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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.   )
Filed by the Registrant ☒
Filed by a Party other than the Registrant
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under Rule 14a-12
NISOURCE INC.
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
 
 
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
 
 
 
 
(1)
Title of each class of securities to which transaction applies:
 
 
 
 
(2)
Aggregate number of securities to which transaction applies:
 
 
 
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
 
 
(4)
Proposed maximum aggregate value of transaction:
 
 
 
 
(5)
Total fee paid:
 
 
 
Fee paid previously with preliminary materials.
 
 
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
 
 
 
(1)
Amount Previously Paid:
 
 
 
 
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Form, Schedule or Registration Statement No.:
 
 
 
 
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Filing Party:
 
 
 
 
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Date Filed:
 
 
 

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NiSource Inc.,
801 E. 86th Avenue, • Merrillville, Indiana 46410 • (877) 647-5990
NOTICE OF ANNUAL MEETING
April 13, 2020
To the Holders of Our Common Stock:
The 2020 annual meeting of stockholders (the “Annual Meeting”) of NiSource Inc., a Delaware corporation, will be conducted in a virtual format only via live audio webcast on Tuesday, May 19, 2020, at 1:00 p.m. Central Time at www.virtualshareholdermeeting.com/NI2020, for the following purposes:
(1)
To elect twelve directors named in the proxy statement to hold office until the next annual stockholders’ meeting and until their respective successors have been elected or appointed and qualified;
(2)
To approve named executive officer compensation on an advisory basis;
(3)
To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2020;
(4)
To approve the NiSource Inc. 2020 Omnibus Incentive Plan;
(5)
To consider a stockholder proposal regarding stockholder right to act by written consent, if properly presented; and
(6)
To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
In light of public health concerns regarding the coronavirus (“COVID-19”) outbreak, this year’s Annual Meeting will be conducted in a virtual format only in order to assist in protecting the health and well-being of our stockholders and employees and to provide access to our stockholders regardless of geographic location. There is no in-person meeting for you to attend. We designed the format of this year's Annual Meeting to ensure that our stockholders who attend the Annual Meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting.
All stockholders of record as of the close of business on March 24, 2020, are eligible to vote at the Annual Meeting and any adjournment or postponement thereof.
Your vote is very important. Whether or not you plan to attend the virtual Annual Meeting, please vote at your earliest convenience by telephone, through the Internet or by completing and mailing the enclosed proxy card. If you later choose to revoke your proxy or change your vote, you may do so by following the procedures described in the attached proxy statement. See the section “Attending and Voting During the Virtual Annual Meeting” for specific instructions on voting your shares at the Annual Meeting.
PLEASE VOTE YOUR SHARES AS SOON AS POSSIBLE BY TELEPHONE, THROUGH THE INTERNET OR BY PROMPTLY MARKING, DATING, SIGNING AND RETURNING THE ENCLOSED PROXY CARD.
 

 
Anne-Marie W. D'Angelo
 
Senior Vice President, General Counsel
and Corporate Secretary
Important Notice Regarding the Availability of Proxy Materials
For the Annual Meeting of Stockholders to be Held on May 19, 2020
The Proxy Statement, Notice of Annual Meeting and 2019 Annual Report to Stockholders
are available at https://www.nisource.com/filings

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PROXY STATEMENT SUMMARY
This summary highlights information that may be expanded upon elsewhere in this proxy statement (“Proxy Statement”). This summary does not contain all of the information that you should consider and you should read the entire Proxy Statement before voting. The accompanying proxy is solicited on behalf of the Board of Directors of NiSource Inc. (the “Board”) for the 2020 annual meeting of the stockholders (the “Annual Meeting”).

2020 ANNUAL MEETING OF STOCKHOLDERS
Time and Date: 1:00 p.m. Central Time on Tuesday, May 19, 2020
Website: www.virtualshareholdermeeting.com/NI2020
Record Date: March 24, 2020
Shares of Common Stock Outstanding on Record Date: 382,683,443
Voting: Each share is entitled to one vote for each director to be elected and on each matter to be voted upon at the Annual Meeting.
This proxy statement and the accompanying proxy card are first being sent to stockholders on April 13, 2020.

