Security Ownership of Certain Beneficial Owners
The following table sets forth certain information,
as of March 12, 2018, as to each person known to the Company, based on filings with the SEC, who beneficially owns 5 percent or
more of the
Company’s Common Stock. Based on filings made with the SEC, each shareholder named below has sole voting and
investment power with respect to such shares.
Name and Address of Beneficial Owner
|
|
Shares Beneficially Owned
|
|
|
Percent of Class
|
|
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
|
|
|
10,184,899
|
|
|
|
12.8%
|
|
The Vanguard Group
100 Vanguard Blvd
Malvern, PA 19355
|
|
|
7,820,779
|
|
|
|
9.83%
|
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
15
|
CORPORATE GOVERNANCE
The Board
of Directors
Leadership Structure
Effective May 1, 2015, the Board of Directors
decided to separate the Chairman and CEO roles, with Mr. Renna assuming the role of President and CEO, and Walter M. Higgins III,
becoming the non-executive Chairman of SJI’s Board of Directors.
In the role, Mr. Higgins:
•
|
Provides
leadership to the Board
|
|
|
•
|
Chairs
meetings of the Board of Directors
|
|
|
•
|
Establishes
procedures to govern the Board’s work
|
|
|
•
|
Ensures
the Board’s full discharge of its duties
|
|
|
•
|
Schedules
meetings of the full Board and works with the committee chairmen, CEO and Corporate Secretary
for the schedule of meetings for committees
|
|
|
•
|
Organizes
and presents the agenda for regular or special Board meetings based on input from Directors,
CEO and Corporate Secretary
|
|
|
•
|
Ensures
proper flow of information to the Board, reviewing adequacy and timing of documentary
materials in support of management’s proposals
|
|
|
|
•
|
Ensures adequate lead time
for effective study and discussion of business under consideration
|
•
|
Helps
the Board fulfill the goals it sets by assigning specific tasks to members of the Board
|
|
|
•
|
Identifies
guidelines for the conduct of the Directors, and ensures that each Director is making
a significant contribution
|
|
|
•
|
Acts
as liaison between the Board and CEO
|
|
|
•
|
Works
with the Governance Committee and CEO, and ensures proper committee structure, including
assignments and committee chairmen
|
|
|
•
|
Sets
and monitors the ethical tone of the Board of Directors
|
|
|
•
|
Manages
conflicts which may arise with respect to the Board
|
|
|
•
|
Monitors
how the Board functions and works together effectively
|
|
|
•
|
Carries
out other duties as requested by the CEO and Board as a whole, depending on need and
circumstances
|
|
|
•
|
Serves
as a resource to the CEO, Corporate Secretary and other Board members on corporate governance
procedure and policies
|
Independence of Directors
The Board adopted Corporate Governance Guidelines
that require the Board to be composed of a majority of Directors who are “Independent Directors” as defined by the
rules of the New York Stock Exchange. No Director will be considered “Independent” unless the Board of Directors affirmatively
determines that the Director has no material relationship with the Company. When making “Independence” determinations,
the Board considers all relevant facts and circumstances, as well as any other facts and considerations specified by the New York
Stock Exchange, by law or by any rule or regulation of any other regulatory body or self-regulatory body applicable to the Company.
As part of its Corporate Governance Guidelines, the Board established a policy that Board members may not serve on more than four
other
boards of publicly traded companies. SJI’s Corporate Governance Guidelines are available on our website at www.sjindustries.com
under the heading “Investors”.
For 2017, the Board determined that
Directors Barpoulis, Bracken, Campbell, Fortkiewicz, Hartnett-Devlin, Higgins, Holzer, Rigby, and Sims, constituting all of
the non-employee Directors, meet the New York Stock Exchange standards and our own standards noted above for independence and
are, therefore, considered to be Independent Directors. Accordingly, all but one of the Company’s Directors was
considered to be “Independent.” Mr. Renna is not considered independent by virtue of his employment with the
Company.
Codes of Conduct
The Company has adopted codes of conduct for
all employees, Officers and Directors, which include the codes of ethics for our principal executive officer and principal financial
officer within the meaning of the SEC regulations adopted pursuant to the Sarbanes-Oxley Act of 2002. Additionally, the Company
established a hotline and website for employees to anonymously report suspected violations.
Copies of the codes of ethics are available on
the Company’s website at www.sjindustries.com under Investors > Corporate Governance. Copies of our codes of conduct
are also available at no cost to any shareholder who requests them in writing at South Jersey Industries, Inc., 1 South Jersey
Plaza, Folsom, New Jersey 08037, Attention: Corporate Secretary.
Communication with Directors
You may communicate with the Chairman of
the Board and chairmen of the Audit, Compensation, Corporate Responsibility Governance, Risk and Strategy & Finance
Committees by sending an e-mail to chairmanoftheboard@sjindustries.com, auditchair@sjindustries.com,
compchair@sjindustries.com, govchair@sjindustries.com, corpresp@sjindustries.com, StratandFinChair@sjindustries.com
or riskchair@sjindustries.com respectively, or you may communicate with our outside
Independent Directors as a group by
sending an e-mail to sjidirectors@sjindustries.com. The Charters and scope of responsibility for each of the Company’s
committees are located on the Company’s website at www.sjindustries.com. You may also address any correspondence to the
Chairman of the Board, chairmen of the committees or to the Independent Directors at South Jersey Industries, Inc., 1 South
Jersey Plaza, Folsom, New Jersey 08037.
16
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Corporate
Governance
Corporate Governance Materials
Shareholders can see the Company’s Corporate
Governance Guidelines and Profile, Charters of the Audit Committee, Compensation Committee, Corporate Responsibility Committee,
Executive Committee, Governance Committee, Risk Committee, and Strategy & Finance Committee, and Codes of Ethics on the Company’s
website at www.sjindustries.com under Investors
> Corporate Governance. Copies of these documents, as well as additional copies
of this Proxy Statement, are available to shareholders without charge upon request to the Corporate Secretary at South Jersey
Industries, Inc., 1 South Jersey Plaza, Folsom, New Jersey 08037.
Board
Evaluation Process
The Governance Committee is responsible for implementing
the Board Evaluation Process on an annual basis. The Governance Committee engages an independent, third-party facilitator and
uses surveys and interviews to ensure robust feedback that can be used to enhance Board processes. The goal of the process is
to gather input regarding Board composition and processes, and compliance with corporate governance best practices. Covered areas
include essential aspects of Board leadership
and effectiveness, contribution of
individual directors, overall group dynamics, and whether the experience and skillsets of the members are well aligned with
SJI’s current and future strategic needs. In 2017, the process included the evaluation of the Board and its committees.
In addition to the Directors, the Executive Officers participated in the process. The Governance Committee is responsible for
implementing the recommendations generated from the evaluation results.
Meetings
of the Board of Directors and its Committees
|
|
|
|
|
The
Board of Directors met 17 times in 2017.
|
Each
Director attended 75 percent or more of the total number of Board meetings and the Board committee meetings on which he or
she served.
|
It
is the Board’s policy that the Independent Directors meet in Executive Session at every in-person meeting of the Board
or its Committees.
|
During
2017, the Independent Directors met five times at the conclusion of SJI Board meetings.
|
Topics
of these sessions included CEO and Officer Performance and Compensation, Succession Planning, Director Tenure, Retirement
Age, Strategy and Discussions of Corporate Governance. Director Higgins, Chairman of the Board, chaired the meetings of the
Independent Directors.
|
All current Board members and all nominees for
election to the Company’s Board of Directors are required to attend the Company’s Annual Meetings of Shareholders
unless unique personal circumstances affecting the Board member or Director nominee make his or her attendance impracticable.
All the Directors attended the 2017 Annual Meeting of Shareholders. During 2017, each of the Company’s Directors also served
on the Boards or Executive Committees of one or more of South Jersey Gas Company, South Jersey Energy Company, South
Jersey Energy
Solutions, LLC, Marina Energy, LLC, South Jersey Resources Group, LLC, South Jersey Energy Service Plus, LLC, Energy & Minerals,
Inc., R&T Group, Inc., and SJI Midstream, LLC, all of which are Company subsidiaries.
There are seven standing committees of the Board:
the Audit Committee; the Compensation Committee; the Corporate Responsibility Committee; the Executive Committee; the Governance
Committee; the Risk Committee and the Strategy & Finance Committee.
Audit Committee
The Board’s Audit Committee, which met
eight times during 2017, was comprised of six “Independent” Directors until April 21, 2017 and five thereafter: Sheila
Hartnett-Devlin, Chairman until April 21, 2017; Sarah M. Barpoulis elected Chairman on April 21, 2017; Joseph H. Petrowski until
April 21, 2017; Joseph M. Rigby; and Frank L. Sims. Walter M. Higgins III is an ex-officio member of the Audit Committee. The
Board determined that no member of the Audit Committee has a material relationship that would jeopardize such member’s ability
to exercise independent judgment. The Board of Directors designated each member of the Audit Committee as an “audit committee
financial expert” as defined by applicable Securities and Exchange Commission rules and regulations. The Audit Committee:
(1) annually engages and evaluates an independent registered public accounting firm for appointment, subject to Board and shareholder
approval, as auditors of the Company and has the authority to unilaterally retain, compensate and terminate the Company’s
independent
registered public accounting firm; (2) reviews with the independent registered public accounting firm the scope
and results of each annual audit; (3) reviews with the independent registered public accounting firm, the Company’s internal
auditors and management, the quality and adequacy of the Company’s internal controls and the internal audit function’s
organization, responsibilities, budget, and staffing; and (4) considers the possible effect on the objectivity and independence
of the independent registered public accounting firm of any non-audit services to be rendered to the Company. The Audit Committee
members meet in Executive Session with Internal Audit and the independent accounting firm at the end of each in-person meeting.
The Audit Committee is also responsible for reviewing
the Company’s major financial risk exposures and the steps Management has taken to monitor and control these exposures,
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
17
|
Corporate
Governance
and reviewing the guidelines and policies that govern the process by which risk assessment and management is undertaken by the
Board and Management.
The Audit Committee established policies and
procedures for engaging the independent registered public accounting firm to provide audit and permitted non-audit services.
The Committee Charter is available on our website
at www.sjindustries.com, under the heading “Investors”. You may obtain a copy by writing to the Corporate Secretary, South Jersey Industries Board of Directors, South Jersey Industries,
Inc., 1 South Jersey Plaza, Folsom, New Jersey 08037.
Compensation Committee
The Board’s Compensation Committee, which
met six times during 2017, was comprised of five “Independent” Directors in 2017: Keith S. Campbell, Chairman until
April 21, 2017; Sheila Harnett-Devlin until April 21, 2017; Sunita Holzer elected Chairman on April 21, 2017; Joseph H. Petrowski
until April 21, 2017; and Joseph M. Rigby effective April 21, 2017. Walter M. Higgins III is an ex-officio member of the Compensation
Committee. The Compensation Committee carries out the responsibilities delegated by the Board
relating to the review and determination
of executive compensation as well as the structure and performance of significant, long-term employee defined benefits and defined
contribution plans.
The Committee’s Charter is available on
our website at www.sjindustries.com under the heading “Investors” or you may obtain a copy by writing to the Corporate Secretary,
South Jersey Industries Board of Directors, South Jersey Industries, Inc.,1 South Jersey Plaza, Folsom, New Jersey 08037.
Compensation Committee Interlocks and Insider
Participation
No member of the Compensation Committee has ever
been an Officer or employee of the Company, or any of its subsidiaries or affiliates. During the last fiscal year, none of the
Company’s
Executive Officers served on a compensation committee or as a Director for any other publicly traded company.
