
|
|
|
1.3
|
|
Public Service Commission Complaints
|
|
Per
100,000
Customers
|
|
|
£
2.3
|
|
|
|
1.3
|
|
Representative Calls Answered in 30 Seconds
|
|
%
|
|
|
³
63.0
|
|
|
|
64.3
|
|
Customer Satisfaction Surveys
|
|
#Score
|
|
|
³
85.0
|
|
|
|
91.6
|
|
Safety Index
|
|
%
|
|
|
³
87.5
|
|
|
|
100.0
|
|
Environmental Index
|
|
%
|
|
|
³
87.5
|
|
|
|
87.5
|
|
Storm Index
|
|
%
|
|
|
³
83.3
|
|
|
|
100.0
|
|
Employee Development Index
|
|
%
|
|
|
³
83.3
|
|
|
|
100.0
|
|
Footnote:
(1)
|
|
Operating objectives were weighted equally.
|
The weightings earned
for Con Edison of New Yorks operating objectives component were determined based on the following scales:
|
|
|
|
|
|
|
Performance
Indicators
Achieved
|
|
Weighting
Earned for
McAvoy,
Hoglund,
and
Moore
(1)
|
|
Weighting
Earned
for
Ivey
(1)
|
|
Payout
Relative
to
Target
|
14/14
|
|
49%
|
|
52.5%
|
|
175%
|
(Target) 11/14
|
|
28%
|
|
30%
|
|
100%
|
< 7/14
|
|
0%
|
|
0%
|
|
0%
|
Footnote:
(1)
|
|
The weightings earned, which were based on actual performance between performance goals, are shown on the
Executive
|
|
Compensation ActionsAnnual Incentive Compensation
Achievement of 2016 Financial and Operating Objectives
table on page 38. Con Edison of New York achieved 14
out of the 14 operating objectives resulting in a weighting earned of 52.5% of the component target weighting.
|
|
|
|
|
|
|
|
|
|
|
|
Orange & Rockland
Operating Objectives
(1)
|
|
Unit of
Measure
|
|
Target
|
|
|
Actual
|
|
Electric Service Reliability Frequency
|
|
Outages Per
Customer
|
|
|
£
1.20
|
|
|
|
0.99
|
|
Electric Service Reliability Restoration Time
|
|
Minutes
|
|
|
£
115.5
|
|
|
|
106.7
|
|
Customer Experience
|
|
%
|
|
|
85.7
|
|
|
|
100
|
|
Respond to Gas Odor Calls within 30 Minutes
|
|
%
|
|
|
³
75.0
|
|
|
|
88.9
|
|
Gas Leaks
|
|
|
|
|
|
|
|
|
|
|
Workable Gas Leaks
Total Gas Leaks
|
|
#
#
|
|
|
£
20
£
250
|
|
|
|
2
27
|
|
Damage Prevention Program
|
|
%
|
|
|
³
100.0
|
|
|
|
100
|
|
Gas Main Replacement Program
|
|
# of Feet
|
|
|
³
110,880
|
|
|
|
123,330
|
|
Storm Hardening / System Resiliency Projects
|
|
%
|
|
|
³
75.0
|
|
|
|
100
|
|
Major Capital Projects
|
|
%
|
|
|
³
80.0
|
|
|
|
80.0
|
|
Safety Index
|
|
%
|
|
|
³
87.5
|
|
|
|
87.5
|
|
Environmental Index
|
|
%
|
|
|
³
80.0
|
|
|
|
100
|
|
Storm Index
|
|
%
|
|
|
³
85.7
|
|
|
|
100
|
|
Employee Development Index
|
|
%
|
|
|
³
83.3
|
|
|
|
100
|
|
Footnote:
(1)
|
|
Operating objectives were weighted equally. The weightings earned for Orange & Rocklands operating objectives component were determined based on the
following scales:
|
|
|
|
|
|
|
|
Performance
Indicators
Achieved
|
|
Weighting
Earned for
McAvoy, Hoglund,
and Moore
(1)
|
|
Weighting
Earned for
Cawley
(1)
|
|
Payout
Relative to
Target
|
13/13
|
|
1.75%
|
|
52.5%
|
|
175%
|
(Target) 11/13
|
|
1%
|
|
30%
|
|
100%
|
< 7/13
|
|
0%
|
|
0%
|
|
0%
|
Footnote:
(1)
|
|
The weightings earned, which were based on actual performance between performance goals, are shown on the
Executive Compensation ActionsAnnual Incentive
CompensationAchievement of 2016 Financial and Operating Objectives
table on page 38. Orange & Rockland achieved 13 out of the 13 operating objectives resulting in a weighting earned of 52.5% of the component target
weighting.
|
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
37
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Achievement of 2016
Financial and Operating Objectives
The following table shows, for each Named Executive Officer, the target weightings assigned to the financial and
operating objectives and the weightings earned based on achieving those objectives.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McAvoy, Hoglund,
and Moore
|
|
|
Ivey
|
|
|
Cawley
|
|
|
|
Target
|
|
|
Earned
|
|
|
Target
|
|
|
Earned
|
|
|
Target
|
|
|
Earned
|
|
Financial Objectives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Company Net Income
|
|
|
50
|
%
|
|
|
67
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Regulated Net Income
|
|
|
|
|
|
|
|
|
|
|
50
|
%
|
|
|
46.5
|
%
|
|
|
|
|
|
|
|
|
Adjusted Con Edison of New York Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
%
|
|
|
9.4
|
%
|
Adjusted Orange & Rockland Net Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40
|
%
|
|
|
34.8
|
%
|
Other Financial Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Con Edison of New York Operating Budget
|
|
|
8
|
%
|
|
|
9.5
|
%
|
|
|
10
|
%
|
|
|
11.9
|
%
|
|
|
|
|
|
|
|
|
Con Edison of New York Capital Budget
|
|
|
10
|
%
|
|
|
14
|
%
|
|
|
10
|
%
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
Orange & Rockland Operating Budget
|
|
|
1
|
%
|
|
|
1.3
|
%
|
|
|
|
|
|
|
|
|
|
|
20
|
%
|
|
|
25.8
|
%
|
Clean Energy Businesses
|
|
|
1
|
%
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Objectives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Con Edison of New York
|
|
|
28
|
%
|
|
|
49
|
%
|
|
|
30
|
%
|
|
|
52.5
|
%
|
|
|
|
|
|
|
|
|
Orange & Rockland
|
|
|
1
|
%
|
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
30
|
%
|
|
|
52.5
|
%
|
Clean Energy Businesses
|
|
|
1
|
%
|
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
100
|
%
|
|
|
146.1
|
%
|
|
|
100
|
%
|
|
|
124.9
|
%
|
|
|
100
|
%
|
|
|
122.5
|
%
|
2016 Annual Incentive Awards
In February 2017, the Compensation Committee evaluated and determined whether the applicable financial and operating objectives were satisfied. In assessing
performance against the objectives, the Compensation Committee considered actual results achieved against the specific targets associated with each objective and, based on the results, determined the 2016 annual incentive awards. The Compensation
Committee did not exercise discretion to adjust (upward or downward) the annual incentive award to be paid to each Named Executive Officer.
The
following table shows the calculation of the 2016 annual incentive awards for each Named Executive Officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal Position
|
|
Base
Salary
|
|
|
×
|
|
|
Target
Percentage
|
|
|
×
|
|
|
Weighting
Earned
|
|
|
=
|
|
|
2016 Award
|
|
John McAvoy
Chairman, President and Chief Executive Officer
|
|
$
|
1,225,000
|
|
|
|
|
|
|
|
125
|
%
|
|
|
|
|
|
|
146.1
|
%
|
|
|
|
|
|
$
|
2,237,200
|
|
Robert Hoglund
Senior Vice President and Chief Financial Officer
|
|
$
|
723,000
|
|
|
|
|
|
|
|
50
|
%
|
|
|
|
|
|
|
146.1
|
%
|
|
|
|
|
|
$
|
528,200
|
|
Craig Ivey
President, Con Edison of New York
|
|
$
|
797,300
|
|
|
|
|
|
|
|
80
|
%
|
|
|
|
|
|
|
124.9
|
%
|
|
|
|
|
|
$
|
796,600
|
|
Elizabeth D. Moore
Senior Vice President and General Counsel
|
|
$
|
609,500
|
|
|
|
|
|
|
|
50
|
%
|
|
|
|
|
|
|
146.1
|
%
|
|
|
|
|
|
$
|
445,300
|
|
Timothy P. Cawley
President and Chief Executive Officer, Orange & Rockland
|
|
$
|
409,700
|
|
|
|
|
|
|
|
80
|
%
|
|
|
|
|
|
|
122.5
|
%
|
|
|
|
|
|
$
|
401,500
|
|
|
|
|
38
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Long-Term Incentive Compensation
Awards
Named Executive Officers
are eligible to receive equity-based awards under the Companys long term incentive plan. The Compensation Committee determines the target long-term incentive award value for each Named Executive Officer based on various factors, including:
|
|
Recommendations from the chief executive officer for each of the other Named Executive Officers;
|
|
|
A general assessment of each Named Executive Officers performance of his or her responsibilities; and
|
|
|
The level of long-term incentive compensation compared to key executives in the Companys compensation peer group companies. (See footnote 2 to the table in
Executive Compensation Philosophy and ObjectivesCompetitive PositioningAttraction and Retention
on page 30.)
|
Performance-Based Equity Awards
It is the Compensation Committees practice in
the first quarter of each year to approve performance-based equity awards under the long term incentive plan for the Companys Named Executive Officers. The Compensation Committees use of performance-based equity awards is intended to
further reinforce the alignment of Named Executive Officer pay opportunities with stockholders by directly linking pay to the achievement of strong, sustained long-term financial and operating performance.
The performance units awarded to Named Executive Officers provide for the right to receive one share of Company Common Stock and/or a cash payment equal to the
fair market value of one share of Company Common Stock for each unit awarded, subject to the satisfaction of certain
pre-established
long-term performance objectives. Named Executive Officers may elect to
defer the receipt of the cash value of the award into the Companys deferred income plan and/or to defer the receipt of the shares. Dividends are not paid and do not accrue on the units during the vesting period.
2016 Performance Unit Awards
The
number of performance units awarded to the Named Executive Officers in 2016 for the 2016-2018 performance period is shown in the Grants of Plan-Based Awards Table on
page 50. Payouts of performance units, if any, are calculated by a
non-discretionary
formula as follows:
Award X 30% X Adjusted EPS Percentage
plus
Award X 20% X Operating Objectives Percentage
plus
Award X 50%
X Shareholder Return Percentage
Award
is the annual award of performance units under the long term
incentive plan. The target award of performance units is a percentage of base salary that varies based on each Named Executive Officers position as follows:
|
|
|
|
|
|
|
Target Award
as
a
Percentage of
Base Salary
|
|
John McAvoy
Chairman, President and
Chief Executive Officer
|
|
|
425
|
%
|
Robert Hoglund
Senior Vice President and
Chief Financial Officer
|
|
|
200
|
%
|
Craig Ivey
President, Con Edison of New York
|
|
|
250
|
%
|
Elizabeth D. Moore
Senior Vice President and
General Counsel
|
|
|
150
|
%
|
Timothy P. Cawley
President and Chief Executive Officer, Orange & Rockland
|
|
|
200
|
%
|
Adjusted EPS Percentage
is the payout relative to target over the performance period
beginning January 1, 2016 and ending December 31, 2018 based on attainment of the Companys three-year cumulative Adjusted EPS performance goal, set forth in the following table, that was established in the first quarter of 2016.
|
|
|
|
|
|
|
Three-Year Cumulative Adjusted EPS
(weighting 30%)
(1)
|
Performance
Relative to Target
|
|
Performance
Goal
|
|
|
Payout Relative
to Target
(2)
|
³
112%
|
|
|
³
$13.57
|
|
|
200%
|
(Target) 100%
|
|
|
$12.12
|
|
|
100%
|
< 88%
|
|
|
< $10.67
|
|
|
0%
|
Footnotes:
(1)
|
|
Adjusted EPS is the Companys earnings per share based on adjusted earnings, which excludes the impact of certain items from net income determined in accordance with GAAP.
|
(2)
|
|
Interpolated for actual performance between performance goals.
|
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
39
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Operating Objectives Percentage
is the payout relative to target over the
performance period beginning January 1, 2016 and ending December 31, 2018 based on the attainment of the Companys operating performance goals, set forth in the following table, that were established in the first quarter of 2016.
