·
We Focus on Outcomes Related to
Our Strategic Plan
- Performance measures are tied to achievement
of outcomes targeted by our strategic plan, including our "vital few"
objectives to:
-
make
scheduled progress on system and technology initiatives to meet customer
rising expectations and surpass SERVE standards (a comprehensive set of
customer service reliability and safety standards approved by our
regulators) at the lowest possible cost;
-
return
to investment grade no later than the end of 2010;
-
develop
future power supply alternatives in 2009 as a basis for consensus building
with the public, regulators
and
other utilities;
-
respond
to emerging workforce challenges through comprehensive succession planning
and enhanced
recruitment;
and
-
develop
and implement methods to improve our working relationship with the
Department of Public Service
as
a vital customer.
·
Compensation Should be
Competitive but also Reasonable and Responsible
- It is essential
that the Company's overall compensation levels reflect the value of the
job in the marketplace and be sufficiently competitive to attract talented
leaders and motivate those leaders to achieve superior results without
taking undue risk. At the same time, however, we believe that
compensation should be set at a responsible level. Our
executive compensation programs are intended to be consistent with the
Company's constant focus on balancing cost, performance and
risk.
·
We Believe in a
Pay-for-Performance Culture
- At the core of our compensation
philosophy is our guiding belief that pay should be directly linked to
performance. This philosophy has guided many
compensation-related decisions:
-
a
substantial portion of executive officer compensation is contingent on,
and variable with, achievement of
short-
and long-term
corporate
objectives and/or individual performance objectives;
-
the
Compensation Committee annually reviews the specific measures, weights,
and level of stretch for each
of
our performance measures
compared
to historic performance and other utilities. The goal is to
provide
increasing
levels of stretch or difficulty as appropriate while
maintaining
a balance between types of measures,
e.g.,
financial and customer;
-
our
incentive measures are set and monitored consistent with the Company's
Enterprise Risk Management
Program;
-
100%
of our long-term compensation is performance based and pays out in the
form of performance shares
of
CVPS
Common
Stock,
which
only pay out when pre-defined and objective measurable performance
criteria
are
achieved;
-
we
do not have any special employment or severance agreements with any of our
executive officers. (However,
executive
officers do
have
Change-In-Control ("CIC") Agreements (see "Change-In-Control" section on
page 34
for
further explanation) and are covered
under
the Company's Layoff Policy which covers all employees);
-
we
regularly monitor the relationship between executive pay levels and
corporate performance at Central Vermont
compared
to other
electric
utilities; and
-
due
to a difficult year in 2005, 2006 salaries were reduced by 10% for the CEO
and 5% for other executive officers
and
remain below median
benchmarks.
·
Compensation and
Performance-Based Pay Reflect Position and Responsibility
- Total
compensation and accountability generally increase with higher position
and greater responsibility because those individuals are more able to
affect the Company's results. Consistent with this
philosophy:
-
total
compensation is higher for individuals with greater responsibility and
greater ability to influence
the
Company's
achievement
of targeted
results
and strategic initiatives;
|