Corporate Responsibility Committee
The Board’s Corporate Responsibility Committee,
which met four times during 2017, was comprised of five “Independent” Directors: Victor A. Fortkiewicz, Chairman;
Thomas A. Bracken, Keith S. Campbell, and Sunita Holzer. Walter M. Higgins III is an ex-officio member of the Compensation Committee.
The Committee provides oversight, monitoring and guidance of matters related to corporate and social citizenship, public and legal
policy, environmental stewardship and compliance, political activities, sustainability, quality of work life, and economic and
social vitality in the communities and markets in which the Company operates.
The Committee also oversees the production of
the Company’s annual Corporate Sustainability Report, which conveys how the Company links the business with sustainable
practices. The 2017 report is available on our website at www.sjindustries.com or you may obtain a copy by writing to the Corporate
Secretary, South Jersey Industries Board of Directors, South Jersey Industries, Inc., 1 South Jersey Plaza, Folsom, New Jersey
08037.
The Committee’s Charter is available on
our website at www.sjindustries.com under the heading “Investors” or you may obtain a copy by writing to the Corporate Secretary, South Jersey Industries Board of Directors, South Jersey Industries,
Inc., 1 South Jersey Plaza, Folsom, New Jersey 08037.
Governance Committee
The Board’s Governance Committee, which
met six times during 2017, was comprised of six “Independent” Directors from January 2017 until April 21, 2017, and
five Independent Directors thereafter: Thomas A. Bracken, Chairman; Sarah M. Barpoulis until April 21, 2017; Victor A. Fortkiewicz;
Sheila Hartnett-Devlin elected April 21, 2017; Joseph M. Rigby until April 21, 2017 and Frank L. Sims. Walter M. Higgins III is
an ex-officio member of the Compensation Committee. Each Committee member satisfies the New York Stock Exchange’s independence
requirements. Among its functions, the Governance Committee: (1) maintains a list of prospective candidates for Director, including
those recommended by shareholders; (2) reviews the qualifications of candidates for Director (to review minimum qualifications
for Director candidates, please see the Company’s Corporate Guidelines available on our website at www.sjindustries.com
under the heading “Investors”. These guidelines include consideration of education, experience, judgment, diversity
and other applicable and relevant skills as determined by an assessment of the Board’s needs when an opening exists); (3)
makes recommendations to the Board of Directors to fill vacancies and for nominees for election to be voted on by the shareholders;
and (4) is responsible for monitoring the implementation of the Company’s Corporate Governance Policy.
The Governance Committee reviews with the Board
on an annual basis the appropriate skills and characteristics required of Board members in the context of the current Board make-up
and the Company’s strategic forecast. This assessment includes issues of industry experience, education, general business
and leadership experience, judgment, diversity, age, and other applicable and relevant skills as determined by an assessment of
the Board’s needs. The diversity assessment includes a review of Board composition with regard to race, gender, age and
geography.
The Governance Committee will consider nominees
for the Board of Directors recommended by shareholders and submitted in compliance with the Company’s bylaws, in writing,
to the Corporate Secretary of the Company. Any shareholder wishing to propose a nominee should submit a recommendation in writing
to the Company’s Corporate Secretary at 1 South Jersey Plaza, Folsom, New Jersey 08037, indicating the nominee’s qualifications
and other relevant biographical information and providing confirmation of the nominee’s consent to serve as a Director.
The Committee’s Charter is available on
our website at www.sjindustries.com under the heading “Investors” or you may obtain a copy by writing to the Corporate Secretary, South Jersey Industries Board of Directors, South Jersey Industries,
Inc.,1 South Jersey Plaza, Folsom, New Jersey 08037.
18
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Corporate
Governance
Executive Committee
The Board’s Executive Committee met one
time in 2017. Until April 21, 2017 it was comprised of the Chairman of the SJI Board, Chairmen of the subsidiary Boards, Committee
Chairs and was chaired by the Chairman of the Board. Thereafter the committee is comprised of the Chairman of the Board, the CEO
and the Chairs of the Audit, Compensation, Governance and Risk Committees. The current members are: Walter M. Higgins III, Chairman;
Michael J. Renna; Sarah M. Barpoulis; Thomas A. Bracken; Sunita Holzer; and Frank L. Sims. The Executive Committee acts as directed
by or on behalf of the Board of Directors during intervals between the meetings of the Board of Directors in the event a quorum
of the Board is not available and, if at the discretion of the Chairman of the Board, immediate action is needed. The Committee
also: reviews and investigates other matters as
directed by the Board of Directors; reviews and recommends to the Board the organizational
structure of the Company; reviews and recommends to the Board the Officers of the Company and its direct subsidiaries; reviews
and recommends to the Board the composition and leadership of the Management Risk and Trust committees; monitors and/or implements
the review or investigation of matters related to or involving the Company’s Officers; and takes action on such matters
delegated to the Committee by the Board.
The Committee’s Charter is available on
our website at www.sjindustries.com under the heading “Investors” or you may obtain a copy by writing to the Corporate
Secretary, South Jersey Industries Board of Directors, South Jersey Industries, Inc., 1 South Jersey Plaza, Folsom, New Jersey
08037.
Risk Management Committee
In April 2017, the Board formed the Risk Committee,
which met twice in 2017. In 2017, the committee was comprised of five “Independent” directors: Frank L. Sims, Chairman;
Keith S. Campbell; Victor A. Fortkiewicz; and Sunita Holzer. Walter M. Higgins III is an ex-officio member of the Compensation
Committee. The purpose of the Risk Committee is to assist the Board of Directors in fulfilling its oversight responsibilities
with regard to the risks inherent in the business of SJI and the control processes with respect to such risks.
The Risk Committee monitors major strategic risks
and the potential impact on the execution of the Company’s strategic plans, and oversees and reviews the Company’s
risk assessment process, and risk management strategy and programs. The committee also analyzes the guidelines and policies that
management uses to assess and manage exposure to risk, and analyzes major financial risk exposures and the steps management has
taken to monitor and control such exposure. The Committee presents its findings to the full Board, which is charged with approving
the Company’s risk appetite.
At each Risk Committee meeting, management presents
an update of the Company’s risk management activities. The Company has two internal Risk Committees that report to the Risk
Committee at least quarterly. The SJI Risk Management
Committee (RMC), established 1998, is responsible for overseeing the energy
transactions and the related risks for all of the SJI companies. Annually, the Board approves the RMC members. Committee members
include management from key Company areas such as finance, risk management, legal and business operations.
The RMC establishes a general framework for measuring
and monitoring business risks related to both financial and physical energy transactions, approves all methodologies used in risk
measurement, ensures that objective and independent controls are in place, and presents reports to the Board Risk Committee reflecting
risk management activity.
A South Jersey Gas Company RMC is responsible
for gas supply risk management. Annually, the Board approves the RMC members. Committee members include management from key Company
areas such as finance, risk management, legal and gas supply. This RMC meets at least quarterly.
The Committee’s Charter is available on
our website at www.sjindustries.com under the heading “Investors” or you may obtain a copy by writing to the Corporate Secretary, South Jersey Industries Board of Directors, South Jersey Industries,
Inc.,1 South Jersey Plaza, Folsom, New Jersey 08037.
Strategy & Finance Committee
In April 2017, the Board formed the Strategy
& Finance Committee, which met six times in 2017. In 2017, the committee was comprised of five “Independent” directors:
Joseph M. Rigby, Chairman; Sarah M. Barpoulis; Thomas A. Bracken; and Sheila Hartnett-Devlin. Walter M. Higgins III is an ex-officio
member of the Compensation Committee. The purpose of the Strategy & Finance Committee is to assist the Board of Directors
in fulfilling its oversight of the Company’s strategic, financial and financing plans.
The Strategy & Finance Committee
provides input and support to Management in the development of the Company’s long-term strategic, operating, capital and
financing plans.
The Committee’s Charter is available on
our website at www.sjindustries.com under the heading “Investors” or you may obtain a copy by writing to the Corporate Secretary, South Jersey Industries Board of Directors, South Jersey Industries,
Inc.,1 South Jersey Plaza, Folsom, New Jersey 08037.
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
19
|
Corporate
Governance
Risk Allocation
The Board has allocated its risk oversight duties
as follows:
Risk Areas
|
|
Board
Responsibility
|
Corporate:
|
|
|
·
|
Strategic and Financing
|
|
Strategy & Finance Committee
|
·
|
Enterprise Wide Risk Management
|
|
Risk Committee
|
·
|
Major Financial Risk Exposures
|
|
Audit Committee
|
Operational:
|
|
Risk Committee
|
·
|
Markets/Competition
|
|
|
·
|
Counterparty/Customer Receivables
|
|
|
·
|
Regulatory/Legislative
|
|
|
·
|
Supplier
|
|
|
·
|
Operations
|
|
|
·
|
Capital Allocation/Requirements
|
|
|
·
|
Information Technology
|
|
|
Financial:
|
|
Audit Committee
|
·
|
Guidelines and Policies for Risk Assessment and Management
|
|
|
·
|
Major Financial Risk
|
|
|
·
|
Financial Reporting
|
|
|
·
|
Financial Disclosure
|
|
|
·
|
Financial Controls
|
|
|
·
|
Accounting/Taxes
|
|
|
Corporate Responsibility:
|
|
Corporate Responsibility Committee
|
·
|
Legal
|
|
|
·
|
Ethical
|
|
|
·
|
Corporate Image
|
|
|
·
|
Environmental
|
|
|
·
|
Safety
|
|
|
Compensation
|
|
Compensation Committee
|
·
|
Compensation Program
|
|
|
·
|
Retirement Plans
|
|
|
20
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Corporate
Governance
Executive Compensation
Principles
The Company’s executive compensation program
applies to all Company Officers, including NEOs and is designed to aid in achieving the Company’s strategic plan while increasing
shareholder value. Executive compensation program decisions were made based on the following principles:
•
|
Directly and measurably
link the executive compensation program to business and individual performance with a substantial portion of the compensation
designed to create incentives for superior performance and meaningful consequences for below target performance and no payout
below threshold performance;
|
•
|
Set total compensation to
be competitive with peer companies to attract, retain and motivate high performing business leaders;
|
•
|
Align the interests of NEOs
with shareholders so that compensation levels are commensurate with relative shareholder returns and financial performance;
|
•
|
Balance short-term and long-term
financial and strategic objectives and reward NEOs for the businesses for which they are responsible and for overall Company performance,
as appropriate;
|
•
|
Use independent compensation
consultants who report directly to the Committee; and
|
•
|
Use the peer group 50th
percentile as a reference point when assessing compensation levels.
|
28
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
2017
Compensation Components
The Company’s executive compensation structure
consists of base salary, AIP and LTI. AIP and LTI are directly linked to achieving predefined short-term and long-term performance
goals.
Descriptions of each component of the compensation
program for the NEOs are set forth below:
Pay
Element
|
Description
|
Rationale
|
Salary
|
Fixed cash
opportunity.
|
Provides
compensation for role, level of responsibility and experience.
|
Annual Incentive
Plan (“AIP”)
|
Annual cash
compensation with variable payout depending on performance against pre-determined goals for the fiscal year.
|
Drives and
incents annual performance across key financial and individual performance measures.
|
Long-Term
Incentives (“LTI”)
|
LTI is granted
70% in performance-based restricted stock (“PBRS”), based on Total Shareholder Return (“TSR”) vs.
peers and economic earnings growth, and 30% in time-based restricted stock (“TBRS”) with a ROE performance
condition.
|
100% performance-based
vehicles ensures payout only occurs if threshold level of performance is achieved. Drives long-term financial performance,
shareholder value and executive retention.
|
Benefits
and Perquisites
|
Health
and welfare benefits provided consistent with those generally provided to all employees. In addition, NEOs are also eligible
for certain additional retirement and insurance-related benefits and limited perquisites (i.e., company automobile and executive
physicals). See
Other Benefits and Perquisites
section for more detail.
|
Supports
attraction and retention objectives and helps ensure the overall competitiveness of the compensation program vs. the market.
|
Pursuant to SEC regulations, the Summary Compensation
Table on page 38 shows total compensation for our NEOs, including the change in pension value and nonqualified compensation earnings.