These performance goals further long-term reliability and foster environmental sustainability.
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Objectives
|
|
Performance
Goals
(1)
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
Advanced Meter Infrastructure Work Plan
(Weighting 5.0%)
|
|
|
2
|
|
|
|
3
|
(2)
|
|
|
4
|
|
Cyber Security Work Plan
(Weighting 5.0%)
|
|
|
5
|
|
|
|
6
|
(3)
|
|
|
7
|
|
Gas Main Replacement (Number of Miles Completed)
(Weighting 5.0%)
|
|
|
200
|
|
|
|
235
|
|
|
|
³
270
|
|
Growth in Renewable Portfolio (MW (AC)) (Weighting 5.0%)
|
|
|
127.5
|
|
|
|
255
|
(4)
|
|
|
³
382.5
|
|
Footnotes:
(1)
|
|
Payouts are relative to Target and are as follows: Threshold: 50%; Target: 100%; and Maximum: 150%. Payouts for Gas Main Replacement and Growth in Renewable Portfolio
are interpolated for actual performance between performance goals.
|
(2)
|
|
Target approved by the Compensation Committee for 2016. The Compensation Committee to approve the annual work plan. Performance results are based on average achievement over the
three-year period.
|
(3)
|
|
Target approved by the Compensation Committee for 2016. The Compensation Committee to approve the annual work plan. Performance results are based on average achievement over the
three-year period. The target approved by the Compensation Committee for 2016 applies to the second year of the three-year performance period for the 2015 performance units.
|
(4)
|
|
Target approved by the Compensation Committee for 2016. The Compensation Committee to approve annual plan levels on a three-year cumulative basis. The target approved by the
Compensation Committee for 2016 applies to the second year of the three-year performance period for the 2015 performance units (and the third year of the three-year performance period for the 2014 performance units).
|
Shareholder Return Percentage
is the payout relative to target based on the cumulative change in Company total
shareholder return over the performance period beginning January 1, 2016 and ending December 31, 2018 compared with the Companys compensation peer group as constituted on the date the performance units were granted in 2016. In the
event that the companies that make up the
compensation peer group change during the performance period, the Compensation Committee will use the compensation peer group as constituted on the date the performance unit awards are granted.
If a company ceases to be publicly traded before the end of the performance period, that companys total shareholder returns will not be used to calculate the total shareholder return portion of the performance unit awards.
The Compensation Committee believes that total shareholder return is a performance goal that aligns executive compensation with the creation of
stockholder value.
The level of performance units will be earned as follows:
|
|
|
Company Percentile Rating
|
|
Payout Relative to
Target
(1)
|
90
th
or greater
|
|
200%
|
(Target) 50
th
|
|
100%
|
25
th
|
|
25%
|
Below 25
th
|
|
0%
|
Footnote:
(1)
|
|
Interpolated for actual performance between performance goals.
|
The
actual payout of the performance unit awards to the Named Executive Officers for the 2016-2018 performance period may vary from zero to a maximum of 190% of such award, based on actual performance over the performance period. The maximum payout of
the performance unit awards represents the weighted average under each of the performance objectives as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum
Percentage
Payout
|
|
|
Target
Weight
|
|
|
Weighted
Average
|
|
Adjusted EPS
|
|
|
200
|
%
|
|
|
30
|
%
|
|
|
60
|
%
|
Operating Objectives
|
|
|
150
|
%
|
|
|
20
|
%
|
|
|
30
|
%
|
Shareholder Return
|
|
|
200
|
%
|
|
|
50
|
%
|
|
|
100
|
%
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
190
|
%
|
The Compensation Committee may exercise negative discretion to adjust the actual performance unit awards to be paid to a Named
Executive Officer.
|
|
|
40
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Calculation of Payout of 2014 Performance Unit Awards
Following the end of the relevant performance period for each outstanding performance unit award, the Compensation Committee reviews the Companys achievement
of the performance goals. The Compensation Committee evaluates and approves the Companys performance relative to target and pays out the performance units in either cash and/or shares of Company Common Stock (as elected by the Named Executive
Officer) based on the attainment of the performance goals.
For the 2014-2016 performance period, payouts of the performance units were calculated based
on the following
non-discretionary
formula:
Award X 30% X Adjusted EPS Percentage
plus
Award X 20% X Operating Objectives Percentage
plus
Award X 50% X Shareholder Return Percentage
Award
was the annual award of performance units under the long term incentive plan. The target award of performance
units was a percentage of base salary that varies based on each Named Executive Officers position as follows:
|
|
|
|
|
|
|
Target Award as a
Percentage of
Base Salary
|
|
John McAvoy
Chairman, President and
Chief Executive Officer
|
|
|
375
|
%
|
Robert Hoglund
Senior Vice President and
Chief Financial Officer
|
|
|
200
|
%
|
Craig Ivey
President, Con Edison of New York
|
|
|
250
|
%
|
Elizabeth D. Moore
Senior Vice President and
General Counsel
|
|
|
150
|
%
|
Timothy P. Cawley
President and Chief Executive Officer,
Orange &
Rockland
|
|
|
200
|
%
|
Adjusted EPS Percentage
was the payout relative to target over the
performance period that began January 1, 2014 and ended December 31, 2016 based on attainment of the Companys three-year cumulative Adjusted EPS performance goal, set forth in the following table, that was established in the first
quarter of 2014.
|
|
|
|
|
|
|
Three-Year Cumulative Adjusted EPS
(weighting 30%)
|
Performance
Relative to Target
|
|
Performance
Goal
|
|
|
Payout Relative
to Target
(1)
|
³
112%
|
|
|
³
$13.14
|
|
|
200%
|
(Target) 100%
|
|
|
$11.73
|
|
|
100%
|
< 88%
|
|
|
< $10.32
|
|
|
0%
|
ACTUAL
|
|
|
$11.96
(2)
|
|
|
116.3%
|
Footnotes:
(1)
|
|
Interpolated for actual performance between performance goals.
|
(2)
|
|
Excludes the effects of the 2014 gain on Con Edison Clean Energy Businesses, Inc.s sale of solar electric production projects and loss from lease in/lease out transactions,
the 2016 gain on sale of its retail supply businesses and goodwill impairment related to its energy service business, and its net
mark-to-market
effects. Also, excludes
2015 impairment of assets held for sale of Pike County Light & Power Company.
|
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
41
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Operating Objectives Percentage
was the payout relative to target over the
performance period that began January 1, 2014 and ended December 31, 2016 based on the attainment of the Companys operating performance goals, set forth in the following table, that were established in the first quarter of 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Objectives
|
|
Performance Goals
(1)
|
|
|
Payout
Relative to
Target
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
System Hardening and Resiliency Projects (Weighting 10%)
|
|
|
83
|
|
|
|
93
|
|
|
|
³
103
|
|
|
102 /
145%
|
Growth in Renewable Portfolio (MW (AC)) (Weighting 5%)
|
|
|
231.5
|
|
|
|
463
(2)
|
|
|
|
³
694.5
|
|
|
786 /
150%
|
SF6 Gas Emissions Pounds of Gas Emitted (Weighting 2.5%)
|
|
|
51,750
|
|
|
|
45,000
|
|
|
|
£
38,250
|
|
|
38,892 /
145.2%
|
Opacity Occurrences Number of Occurrences (Weighting 2.5%)
|
|
|
207
|
|
|
|
180
|
|
|
|
£
153
|
|
|
89 /
150%
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147.0%
|
Footnotes:
(1)
|
|
Payouts were relative to Target and were as follows: Threshold: 50%; Target: 100%; and Maximum: 150%. Payouts were interpolated for actual performance between
performance goals.
|
(2)
|
|
The Compensation Committee approved annual plan levels on a three-year cumulative basis, 2014-2016. Target amount represents the sum of the three annual targets as approved by
the Compensation Committee.
|
Shareholder Return Percentage
was the payout relative to target
based on the cumulative change in Company total shareholder return over the performance period that began January 1, 2014 and ended December 31, 2016 compared with the Companys compensation peer group as constituted on the date the
performance units were granted
in 2014. In the event that the companies that made up the compensation peer group changed during the performance period, the Compensation Committee used the compensation peer group as constituted
on the date the performance unit awards were granted. If a company ceased to be publicly traded before the end of the performance period, that companys total shareholder returns was not used to calculate the total shareholder return portion of
the performance unit awards.
The level of performance units earned was as follows:
|
|
|
Company Percentile Rating
|
|
Payout Relative to
Target
(1)
|
90
th
or greater
|
|
200%
|
(Target) 50
th
|
|
100%
|
25
th
|
|
25%
|
Below 25
th
|
|
0%
|
ACTUAL 56th
|
|
115%
|
Footnote:
(1)
|
|
Interpolated for actual performance between performance goals.
|
The
payout of the performance unit awards represents the weighted average of the percentage payout under each of the performance objectives as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum
Percentage
Payout
|
|
|
Target
Weight
|
|
|
Actual
Result
|
|
|
Weighted
Result
|
|
Adjusted EPS
|
|
|
200
|
%
|
|
|
30
|
%
|
|
|
116.3
|
%
|
|
|
34.9
|
%
|
Operating Objectives
|
|
|
150
|
%
|
|
|
20
|
%
|
|
|
147
|
%
|
|
|
29.4
|
%
|
Shareholder Return
|
|
|
200
|
%
|
|
|
50
|
%
|
|
|
115
|
%
|
|
|
57.5
|
%
|
TOTAL
|
|
|
190
|
%
|
|
|
|
|
|
|
|
|
|
|
121.8
|
%
|
The Compensation Committee did not exercise negative discretion to adjust the actual performance unit awards to be paid to a Named
Executive Officer.
|
|
|
42
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
The following table shows, for each Named Executive Officer, the calculation of the
payout with respect to the performance units for the 20142016 performance period:
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal Position
|
|
2014 Award
|
|
|
Weighted
Result
|
|
|
2014-2016
Payout
Total
|
|
John McAvoy
Chairman, President and
Chief Executive Officer
|
|
|
83,700
|
|
|
|
121.8
|
%
|
|
|
101,947
|
|
Robert Hoglund
Senior Vice President and
Chief Financial Officer
|
|
|
26,000
|
|
|
|
121.8
|
%
|
|
|
31,668
|
|
Craig Ivey
President, Con Edison of New York
|
|
|
35,000
|
|
|
|
121.8
|
%
|
|
|
42,630
|
|
Elizabeth D. Moore
Senior Vice President and General Counsel
|
|
|
16,000
|
|
|
|
121.8
|
%
|
|
|
19,488
|
|
Timothy P. Cawley
President and Chief Executive Officer,
Orange & Rockland
|
|
|
15,000
|
|
|
|
121.8
|
%
|
|
|
18,270
|
|
RETIREMENT AND OTHER BENEFITS
The Company provides employees with a range of retirement and welfare benefits that reflects the competitive practices of the utility industry. These benefits
assist the Company in attracting, retaining and motivating employees critical to its long-term success. Named Executive Officers are eligible for benefits under the following Company plans:
|
|
Tax-qualified
retirement plan and its related
non-qualified
supplemental
retirement income plan (collectively, the retirement plans);
|
|
|
Tax-qualified
savings plan and its related
non-qualified
deferred income plan;
|
|
|
Stock purchase plan; and
|
|
|
Health and welfare plans.
|
Retirement Plans
The Company maintains a
tax-qualified
retirement plan that covers
substantially all the Companys employees. All management employees, including Named Executive Officers, whose benefits under the plan are limited by the Internal Revenue Code, are eligible to participate in a
non-qualified
supplemental retirement income plan. The retirement plans and the estimated retirement benefits payable to the Named Executive Officers (determined on a present value basis) are described in the
Pension Benefits Table and the narrative to the Pension Benefits Table on pages 53 to 54. There were no
changes to the retirement plans for plan year 2016 with respect to the Named Executive Officers.