VOTING MATTERS AND BOARD RECOMMENDATIONS
Item
 
Board
Recommendations
Page
Reference
Proposal 1
To elect twelve directors named in this proxy statement;
For All Nominees
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Proposal 2
To approve the compensation of our named executive officers (the “Named Executive Officers”) on an advisory basis;
For
Proposal 3
To ratify Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for 2020;
For
Proposal 4
To approve the NiSource Inc. 2020 Omnibus Incentive Plan; and
For
Proposal 5
To consider a stockholder proposal regarding stockholder right to act by written consent.
Against
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BOARD OF DIRECTORS NOMINEES
Director Nominees (12)
Board Committees
Name
Age
Director
Since
Position
Audit
Comp
Finance
ESS
Nom
&
Gov
Peter A. Altabef
60
2017
Chairman & CEO, Unisys Corporation
✔*
Theodore H. Bunting, Jr.
61
2018
Retired Group President, Entergy Corporation
Eric L. Butler
59
2017
President and CEO, Aswani-Butler Investment Associates
✔*
Aristides S. Candris
68
2012
Retired President & CEO, Westinghouse
✔*
Wayne S. DeVeydt
50
2016
Executive Chairman, Surgery Partners, Inc.
Joseph Hamrock
57
2015
President & CEO, NiSource Inc.
Deborah A. Henretta
58
2015
Partner, G100 Companies; Retired Group President, Procter & Gamble Co.
Deborah A. P. Hersman
50
2019
Consultant at Waymo LLC
Michael E. Jesanis
63
2008
Retired President & CEO, National Grid USA
✔*
Kevin T. Kabat
63
2015
Chairman of the Board, NiSource Inc.
Carolyn Y. Woo
65
1998
Retired President & CEO, Catholic Relief Services
✔*
Lloyd M. Yates
59
2020
Retired Executive Vice President, Duke Energy Corporation
*Chair of Committee
✔11 of 12
Are
Independent
(92%)
✔3 of 12
Are
Female
(25%)
✔4 of 12
Are
Diverse (Race/Ethnicity)
(33%)
✔Average Director
Age:
59 Years
✔Average Director
Tenure:
6 Years
See “Proposal 1 – Election of Directors” for more information on our director nominees.

CORPORATE GOVERNANCE HIGHLIGHTS
Annual election of directors
Majority voting for all directors with resignation policy
No supermajority voting provisions
No stockholder rights plan (“poison pill”)
Proxy access by-law (3% ownership / 3 years duration / 20% of board)
Stockholder right to call special meetings
Separate chairman and CEO
All directors independent except CEO
Board committees comprised of all independent directors
Regular executive sessions of independent directors
Annual Board and committee evaluation process and ongoing evaluations of individual directors
Strategic and risk oversight by Board and committees
Annual “Say-on-Pay” advisory votes
Strong alignment between pay and performance in incentive plans
Commitment to safety and customer care
Political contributions disclosure
Enhanced independent registered public accounting firm disclosure
See “Corporate Governance” for more information on our corporate governance practices.
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EXECUTIVE COMPENSATION HIGHLIGHTS
 
We have designed our executive compensation program to meet our business objectives using various compensation elements intended to drive both long-term and short-term performance. We believe that a significant portion of total compensation should consist of at-risk performance-based compensation. Our executive compensation practices include the following, each of which the Compensation Committee believes reinforces our executive compensation policy and objectives.
 
 
See “Executive Compensation” for more information on our executive compensation program.
 
 
 
 
We DO Have This Practice
We Do NOT Have This Practice
 
 
Incentive award metrics that are tied to key company performance measures
X
Repricing of options without stockholder approval
 
 
Share ownership guidelines applicable to executive officers and independent directors
X
Hedging or pledging transactions or short sales by executive officers or directors
 
 
Compensation recoupment policy
X
Tax gross-ups for Named Executive Officers
 
 
Limited perquisites
X
Automatic single-trigger equity vesting upon a change-in-control
 
 
Prohibition against pledging unearned shares in our long-term incentive plan
X
Excise tax gross-ups under change-in-control agreements
 
 
Double-trigger severance benefits upon a change-in-control
X
Excessive pension benefits or defined benefit supplemental executive retirement plan
 
 
One-year minimum vesting for equity awards
X
Excessive use of non-performance based compensation
 
 
Significant portions of the executive compensation opportunity that are entirely contingent on performance against pre-established performance goals
X
Excessive severance benefits
 
 
Independent compensation consultant
X
Dividend equivalent rights or dividends on unvested performance shares or restricted stock units granted to executive officers
 