The number shown for Mr. Renna in the Change in Pension Value and Nonqualified Compensation Earnings column for 2017 is reflective
of his entering the SERP upon turning 50 in 2017. As a result, this number reflects the accumulation of his SERP benefit earned
based on all of his service from his original hire date (20 years). Going forward, the number shown
in the Change in Pension Value
and Nonqualified Compensation Earnings Column each year will reflect only one year of service. We believe that Mr. Renna’s
year-over-year change in pension value is not representative of the compensation he received in 2017. Therefore, we included a
separate column in the Summary Compensation Table that reflects total compensation minus the change in pension value and nonqualified
compensation earnings for Mr. Renna and the other NEOs, as we believe this number is more representative of actual compensation.
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
29
|
Compensation Discussion & Analysis
Specific 2017 pay decisions for each pay element
were as follows:
Base Salary
The Compensation Committee determines base salaries
for the NEOs each year taking into account multiple factors such as the individual’s performance and potential, breadth,
scope and complexity of the role, internal equity, as well as market positioning. The Committee also considers the analyses provided
by our independent compensation consultants who reaffirmed that for FYE 2016, our position relative to peers was below the median
and generally at or below the 25th percentile of the peer group. We made changes to bring compensation closer to median effective
January 1, 2017. In addition, in the case of NEOs other than the CEO, the Committee takes into consideration the recommendations
of the CEO.
At the beginning of 2017, the Compensation Committee
approved a salary increase for Mr. Renna of 15.7% and salary increases for each of the other NEOs ranging from 5.2% to 25.9% effective
on January 1, 2017. These salary increases were determined considering the NEOs’ target total pay positioning generally
at or below the 25th percentile of the peers, internal equity, succession planning and retention objectives, as well as expansion
in individuals’ roles and responsibilities. Following the salary increases, as well as increases to the AIP and LTI opportunities
for certain NEOs, as described in the following sections, the CEO’s target total pay positioning was around the 25th percentile
of the peers, while the other NEOs’ target total pay positioning was generally between the 25th percentile and median.
Named Executive Officer
|
|
Annual
Base
Salary
at FYE 2016 $Value
|
|
|
Annual
Base
Salary Effective
1/1/2017 $Value
|
|
Michael J. Renna
|
|
|
605,000
|
|
|
|
700,000
|
|
Stephen H. Clark
|
|
|
385,000
|
|
|
|
410,000
|
|
Jeffrey E. DuBois
|
|
|
404,000
|
|
|
|
425,000
|
|
David Robbins Jr.
|
|
|
270,000
|
|
|
|
340,000
|
|
Kathleen A. McEndy
|
|
|
330,000
|
|
|
|
360,000
|
|
Annual Incentive Plan
Each NEO had a pre-established AIP opportunity
for 2017. Actual AIP awards can range from 0 to 150 percent of each NEO’s target AIP opportunity based on the achievement
of the performance
metrics discussed below. The 2017 target AIP award opportunity for each Named Executive is set forth below:
Target AIP Awards for the NEOs
|
|
2016
Target AIP Awards
|
|
|
2017
Target AIP Awards
|
|
Named
Executive Officer
|
|
%
of Salary
|
|
|
$
Value
|
|
|
%
of Salary
|
|
|
$
Value
|
|
Michael J.
Renna
|
|
|
85
|
%
|
|
|
514,250
|
|
|
|
100
|
%
|
|
|
700,000
|
|
Stephen H. Clark
|
|
|
60
|
%
|
|
|
231,000
|
|
|
|
70
|
%
|
|
|
287,000
|
|
Jeffrey E. DuBois
|
|
|
70
|
%
|
|
|
282,800
|
|
|
|
70
|
%
|
|
|
297,500
|
|
David Robbins Jr.
|
|
|
60
|
%
|
|
|
162,000
|
|
|
|
70
|
%
|
|
|
238,000
|
|
Kathleen A. McEndy
|
|
|
60
|
%
|
|
|
198,000
|
|
|
|
60
|
%
|
|
|
216,000
|
|
The AIP drives and rewards short-term performance.
The performance metrics used for the NEOs for 2017 were based on various metrics, including SJI core earnings, South Jersey Gas
(“SJG”) core earnings, and individual balanced scorecard
objectives. Performance and resulting payouts for each metric
were assessed independently. Specific metrics and weightings vary by individual based on role and responsibility as set forth
below:
|
|
Core
Earnings
|
|
|
|
|
Named Executive
Officer
|
|
SJI
|
|
|
South
Jersey Gas
(“SJG”)
|
|
|
Balanced
Scorecard
|
|
Michael J. Renna
|
|
|
75
|
%
|
|
|
|
|
|
|
25
|
%
|
Stephen H. Clark
|
|
|
50
|
%
|
|
|
|
|
|
|
50
|
%
|
Jeffrey E. DuBois
|
|
|
50
|
%
|
|
|
|
|
|
|
50
|
%
|
David Robbins
|
|
|
25
|
%
|
|
|
25
|
%
|
|
|
50
|
%
|
Kathleen A. McEndy
|
|
|
50
|
%
|
|
|
|
|
|
|
50
|
%
|
30
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
2017 Core Earnings Pay/Performance Scales
and Actual Results
The annual incentive goals and payout scales
are set at the beginning of the fiscal year, based on expected levels of performance for that coming year. No payment is made
to our named executive officers for the core earnings component of the annual incentive plan unless threshold performance is met.
Our core earnings are defined as our economic earnings less investment tax credits and adjusted for non-operational events. The
threshold core earnings performance level for SJI in 2017 was set equal to actual SJI core earnings in
2016. Therefore, core earnings
performance at or above prior year actual performance was required for any payout for our SJI core earnings component. The target
core earnings performance level for SJG in 2017 was set below actual SJG core earnings in 2016 to reflect the 2017 SJG budget.
Actual performance and the payouts are interpolated between the levels set forth below.
For SJI core earnings, the goals and payout scales,
and actual results for 2017 were as follows:
|
|
SJI
Core Earnings Pay/Performance Scale
|
|
Performance Level
|
|
SJI Core
Earnings $
Value ($M)
|
|
|
Payout
as a % of Target
|
|
Maximum
|
|
|
≥106.5
|
|
|
|
150
|
%
|
Target
|
|
|
99.1
|
|
|
|
100
|
%
|
Threshold
|
|
|
90.0
|
|
|
|
50
|
%
|
Below Threshold
|
|
|
<90.0
|
|
|
|
0
|
%
|
Actual Performance
|
|
|
96.3
|
|
|
|
85
|
%
|
SJI core earnings of $96.3 million represents
7% growth over prior year.
For SJG core earnings, the goals and payout scales,
and actual results for 2017 were as follows:
|
|
SJG Core Earnings Pay/Performance Scale
|
|
Performance Level
|
|
SJG Core Earnings $
Value ($M)
|
|
|
Payout as a % of Target
|
|
Maximum
|
|
|
≥70.0
|
|
|
|
150
|
%
|
Target
|
|
|
67.0
|
|
|
|
100
|
%
|
Threshold
|
|
|
64.0
|
|
|
|
50
|
%
|
Below Threshold
|
|
|
<64.0
|
|
|
|
0
|
%
|
Actual Performance
|
|
|
72.6
|
|
|
|
150
|
%
|
SJG core earnings of $72.6 million represents
5.1% growth over prior year.
2017 Balanced Scorecard Summary Objectives
In addition to the
financial performance components used to determine the AIP awards described above, awards to NEOs are based on individual balanced
scorecard performance. An individual balanced scorecard (“BSC”) is a strategic performance management tool that has
four quadrants that may be used to measure financial and non-financial goals. The BSC measures may include financial, customer,
process and learning and growth.
The CEO’s performance highlights for the year included: continuing to execute the long-term
strategy, achieving strategic growth milestones, promoting a culture of safety and exceptional customer service and expanded talent
and leadership development efforts.
Fiscal 2017 performance highlights for the other NEOs:
Stephen H. Clark
|
·
|
Managed
capitalization and liquidity in support of strategic goals
|
|
·
|
Enhanced
management information reporting for both internal and external purposes
|
|
·
|
Enhanced
efficiency through departmental reorganization and maintained focus on staff development
|
|
·
|
Supported
new business opportunities and acquisition activity
|
Jeffrey E. DuBois
|
·
|
Provided
leadership to strategic projects and programs including regulatory and infrastructure initiatives
|
|
·
|
Continued
progress in promoting a culture of exceptional service and driving customer growth
|
|
·
|
Reinforced
a culture of safety through training and communication and ensured program compliance
|
|
·
|
Implemented
comprehensive succession plan and related development plans
|
David Robbins
|
·
|
Provided
leadership to achievement of accelerated infrastructure improvement targets
|
|
·
|
Optimized
and implemented improvements for customer experience
|
|
·
|
Reinforced
commitment to safety and ensured achievement of 2017 safety goals
|
|
·
|
Improved
functionality, efficiency and productivity across the organization
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
31
|
Compensation Discussion & Analysis
Kathleen
A. McEndy
·
|
Continued progress
aligning organization and talent with key objectives and providing leadership development
|
·
|
Deployed stakeholder
relations resources in support of major initiatives. Strengthened communications capabilities.
|
·
|
Executed AC
building plan and developed retrofit plan for Folsom building
|
·
|
Strengthened
succession planning process
|
|
|
BSC objectives are
predefined at or close to the beginning of the calendar year in which they are to be performed. The objectives are tied to business
plans for the applicable year. The Compensation Committee approves the objectives for the CEO at the beginning of the year and
assesses his performance at the close of the calendar year based on a review of his performance in comparison to his specific
goals. The BSC for the other Named Executive Officers is determined based on the CEO’s review of each entity’s business
initiatives and individual performance assessments that are then
ratified by
the Compensation Committee. The Compensation Committee approves the BSC payment of the AIP for each Named Executive Officer.
Payment for
achieving balanced scorecard objectives range from 0% at below threshold, 50% at threshold, 100% at target to 150% at maximum.
Payment for achieving results between these levels is interpolated.
The level of performance
achieved for each BSC objective is dependent upon the terms of the objective itself, relative to each NEO’s performance.
For 2017, our NEOs’ BSC payouts reflect each NEO’s performance versus their individual BSC objectives as described
above, as well as our Company’s overall achievements over the year versus our strategic initiatives Based on the performance
level achieved, our CEO received a 150% payout on the individual BSC portion of the AIP (weighted 25% of his total AIP payout).
Individual BSC payouts for our other NEOs, weighted 50% of their total AIP payouts, were as follows: 125% for Messrs. Clark and
DuBois and 150% for Mr. Robbins and Ms. McEndy.
The 2017 AIP target opportunity for each NEO
and actual payout, reflecting actual core earnings and individual BSC results is set forth below:
Named Executive Officer
|
|
Target AIP
Opportunity ($)
|
|
|
Core
Earnings
Weighted %
Payout
|
|
|
BSC
Objectives
Weighted %
Payout
|
|
|
Total Payout
as a % of
Target
|
|
|
Total AIP Award
Received for 2017
Performance
($)
|
|
Michael J. Renna
|
|
|
700,000
|
|
|
|
63.75
|
%
|
|
|
37.5
|
%
|
|
|
101.25
|
%
|
|
|
708,750
|
|
Stephen H. Clark
|
|
|
287,000
|
|
|
|
42.5
|
%
|
|
|
62.5
|
%
|
|
|
105
|
%
|
|
|
301,350
|
|
Jeffrey E. DuBois
|
|
|
297,500
|
|
|
|
42.5
|
%
|
|
|
62.5
|
%
|
|
|
105
|
%
|
|
|
312,375
|
|
David Robbins
|
|
|
238,000
|
|
|
|
58.75
|
%
|
|
|
75
|
%
|
|
|
133.75
|
%
|
|
|
318,325
|
|
Kathleen A. McEndy
|
|
|
216,000
|
|
|
|
42.5
|
%
|
|
|
75
|
%
|
|
|
117.5
|
%
|
|
|
253,800
|
|
Long-Term Incentives
Awards Granted in 2017
For 2017, the LTI component of the executive
compensation program for NEOs consists of 70% performance-based restricted stock (“PBRS”) grants and 30% time-based
restricted stock
(“TBRS”) with a performance condition to satisfy the conditions for tax deductibility under Section
162(m) of the Code.