As required by Securities and Exchange Commission rules, the
Change in Pension Value and
Non-Qualified
Deferred
Compensation Earnings
column of the Summary Compensation Table on page 48 sets forth the year-over-year change in the actuarial present value of the accumulated pension benefits for each Named Executive Officer under the retirement
plans. The Company did not provide above-market or preferential earnings with respect to the
non-qualified
deferred compensation arrangements in the years reported.
The change in the actuarial present value of an accumulated pension benefit is subject to many external variables, including fluctuations in interest rates and
changes in actuarial assumptions, and does not represent actual compensation paid to the Named Executive Officers in 2016. Instead, the amounts represent changes in the estimated retirement benefits payable to the Named Executive Officers based on
the year-over-year difference between the amounts required to be disclosed in the Pension Benefits Table on page 54 as of December 31, 2016 and the amounts reported in the Pension Benefits Table in the 2016 proxy statement on page 54.
The change in the present value of Mr. McAvoys accumulated pension benefit resulted primarily from his salary increase upon his promotion to
chief executive officer in 2013. For management employees who participate in the retirement plan and who were hired before January 1, 2001, including
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
43
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Mr. McAvoy, a final average salary formula is used to determine a participants pension benefit. The final average salary includes a participants highest
average salary for the 48 consecutive months within the 120 consecutive months prior to retirement. (See narrative to the Pension Benefits Table on page 53.) Mr. McAvoys higher earnings as chief executive officer in 2016 replaced
lower earnings during a portion of the 48 consecutive month final average salary period resulting in a higher final average salary pursuant to the pension formula.
Savings Plans
The Company maintains a
tax-qualified
savings plan that covers substantially all of the Companys employees. All employees, including the Named Executive Officers, whose benefits under the plan are limited by the Internal Revenue
Code, are eligible to participate in a deferred income plan, a
non-qualified
deferred compensation plan. Named Executive Officers may defer a portion of their salary into the deferred income plan. The deferred
income plan is described in the narrative to the
Non-Qualified
Deferred Compensation Table on page 55. Company matching contributions allocated to the Named Executive Officers under the savings plan and
deferred income plan are included in the
All Other Compensation
column of the Summary Compensation Table on page 48.
Employees
who participate in the savings plan, including the Named Executive Officers, may contribute up to 50% of their compensation on a
before-tax
basis and/or an
after-tax
basis, into their savings plan accounts. For participating employees whose retirement plan benefit is based on the final average salary formula, including Messrs. McAvoy and Cawley, the Company matches 50% for each dollar contributed by such
employees on the first six percent (6%) of their regular earnings. For participating employees whose retirement plan benefit is determined using the cash balance formula, including Messrs. Hoglund and Ivey and Ms. Moore, the Company
matches 100% for each dollar contributed by such employees on the first four percent (4%) of their regular earnings plus an additional 50% for each dollar contributed on the next four percent (4%) of their regular earnings. The final
average salary formula and the cash balance formula under the retirement plan are described in the narrative to the Pension Benefits Table on page 53.
Pursuant to the Internal Revenue Code, effective for 2016, the savings plan limits the additions that can be made to a participating employees account to $53,000 per year. Additions
include Company matching contributions,
before-tax
contributions made by a participating employee under Section 401(k) of the Internal Revenue Code, and
employee
after-tax
contributions. Of those additions, the maximum
before-tax
contribution was $18,000 per year (or
$24,000 per year for participants age 50 and over). In addition, no more than $265,000 of annual compensation may be taken into account in computing benefits under the savings plan.
Stock Purchase Plan
The stock purchase plan covers
substantially all of the Companys employees, including the Named Executive Officers, and provides the opportunity to purchase shares of Company Common Stock. The stock purchase plan is described in Note M
to the financial statements in
the Companys Annual Report on Form
10-K
for the fiscal year ended December
31, 2016.
Health and Welfare Plans
Active employee benefits, such as medical, prescription drug, dental, vision, life insurance and disability coverage, are available to substantially all employees, including the Named Executive Officers, through
the Companys health and welfare benefits plans. Employees contribute toward the cost of the health plans by paying a portion of the premium costs on a
pre-tax
basis. Employees may purchase additional
life insurance and disability coverage on an
after-tax
basis. Officers, including the Named Executive Officers, may purchase supplemental health benefits on an
after-tax
basis with the option to continue their participation following retirement. The Company also provides all employees with paid
time-off
benefits, such as vacation and sick leave.
Perquisites and Personal Benefits
The Company provides certain officers, including the Named Executive Officers, with limited, specific perquisites that are competitive with industry practices. The Compensation Committee reviews the level of
perquisites and personal benefits annually. The Company provides the following perquisites, the costs of which, if used by a Named Executive Officer in 2016, are set forth in the
All Other Compensation
column of the Summary
Compensation Table on page 48:
|
|
Supplemental health insurance;
|
|
|
Reimbursement for reasonable costs of financial planning; and
|
|
|
A company vehicle and, in the case of the chief executive officer, a company vehicle and driver.
|
|
|
|
44
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
Severance and Change of Control Benefits
The Company provides for the payment of severance benefits upon certain types of employment terminations. Providing severance and change of control benefits assists
the Company in attracting and retaining executive talent and reduces the personal uncertainty that executives are likely to feel when considering a corporate transaction. These arrangements also provide valuable retention incentives that focus
executives on completing such transactions, thus, enhancing long-term stockholder value. The compensation under the various circumstances that trigger payments or provision of benefits upon termination or a change of control was chosen to be broadly
consistent with prevailing competitive practices.
Officers of the Company, including the Named Executive Officers, are provided benefits under the
officers severance program. The severance benefits payable to each Named Executive Officer are described in footnotes 2 and 3 to the Potential Payments Upon Termination of Employment or Change of Control table on pages 57 to 58. The
estimated severance benefits that each Named Executive Officer would be entitled to receive upon a hypothetical termination of employment are set forth in the applicable Potential Payments Upon Termination of Employment or Change of Control table
beginning on page 57.
STOCK OWNERSHIP GUIDELINES
The Company has stock ownership guidelines for certain officers, including the Named Executive Officers. The stock ownership guidelines for the Companys Named
Executive Officers are as follows:
|
|
|
|
|
Title
|
|
Multiple of
Base Salary
|
|
Chief Executive Officer
|
|
|
3 × base salary
|
|
Chief Financial Officer
|
|
|
2 × base salary
|
|
President of Con Edison of New York
|
|
|
2 × base salary
|
|
President and Chief Executive Officer of Orange & Rockland
|
|
|
2 × base salary
|
|
General Counsel
|
|
|
1 × base salary
|
|
Officers of the Company subject to the guidelines have five years from January 1
st
after their appointment to one of the covered title or promotion to a position with a
higher ownership requirement to meet the guidelines. In January 2017, it was determined that, as of December 31, 2016, these
officers have either met their ownership milestones or are making reasonable progress towards their milestones.
The officers covered by the guidelines are expected to retain for at least one year a minimum of 25% of the net shares acquired upon exercise of stock options and 25% of the net shares acquired pursuant to vested
restricted stock and restricted stock unit grants until their holdings of common stock equal or exceed their applicable ownership guidelines.
For
purposes of the guidelines:
|
|
Stock ownership includes the value of the officers individually-owned shares, the value of vested restricted shares and performance based
restricted shares, and shares held under the Companys benefit plans. Equity-based incentive compensation held by the Companys officers is based 100% on performance. Restricted stock and restricted stock units do not vest until the end of
the performance period and performance is determined by the Compensation Committee.
|
|
|
The
one-year
period is measured from the date the stock options are exercised or the restricted stock or restricted stock
units vest, as applicable.
|
|
|
Net shares means the shares remaining after sale of shares necessary to pay the related tax liability and, if applicable, exercise price.
|
NO HEDGING NOR PLEDGING
To encourage a long-term commitment to the Companys sustained performance, the Companys policies prohibit all directors, officers, including the Named
Executive Officers, financial personnel, and certain other individuals from shorting, hedging, and pledging Company securities or holding Company securities in a margin account.
RECOUPMENT POLICY
In 2010, the Company adopted a
Recoupment Policy (commonly referred to as a clawback policy). The Recoupment Policy allows the Company to recoup excess incentive-based compensation received by any current or former officer during the three-year period preceding the
date on which the Companys Audit Committee determines that the Company is required to prepare an accounting restatement due to the Companys material noncompliance with any financial reporting requirement under the securities laws. The
Recoupment Policy applies to the long-term incentive-based compensation awards under the Companys long term incentive plan, and the incentive-based compensation payments made under the Companys annual incentive plan.
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
45
|
|
|
|
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
TAX DEDUCTIBILITY OF PAY
Section 162(m) of the Internal Revenue Code places a limit of $1 million on the amount of compensation that the Company may deduct in any one year with
respect to each of the Named Executive Officers, other than the chief financial officer, employed by the Company on the last day of the fiscal year. There is an exception to the $1 million limitation for performance-based compensation meeting
certain requirements. While the Compensation Committee considers the tax impact of Section 162(m), the Compensation Committee has determined that it is appropriate to maintain flexibility in compensating Named Executive Officers in a
manner intended to promote varying corporate goals, recognizing that certain amounts paid to Named Executive Officers in excess of $1 million may not be deductible under Section 162(m).
Accordingly, while the Compensation Committee strives to award executive compensation that meets the deductibility requirements, it has reserved the right to enter into compensation arrangements under which payments are not deductible on account of
Section 162(m). For 2016, the Company estimates that approximately $1,740,000, $1,971,000, and $931,000 of the compensation paid to Mr. McAvoy, Mr. Ivey, and Ms. Moore, respectively, was not deductible for federal income tax
purposes.
|
|
|
46
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
COMPENSATION RISK MANAGEMENT
|
|
COMPENSATION RISK
MANAGEMENT
|
In 2016, the Compensation Committee asked Mercer to undertake a risk assessment of the Companys compensation
programs to determine whether the Companys compensation policies and practices for employees, generally, would reasonably be expected to have a material adverse effect on the Companys risk management and create incentives that could lead
to excessive or inappropriate risk taking by employees. The Compensation Committee also asked management to review the assessment. Based on Mercers risk assessment findings, with which the Compensation Committee and management concur, the
Companys compensation programs are not reasonably likely to have a material adverse effect on the Companys risk management or create incentives that could lead to excessive or inappropriate risk taking by employees.