2017 PBRS Award
PBRS awards are earned based on the following
performance measures:
•
|
50% based on the Company’s
three-year total shareholder return (“TSR”) vs. peer group performance
|
|
|
•
|
50% based on three-year
compound annual economic earnings growth
|
|
|
TSR directly ties to shareholder return and economic
earnings growth is a financial measure that links awards to longer-term operating performance and financial goals.
The relative TSR goals are set at levels consistent
with market practice for similar relative TSR based long-term performance awards and reflect rigorous performance hurdles.
The economic earnings goals are set at levels
that require long-term growth for any payouts to be received for these components.
The PBRS goals and payout
scales are set at the beginning of the three-year performance period. The Committee has developed a schedule to determine the
actual amount of the LTI awards earned, evaluated for each measure separately, as shown below.
32
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
Specific performance and the resulting payout
will be interpolated between the levels indicated below. PBRS can be earned from 50% of target shares granted if threshold performance
is met and up to 200% of target shares granted if maximum performance
is met. No shares are earned for performance below threshold
performance level.
Provided below are the pay-and-performance scales
for the 2017 PBRS awards:
|
|
TSR
vs. SJI Peers
|
|
Performance
Level
|
|
SJI’s
3-Year TSR
Percentile
Positioning
vs.
Peers
|
|
|
Payout
as a
%
of Target
|
|
Maximum
|
|
|
≥99
th
|
|
|
|
200
|
%
|
Stretch
|
|
|
80
th
|
|
|
|
150
|
%
|
Target
|
|
|
50
th
|
|
|
|
100
|
%
|
Threshold
|
|
|
35
th
|
|
|
|
50
|
%
|
Below Threshold
|
|
|
<35
th
|
|
|
|
0
|
%
|
|
|
Compound
Annual Economic Earnings Growth
|
|
Performance
Level
|
|
SJI’s
3-Year
Compound Annual
Economic
Earnings Growth
|
|
|
Payout
as a %
of Target
|
|
Maximum
|
|
|
≥15
|
%
|
|
|
200
|
%
|
Target
|
|
|
9
|
%
|
|
|
100
|
%
|
Threshold
|
|
|
3
|
%
|
|
|
50
|
%
|
Below Threshold
|
|
|
<3
|
%
|
|
|
0
|
%
|
2017 TBRS Award
TBRS grants made in 2017 vest in three equal
installments in March 2018, January 2019 and January 2020, subject to achieving the performance condition of at least 7% ROE in
2017. This performance condition is intended to satisfy the conditions
for deductibility under Section 162(m) of the Code. Actual
ROE for 2017 was 7.9%, exceeding the ROE performance condition. The 2017 TBRS grants are subject to continued time-based vesting.
Fiscal 2017 LTI Award Opportunities
The Compensation Committee considered the data
provided by the independent compensation consultants, which reaffirmed the Compensation Committee’s understanding that,
for FYE 2016, total compensation for the NEOs was below market median and generally at or below the 25th percentile. In particular,
the LTI target
opportunities were below market for 2016. Given the relatively low market pay position and considering pay for
performance alignment for some of the NEOs, the Committee approved increases to LTI target opportunities for 2017 for Messrs.
Renna and Clark as set forth below.
|
|
2016 Target LTI
|
|
|
2017 Target LTI
|
Named Executive Officer
|
|
% of Salary
|
|
|
$ Value
|
|
|
% of Salary
|
|
|
$ Value
|
Michael J. Renna
|
|
|
170
|
%
|
|
|
1,028,500
|
|
|
|
200
|
%
|
|
|
1,400,000
|
|
Stephen H. Clark
|
|
|
85
|
%
|
|
|
327,250
|
|
|
|
100
|
%
|
|
|
410,000
|
|
Jeffrey E. DuBois
|
|
|
100
|
%
|
|
|
404,000
|
|
|
|
100
|
%
|
|
|
425,000
|
|
David Robbins
|
|
|
100
|
%
|
|
|
270,000
|
|
|
|
100
|
%
|
|
|
340,000
|
|
Kathleen A. McEndy
|
|
|
85
|
%
|
|
|
280,500
|
|
|
|
85
|
%
|
|
|
306,000
|
|
Details with respect to the number of shares,
stock prices on the date of grant and grant date values for the NEOs’ 2017 LTI
grants are provided in the “Grants
of Plan-Based Awards and Outstanding Equity Awards” tables.
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
33
|
Compensation Discussion & Analysis
Fiscal 2015 LTI Grant Payout
The LTI goals and payout scales are set prior
to the beginning of the upcoming three-year performance cycle. Specifically, for the LTI performance cycle ended in fiscal 2017,
goals were set prior to the beginning of fiscal 2015 and were based 40% on three-year TSR vs. the peer group, 30% on 3-year compound
annual EPS growth, and 30% on 3-year average ROE. The LTI goals were set at appropriate
levels that fully supported the pay-for-performance
philosophy. In addition, the relative goals are designed to be consistent with typical market practices among companies also setting
LTI goals relative to peers.
For relative TSR, the goals and payout scales,
and actual results for 2017 were as follows:
Performance Level
|
|
SJI Relative TSR Percentile
Positioning
vs. Peers
|
|
|
Payout as a %
of Target
|
|
Maximum
|
|
|
≥99
th
|
|
|
|
200
|
%
|
Stretch
|
|
|
80
th
|
|
|
|
150
|
%
|
Target
|
|
|
50
th
|
|
|
|
100
|
%
|
Threshold
|
|
|
35
th
|
|
|
|
50
|
%
|
Below Threshold
|
|
|
<35
th
|
|
|
|
0
|
%
|
Actual Performance – Relative TSR
|
|
|
0
th
|
|
|
|
0
|
%
|
For EPS growth, the goals and payout scales,
and actual results for 2017 were as follows:
Performance
Level
|
|
SJI
EPS CAGR
|
|
|
Payout
as a %
of Target
|
|
Maximum
|
|
|
10.0
|
%
|
|
|
200
|
%
|
Target
|
|
|
6.0
|
%
|
|
|
100
|
%
|
Threshold
|
|
|
2.0
|
%
|
|
|
50
|
%
|
Below Threshold
|
|
|
<2.0
|
%
|
|
|
0
|
%
|
Actual Performance – EPS CAGR
|
|
|
–7.8
|
%
|
|
|
0
|
%
|
For ROE, the goals and payout scales, and actual
results for 2017 were as follows:
Performance Level
|
|
SJI ROE Average
|
|
|
Payout as a %
of Target
|
|
Maximum
|
|
|
15.0
|
%
|
|
|
200
|
%
|
Target
|
|
|
11.0
|
%
|
|
|
100
|
%
|
Threshold
|
|
|
9.0
|
%
|
|
|
50
|
%
|
Below Threshold
|
|
|
<9.0%
|
|
|
|
0
|
%
|
Actual Performance – ROE Average
|
|
|
9.4
|
%
|
|
|
60.2
|
%
|
For the three-year performance cycle ended December
31, 2017 (Fiscal 2015 PBRS award), the total weighted payout based on the performance above is 18.1%.
Benefits and Perquisites
Each of the NEOs is eligible for other employee
benefit plans generally available to all employees (e.g., qualified pension plan, deferred compensation plan, major medical and
health insurance,
disability insurance, 401(k) Plan) on the same terms as all other employees. In addition to those benefits,
NEOs are eligible for the following benefits:
Non-Qualified Supplemental Retirement Plan
(the “SERP”)
|
•
|
Employees who became officers
prior to 2016 are also covered by a supplemental retirement plan (the “SERP”) upon attaining age 50. Compensation
under the SERP is considered as base
|
|
|
salary plus annual
incentives. See
Pension Benefits Table
section for further detail. In 2016, the
plan was closed to new participants.
|
Non-Qualified Performance-Based Defined
Contribution Plan (the “PBDCP”)
|
•
|
Beginning in 2016, newly
appointed Officers may participate in the PBDCP. Each year, Officers/NEOs in the PBDCP may receive an “Employer Credit”
which is a company contribution that is a percentage of annual cash compensation ranging from 8%-12% of compensation based on
the age of the
|
|
|
NEO. The annual Employer
Credit is subject to the Company achieving a pre-set annual performance metric hurdle. PBDCP account balances are not vested until
age 50. Plan participants that terminate prior to age 50, forfeit their entire account balance.
|
34
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
Supplemental Saving Plan Contributions
|
•
|
The Internal Revenue Code
limits the contributions that may be made by, or on behalf of, an individual under defined contribution plans such as the Company’s
401(k) Plan. NEOs
|
|
|
are reimbursed the amount
of Company contributions that may not be made because of this limitation. Amounts paid pursuant to this policy are included in
the Summary Compensation Table.
|
Disability Insurance
|
•
|
NEOs are eligible for short-term
disability benefits equal to 100% of the NEO’s base salary for a certain period of time depending on years of service. Long-term
disability (LTD) begins upon the expiration of temporary disability benefits and is generally paid at a rate of 60% of the NEO’s
base salary up
|
|
|
to a monthly maximum benefit
of $10,000. Due to limitations in the group LTD benefits, in 2017, a supplemental LTD plan was implemented to cover up to 60%
of salary and cash bonus up to a monthly maximum benefit of $25,000.
|
Group Life Insurance
|
•
|
NEOs are provided with both
group life insurance and 24- Hour Accident Protection coverage. The insurance premiums for these benefits are paid by the Company
and the NEO is responsible
|
|
|
for resultant federal, state
or local income taxes. Amounts paid pursuant to this policy are included in the Summary Compensation Table.
|
Supplemental Survivor’s Benefit
|
•
|
Upon the death of any NEO
while employed by the Company, his/her surviving beneficiary shall receive a lump sum payment of $1,000 to be paid as soon as
practical following the NEOs’ death. The surviving beneficiary will receive a lump sum death benefit based upon years of
service with the Company in the
|
|
|
amounts of six months base
salary for 10-15 service years; nine months base salary for 15-25 service years; and 12 months base salary for 25+ service years.
Such payment is offset by proceeds from the NEOs’ retirement plans in the year of death.
|
Other Benefits and
Perquisites
|
•
|
NEOs are provided an automobile
to be used for business and at the NEO’s discretion, for commuting and other non-business purposes. Each NEO is responsible
for any federal and/or state income taxes that result from non-business usage.
|
|
•
|
The Company provides NEOs
with an annual physical examination at the Company’s expense.
|
Approach for Developing the Executive Compensation
Program
Role of the Compensation Committee
SJI’s executive compensation program is
administered by the Committee. The Committee members meet the New York Stock Exchange’s independence standards. In determining
the independence of members of the Compensation Committee, the Board considers all factors specifically relevant to determining
whether the director has a relationship to the Company that is material to that director’s ability to be independent from
management in connection with the duties of a Compensation Committee member, including: (i) the source of the director’s
compensation, including any consulting, advisory or other compensation fees; and (ii) any affiliate relationships between the
director and the Company or any of its subsidiaries. In accordance with its charter, the Committee sets the principles and strategies
that guide the design of the employee compensation and benefit programs for the NEOs.
The Committee annually evaluates the CEO’s
performance. Taking performance into consideration, along with recommendations from the compensation consultant (discussed below),
the Committee
then establishes and approves compensation levels for the CEO, including annual base salary and AIP and long-term
stock incentive awards. The Committee also reviews recommendations from the CEO regarding the CEO’s evaluation of, and pay
recommendations for, the other NEOs. The Committee evaluates and approves the recommendations, as appropriate. All performance
goals for the NEOs’ AIP awards are established at the beginning of each year for use in the performance evaluation process.
The Committee reviews direct compensation (base salary, AIP and long-term incentives) annually. The Committee meets regularly
in executive sessions without members of management present to evaluate the executive compensation program and reports regularly
to the Board of Directors on its actions and recommendations.
The Committee reviews indirect compensation (non-qualified
retirement plan and other benefits and change in control agreements) on a 3-year cycle, or more frequently, if warranted, based
on market conditions and the recommendation of the independent compensation and benefits consultant.
Role of Independent Consultants
To assist the Committee in its evaluation of
the executive compensation program for 2017, the Committee retained an independent compensation consultant, ClearBridge Compensation
Group, LLC (“ClearBridge”). ClearBridge’s role as independent advisor to the Committee includes:
•
|
Providing research, analyses
and design expertise in developing compensation programs for executives and incentive programs for eligible employees
|
|
|
|
•
|
Reviewing management recommendations
to ensure alignment with business and compensation objectives
|
•
|
Keeping the Committee apprised
of regulatory developments and market trends related to executive compensation practices
|
|
|
•
|
Attending Committee meetings
to provide information and recommendations regarding the executive compensation program while being available to participate in
executive sessions and communicate with the Committee between meetings, as appropriate
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
35
|
Compensation Discussion & Analysis
During 2017, in connection with its review of
South Jersey Industries’ Executive benefit programs, the Committee also retained an independent benefits consultant, Pinnacle
Financial Group (“Pinnacle”) to provide consulting services for the nonqualified deferred compensation plan and the
supplemental long term disability plan. Pinnacle assisted with the plan design, financial analysis, record-keeper selection, education
and communication with plan eligibles, and plan implementation.
The Committee reviewed its engagement with ClearBridge
and Pinnacle and believes there are no conflicts of interest between these firms and the Committee. In reaching this conclusion,
the Committee considered the factors regarding compensation advisor independence set forth in the SEC rule effective July 27,
2012 and the NYSE proposed listing standards released on September 25, 2012 that were adopted by the SEC on January 11, 2013.
Role of the Compensation Peer Group
Along with reviewing the executive compensation
program, the Committee reviews and determines the appropriate peer group companies for benchmarking purposes. Consistent with
the goal of providing competitive compensation, the executive compensation programs are compared to those programs in place at
identified peer companies. For 2017, the Committee,
in consultation with its independent consultant, ClearBridge, selected a peer
group that was comprised of 12 similarly sized gas and multi-utility companies with comparable revenue and market capitalization.
The peer group consists of the following companies:
Avista Corp.
|
Black Hills Corporation
|
New Jersey Resources Corp.
|
Northwest Natural Gas Co.
|
NorthWestern Corp.
|
ONE Gas, Inc.
|
Piedmont Natural Gas Co.
|
Questar Corporation
|
Southwest Gas Corporation
|
Spire, Inc.
|
Vectren Corp.
|
WGL Holdings, Inc.
|
This peer group was consistent with the peer
group used in 2016, with the following exceptions: ONE Gas, Inc. was added given its size and business relevance and UIL Holdings
was removed following its acquisition by Iberdrola USA. For fiscal 2018, the peer group was further revised to add National Fuel
Gas Company, PNM Resources, Inc., and Portland General Electric Company given their size and business relevance and remove Piedmont
Natural Gas Co. following its acquisition by Duke Energy, and Questar Corporation following its acquisition by Dominion Resources.
The Company used the above peer group for purposes
of benchmarking salary, AIP, LTI, and TDC. The Committee relied on the peer group for all formal benchmarking. The Committee believes
that the peer group data and industry compensation
studies give the Committee an independent and accurate view of the market “value”
of each position on a comparative basis. While the Company does not target any particular percentile at which to align pay, the
Committee uses the peer group 50th percentile as a reference point when assessing compensation levels. The purpose of referencing
the 50th percentile is to inform the Company of the relevant competitive market when making pay decisions and enable the Company
to attract and retain qualified executives while at the same time protecting shareholder interests. Although the 50th percentile
is used as a reference point, actual levels of pay depend on a variety of factors such as experience and individual and Company
performance. Based on this information from ClearBridge and the performance evaluations (See “Role of the Compensation Committee”
for more detail), the Committee determines the salary, target AIP, LTI and TDC for each NEO.
Severance/Change in Control Agreements
SJI has not entered into separate employment
agreements with any employee, including any of the NEOs. Instead, the Company has an Officer Severance Plan to provide certain
benefits to Company Officers, including the NEOs, upon an involuntary termination without cause by the Company or resignation
for good reason by the NEO, absent a change in control. The Company has also adopted separate Change in Control (“CIC”)
agreements which provide the Company’s senior executive officers, including the NEOs, with certain severance benefits upon
a qualifying termination following a change in control. Further details regarding the severance and change in control benefits
are provided under the “Change in Control Agreements and Other Potential Post-Employment Payments” section.
Effective with the 2015 LTI grants, equity award
agreements provide for “double trigger” vesting upon a change in control. Further, under the 2015 Omnibus Equity Compensation
Plan, in the event of a termination by the Company without Cause, or if the employee terminates employment for Good Reason, in
either case within 12 months following a change in control, outstanding awards will become fully vested as of the date of such
termination. However, if the vesting of any such award is based on performance, the applicable Award Agreement specifies how the
award will become vested. See the “Change in Control Agreements and Other Potential Post-Employment Payments” section
for further details.
36
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
Stock Ownership Guidelines and Holding
Requirements
The Company has stock ownership guidelines in
place for NEOs to reinforce alignment with shareholders.
CEO stock ownership guideline is 5 times the
CEO’s annual base salary. All other NEOs are required to own shares of Company common stock with a market value equal to
a minimum of 2 times their annual base salary. NEOs have six
years to achieve their ownership guidelines. As of December 31, 2017,
all NEOs are in compliance with the ownership guidelines.
Additionally, a stock holding period was introduced
in 2015 that requires all of the NEOs to retain at least 50 percent of vested and/or earned shares, net of taxes, until their
new stock ownership guideline has been met.
Clawback Policy
The Company has a clawback policy that applies
to all annual incentive awards and long-term equity awards held by officers
including our NEOs in the event of a material negative
financial restatement due to fraud, negligence, or intentional misconduct.
Anti-Hedging and Anti-Pledging Policies
The Company has anti-hedging and anti-pledging
policies that prohibit the Officers from engaging in any hedging or monetization
transactions with respect to the Company’s
securities.
Other Compensation-Related Matters
Accounting for Share-Based Compensation
Share-based compensation including restricted
stock, restricted stock units and performance share awards are accounted for in accordance with Financial Accounting Standards
Board
Accounting Standards Codification Topic 718 (“ASC Topic 718”), Compensation – Stock Compensation.
Impact of Tax Treatment on Compensation
Section 162(m) of the Internal Revenue Code limits
the deduction allowable for compensation paid to certain NEOs over $1 million. Qualified performance-based compensation is excluded
from this limitation if certain requirements are met. While the Company generally attempts to preserve the federal income tax
deductibility of compensation paid, to the extent consistent with its business goals, the Committee weighs the benefits of full
deductibility with the other objectives of the executive compensation program and reserves the right to pay the Company’s
employees, including NEOs, amounts which may or may not be deductible under Section 162(m) or other provisions of the Internal
Revenue Code. Section 162(m) was changed substantially in connection with the
adoption of the Tax Cuts and Jobs Act that was signed
into law on December 22, 2017 (the “Act”). Under the Act, the “qualified performance-based” compensation
exemption was repealed for tax years beginning in 2018, unless such compensation qualifies for transition relief applicable for
compensation paid pursuant to a written binding contract that was in effect as of November 2, 2017. The application and interpretation
of the transition relief under the legislation is ambiguous and although we expect that certain incentive compensation will satisfy
this transition relief, no assurances can be given that compensation intended to satisfy the requirements for exemption from Section
162(m) as “qualified performance-based” compensation will, in fact, be fully deductible.
Risk Assessment
The Committee reviews its compensation programs
in order to help mitigate the effects of excessive risk-taking. Through a combination of incentive compensation that has a short
and long-term focus, the Company tries to establish an appropriate balance between achieving short-term and long-term goals. In
addition, the Committee utilizes multiple metrics to help ensure that there is not undue focus on any particular financial result
to the detriment of other aspects of the business. Payout schedules related to the metrics are measured after the completion of
the appropriate time horizon to help ensure a full assessment of the metric. Finally, in formulating and reviewing the executive
compensation policies, the Committee considers whether the policy’s design encourages excessive risk-taking and attaches
specific measurable objectives to the extent possible.
During 2017, the Company, consisting of a team
from the Human Resources and Risk Management departments, conducted a comprehensive assessment of the compensation programs administered
by the Company and each of its subsidiaries. These evaluations focused on potential risks inherent in the compensation programs.
Having reviewed the extensive risk assessment conducted by the Company, the Committee determined that the compensation programs
are not reasonably likely to have a material adverse effect upon the Company and do not encourage unnecessary or excessive risk.