Among the relevant features of the Companys compensation programs that mitigate risk are:
|
|
A recoupment policy applicable to all Company officers with respect to incentive-based compensation;
|
|
|
Annual and long-term incentives under the Companys compensation programs appropriately balanced between annual and long-term financial performance goals
that are
|
|
|
tied to key goals that are expected to enhance stockholder value;
|
|
|
Annual and long-term incentives tied to multiple performance goals to reduce undue weight on any one goal;
|
|
|
Non-financial
performance factors used in determining the actual payout of annual incentive compensation as a
counterbalance to financial performance goals;
|
|
|
Compensation programs designed to deliver a significant portion of compensation in the form of long-term incentives, discouraging excessive focus on annual
results;
|
|
|
Performance-based equity awards based on performance over a three-year period, focusing on sustainable performance over a three-year cycle rather than any one
year;
|
|
|
Annual and long-term incentive awards that are subject to appropriate payment caps and Compensation Committee discretion to reduce payouts; and
|
|
|
Share ownership guidelines that further the long-term interests of executives and stockholders, and restrictions on shorting, hedging, and pledging Company
securities.
|
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
47
|
|
|
|
|
|
SUMMARY COMPENSATION TABLE
|
|
SUMMARY COMPENSATION
TABLE
|
The following table sets forth certain information with respect to the compensation for the Named Executive Officers for the fiscal
years ended December 31, 2016, 2015 and 2014. Information for Mr. Cawley for fiscal years ended December 31, 2014 is not provided because he was not a Named Executive Officer in that year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal
Position
|
|
Year
|
|
|
Salary
|
|
|
Bonus
|
|
|
Stock
Awards
(1)
|
|
|
Non-Equity
Incentive Plan
Compensation
(2)
|
|
|
Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings
(3)
|
|
|
All
Other
Compensation
(4)
|
|
|
Securities
and
Exchange
Commission
Total
(5)
|
|
|
|
|
|
Securities
and
Exchange
Commission
Total
Without
Change in
Pension
Value
(6)
|
|
John McAvoy
|
|
|
2016
|
|
|
$
|
1,220,767
|
|
|
$
|
|
|
|
$
|
6,176,408
|
|
|
$
|
2,237,200
|
|
|
$
|
5,103,773
|
|
|
$
|
64,256
|
|
|
$
|
14,802,404
|
|
|
|
|
|
|
$
|
9,698,631
|
|
Chairman,
President and Chief
Executive Officer
|
|
|
2015
|
|
|
$
|
1,171,350
|
|
|
$
|
|
|
|
$
|
3,987,654
|
|
|
$
|
1,776,600
|
|
|
$
|
4,030,677
|
|
|
$
|
59,392
|
|
|
$
|
11,025,673
|
|
|
|
|
|
|
$
|
6,994,996
|
|
|
|
2014
|
|
|
$
|
1,140,000
|
|
|
$
|
|
|
|
$
|
3,055,887
|
|
|
$
|
1,711,100
|
|
|
$
|
3,724,321
|
|
|
$
|
54,380
|
|
|
$
|
9,685,688
|
|
|
|
|
|
|
$
|
5,961,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Hoglund
|
|
|
2016
|
|
|
$
|
721,242
|
|
|
$
|
|
|
|
$
|
1,739,205
|
|
|
$
|
528,200
|
|
|
$
|
134,593
|
|
|
$
|
59,272
|
|
|
$
|
3,182,512
|
|
|
|
|
|
|
$
|
3,047,919
|
|
Senior Vice
President and Chief
Financial Officer
|
|
|
2015
|
|
|
$
|
700,200
|
|
|
$
|
|
|
|
$
|
1,268,799
|
|
|
$
|
531,100
|
|
|
$
|
142,890
|
|
|
$
|
55,970
|
|
|
$
|
2,698,959
|
|
|
|
|
|
|
$
|
2,556,069
|
|
|
|
2014
|
|
|
$
|
679,742
|
|
|
$
|
|
|
|
$
|
949,260
|
|
|
$
|
511,500
|
|
|
$
|
814,137
|
|
|
$
|
54,178
|
|
|
$
|
3,008,817
|
|
|
|
|
|
|
$
|
2,194,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig Ivey
President,
Con
Edison of New York
|
|
|
2016
|
|
|
$
|
795,367
|
|
|
$
|
|
|
|
$
|
2,393,265
|
|
|
$
|
796,600
|
|
|
$
|
155,369
|
|
|
$
|
61,341
|
|
|
$
|
4,201,942
|
|
|
|
|
|
|
$
|
4,046,573
|
|
|
|
2015
|
|
|
$
|
772,225
|
|
|
$
|
|
|
|
$
|
1,754,100
|
|
|
$
|
831,100
|
|
|
$
|
118,048
|
|
|
$
|
58,922
|
|
|
$
|
3,534,395
|
|
|
|
|
|
|
$
|
3,416,347
|
|
|
|
2014
|
|
|
$
|
748,058
|
|
|
$
|
|
|
|
$
|
1,277,850
|
|
|
$
|
855,000
|
|
|
$
|
230,725
|
|
|
$
|
57,813
|
|
|
$
|
3,169,446
|
|
|
|
|
|
|
$
|
2,938,721
|
|
Elizabeth D. Moore
|
|
|
2016
|
|
|
$
|
608,017
|
|
|
$
|
|
|
|
$
|
1,100,010
|
|
|
$
|
445,300
|
|
|
$
|
125,952
|
|
|
$
|
51,049
|
|
|
$
|
2,330,328
|
|
|
|
|
|
|
$
|
2,204,376
|
|
Senior Vice
President and
General Counsel
|
|
|
2015
|
|
|
$
|
590,267
|
|
|
$
|
|
|
|
$
|
801,039
|
|
|
$
|
447,700
|
|
|
$
|
108,323
|
|
|
$
|
49,290
|
|
|
$
|
1,996,619
|
|
|
|
|
|
|
$
|
1,888,296
|
|
|
|
2014
|
|
|
$
|
573,017
|
|
|
$
|
|
|
|
$
|
584,160
|
|
|
$
|
431,200
|
|
|
$
|
128,517
|
|
|
$
|
46,955
|
|
|
$
|
1,763,849
|
|
|
|
|
|
|
$
|
1,635,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy P. Cawley
|
|
|
2016
|
|
|
$
|
409,033
|
|
|
$
|
|
|
|
$
|
995,955
|
|
|
$
|
401,500
|
|
|
$
|
559,125
|
|
|
$
|
30,587
|
|
|
$
|
2,396,200
|
|
|
|
|
|
|
$
|
1,837,075
|
|
President and Chief
Executive Officer,
Orange & Rockland
|
|
|
2015
|
|
|
$
|
400,725
|
|
|
$
|
|
|
|
$
|
725,028
|
|
|
$
|
233,000
|
|
|
$
|
550,075
|
|
|
$
|
30,074
|
|
|
$
|
1,938,902
|
|
|
|
|
|
|
$
|
1,388,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes:
(1)
|
|
Dividends are not paid and do not accrue on awards during the vesting period. Amounts shown do not reflect the payment or accrual of dividends during the vesting period for any
portion of the awards and otherwise reflect the assumptions used for the Companys financial statements. (See Note M to the financial statements in the Companys Annual Report on Form
10-K.)
Actual
value to be realized, if any, on awards by the Named Executive Officers will depend on the satisfaction of certain
pre-established
objectives, the performance of Company Common Stock, and the Named Executive
Officers continued service. The awards granted for fiscal year 2016 are set forth on the Grants of Plan-Based Awards Table on page 50. Based on the fair value at grant date, the following are the maximum potential values of the
performance units for the 2016-2018 performance period granted under the long term incentive plan assuming maximum level of performance is achieved: Mr. McAvoy $11,735,174; Mr. Hoglund $3,304,490; Mr. Ivey $4,547,204; Ms. Moore
$2,090,019; and Mr. Cawley $1,892,315.
|
(2)
|
|
The amounts paid were awarded under the annual incentive plan.
|
(3)
|
|
Amounts do not represent actual compensation paid to the Named Executive Officers. Instead, the amounts represent the aggregate change in the actuarial present value of the
accumulated pension benefit based on the difference between the amounts required to be disclosed in the Pension Benefits Table for the year indicated and the amounts reported or that would have been reported in the Pension Benefits Table for the
previous year. The Company did not provide above-market or preferential earnings with respect to the
non-qualified
deferred compensation arrangements.
|
|
|
The change in the present value of Mr. McAvoys accumulated pension benefit resulted primarily from his salary increase upon his promotion to chief executive officer in
2013. For management employees who participate in the retirement plan and who were hired before January 1, 2001, including Mr. McAvoy, a final average salary formula is used to determine a participants pension benefit.
The final average salary includes a participants highest average salary for the 48 consecutive months within the 120 consecutive months prior to retirement. Mr. McAvoys higher earnings as chief executive officer in 2016
replaced lower earnings during a portion of the 48 consecutive month final average salary period resulting in a higher final average salary pursuant to the pension formula. See
Retirement and Other
BenefitsRetirement Plans
on page 43 and narrative to the Pension Benefits Table on page 53.
|
|
|
|
48
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
SUMMARY COMPENSATION TABLE
|
(4)
|
|
For 2016, the amount reported in the
All Other Compensation
column for each Named Executive Officers is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McAvoy
|
|
|
Hoglund
|
|
|
Ivey
|
|
|
Moore
|
|
|
Cawley
|
|
Personal use of Company provided vehicle
|
|
$
|
5,298
|
|
|
$
|
4,283
|
|
|
$
|
435
|
|
|
$
|
6,734
|
|
|
$
|
7,516
|
|
Driver costs
|
|
$
|
1,451
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Financial planning
|
|
$
|
18,500
|
|
|
$
|
10,800
|
|
|
$
|
10,800
|
|
|
$
|
10,800
|
|
|
$
|
10,800
|
|
Supplemental health insurance
|
|
$
|
2,384
|
|
|
$
|
2,384
|
|
|
$
|
2,384
|
|
|
$
|
833
|
|
|
$
|
|
|
Company matching contributions:
Qualified savings plan
|
|
$
|
7,950
|
|
|
$
|
14,430
|
|
|
$
|
15,900
|
|
|
$
|
12,101
|
|
|
$
|
7,950
|
|
Non-qualified
savings plan
|
|
$
|
28,673
|
|
|
$
|
27,375
|
|
|
$
|
31,822
|
|
|
$
|
20,581
|
|
|
$
|
4,321
|
|
Total
|
|
$
|
64,256
|
|
|
$
|
59,272
|
|
|
$
|
61,341
|
|
|
$
|
51,049
|
|
|
$
|
30,587
|
|
The value of the items in the table are based on the aggregate incremental cost, which except for the Company
provided vehicle, is the actual cost to the Company. The cost of the Company provided vehicle was determined based on the personal use of the vehicle as a percentage of total usage compared to the lease value of the vehicle.
(5)
|
|
As per the applicable Securities and Exchange Commission (SEC) rules, represents, for each Named Executive Officer, the total of amounts shown for the Named Executive Officer in
all other columns of the table.
|
(6)
|
|
To show the effect that the year-over-year change in pension value had on total compensation, this column is included to show total compensation minus the change in pension
value. The amounts reported in the
Securities and Exchange Commission Total Without Change in Pension Value
column may differ substantially from the amounts reported in the
Securities and Exchange Commission
Total
column required under SEC rules and are not a substitute for total compensation. The
Securities and Exchange Commission Total Without Change in Pension Value
column represents total compensation, as required under
applicable SEC rules, minus the change in pension value reported in the
Change in Pension Value and
Non-Qualified
Deferred Compensation Earnings
column. See
Retirement and other
BenefitsRetirement Plans
on page 43.
|
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
49
|
|
|
|
|
|
GRANTS OF PLAN-BASED AWARDS TABLE
|
|
GRANTS OF PLAN-BASED AWARDS
TABLE
|
The following table sets forth certain information with respect to the grant of equity plan awards and
non-equity
incentive plan awards awarded to the Named Executive Officers for the fiscal year ended December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
Non-Equity
Incentive Plan Awards
(1)
|
|
|
Estimated Future Payouts
Under Equity Incentive Plan
Awards
(2)
|
|
|
Grant
Date Fair
Value
of
Stock
Awards
(3)
($)
|
|
Name & Principal Position
|
|
Grant
Date
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
John McAvoy
Chairman, President
and
Chief Executive Officer
|
|
|
2/1/2016
|
|
|
$
|
153,100
|
|
|
$
|
1,225,000
|
|
|
$
|
2,358,100
|
|
|
|
2,078
|
|
|
|
83,100
|
|
|
|
157,890
|
|
|
$
|
6,176,408
|
|
|
|
|
|
|
|
|
|
|
Robert Hoglund
Senior Vice President
and
Chief Financial Officer
|
|
|
2/1/2016
|
|
|
$
|
45,200
|
|
|
$
|
361,500
|
|
|
$
|
695,900
|
|
|
|
585
|
|
|
|
23,400
|
|
|
|
44,460
|
|
|
$
|
1,739,205
|
|
|
|
|
|
|
|
|
|
|
Craig Ivey
President, Con Edison of
New
York
|
|
|
2/1/2016
|
|
|
$
|
79,700
|
|
|
$
|
637,800
|
|
|
$
|
1,227,800
|
|
|
|
805
|
|
|
|
32,200
|
|
|
|
61,180
|
|
|
$
|
2,393,265
|
|
|
|
|
|
|
|
|
|
|
Elizabeth D. Moore
Senior Vice President
and
General Counsel
|
|
|
2/1/2016
|
|
|
$
|
38,100
|
|
|
$
|
304,800
|
|
|
$
|
586,700
|
|
|
|
370
|
|
|
|
14,800
|
|
|
|
28,120
|
|
|
$
|
1,100,010
|
|
|
|
|
|
|
|
|
|
|
Timothy P. Cawley
President and Chief Executive Officer, Orange & Rockland
|
|
|
2/1/2016
|
|
|
$
|
41,000
|
|
|
$
|
327,800
|
|
|
$
|
631,000
|
|
|
|
335
|
|
|
|
13,400
|
|
|
|
25,460
|
|
|
$
|
995,955
|
|
Footnotes:
(1)
|
|
Represents annual cash incentive award opportunity awarded under the Companys annual incentive plan. (See
Executive Compensation ActionsAnnual Incentive
Compensation
beginning on page 34.)
|
(2)
|
|
Represents grants of performance units for the 2016-2018 performance period granted under the Companys long term incentive plan. (See
Executive Compensation
ActionsLong-Term Incentive Compensation
beginning on page 39.) Based on the fair value at grant date, the following are the maximum potential values of the performance units for the 2016-2018 performance period granted under the
long term incentive plan assuming maximum level of performance is achieved: Mr. McAvoy $11,735,174; Mr. Hoglund $3,304,490; Mr. Ivey $4,547,204; Ms. Moore $2,090,019; and Mr. Cawley $1,892,315.
|
(3)
|
|
The
Grant Date Fair Value of Stock Awards
column reflects the grant date fair value of the performance units for the 2016-2018 performance period. (See
footnote 1 to the Summary Compensation Table on page 48.)
|
|
|
|
50
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
OUTSTANDING EQUITY AWARDS TABLE
|
|
OUTSTANDING EQUITY AWARDS
TABLE
|
The following table sets forth certain information with respect to all unvested stock awards previously awarded to the Named
Executive Officers as of the fiscal year ended December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
STOCK AWARDS
(1)
|
|
Name & Principal Position
|
|
Equity Incentive
Plan
Awards:
Number of unearned
shares, units or other
rights held that have
not
vested
|
|
|
Equity Incentive
Plan Awards:
Market or Payout Value
of unearned shares, units
or other rights that have
not vested
|
|
John McAvoy
|
|
|
68,200
|
(2)
|
|
$
|
5,024,976
|
|
Chairman, President and Chief Executive Officer
|
|
|
83,100
|
(3)
|
|
$
|
6,122,808
|
|
Robert Hoglund
|
|
|
21,700
|
(2)
|
|
$
|
1,598,856
|
|
Senior Vice President and Chief Financial Officer
|
|
|
23,400
|
(3)
|
|
$
|
1,724,112
|
|
Craig Ivey
|
|
|
30,000
|
(2)
|
|
$
|
2,210,400
|
|
President, Con Edison of New York
|
|
|
32,200
|
(3)
|
|
$
|
2,372,496
|
|
Elizabeth D. Moore
|
|
|
13,700
|
(2)
|
|
$
|
1,009,416
|
|
Senior Vice President and General Counsel
|
|
|
14,800
|
(3)
|
|
$
|
1,090,464
|
|
Timothy P. Cawley
|
|
|
12,400
|
(2)
|
|
$
|
913,632
|
|
President and Chief Executive Officer, Orange & Rockland
|
|
|
13,400
|
(3)
|
|
$
|
987,312
|
|
Footnotes:
(1)
|
|
Value of unvested performance-based equity awards using the closing price of $73.68 for a share of Company Common Stock on December 31, 2016.
|
(2)
|
|
The number of performance units and payment amount of the performance units will be determined as of December 31, 2017 based on satisfaction of performance goals for the
2015-2017 performance cycle.
|
(3)
|
|
The number of performance units and payment amount of the performance units will be determined as of December 31, 2018 based on satisfaction of performance goals for the
2016-2018 performance cycle.
|
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
51
|
|
|
|
|
|
OPTION EXERCISES AND STOCK VESTED TABLE
|
|
OPTION EXERCISES AND STOCK
VESTED TABLE
|
The following table sets forth certain information with respect to all stock awards vested in 2016 for the Named Executive
Officers.
|
|
|
|
|
|
|
|
|
|
|
STOCK AWARDS
(1)
|
|
Name & Principal Position
|
|
Number of Shares
Acquired on
Vesting
|
|
|
Value Realized
on Vesting
|
|
John McAvoy
Chairman, President and Chief
Executive Officer
|
|
|
101,947
|
|
|
$
|
7,512,474
|
|
Robert Hoglund
Senior Vice President and
Chief Financial Officer
|
|
|
31,668
|
|
|
$
|
2,333,615
|
|
Craig Ivey
President, Con Edison of New
York
|
|
|
42,630
|
|
|
$
|
3,141,405
|
|
Elizabeth D. Moore
Senior Vice President
and General Counsel
|
|
|
19,488
|
|
|
$
|
1,436,071
|
|
Timothy P. Cawley
President and Chief Executive Officer, Orange & Rockland
|
|
|
18,270
|
|
|
$
|
1,346,316
|
|
Footnote:
(1)
|
|
Represents the vesting of each Named Executive Officers performance unit award for the 2014-2016 performance period, valued at $73.69, the closing price of Company Common
Stock on February 14, 2017. Actual value realized by each Named Executive Officer will depend on each individuals payout election under the Companys long term incentive plan.
|
|
|
|
52
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
PENSION BENEFITS
|
Retirement Plan Benefits
The retirement plan, a tax qualified retirement plan, covers substantially all of the Companys employees. The supplemental retirement income plan provides certain highly compensated employees, including the
Named Executive Officers, whose benefits are limited by the Internal Revenue Code, with that portion of their retirement benefit that represents the difference between: (i) the amount they would have received under the retirement plan absent
Internal Revenue Code limitations on the amount of final average salary that may be considered in calculating pension benefits and the amount of pension benefits payable; and (ii) the amount actually paid from the retirement plan. All amounts
under the supplemental retirement income plan are paid out of the Companys general assets.
For management employees hired before
January 1, 2001, including Messrs. McAvoy and Cawley, the retirement plan provides pension benefits based on: (i) the participants highest average salary for 48 consecutive months within the 120 consecutive months prior to
retirement (final average salary); (ii) the portion of final average salary in excess of the Social Security taxable wage base in the year of retirement; and (iii) the participants length of service. For purposes of the
retirement plan, a participants salary for a year is deemed to include any award under the Companys annual incentive plans for that year. Participants in the retirement plans whose age and years of service equal 75 are entitled to an
annual pension benefit for life, payable in monthly installments or, effective June 1 2017, in a lump sum. Participants may earn increased pension benefits by working additional years. Benefits payable to a participant who retires between ages
55 and 59 with less than 30 years of service are subject to a reduction of one and a half percent (1.5%) for each full year of retirement before age 60. Early retirement reduction factors are not applied to pensions of participants electing
retirement at age 55 or older with at least 30 years of service. Effective January 1, 2013, the portion of future benefits earned and payable at retirement to participants who were under age 50 prior to 2013 and who retire between ages 55 and
59 are subject to an early retirement reduction. The reduction applied to benefits earned after 2012 is five percent (5%) for each full year of retirement before age 60. The retirement plan provides
an annual adjustment equal to the lesser of three percent (3%) or three-quarters (3/4) of the annual increase in the Consumer Price Index to offset partially the effects of inflation.
For management employees hired on or after January 1, 2001, including Messrs. Hoglund and Ivey and Ms. Moore, the retirement plan provides
pension benefits based on a cash balance formula under which benefits accrue at the end of each calendar quarter. Benefit distributions are made in the form of an immediate or deferred lifetime annuity but participants may also elect a lump sum
payment. The crediting percent, which can range from four percent (4%) to seven percent (7%), depending on the participants age and years of service, is applied to the participants base salary and annual incentive
award (Earnings) during the quarter. In addition, a participant whose Earnings exceed the Social Security Wage Base ($118,500 for 2016) will receive a four percent (4%) credit on the amount of
his or her Earnings that exceed the Social Security Wage Base. The cash balance account of participants is credited with interest quarterly at a rate equal to
one-quarter
(1/4) of the
annual interest rate payable on the
30-year
U.S. Treasury bond, subject to a minimum annual rate of three percent (3%) and a maximum annual rate of nine percent (9%). The following table shows how this
works:
|
|
|
|
|
|
|
|
|
|
|
|
|
Age Plus Years
of Service
|
|
Rate on
Earnings
|
|
|
Plus
|
|
|
Rate on
Earnings Above
Social Security
Wage Base
|
|
Under 35
|
|
|
4
|
%
|
|
|
|
|
|
|
4
|
%
|
3549
|
|
|
5
|
%
|
|
|
|
|
|
|
4
|
%
|
5064
|
|
|
6
|
%
|
|
|
|
|
|
|
4
|
%
|
Over 64
|
|
|
7
|
%
|
|
|
|
|
|
|
4
|
%
|
From June 1, 2017 through December 31, 2021, management employees hired before January 1, 2017 may make an
irrevocable election to have future company contributions made to the savings plan in lieu of the cash balance formula. Supplemental benefits will be provided under the deferred income plan if qualified plan benefits are restricted by Internal
Revenue Service limits.