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
37
|
Compensation Discussion & Analysis
Executive
Compensation Tables
Summary Compensation Table
Name
and
Principal Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
(1)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
(2)
|
|
|
Change
in
Pension Value
and
Nonqualified
Compensation
Earnings
($)
(3)
|
|
|
All
Other
Compensation
(4)
|
|
|
Totals
($)
|
|
|
Totals
Without
Change in
Pension
Value and
Nonqualified
Compensation
Earnings ($)
(5)
|
|
Michael J. Renna
|
|
|
2017
|
|
|
|
696,346
|
|
|
|
—
|
|
|
|
1,377,914
|
|
|
|
708,750
|
|
|
|
5,476,000
|
|
|
|
28,016
|
|
|
|
8,287,026
|
|
|
|
2,811,026
|
|
President and Chief Executive
|
|
|
2016
|
|
|
|
603,096
|
|
|
|
—
|
|
|
|
1,013,354
|
|
|
|
604,244
|
|
|
|
107,000
|
|
|
|
24,680
|
|
|
|
2,352,374
|
|
|
|
2,245,374
|
|
Officer
|
|
|
2015
|
|
|
|
528,846
|
|
|
|
—
|
|
|
|
786,842
|
|
|
|
113,437
|
|
|
|
—
|
|
|
|
20,373
|
|
|
|
1,449,498
|
|
|
|
1,449,498
|
|
Stephen H. Clark
|
|
|
2017
|
|
|
|
409,038
|
|
|
|
—
|
|
|
|
403,533
|
|
|
|
301,350
|
|
|
|
1,320,000
|
|
|
|
25,007
|
|
|
|
2,458,928
|
|
|
|
1,138,928
|
|
Executive Vice President
|
|
|
2016
|
|
|
|
383,789
|
|
|
|
—
|
|
|
|
322,436
|
|
|
|
255,833
|
|
|
|
1,116,000
|
|
|
|
23,323
|
|
|
|
2,101,381
|
|
|
|
985,381
|
|
and Chief Financial Officer
|
|
|
2015
|
|
|
|
347,692
|
|
|
|
—
|
|
|
|
237,627
|
|
|
|
57,750
|
|
|
|
347,000
|
|
|
|
20,541
|
|
|
|
1,010,610
|
|
|
|
663,610
|
|
Jeffrey E. DuBois
|
|
|
2017
|
|
|
|
424,192
|
|
|
|
—
|
|
|
|
418,322
|
|
|
|
312,375
|
|
|
|
1,622,000
|
|
|
|
43,829
|
|
|
|
2,820,718
|
|
|
|
1,198,718
|
|
Executive Vice President and
|
|
|
2016
|
|
|
|
403,515
|
|
|
|
—
|
|
|
|
398,051
|
|
|
|
313,201
|
|
|
|
1,441,000
|
|
|
|
23,731
|
|
|
|
2,579,498
|
|
|
|
1,138,498
|
|
Chief Operating Officer SJI
|
|
|
2015
|
|
|
|
388,769
|
|
|
|
—
|
|
|
|
378,305
|
|
|
|
61,425
|
|
|
|
202,000
|
|
|
|
22,874
|
|
|
|
1,053,373
|
|
|
|
851,373
|
|
David Robbins
|
|
|
2017
|
|
|
|
337,308
|
|
|
|
—
|
|
|
|
334,631
|
|
|
|
318,325
|
|
|
|
1,343,000
|
|
|
|
14,804
|
|
|
|
2,348,068
|
|
|
|
1,005,068
|
|
Senior Vice President and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President, South Jersey Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. McEndy
|
|
|
2017
|
|
|
|
358,846
|
|
|
|
—
|
|
|
|
301,174
|
|
|
|
253,800
|
|
|
|
329,000
|
|
|
|
26,569
|
|
|
|
1,269,389
|
|
|
|
940,389
|
|
Senior Vice President
|
|
|
2016
|
|
|
|
328,961
|
|
|
|
—
|
|
|
|
276,367
|
|
|
|
237,600
|
|
|
|
286,000
|
|
|
|
23,925
|
|
|
|
1,152,853
|
|
|
|
866,853
|
|
and Chief Administrative Officer
|
|
|
2015
|
|
|
|
299,231
|
|
|
|
—
|
|
|
|
203,729
|
|
|
|
99,000
|
|
|
|
105,000
|
|
|
|
23,663
|
|
|
|
730,623
|
|
|
|
625,623
|
|
|
(1)
|
Represents the full grant
date fair value of awards in connection with the grants of performance-based restricted stock (PBRS) and time-based restricted
stock with a performance condition (TBRS), calculated in accordance with FASB ASC Topic 718. See Footnote 2 of the Company’s
financial statements for additional information, including valuation assumptions used in calculating the fair value of the award.
For 2017, these numbers represent $957,901 of PBRS and $420,013 of TBRS for Mr. Renna, $280,531 of PBRS and $123,002 of TBRS for
Mr. Clark, $290,805 of PBRS and $127,517 of TBRS for Mr. DuBois, $232,618 of PBRS and $102,013 of TBRS for Mr. Robbins, $209,369
of PBRS and $91,805 of TBRS for Ms. McEndy. The fair value of PBRS awards reflect the value of the award at the grant date based
on the probable outcome of the performance conditions. The value of the 2017 PBRS awards on the grant date at the maximum performance
payout level, calculated by multiplying the maximum number of shares by the closing stock price of the Company’s common
stock on the grant date are as follows: Mr. Renna $1,960,017; Mr. Clark $574,010; Mr. DuBois $595,033; Mr. Robbins $475,972; and
Ms. McEndy $428,402.
|
|
(2)
|
This amount represents the
aggregate annual incentive awards paid out to each Named Executive with respect to 2015, 2016 and 2017 performance under the Company’s
Annual Incentive Plan.
|
|
(3)
|
Amounts in this column represent
the aggregate change in the actuarial present value of each NEO’s accumulated benefit in the SERP and Retirement Plan for
Employees of South Jersey Industries, Inc. All of the NEOs are currently eligible for the SERP. The SERP covers officers of South
Jersey Industries who became officers prior to April 30, 2016 once they have attained age 50.
|
|
(4)
|
Includes employer contributions
to the Company’s 401(k) Plan, reimbursement for 401(k) contributions not permitted under Internal Revenue Code, the value
of group life insurance and other perquisites. The 2017 values for these items are listed in the “All Other Compensation
Table” on page 39.
|
|
(5)
|
The Total Without Change
in Pension Value and Nonqualified Compensation Earnings column reflects the amount reported in the Totals column, pursuant to
SEC regulations minus the value reported in the Change in Pension Value and Nonqualified Compensation Earnings column. The amounts
set forth in the Total Without Change in Pension Value and Nonqualified Compensation Earnings column may differ substantially
from, and are not a substitute for, the amounts reported in the Totals column pursuant to SEC regulations. The change in pension
value reported in the Change in Pension Value and Nonqualified Compensation Earnings column is dependent on a number of external
variables, such as assumptions on life expectancy and interest rates, which are not reflective of Company performance and are
outside of the Committee’s control. Further, the number shown for Mr. Renna in the Change in Pension Value and Nonqualified
Compensation Earnings column for 2017 is reflective of his entering the SERP upon turning 50 in 2017. As a result, this number
reflects the accumulation of his SERP benefit earned based on all of his service from his original hire date (20 years). Going
forward, the number shown in the Change in Pension Value and Nonqualified Compensation Earnings column each year will reflect
only one year of service. Therefore, we believe that including Mr. Renna’s year-over-year change in pension value is not
representative of the compensation he received in 2017 and that the Total Without Change in Pension Value and Nonqualified Compensation
Earnings column is more representative of 2017 compensation for Mr. Renna and the other NEOs.
|
38
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
All Other Compensation
As of Fiscal Year End 2017
|
|
Michael J.
Renna
|
|
|
Stephen H.
Clark
|
|
|
Jeffrey E.
DuBois
|
|
|
David
Robbins
|
|
|
Kathleen A.
McEndy
|
|
401(k) Plan
|
|
$
|
6,883
|
|
|
$
|
7,743
|
|
|
$
|
8,100
|
|
|
$
|
4,627
|
|
|
$
|
9,000
|
|
401(k) Reimbursement
|
|
$
|
10,143
|
|
|
$
|
3,564
|
|
|
$
|
4,155
|
|
|
$
|
108
|
|
|
$
|
2,558
|
|
Group Life Insurance
|
|
$
|
3,584
|
|
|
$
|
3,975
|
|
|
$
|
4,114
|
|
|
$
|
3,170
|
|
|
$
|
5,271
|
|
Perquisites (a)
|
|
$
|
7,406
|
|
|
$
|
9,724
|
|
|
$
|
27,460
|
|
|
$
|
6,899
|
|
|
$
|
9,740
|
|
Total Value
|
|
$
|
28,016
|
|
|
$
|
25,007
|
|
|
$
|
43,829
|
|
|
$
|
14,804
|
|
|
$
|
26,569
|
|
(a)
|
The
amounts of the perquisites reflect the value of the Company-provided automobile for each NEO, as well as the value of Mr. DuBois’
car, phone, computer, and tablet.
|
|
|
Grants of Plan-Based Awards
The following table sets forth certain information
concerning the grant of awards made to the Named Executive Officers during the year ended December 31, 2017.
Grants of Plan-Based Awards - 2017
|
|
|
|
|
Estimated
Possible Payouts
Under Non-Equity Incentive
Plan Awards (1)
|
|
|
Estimated
Possible Payouts of
Shares Under Equity Incentive
Plan Awards (2)
|
|
|
All
Other
Stock
Awards:
Number of
Shares of
|
|
|
Exercise
or
Base Price
of Option
|
|
|
Grant
Date Fair
Value of
Stock
and
Option
|
|
Name
|
|
Grant
Date
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
Stock
or
Units (#)
|
|
|
Awards
($ / Sh)
|
|
|
Awards
($) (3)
|
|
Michael
J. Renna
|
|
|
1/1/2017
(4)
|
|
|
|
0
|
|
|
|
700,000
|
|
|
|
1,050,000
|
|
|
|
0
|
|
|
|
29,089
|
|
|
|
58,178
|
|
|
|
—
|
|
|
|
—
|
|
|
|
957,901
|
|
|
|
|
1/1/2017
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,467
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
420,013
|
|
Stephen
H. Clark
|
|
|
1/1/2017
(4)
|
|
|
|
0
|
|
|
|
287,000
|
|
|
|
430,500
|
|
|
|
0
|
|
|
|
8,519
|
|
|
|
17,038
|
|
|
|
—
|
|
|
|
—
|
|
|
|
280,531
|
|
|
|
|
1/1/2017
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,651
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
123,002
|
|
Jeffrey
E. DuBois
|
|
|
1/1/2017
(4)
|
|
|
|
0
|
|
|
|
297,500
|
|
|
|
446,250
|
|
|
|
0
|
|
|
|
8,831
|
|
|
|
17,662
|
|
|
|
—
|
|
|
|
—
|
|
|
|
290,805
|
|
|
|
|
1/1/2017
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,785
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
127,517
|
|
David
Robbins
|
|
|
1/1/2017
(4)
|
|
|
|
0
|
|
|
|
238,000
|
|
|
|
357,000
|
|
|
|
0
|
|
|
|
7,064
|
|
|
|
14,128
|
|
|
|
—
|
|
|
|
—
|
|
|
|
232,618
|
|
|
|
|
1/1/2017
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,028
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
102,013
|
|
Kathleen A. McEndy
|
|
|
1/1/2017
(4)
|
|
|
|
0
|
|
|
|
216,000
|
|
|
|
324,000
|
|
|
|
0
|
|
|
|
6,358
|
|
|
|
12,716
|
|
|
|
—
|
|
|
|
—
|
|
|
|
209,369
|
|
|
|
|
1/1/2017
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,725
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
91,805
|
|
(1)
|
Amounts represent potential
cash awards payable to our NEOs determined by the level of performance achieved against the 2017 goals. Actual cash awards paid
to our NEOs for 2017 performance are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary
Compensation Table.
|
(2)
|
Represents the possible
payout of shares of the performance-based restricted stock grants and time-based restricted stock grants with a performance condition
to each NEO.
|
(3)
|
Represents the full grant
date fair value of the grants of restricted stock calculated in accordance with FASB ASC Topic 718. See Footnote 2 of the financial
statements for additional information, including valuation assumptions used in calculating the fair value of the awards.
|
(4)
|
Represents performance-based
restricted stock grants with a performance period from 2017-2019.
|
(5)
|
Represents time-based restricted
stock grants subject to a 1-year ROE performance condition. Number of shares represents where award will pay out if the performance
condition is achieved. There are no threshold/maximum levels for the award. If the performance condition is not achieved, the
award will not vest.
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
39
|
Compensation Discussion & Analysis
Equity Awards
The following table sets forth certain information
concerning outstanding restricted stock awards for the Named Executive Officers as of December 31, 2017.