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
53
|
|
|
|
|
|
PENSION BENEFITS
|
Pension Benefits Table
The
following table shows certain pension benefits information for each Named Executive Officer as of December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal Position
|
|
Plan Name
|
|
Number of
Years Credited
Service
|
|
|
Present Value of
Accumulated
Benefit
(1)
|
|
|
Payments during
Last Fiscal Year
|
|
John McAvoy
Chairman, President and
Chief Executive Officer
|
|
Retirement Plan
Supplemental Retirement
Income Plan
|
|
|
37
37
|
|
|
$
$
|
1,822,968
14,859,460
|
|
|
$
$
|
0
0
|
|
Robert Hoglund
Senior Vice President and
Chief Financial Officer
|
|
Retirement Plan
Supplemental Retirement
Income Plan
|
|
|
13
18
|
(2)
|
|
$
$
|
307,843
1,750,883
|
|
|
$
$
|
0
0
|
|
Craig Ivey
President, Con Edison
of New York
|
|
Retirement Plan
Supplemental Retirement
Income Plan
|
|
|
7
7
|
|
|
$
$
|
166,435
902,965
|
|
|
$
$
|
0
0
|
|
Elizabeth D. Moore
Senior Vice President and
General Counsel
|
|
Retirement Plan
Supplemental Retirement
Income Plan
|
|
|
7
7
|
|
|
$
$
|
190,353
576,371
|
|
|
$
$
|
0
0
|
|
Timothy P. Cawley
President and Chief Executive
Officer, Orange & Rockland
|
|
Retirement Plan
Supplemental Retirement
Income Plan
|
|
|
29
29
|
|
|
$
$
|
1,439,485
2,335,732
|
|
|
$
$
|
0
0
|
|
Footnotes:
(1)
|
|
Amounts were calculated as of December 31, 2016, using the assumptions that were used for the Companys financial statements. (See Note E to the financial
statements in the Companys Annual Report on Form
10-K
for material assumptions.)
|
(2)
|
|
As part of Mr. Hoglunds employment offer in 2004, the Company agreed to provide Mr. Hoglund credit for an additional ten years of service in the cash balance
formula to offset part of the long-term incentives forfeited upon leaving his previous employer. Five of the additional ten years of service were credited on April 1, 2014 after he completed ten years of continuous employment and the remaining
five years will be credited after he completes 15 years of continuous service. The portion of Mr. Hoglunds retirement benefit that is attributable to the additional years of service provided by the Company ($666,055 as of
December 31, 2016) will be paid under the supplemental retirement income plan.
|
|
|
|
54
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
NON-QUALIFIED
DEFERRED COMPENSATION
|
|
NON-QUALIFIED DEFERRED
COMPENSATION
|
Deferred Income Plan
The savings plan, a
tax-qualified
savings plan, covers substantially all of the Companys employees. The savings plan is described on page 44. All employees,
including Named Executive Officers, whose benefits under the savings plan are limited by the Internal Revenue Code, are eligible to defer a portion of their salary into the deferred income plan, a
non-qualified
deferred compensation plan. The deferred income plan permits participating officers to defer on a
before-tax
basis: (i) up to 50% of their base
salary; (ii) all or a portion of their annual incentive award; and (iii) the cash value of any restricted stock unit awards (including any dividend equivalents). Deferrals (including any investment returns thereon) are fully vested. In
addition, under the deferred income plan, the Company will credit participating employees with a Company matching contribution on that portion of their contributions that cannot be matched under the savings plan because of Internal Revenue Code
limitations. Earnings on amounts contributed under the deferred income plan reflect investment in accordance with participating employees investment elections. Deferrals and any earnings thereon are always 100% vested. Company matching
contributions vest
100% three years after a participating employees date of hire. There were no above-market or preferential earnings with respect to the deferred income plan. Individuals participating in the
deferred income plan may elect to receive the performance of funds institutionally managed by the Nationwide Insurance Company. Participants may change their investment allocation once per calendar quarter. All amounts distributed from the deferred
income plan are paid out of the Companys general assets.
Amounts deferred, if any, under the savings plan and the deferred income plan by the
Named Executive Officers are included in the
Salary
and
Non-Equity
Incentive Plan Compensation
columns of the Summary Compensation Table on page 48. Company matching
contributions allocated to the Named Executive Officers under the savings plan and the deferred income plan are shown in the
All Other Compensation
column of the Summary Compensation Table on page 48. Amounts realized upon
vesting of stock awards that were deferred into the deferred income plan, if any, are shown on the
Value Realized on Vesting
column of the Option Exercises and Stock Vested Table on page 52.
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
55
|
|
|
|
|
|
NON-QUALIFIED
DEFERRED COMPENSATION
|
Non-Qualified
Deferred Compensation Table
The following table sets forth certain information with respect to
non-qualified
deferred compensation for each Named Executive Officer as of December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal Position
|
|
Executive
Contributions
in Last
FY
(1)
|
|
|
Registrant
Contributions
in Last
FY
(2)
|
|
|
Aggregate
Earnings/(Losses)
in Last FY
(3)
|
|
|
Aggregate
Withdrawals/
Distributions
|
|
|
Aggregate
Balance at
Last
FYE
(4)
|
|
John McAvoy
Chairman, President and
Chief
Executive Officer
|
|
$
|
737,593
|
|
|
$
|
28,673
|
|
|
$
|
98,147
|
|
|
$
|
0
|
|
|
$
|
1,057,898
|
|
Robert Hoglund
Senior Vice President
and
Chief Financial Officer
|
|
$
|
116,164
|
|
|
$
|
27,375
|
|
|
$
|
63,627
|
|
|
$
|
0
|
|
|
$
|
854,770
|
|
Craig Ivey
President, Con
Edison
of New York
|
|
$
|
408,298
|
|
|
$
|
31,822
|
|
|
$
|
136,647
|
|
|
$
|
0
|
|
|
$
|
2,186,243
|
|
Elizabeth D. Moore
Senior Vice
President
General Counsel
|
|
$
|
27,441
|
|
|
$
|
20,581
|
|
|
$
|
94,797
|
|
|
$
|
0
|
|
|
$
|
1,650,850
|
|
Timothy P. Cawley
President and Chief Executive Officer, Orange & Rockland
|
|
$
|
8,642
|
|
|
$
|
4,321
|
|
|
$
|
6,071
|
|
|
$
|
0
|
|
|
$
|
155,238
|
|
Footnotes:
(1)
|
|
Amounts set forth under
Executive Contributions in Last FY
column are reported in either: (i) the
Salary
column of the Summary
Compensation Table; (ii) the
Value Realized on Vesting
column of the Option Exercises and Stock Vested Table; or (iii) the
Non-Equity
Incentive Plan Compensation
column of the Summary Compensation Table of the Companys proxy statements for its 2016 and 2017 annual meetings of stockholders, as applicable.
|
(2)
|
|
The amounts set forth under the
Registrant Contributions in Last FY
column are reported in the
All Other Compensation
column of the Summary
Compensation Table on page 48.
|
(3)
|
|
Represents earnings or losses on accounts for fiscal year 2016. No amounts set forth under
Aggregate Earnings/(Losses) in Last FY
column have been reported in
the Summary Compensation Table on page 48, as there were no above-market or preferential earnings credited to any Named Executive Officers account.
|
(4)
|
|
Aggregate account balances as of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McAvoy
|
|
|
Hoglund
|
|
|
Ivey
|
|
|
Moore
|
|
|
Cawley
|
|
Executive Contributions
|
|
$
|
865,830
|
|
|
$
|
386,333
|
|
|
$
|
1,675,900
|
|
|
$
|
1,267,390
|
|
|
$
|
101,838
|
|
Company Matching Contributions
|
|
$
|
92,334
|
|
|
$
|
182,772
|
|
|
$
|
151,666
|
|
|
$
|
102,929
|
|
|
$
|
15,157
|
|
Earnings
|
|
$
|
99,734
|
|
|
$
|
285,665
|
|
|
$
|
358,677
|
|
|
$
|
280,531
|
|
|
$
|
38,243
|
|
Total
|
|
$
|
1,057,898
|
|
|
$
|
854,770
|
|
|
$
|
2,186,243
|
|
|
$
|
1,650,850
|
|
|
$
|
155,238
|
|
|
|
|
56
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
|
POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL
|
|
POTENTIAL PAYMENTS UPON
TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL
|
The Severance Program for Officers of the Company and its subsidiaries (the Severance Program) provides compensation to
the Named Executive Officers in the event of certain terminations of employment or a change of control of the Company. The amount of compensation that is potentially payable to each Named Executive Officer in each situation is listed in the table.
These amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to these Named Executive Officers, which would only be known at the time that they become eligible for payment. The table reflects the amount that
could be payable under the Severance Program assuming such termination occurred at December 31, 2016. The price per share of Company Common Stock on December 31, 2016 was $73.68 per share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name & Principal Position
|
|
Executive
Benefits and
Payments Upon
Termination
(1)
|
|
Resignation
for any
Reason
(prior to CIC)
or Resignation
without
Good Reason
(following a
CIC)
|
|
|
Retirement
|
|
|
Termination
without
Cause
(2)
|
|
|
Termination
for
Cause
|
|
|
Termination
without Cause
or Resignation
for Good
Reason
(following
a
CIC)
(3)
|
|
|
Death or
Disability
|
|
John McAvoy
|
|
Severance
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
4,287,600
|
|
|
$
|
0
|
|
|
$
|
7,043,900
|
|
|
$
|
0
|
|
Chairman, President and Chief Executive Officer
|
|
Long-term plan incentives
(4)
|
|
$
|
0
|
|
|
$
|
11,147,784
|
(5)
|
|
$
|
11,147,784
|
(5)
|
|
$
|
0
|
|
|
$
|
11,147,784
|
(5)
|
|
$
|
11,147,784
|
(5)
|
|
Benefits and Perquisites
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,909,481
|
|
|
$
|
0
|
|
|
$
|
5,793,962
|
|
|
$
|
1,225,000
|
|
|
Total
(6)
|
|
$
|
0
|
|
|
$
|
11,147,784
|
|
|
$
|
18,344,865
|
|
|
$
|
0
|
|
|
$
|
23,985,646
|
|
|
$
|
12,372,784
|
|
Robert Hoglund
|
|
Severance
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,446,000
|
|
|
$
|
0
|
|
|
$
|
2,530,500
|
|
|
$
|
0
|
|
Senior Vice President and Chief Financial Officer
|
|
Long-term plan incentives
(4)
|
|
$
|
0
|
|
|
$
|
3,322,968
|
(5)
|
|
$
|
3,322,968
|
(5)
|
|
$
|
0
|
|
|
$
|
3,322,968
|
(5)
|
|
$
|
3,322,968
|
(5)
|
|
Benefits and Perquisites
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
182,701
|
|
|
$
|
0
|
|
|
$
|
340,401
|
|
|
$
|
723,000
|
|
|
Total
(6)
|
|
$
|
0
|
|
|
$
|
3,322,968
|
|
|
$
|
4,951,669
|
|
|
$
|
0
|
|
|
$
|
6,193,869
|
|
|
$
|
4,045,968
|
|
Craig Ivey
|
|
Severance
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
2,072,900
|
|
|
$
|
0
|
|
|
$
|
3,508,000
|
|
|
$
|
0
|
|
President, Con Edison of New York
|
|
Long-term plan incentives
(4)
|
|
$
|
0
|
|
|
$
|
4,582,896
|
(5)
|
|
$
|
4,582,896
|
(5)
|
|
$
|
0
|
|
|
$
|
4,582,896
|
(5)
|
|
$
|
4,582,896
|
(5)
|
|
Benefits and Perquisites
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
208,856
|
|
|
$
|
0
|
|
|
$
|
392,712
|
|
|
$
|
797,300
|
|
|
Total
(6)
|
|
$
|
0
|
|
|
$
|
4,582,896
|
|
|
$
|
6,864,652
|
|
|
$
|
0
|
|
|
$
|
8,483,608
|
|
|
$
|
5,380,196
|
|
Elizabeth D. Moore
|
|
Severance
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,219,100
|
|
|
$
|
0
|
|
|
$
|
2,133,400
|
|
|
$
|
0
|
|
Senior Vice President and General Counsel
|
|
Long-term plan incentives
(4)
|
|
$
|
0
|
|
|
$
|
2,099,880
|
(5)
|
|
$
|
2,099,880
|
(5)
|
|
$
|
0
|
|
|
$
|
2,099,880
|
(5)
|
|
$
|
2,099,880
|
(5)
|
|
Benefits and Perquisites
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
152,822
|
|
|
$
|
0
|
|
|
$
|
280,644
|
|
|
$
|
609,500
|
|
|
Total
(6)
|
|
$
|
0
|
|
|
$
|
2,099,880
|
|
|
$
|
3,471,802
|
|
|
$
|
0
|
|
|
$
|
4,513,924
|
|
|
$
|
2,709,380
|
|
Timothy P. Cawley
|
|
Severance
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,065,300
|
|
|
$
|
0
|
|
|
$
|
1,802,800
|
|
|
$
|
0
|
|
President and Chief Executive Officer, Orange & Rockland
|
|
Long-term plan incentives
(4)
|
|
$
|
0
|
|
|
$
|
1,900,944
|
(5)
|
|
$
|
1,900,944
|
(5)
|
|
$
|
0
|
|
|
$
|
1,900,944
|
(5)
|
|
$
|
1,900,944
|
(5)
|
|
Benefits and Perquisites
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
356,629
|
|
|
$
|
0
|
|
|
$
|
688,257
|
|
|
$
|
409,700
|
|
|
Total
(6)
|
|
$
|
0
|
|
|
$
|
1,900,944
|
|
|
$
|
3,322,873
|
|
|
$
|
0
|
|
|
$
|
4,392,001
|
|
|
$
|
2,310,644
|
|
Footnotes:
(1)
|
|
For purposes of the table above, Messrs. McAvoy, Hoglund, Ivey and Cawley, and Ms. Moore, are each defined as the Executive in the corresponding footnotes below.