Outstanding Equity Awards at Fiscal Year-End
- 2017
Stock Awards
Name
|
|
Year
|
|
|
Number of Shares
or Units of Stock
That Have Not
Vested (#)
|
|
|
Market Value of
Shares or Units of
Stock That Have
Not Vested ($)
|
|
|
Equity Incentive Plan
Awards: Number of
Unearned Shares,
Units or Other
Rights That Have Not
Vested (#) (1)
|
|
|
Equity Incentive Plan
Awards: Market or Payout
Value of Unearned Shares,
Units or Other Rights That
Have Not Vested ($) (2)
|
|
Michael J. Renna
|
|
|
2017
|
(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
29,089
|
|
|
|
908,449
|
|
|
|
|
2017
|
(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
12,467
|
|
|
|
389,344
|
|
|
|
|
2016
|
(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
30,610
|
|
|
|
955,950
|
|
|
|
|
2016
|
(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
8,746
|
|
|
|
273,138
|
|
|
|
|
2015
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
17,818
|
|
|
|
556,456
|
|
|
|
|
2015
|
(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
2,544
|
|
|
|
79,449
|
|
|
|
|
2015
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,584
|
|
|
|
49,468
|
|
|
|
|
2015
|
(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
226
|
|
|
|
7,058
|
|
Stephen H. Clark
|
|
|
2017
|
(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
8,519
|
|
|
|
266,048
|
|
|
|
|
2017
|
(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
3,651
|
|
|
|
114,021
|
|
|
|
|
2016
|
(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
9,740
|
|
|
|
304,180
|
|
|
|
|
2016
|
(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
2,783
|
|
|
|
86,913
|
|
|
|
|
2015
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
5,820
|
|
|
|
181,759
|
|
|
|
|
2015
|
(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
830
|
|
|
|
25,921
|
|
Jeffrey E. DuBois
|
|
|
2017
|
(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
8,831
|
|
|
|
275,792
|
|
|
|
|
2017
|
(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
3,785
|
|
|
|
118,206
|
|
|
|
|
2016
|
(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
12,024
|
|
|
|
375,510
|
|
|
|
|
2016
|
(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
3,435
|
|
|
|
107,275
|
|
|
|
|
2015
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
9,266
|
|
|
|
289,377
|
|
|
|
|
2015
|
(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
1,322
|
|
|
|
41,286
|
|
David Robbins
|
|
|
2017
|
(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
7,064
|
|
|
|
220,609
|
|
|
|
|
2017
|
(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
3,028
|
|
|
|
94,564
|
|
|
|
|
2016
|
(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
8,036
|
|
|
|
250,964
|
|
|
|
|
2016
|
(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
2,296
|
|
|
|
71,704
|
|
|
|
|
2015
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
3,824
|
|
|
|
119,424
|
|
|
|
|
2015
|
(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
548
|
|
|
|
17,114
|
|
Kathleen A. McEndy
|
|
|
2017
|
(3)
|
|
|
—
|
|
|
|
—
|
|
|
|
6,358
|
|
|
|
198,560
|
|
|
|
|
2017
|
(4)
|
|
|
—
|
|
|
|
—
|
|
|
|
2,725
|
|
|
|
85,102
|
|
|
|
|
2016
|
(5)
|
|
|
—
|
|
|
|
—
|
|
|
|
8,348
|
|
|
|
260,708
|
|
|
|
|
2016
|
(6)
|
|
|
—
|
|
|
|
—
|
|
|
|
2,385
|
|
|
|
74,484
|
|
|
|
|
2015
|
(7)
|
|
|
—
|
|
|
|
—
|
|
|
|
4,990
|
|
|
|
155,838
|
|
|
|
|
2015
|
(8)
|
|
|
—
|
|
|
|
—
|
|
|
|
714
|
|
|
|
22,298
|
|
|
(1)
|
Represents grants of performance-based
restricted stock at target performance and time-based restricted stock assuming the performance hurdle is met. For performance-based
restricted stock, actual awards could range from 50 percent to 200 percent of target performance, with 0 percent payout for below
threshold performance. For time based restricted stock, no shares will vest if the performance hurdle is not achieved.
|
|
(2)
|
Market value of Company
common stock at December 31, 2017 was $31.23 and was used to calculate market value.
|
|
(3)
|
These awards consist of
performance-based restricted stock that would vest in March 2020 if the performance criteria are satisfied. The number of shares
is shown at target assuming the performance criteria are satisfied.
|
|
(4)
|
These awards consist of
time-based restricted stock with a 1-year performance condition. The performance criteria has been satisfied, and the awards will
vest in three equal installments in March 2018, January 2019 and January 2020.
|
|
(5)
|
These awards consist of
performance-based restricted stock that would vest in March 2019 if the performance criteria are satisfied. The number of shares
is shown at target assuming the performance criteria are satisfied.
|
40
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
(6)
|
These awards consist of
time-based restricted stock with a 1-year performance condition. The performance criteria has been satisfied, and the awards will
vest in three equal installments with the first portion having vested in March 2017, and the remaining portions to vest in January
2018 and January 2019.
|
(7)
|
These awards consist of
performance-based restricted stock that would vest in March 2018 if the performance criteria are satisfied. The number of shares
is shown at target assuming the performance criteria are satisfied.
|
(8)
|
These awards consist of
time-based restricted stock with a 1-year performance condition. The performance criteria has been satisfied, and the awards will
vest in three equal installments with the first two portions having vested in March 2016 and January 2017, and the remaining portion
to vest in January 2018.
|
|
|
Stock Vesting - 2017
The following table sets forth certain information
concerning the vesting of restricted stock for the Company’s Named Executive Officers during the year ended December 31,
2017. No options are outstanding and none were exercised by the NEOs during the year ended December 31, 2017.
Stock Vested – 2017
Stock Awards
Name
|
|
Number of
Shares Acquired on
Vesting (#) (1)
|
|
|
Value Realized
on Vesting ($) (2)
|
|
Michael J. Renna
|
|
|
12,303
|
|
|
|
428,661
|
|
Stephen H. Clark
|
|
|
4,313
|
|
|
|
150,495
|
|
Jeffrey E. DuBois
|
|
|
6,559
|
|
|
|
228,760
|
|
David Robbins
|
|
|
2,975
|
|
|
|
103,838
|
|
Kathleen A. McEndy
|
|
|
4,307
|
|
|
|
150,496
|
|
(1)
|
This column represents the
portion of the time-based restricted stock awards granted in 2015 that vested on January 1, 2017, the portion of the time-based
restricted stock granted in 2016 that vested on March 1, 2017 and the performance-based restricted stock awards granted in 2014
that vested on March 1, 2017 based on performance from 2014 to 2016.
|
(2)
|
The dollar value is calculated
by multiplying the number of shares that vested by the market value of the Company’s common stock on the respective vesting
date. The closing prices on the vesting dates of January 1, 2017 and March 1, 2017, were $33.69 and $35.21, respectively.
|
|
|
Pension Benefits Table
Name
|
|
Plan Name (1) (2)
|
|
Number of Years Credited
Service Under Plan at FAS
Measurement Date
|
|
|
Present Value of
Accumulated Benefit (3)
|
|
|
Payments During
Last Fiscal Year
|
|
|
|
Retirement Plan for
Employees of SJI
|
|
|
19
|
|
|
$
|
674,000
|
|
|
$
|
0
|
|
Michael
J. Renna
|
|
SJI Supplemental Executive
Retirement Plan
|
|
|
20
|
|
|
$
|
5,345,000
|
|
|
$
|
0
|
|
|
|
Retirement Plan for
Employees of SJI
|
|
|
20
|
|
|
$
|
986,000
|
|
|
$
|
0
|
|
Stephen
H. Clark
|
|
SJI Supplemental Executive
Retirement Plan
|
|
|
21
|
|
|
$
|
3,603,000
|
|
|
$
|
0
|
|
|
|
Retirement Plan for
Employees of SJI
|
|
|
30
|
|
|
$
|
1,403,000
|
|
|
$
|
0
|
|
Jeffrey
E. DuBois
|
|
SJI Supplemental Executive
Retirement Plan
|
|
|
31
|
|
|
$
|
5,886,000
|
|
|
$
|
0
|
|
|
|
Retirement Plan for
Employees of SJI
|
|
|
21
|
|
|
$
|
903,000
|
|
|
$
|
0
|
|
David
Robbins
|
|
SJI Supplemental Executive
Retirement Plan
|
|
|
22
|
|
|
$
|
2,497,000
|
|
|
$
|
0
|
|
|
|
Retirement Plan for
Employees of SJI
|
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen
A. McEndy
|
|
SJI Supplemental Executive
Retirement Plan
|
|
|
5
|
|
|
$
|
1,227,000
|
|
|
$
|
0
|
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
41
|
Compensation Discussion & Analysis
(1)
|
Employees who became an
officer prior to April 30, 2016 will be eligible for the South Jersey Industries, Inc. Supplemental Executive Retirement Plan
(the “SERP”) once they have attained age 50.
|
|
A participant is
eligible for a normal retirement benefit under the SERP after having attained age 60. We base the normal retirement benefit on
2 percent of the participant’s “final average compensation” multiplied by years of credited service (up to 30
years), plus an additional 5 percent of final average compensation. “Final average compensation” is the average of
the participant’s base pay plus annual incentive award for the highest three years in the final six years of employment.
|
|
A participant is eligible
for an early retirement benefit under the SERP after having attained age 55. A participant’s early retirement benefit equals
his or her normal retirement benefit reduced by 2 percent per year. The SERP benefit for officers hired on or after July 1, 2003
reflects a reduction for the annuity equivalent of the employer provided benefit under the Company’s 401(k) Plan.
|
|
The SERP’s normal
form of payment is a life annuity with six years guaranteed.
|
(2)
|
The Retirement Plan for
Employees of South Jersey Industries, Inc. (the “Retirement Plan”) provides benefits to non-bargaining employees who
were hired before July 1, 2003. Eligibility for the Retirement Plan for Employees of SJI began after one year of service. The
plan defines Normal Retirement Age as age 65. A Participant is eligible for a non-reduced benefit under the Retirement Plan after
having attained age 60 with 5 years of service. We base the normal retirement benefit on the sum of (a) the participant’s
accrued benefit as of September 30, 1989 increased 5 percent per year thereafter, and (b) 1.00 percent of the participant’s
“final average compensation” plus 0.35 percent of the participant’s final average compensation in excess of
covered compensation, multiplied by years of credited service after September 30, 1989 (up to 35 years less credited service as
of September 30, 1989). “Final average compensation” is the average of the participant’s base pay plus commissions
for the highest three years of the final six years of employment immediately preceding retirement, as defined by the plan.
|
|
A participant is eligible
for an early retirement benefit under the Retirement Plan after having attained age 55 and completed five years of service. A
participant’s early retirement benefit equals his or her normal retirement benefit reduced by 2 percent per year prior to
age 60. The Retirement Plan’s normal form of payment is a life annuity with six years guaranteed.
|
(3)
|
We base present values for
participants on a 3.73 percent discount rate and RP-2017 bases tables with MP-2017 generational projection scale (postretirement
only), and no preretirement decrements.
|
|
|
Nonqualified Deferred Compensation Table
The following table sets forth certain information
regarding the Company’s Restricted Stock Deferral Plan and Non-Qualified Deferred Compensation Plan. The Restricted Stock
Deferral Plan permits the deferral of fully vested shares of restricted stock earned by the Company’s NEOs pursuant to previously
issued performance-based, restricted stock grants. The Company does not make contributions to the plan, and all earnings referenced
in the table represent dividends paid on outstanding shares of common stock.
Beginning July 2017, the company implemented
a Non-Qualified Deferred Compensation Plan which offers NEOs and other
highly compensated employees the ability to defer
pretax base compensation and AIP awards in excess of the maximum benefits that may be provided under the Saving Plan as a result
of limits imposed by the Code. Generally, NEOs may elect to defer up to 75 percent of salary and up to 100 percent of AIP. Deferral
elections are made annually by eligible participants in respect to compensation to be earned for the following year. There were
no contributions by the NEOs under the Non-Qualified Deferred Compensation plan in 2017.