Assumes the compensation of Messrs. McAvoy, Hoglund, Ivey and Cawley, and Ms. Moore for 2016 is as follows: (i) Mr. McAvoys base salary equal to $1,225,000 and a target annual bonus equal to 125% of base salary;
(ii) Mr. Hoglunds base salary equal to $723,000 and a target annual bonus equal to 50% of base salary; (iii) Mr. Iveys base salary equal to $797,300 and a target annual bonus equal to 80% of base salary;
(iv) Ms. Moores base salary equal to $609,500 and a target annual bonus equal to 50% of base salary; and (v) Mr. Cawleys base salary equal to $409,700 and a target annual bonus equal to 80% of base salary. Benefits
and perquisites include incremental
non-qualified
retirement plan amounts (supplemental retirement income plan), health care cost coverage, death benefit proceeds (deferred income plan), and outplacement
costs. For disclosure of the benefits payable to each Named Executive Officer upon termination of employment under the Companys (i) qualified and
non-qualified
retirement plans, see the Pension
Benefits table and related footnotes on page 54, and
(ii) non-qualified
deferred compensation plan (deferred income plan), see the
Non-Qualified
Deferred
Compensation table and related footnotes on page 56.
|
(2)
|
|
As per the Severance Program, the Executives severance benefit pursuant to a termination without Cause (before a Change of Control or CIC) is equal
to: (i) a lump sum equal to any unpaid base salary and annual target bonus
pro-rated
through the termination date and any accrued vacation pay, (ii) a lump sum equal to the net present value of one
additional year of service credit under the Companys retirement plans (assuming compensation at Executives then annual rate of base salary and target annual bonus), (iii) a lump sum equal to 1x the sum of the Executives then base
salary and target annual bonus, (iv) one year continuation of health and life insurance coverage and one year of additional service credit toward eligibility for (but not for commencement of) retiree benefits, and (v) one year of
outplacement costs.
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|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
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57
|
|
|
|
|
|
POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL
|
(3)
|
|
As per the Severance Program, the Executives severance benefit under a termination without Cause or resignation for Good Reason (on or following CIC) is equal to the same
severance benefit under a termination without Cause (before CIC) as described in footnote 2 except the amounts in clauses (ii), (iii), and (iv) are 2x instead of 1x.
|
(4)
|
|
Potential payments under the long term incentive plan require the occurrence of a (i) CIC and (ii) qualifying termination of employment (a CIC Separation from
Service) unless the Compensation Committee determines otherwise.
|
(5)
|
|
For disclosure purposes, the Compensation Committee is assumed to have taken action pursuant to the long term incentive plan to fully accelerate the vesting of target performance
unit awards.
|
(6)
|
|
The total amounts are in addition to (i) vested or accumulated benefits under the Companys defined benefit pension plans, 401(k) plans, and
non-qualified
deferred compensation plans, which are set forth in the compensation disclosure tables; (ii) benefits paid by insurance providers under life and disability insurance policies; and
(iii) benefits generally available to all management employees, such as accrued vacation.
|
A description of the assumptions that were used in creating the table for Messrs. McAvoy, Hoglund, Ivey, and Cawley,
and Ms. Moore (each defined as the Executive) is as follows:
Equity Acceleration
Separation from Service
With respect to unvested
performance-based equity awards under the long term incentive plan, in the event of a Termination, resignation, retirement, death or Disability, the Compensation Committee has discretion to determine the terms of the awards (including, without
limitation, to accelerate the vesting of unvested awards). Unless otherwise provided by the Compensation Committee, in the event of a retirement, death or Disability, performance-based equity awards vest
pro-rata
through the date of the event.
For the purposes of the long term incentive plan:
(i) Termination means a resignation or discharge from employment, except death, disability or retirement, (ii) retirement means resignation on or after age 55 with at least five years of service, and
(iii) Disability means an inability to work in any gainful occupation for which the person is reasonably qualified by education, training or experience because of a sickness or injury for which the person is under doctors
care.
Change in Control
As per the long
term incentive plan, in the event of a Change in Control or CIC Separation from Service, as applicable, unvested performance-based equity awards, respectively, vest
pro-rata
through the date of the Change in
Control, assuming targeted performance was achieved.
For purposes of the long term incentive plan, Change in Control has the same meaning
as Change of Control under the Severance Program.
For purposes of the long term incentive plan, a CIC Separation from Service
means a termination without Cause
or due to a resignation for Good Reason that occurs on or before the second anniversary following the occurrence of a Change in Control.
Cause
means the conviction of the Executive of a felony or the entering by the Executive of a plea of
nolo contendere
to a felony, in either case having a significant adverse effect
on the business and affairs of the Company.
Good Reason
occurs if the Executive resigns for any of the following reasons:
(i) any material decrease in base compensation, (ii) any material breach by the Company of any material provisions of the long term incentive plan, (iii) a requirement by the Company for the Executive to be based at any office or
location more than 50 miles from the location the Executive is employed prior to the Change in Control, or (iv) the assignment of any duties materially inconsistent in any respect with the Executives position, authority, duties or
responsibilities.
Incremental Retirement Amounts
As per the Severance Program, the amounts relating to the incremental retirement amounts in the table are based on the net present value of one additional year of service credit under the Companys retirement
plans following a termination without Cause or a resignation for Good Reason (two additional years if such termination is in connection with a Change in Control) assuming compensation at the Executives annual salary and target award, age 65
normal retirement, and the assumptions used to calculate lump sum benefits under the qualified retirement plan in December 2016.
The assumptions for
Messrs. McAvoy and Cawley include interest rates of 1.47% for the first five years, 3.34% for the next 15 years, and 4.30% thereafter (adjusted to
-0.23%,
1.61% and 2.56%, respectively, to reflect cost of
living adjustments) and the
RP-2000
mortality table projected for 2016 (50% male/50% female blend).
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58
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CONSOLIDATED EDISON, INC.
Proxy Statement
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|
|
|
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POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE OF CONTROL
|
The assumptions for Messrs. Hoglunds and Iveys and Ms. Moores retirement amount are in
accordance with the cash balance formula. All amounts payable pursuant to an incremental
non-qualified
retirement plan are assumed to be paid as a lump sum.
Termination without Cause or a Resignation for Good Reason
As per the Severance Program, the Executive will receive certain benefits as described in the table if he or she is terminated by the Company for reasons other than Cause or he or she resigns for Good Reason
(following a Change of Control). A termination is for Cause if it is for any of the following reasons: (i) willful and continued failure to substantially perform his or her duties, (ii) a conviction of a felony or entering a plea of
nolo contendere
to a felony that has a significant adverse effect on the business of the Company, or (iii) a willful engaging in illegal conduct or in gross misconduct materially and demonstrably injurious to the Company.
As per the Severance Program, a resignation for Good Reason occurs if the Executive resigns for any of the following reasons on or following a Change of Control:
(i) any material decrease in base compensation (except uniform decreases affecting similarly situated employees), (ii) any material breach by the Company of any material provisions of the Severance Program, (iii) a requirement by the
Company for the Executive to be based more than 50 miles from the location the Executive is employed prior to the Change of Control, or (iv) the assignment of any duties materially inconsistent in any respect with the Executives position,
authority, duties or responsibilities.
Payments upon Termination of Employment in Connection with a Change of Control
As per the Severance Program, the Executive will receive certain benefits as described in the table if his or her termination of employment is
without Cause by the Company or he or she resigns for Good Reason following a Change of Control.
Section 280G
Reduction
As per the Severance Program, in the event an Executive receives any payment or distribution from the Company in connection with a Change
of Control, he or she may be subject to certain excise taxes pursuant to Section 280G of the Internal Revenue Code. If any such payment or distribution subjects the Executive to such taxes and the Executive would receive a greater net
after-tax
amount if the payment were reduced to avoid such taxation, the aggregate present value of amounts payable to the Executive pursuant to the Severance Program will be reduced (but not below zero) to the
extent it does not trigger taxation under Section 4999 of the Internal Revenue Code.
Death Benefit
As per the Companys Deferred Income Plan, the Executive is entitled to a death benefit equal to his or her base salary. The benefits are payable in a lump
sum.
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CONSOLIDATED EDISON, INC.
Proxy Statement
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|
59
|
|
|
|
|
|
QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING
|
|
QUESTIONS AND ANSWERS ABOUT THE
2017 ANNUAL MEETING AND VOTING
|
PROXY MATERIALS
What Are The Proxy Materials?
The Proxy Materials include the following:
|
|
The Annual Report to Stockholders of the Company, which includes the consolidated financial statements and accompanying notes for the year ended
December 31, 2016, and other information relating to the Companys financial condition and results of operations.
|
If you
received the Proxy Materials by mail, they also include a proxy card or a voter instruction form for use at the 2017 Annual Meeting.
Why Am I
Receiving The Proxy Materials?
The Proxy Materials are provided to stockholders of the Company on or about April 3, 2017, in connection
with the solicitation of proxies by the Board of Directors of the Company for use at the Annual Meeting and any adjournments or postponements of the Annual Meeting. As a stockholder, you are invited to attend the Annual Meeting and to vote on the
items of business described in this Proxy Statement. The Proxy Materials include information that we are required to provide to you under the rules of the Securities and Exchange Commission. We are providing the Proxy Materials to our
stockholders by mail,
e-mail,
or in accordance with the Securities and Exchange Commissions Notice and Access rule.
Why Did I Receive The Proxy Materials In The Mail?
We are providing some of our stockholders, including
stockholders who have previously requested to receive paper copies of the Proxy Materials, with paper copies of the Proxy Materials. You may also access the Proxy Materials and vote online at the Internet address provided on the proxy card or the
voter instruction form. If you do not want to receive paper copies of proxy materials on an ongoing basis, please follow the instructions for Internet voting on your proxy card or voter instruction form.
Why Did I Receive
E-Mail
Delivery Of The Proxy Materials?
We are providing
e-mail
delivery of the Proxy Materials to those stockholders who have previously
elected electronic delivery. Those stockholders should have received an
e-mail
containing a link to the website where those materials are available and a link to the proxy voting website.
Why Did I Receive A Notice Of Internet Availability Of Proxy Materials?