Name
|
Plan
Name
|
Executive
Contribution
in Last FY
|
Registrant
Contributions
in Last FY
|
Aggregate
Earnings in
Last FY (2)
|
Aggregate
Withdrawals
Distribution
|
Aggregate
Balance in
Last FYE (1)
|
Michael J. Renna
|
Restricted Stock Deferral Plan
|
|
|
|
|
|
|
Non-Qualified
Deferred
Compensation plan
|
|
|
|
|
|
Stephen H. Clark
|
Restricted Stock Deferral Plan
|
|
|
|
|
|
|
Non-Qualified
Deferred
Compensation plan
|
|
|
|
|
|
Jeffrey E. DuBois
|
Restricted Stock Deferral Plan
|
3,274
|
|
107
|
|
105,578
|
|
Non-Qualified
Deferred
Compensation plan
|
|
|
|
|
|
David Robbins
|
Restricted Stock Deferral Plan
|
1,639
|
|
72
|
|
70,427
|
|
Non-Qualified
Deferred
Compensation plan
|
|
|
|
|
|
Kathleen A. McEndy
|
Restricted Stock Deferral Plan
|
|
|
|
|
|
|
Non-Qualified
Deferred
Compensation plan
|
|
|
|
|
|
42
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
(1)
|
The amounts represent the market value of vested
shares of previously restricted stock deferred by the NEOs calculated by multiplying the number of shares of deferred stock
by the market value of the Company’s common stock as of December 31, 2017, which was $31.23.
|
(2)
|
The amounts represent dividends paid on the
deferred common stock. These amounts are not reported in the Summary Compensation Table as they represent dividends earned on
the deferred common stock, which dividends are payable on all outstanding shares of the Company’s common
stock.
|
(3)
|
The amounts represent the
market value of vested shares of previously restricted stock deferred by the NEO. The Company has, in previous years, disclosed
the issuance of the restricted shares as compensation in the Summary Compensation Table for such year.
|
Change in Control Agreements
and Other Potential Post-Employment Payments
All Named Executive Officers are party to a Change
in Control Agreement (“CIC Agreement”) that provides for severance benefits upon a qualifying termination following
a change in control. A summary of the CIC Agreement terms are set below:
•
|
Severance is payable upon
an involuntary termination without cause by the Company or resignation for good reason by the NEO within 1 year following a change
in control. No severance is payable under the CIC agreement upon an involuntary termination without a change in control;
|
|
|
•
|
Severance equals two times
(three times for the CEO) base salary and average annual incentive award for the three fiscal years immediately preceding the
date of termination, along with the reimbursement of COBRA coverage costs for the applicable two or three year period, less the
employee contribution rate;
|
|
|
•
|
NEOs are also entitled to
receive a pro-rated annual incentive payment at target for the fiscal year in which the termination occurs; and
|
|
|
|
•
|
Accelerated vesting of all
time-based equity awards and vesting of performance-based equity awards only to the extent provided in the award agreement evidencing
the performance based award.
|
In addition to the CIC Agreements, all Named
Executive Officers participate in the South Jersey Industries, Inc. Officer Severance Plan effective January 1, 2013 (the “Officer
Severance Plan”) that provides for the following benefits upon an involuntary termination without cause by the Company or
resignation for good reason by the NEO, absent a change in control:
•
|
A lump sum cash payment
equal to one times annual base salary;
|
|
|
•
|
A monthly reimbursement
of the COBRA premium cost for the NEOs and their dependents (where applicable) for 12 months, less the required employee contribution
rate, provided that the NEOs are eligible for and timely elect COBRA continuation coverage; and
|
|
|
•
|
Accelerated vesting of all
time-based equity awards while performance-based awards vest only to the extent provided in the award agreement evidencing the
performance-based awards.
|
Below is an estimate of the amounts payable to
each NEO assuming various termination of employment scenarios on December 31, 2017.
Termination
As of Fiscal Year End 2017
Executive Benefits
and Payments
Upon Termination
|
|
Retirement ($)
|
|
|
Termination
by the
Company
for
Cause ($)
|
|
|
Termination by the NEO
for Good Reason or by the
Company without Cause
following a CIC ($)
|
|
|
Termination by the NEO for
Good Reason or by the
Company without Cause
without a CIC ($)
|
|
Michael J. Renna
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,931,236
|
|
|
$
|
730,448
|
|
Equity Compensation
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,219,313
|
|
|
$
|
359,645
|
|
Stephen H. Clark
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,484,603
|
|
|
$
|
440,448
|
|
Equity Compensation
|
|
$
|
431,724
|
|
|
$
|
0
|
|
|
$
|
978,842
|
|
|
$
|
112,834
|
|
Jeffrey E. DuBois*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
Equity Compensation
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
n/a
|
|
David Robbins
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,182,663
|
|
|
$
|
370,448
|
|
Equity Compensation
|
|
$
|
346,903
|
|
|
$
|
0
|
|
|
$
|
796,990
|
|
|
$
|
96,782
|
|
Kathleen A. McEndy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Compensation
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
1,340,209
|
|
|
$
|
386,001
|
|
Equity Compensation
|
|
$
|
94,533
|
|
|
$
|
0
|
|
|
$
|
774,379
|
|
|
$
|
88,818
|
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
43
|
Compensation Discussion & Analysis
Below is a description of the additional assumptions
that were used in determining the payments in the tables above upon termination as of December 31, 2017:
Retirement
NEOs are entitled to pro-rated vesting of PBRS
upon retirement, based on the applicable 3-year performance period and actual performance. NEOs are also entitled to pro-rated
vesting of TBRS awards upon retirement, based on the applicable 3-year vesting period and achievement of the performance condition.
The amounts for Messrs. Clark and Robbins represent the pro-rated value of outstanding shares from the 2016 and 2017 PBRS awards
based on target level performance, and the pro-rated value of the 2015, 2016 and 2017 TBRS awards. The 2015 PBRS awards have been
included based on actual performance. The amount for Ms. McEndy represents the pro-rated value of outstanding shares from the
2017 PBRS award based on target level performance, and the pro-rated value of the 2017 TBRS award, per the award agreement.
*Mr. DuBois retired from the position of Executive
Vice President and Chief Operating Officer, SJI effective December 31, 2017.
In connection with his retirement, he was entitled
to (i) a payout of his 2017 annual incentive award in the amount of $312,375, (ii) his company car, phone, computer, and tablet,
with an aggregate fair market value of $20,123, as included in the Summary Compensation Table and (iii) a pro-rated payout of
all outstanding shares of restricted stock, based on his service during the applicable performance period and the actual performance
achieved. Assuming a pro-rated payout at actual performance for the 2015 PBRS awards, a pro-rated payout at target level for the
2016 and 2017 outstanding PBRS awards, a pro-rated payout at actual performance for the 2015, 2016, and 2017 TBRS awards, and
using the market value of the Company’s common stock as of December 31, 2017 of $31.23, the value of the outstanding restricted
stock awards would be $528,880. Mr. DuBois is also entitled to certain pension benefits as described under the Pension Benefits
Table.
Change in Control (CIC)
A change in control generally means any of the
following: (1) consummation of a merger or consolidation of the Company with another corporation where the shareholders of the Company, immediately
prior to the merger or consolidation, will not own 50 percent or more of the shares of the surviving corporation; (2) sale or
other disposition of substantially all of the assets of the Company; (3) election to the Board of Directors of SJI a new
majority
different from the current slate, unless each such new director stands for election as a management nominee and is elected by
shareholders immediately prior to the election of any such new majority; or (4) the acquisition by any person(s) of 30 percent
or more of the stock of SJI having general voting rights in the election of directors.
Section 280G Modified Cutback
Termination Following a Change in Control
(Good Reason or Without Cause)
– The CIC Agreements include a modified cutback if any payments under the agreements
(including any other agreements) would otherwise constitute a parachute payment under Section 280G of the Code so that the payments
will be
limited to the greater of (i) the dollar amount which can be paid to the NEO without triggering an excise tax under Section
4999 of the Code or (ii) the greatest after-tax dollar amount after taking into account any excise tax incurred under Section
4999 of the Code with respect to such parachute payments.
Equity Compensation
Retirement
– NEOs are entitled to
pro-rated vesting of PBRS upon retirement, based on the applicable 3-year performance period and actual performance. NEOs are
also entitled to pro-rated vesting of TBRS awards upon retirement, based on the applicable 3-year vesting period and achievement
of the performance condition. The amounts for Messrs. Clark and Robbins represent the pro-rated value of outstanding shares from
the 2016 and 2017 PBRS awards based on target level performance, and the pro-rated value of the 2015, 2016 and 2017 TBRS awards.
The 2015 PBRS awards have been included based on actual performance. The amount for Ms. McEndy represents the pro-rated value
of outstanding shares from the 2017 PBRS award based on target level performance, and the pro-rated value of the 2017 TBRS award,
per the award agreement.
Change in Control
– Upon a qualifying
termination following a change in control, the award agreements currently provide that all unvested PBRS awards that are outstanding
vest and pay
at target level performance. TBRS awards that are outstanding will fully vest. A qualifying termination includes
an involuntary termination without cause by the Company or a resignation for good reason by the NEO, each following a change in
control. The amounts disclosed represent the value of outstanding 2015, 2016 and 2017 PBRS awards based on target level of performance
and the value of 2015, 2016 and 2017 TBRS awards.
Termination Without a Change in Control
– Under the Officer Severance Plan, upon an NEO’s qualifying termination, TBRS awards that are outstanding will fully
vest. PBRS awards that are outstanding are forfeited, in accordance with the terms of the award agreements. A qualifying termination
includes an involuntary termination without cause for the Company or a resignation for good reason by the NEO, absent a change
in control.
Stock Price
– Assumed to be $31.23
based on the market value of the Company’s common stock as of December 31, 2017.
44
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
Compensation Discussion & Analysis
CEO Pay Ratio
The ratio of our CEO’s compensation to
our median employee’s compensation was calculated as required by the SEC pursuant to Item 402(u) of Regulation S-K. Consistent
with the applicable rules we used reasonable estimates in the methodology used to identify our median employee. We determined
our median employee based on 2017 W-2 gross earnings for all individuals who were employed by the Company as of December 31, 2017,
excluding our CEO. This included all full-time and part-time employees of the Company aside from the CEO. Compensation was annualized
for employees hired or on leaves of absence during the year.
After identifying the median employee, we calculated
the median employee’s total 2017 compensation in the same way as
calculated for our NEOs in the Summary Compensation Table
included in this Proxy Statement. Calculated in this manner, our median employee compensation was $157,088. Our CEO’s total
2017 compensation, as set forth in the Summary Compensation Table was $8,287,026. Therefore, our CEO to median employee pay ratio
was 53 to 1. As described in the Summary Compensation Table on page 38, Mr. Renna’s change in pension value and nonqualified
compensation earnings for 2017 is not reflective of his compensation levels going forward. If we eliminated the change in pension
value and nonqualified compensation earnings from our median employee and CEO’s total compensation, our CEO to median employee
pay ratio would have been 30 to 1.
Securities Authorized for Issuance under
Equity Compensation Plans
The following table provides information as of
December 31, 2017 relating to equity compensation plans of the Company pursuant to
which grants of restricted stock, options or
other rights to acquire shares may be made from time to time.
Equity Compensation Plan Information
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Plan Category
|
|
Number of securities to
be issued upon
exercise
of outstanding options,
warrants and rights
(#)
|
|
|
Weighted average exercise
price of outstanding options,
warrants and rights
($) (1)
|
|
|
Number of securities remaining
available for future issuance
under equity compensation
plans excluding securities
reflected in column (a)
(#)
|
|
Equity compensation plans
approved by security
holders
(2)
|
|
|
455,127
|
|
|
|
—
|
|
|
|
1,820,541
|
|
Equity compensation plans
not approved by security
holders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total 2015 Omnibus
Equity Compensation Plan
|
|
|
455,127
|
|
|
|
—
|
|
|
|
1,820,541
|
|
(1)
|
Only restricted stock has
been issued. The restricted stock is issuable for no additional consideration, and therefore, the shares are not included in the
calculation of weighted average exercise price.
|
(2)
|
These plans include those
used to make awards of performance-based and time-based restricted stock to the Company’s Officers and restricted stock
to the Directors under the 2015 Omnibus Equity Compensation Plan.
|
|
South
Jersey Industries, Inc. - 2018 Proxy Statement
|
|
45
|
FINANCIAL