To reduce the environmental impact of our Annual Meeting, we are providing the Proxy Materials over the Internet. As a result, we are sending many of our stockholders a Notice of Internet Availability of Proxy
Materials (the Notice of Internet Availability) instead of a paper copy of the Proxy Materials. All stockholders receiving the Notice of Internet Availability may access the Proxy Materials over the Internet and request a paper copy of
the Proxy Materials by mail. Instructions on how to access the Proxy Materials over the Internet, to vote online, and to request a paper copy may be found in the Notice of Internet Availability. In addition, the Notice of Internet Availability
contains instructions on how you may request delivery of proxy materials in printed form by mail or electronically on an ongoing basis.
Can I
Request A Paper Copy Of The Proxy Statement And Annual Report?
The Companys Proxy Statement and Annual Report are available on our website
at
conedison.com/shareholder
s.
A copy of these materials is also available without charge upon written request to the Companys Vice President and Corporate Secretary at the Companys principal executive office at
4
Irving Place, New York, New York 10003.
I Share An Address With Another Stockholder, And We Received Only One Copy Of
The Proxy Materials. How May I Obtain An Additional Copy?
If you are a registered holder of Company Common Stock, Computershare may deliver only
one copy of the Proxy Materials or Notice of Internet Availability to multiple stockholders who share an address unless Computershare has received contrary instructions.
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60
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CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
|
|
|
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QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING
|
If you hold your Company Common Stock through a broker, bank, or other financial institution
(broker), your broker may deliver only one copy of the Proxy Materials or Notice of Internet Availability to multiple stockholders who share an address unless contrary instructions are received. If you would like to receive a
separate copy of the Proxy Materials or Notice of Internet Availability, or if you would like to receive separate copies for future meetings, please submit a request to Broadridge Householding Department by telephone at
1-866-540-7095
or by mail at 51 Mercedes Way, Edgewood, NY 11717, and your requested material(s) will be delivered promptly. If you
currently receive separate copies of these materials and wish to receive a single copy in the future, please contact your broker.
Who Pays The
Cost Of Soliciting Proxies For The Annual Meeting?
The Company will pay the expenses associated with the solicitation of proxies. The
solicitation of proxies is being made by mail, telephone, the Internet, electronic transmission, or overnight delivery. The expense associated with the solicitation of proxies will include reimbursement for postage and clerical expenses to brokerage
houses and other custodians, nominees or fiduciaries for forwarding Proxy Materials and other documents to beneficial owners of stock held in their names. Morrow Sodali LLC (Morrow), 470 West Avenue, Stamford, CT 06902, has been retained
to assist in the solicitation of proxies. The estimated cost of Morrows services is $22,000
plus distribution costs and other costs and expenses.
VOTING AND RELATED MATTERS
What Is The Record Date?
The Board of Directors has established March 21, 2017 as the record date for the determination of the Companys stockholders entitled to receive notice of
and to vote at the Annual Meeting.
How Many Votes Do I Have?
You are entitled to one vote on each proposal presented at the Annual Meeting for each outstanding share of Company Common Stock you owned on the record date.
How Many Votes Can Be Cast By All Stockholders Entitled To Vote At The Annual Meeting?
One vote on each proposal presented at the Annual Meeting for each of the 305,274,517 shares of Company Common Stock that were outstanding on the record date.
How Many Votes Must Be Present To Hold The Annual Meeting?
To constitute a quorum to transact business at the Annual Meeting, the holders of a majority of the shares entitled to vote at the Annual Meeting must be present in person or by proxy. We urge you to vote by proxy
even if you plan to attend the Annual Meeting, so that we will know as soon as possible that enough votes will be present to hold the meeting. Abstentions and broker
non-votes
are counted in the determination
of the quorum.
How Do I Vote?
You can
vote whether or not you attend the Annual Meeting. Stockholders have a choice of voting over the Internet, by telephone, by mail using a proxy card or voter instruction form, or in person at the Annual Meeting.
|
|
If you received a printed copy of the Proxy Materials, please follow the instructions on your proxy card or voter instruction form. Your proxy card or voter
instruction form provides information on how to vote over the Internet, by telephone, or by mail.
|
|
|
If you received a Notice of Internet Availability, please follow the instructions on the notice. The Notice of Internet Availability provides information on how
to vote over the Internet, by telephone, or by mail.
|
|
|
If you received an
e-mail
notification, please click on the link provided in the
e-mail
notification, and follow the instructions on how to vote over the Internet or by telephone.
|
|
|
If you are a registered holder of the Companys Common Stock, you may also vote in person at the Annual Meeting.
|
To help us reduce the environmental impact of our meeting, we ask that you vote through the Internet or by telephone, both of which are available 24 hours
a day. To ensure that your vote is counted, please remember to submit your vote by the date and time indicated on your Notice of Internet Availability, proxy card or voter instruction form, as applicable.
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CONSOLIDATED EDISON, INC.
Proxy Statement
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61
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QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING
|
If My Shares Are Held By My Broker, Can My Shares Be Voted If I Dont Instruct My Broker?
The Securities and Exchange Commission has approved a New York Stock Exchange rule that affects the manner in which your broker may vote your
shares. Your broker may not vote on your behalf for the election of directors or compensation-related matters unless you provide specific voting instructions to your broker. For your vote to be counted, you need to communicate your voting decisions
to your broker, in the manner prescribed by your broker, before the date of the Annual Meeting.
If you have any questions about this rule or the
proxy voting process in general, please contact the broker where you hold your shares. The Securities and Exchange Commission also has a website (
www.sec.gov/spotlight/proxymatters.shtml
) with more information about your
rights as a stockholder.
If I Am A Registered Holder Of Company Common Stock, What If I Dont Vote For One Or More Of The Matters Listed On
My Proxy Card?
All shares represented by properly executed proxies received in time for the Annual Meeting will be voted at the Annual Meeting
in the manner specified by the persons giving those proxies. If you return a signed proxy without indicating voting instructions your shares will be voted as follows:
|
|
for
the election of the ten Director nominees;
|
|
|
for
the ratification of the appointment of independent accountants;
|
|
|
for
the advisory vote to approve Named Executive Officer compensation; and
|
|
|
for
the advisory vote (1 Year) on the frequency of future advisory votes on named executive officer compensation.
|
Can I Revoke My Proxy Or Change My Vote?
Yes,
depending on how your shares of Company Common Stock are held, you may revoke your proxy or change your vote by sending in a new, properly executed proxy card or voter instruction form with a later date, or by casting a new vote by Internet
or telephone, or by sending a properly executed written notice of revocation to the Companys Vice President and Corporate Secretary at the Companys principal executive office at 4 Irving Place, New York, New York
10003. Check the instructions on your Notice of Internet Availability, proxy card or voter instruction form for information
regarding your specific revocation options. If you are a registered holder of Company Common Stock, you may also change your vote by appearing at the Annual Meeting and voting in person.
Attendance at the Annual Meeting without voting will not by itself revoke a proxy.
ANNUAL MEETING INFORMATION
What Is The Location, Date, And Time Of The Annual Meeting?
The Annual Meeting will be held at the Companys principal executive office at 4 Irving Place, New York, New York 10003, on Monday, May 15, 2017, at 10:00 a.m.
Where Can I Find Directions To The Annual Meeting?
Directions to the Annual Meeting are available on our website at
conedison.com/shareholders
.
Who Can Attend The Annual Meeting?
Attendance at the Annual Meeting will be limited to holders of Company Common Stock on March 21, 2017, the record date, the authorized representative (one
only) of an absent stockholder, and invited guests of management.
Do I Need A Ticket To Attend The Annual Meeting?
Yes, you will need an admission ticket and proof of ownership of Company Common Stock on the record date to enter the meeting.
|
|
If you received a printed copy of the Proxy Materials and you are a registered holder of Company Common Stock, your proxy card serves as your admission ticket to
the Annual Meeting.
|
|
|
If you received a printed copy of the Proxy Materials and you hold your shares through a broker or through an employee plan, please bring to the Annual
Meeting a copy of a brokerage or other statement reflecting your stock ownership as of the record date.
|
|
|
If you received a Notice of Internet Availability, that Notice of Internet Availability serves as your admission ticket to the Annual Meeting.
|
|
|
If you received an
e-mail
notification, please access the Proxy Materials by clicking on the link provided in
thee-mail
notification and follow the instructions for downloading a copy of your admission ticket.
|
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62
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CONSOLIDATED EDISON, INC.
Proxy Statement
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|
|
|
|
|
QUESTIONS AND ANSWERS ABOUT THE 2017 ANNUAL MEETING AND VOTING
|
If you hold your shares through a broker, you can expedite your admission to the Annual Meeting by registering in
advance and printing your admission ticket by visiting
www.proxyvote.com
and following the instructions provided (you will need the 16 digit number included on your proxy card, voter instruction form or Notice of Internet
Availability).
You may be asked to present valid picture identification to gain entrance to the Annual Meeting. Any person claiming to be an
authorized representative of a stockholder must, upon request, produce written evidence of the authorization.
Are There Any Special Attendance Procedures?
In order to assure the holding of a fair and orderly meeting and to accommodate as many stockholders as possible who may wish to speak at the Annual Meeting, management will limit the general discussion portion of
the meeting and permit only stockholders or their authorized representatives to address the meeting. No signs, banners, placards, handouts, cameras, recording equipment, nor similar items may be brought to the meeting room. Many cellular phones have
built-in
digital cameras, and, while these phones may be brought into the Annual Meeting, the camera function may not be used at any time. Recording of the Annual Meeting is prohibited. Suitcases, briefcases,
packages, and other items may be subject to inspection.
|
|
|
CONSOLIDATED EDISON, INC.
Proxy Statement
|
|
63
|
|
|
|
|
|
CERTAIN INFORMATION AS TO INSURANCE AND INDEMNIFICATION
|
|
CERTAIN INFORMATION AS TO
INSURANCE AND INDEMNIFICATION
|
No stockholder action is required with respect to the following information that is included to fulfill the
requirements of Section 726 of the Business Corporation Law of the State of New York.
Effective December 2, 2016, the Company purchased
Directors and Officers (D&O) Liability insurance for a
one-year
term providing for reimbursement, with certain exclusions and deductions, to: (a) the Company and its subsidiaries for
payments they make to indemnify Directors, Trustees, officers and assistant officers of the Company and its subsidiaries, (b) Directors, Trustees, officers, and assistant officers for losses, costs and expenses incurred by them in actions
brought against them in connection with their acts in those capacities for which they are not indemnified by the Company or its subsidiaries, and (c) the Company and its subsidiaries for any payments they make resulting from a securities claim.
The insurers are: Associated Electric & Gas Insurance Services Limited, Arch Insurance Company, Axis Insurance Company, Berkley Insurance Company, Continental Casualty Company,
Endurance American Insurance Company, Federal Insurance Company, Illinois National Insurance Company, U.S. Specialty Insurance Company, X.L. Insurance (Bermuda) Ltd., XL Specialty Insurance
Company and Zurich American Insurance Company. The total cost of the D&O Liability insurance for one year from December 2, 2016 amounts to $3,295,197. The Company also purchased from Associated Electric & Gas Insurance Services
Limited, Arch Insurance Company, Axis Insurance Company, Great American Insurance Company, Illinois National Insurance Company, RLI Insurance Company, Travelers Casualty and Surety Company of America, U.S. Specialty Insurance Company and Zurich
American Insurance Company, additional insurance coverage for one year effective January 1, 2017, insuring the Directors, Trustees, officers, assistant officers and employees of the Company and its subsidiaries and certain other parties against
certain liabilities which could arise in connection with fiduciary obligations mandated by ERISA and from the administration of the employee benefit plans of the Company and its subsidiaries. The cost of such coverage was $776,457.
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CONSOLIDATED EDISON, INC.
Proxy Statement
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STOCKHOLDER PROPOSALS FOR THE 2018 ANNUAL MEETING AND OTHER MATTERS
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