 
Annual Say-on-Pay vote by stockholders
 
 
 
 
 
 
 
 

GENERAL INFORMATION
Stock Symbol:  NI
Stock Exchange:  NYSE
Registrar and Transfer Agent:  Computershare Investor Services
State of Incorporation:  Delaware
Corporate Headquarters:  801 E. 86th Avenue, Merrillville, Indiana 46410
Corporate Website:  www.nisource.com

BUSINESS AND STRATEGY
We are an energy holding company under the Public Utility Holding Company Act of 2005 whose subsidiaries are fully regulated natural gas and electric utility companies serving customers in seven states. We generate substantially all of our operating income through these rate-regulated businesses which are summarized for financial reporting purposes into two primary reportable segments: Gas Distribution Operations and Electric Operations.
Our goal is to develop strategies that benefit all stakeholders as we address changing customer conservation patterns, develop more contemporary pricing structures and embark on long-term infrastructure investment programs. These strategies are intended to improve reliability and safety, enhance customer service, and reduce emissions, while generating sustainable returns.
Our directors possess the necessary breadth and depth of skills and experience to oversee our business operations and long term strategy as set forth in “Proposal 1 – Election of Directors – Biographical Information and Skills.”
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PROXY STATEMENT
The accompanying proxy is solicited on behalf of the Board for the Annual Meeting to be held on Tuesday, May 19, 2020, at 1:00 p.m. Central Time, in a virtual format only via live audio webcast at www.virtualshareholdermeeting.com/NI2020. The common stock, $.01 par value per share, of the Company represented by the accompanying proxy will be voted as directed. If you return a signed proxy card without indicating how you want to vote your shares, the shares represented by the accompanying proxy will be voted as recommended by the Board:
“FOR” all of the nominees for director;
“FOR” advisory approval of the compensation of our Named Executive Officers;
“FOR” the ratification of the appointment of Deloitte as our independent registered public accounting firm for 2020;
“FOR” approval of the NiSource Inc. 2020 Omnibus Incentive Plan; and
“AGAINST” the stockholder proposal regarding stockholder right to act by written consent.
This proxy statement and the accompanying proxy card are first being sent to stockholders on April 13, 2020. We will bear the expense of this mail solicitation, which may be supplemented by telephone, facsimile, email and personal solicitation by our officers, employees and agents. To aid in the solicitation of proxies, we have retained D.F. King for a fee of $9,500, plus reimbursement of expenses. We may incur additional fees if we request additional services. We will also request brokerage houses and other nominees and fiduciaries to forward proxy materials, at our expense, to the beneficial owners of stock held as of 5:00 p.m. Eastern Time on March 24, 2020, the record date for voting.
We use the terms “NiSource,” the “Company,” “we,” “our” and “us” in this proxy statement to refer to NiSource Inc.
Who May Vote
Holders of shares of common stock as of the close of business on March 24, 2020, are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. As of March 24, 2020, 382,683,443 shares of common stock were issued and outstanding. Each share of common stock outstanding on that date is entitled to one vote on each matter presented at the Annual Meeting.
Voting Your Proxy
If you are a “stockholder of record” (that is, if your shares of common stock are registered directly in your name on the Company’s records), you may vote your shares by proxy in advance of the Annual Meeting using any of the following methods:
Telephoning the toll-free number listed on the proxy card;
Using the Internet website listed on the proxy card: www.proxyvote.com; or
Marking, dating, signing and returning the enclosed proxy card.
All votes must be received by the proxy tabulator by 11:59 p.m. Eastern Time on May 18, 2020.
If your shares are held in a brokerage account or by a bank, broker, trust or other nominee (herein referred to as a “Broker”), you are considered a “beneficial owner” of shares held in “street name.” As a beneficial owner, you will receive proxy materials and voting instructions from the stockholder of record that holds your shares. You must follow the voting instructions in order to have your shares of common stock voted.
Discretionary Voting by Brokers and “Broker Non-Votes”
If your shares are held in street name and you do not provide the Broker with instructions as to how to vote such shares, your Broker will only be able to vote your shares at its discretion on certain “routine” matters as permitted by New York Stock Exchange (“NYSE”) rules. The proposal to ratify the appointment of our independent registered public accounting firm is the only proposal considered a routine matter and, accordingly, at the Annual Meeting, Brokers will only have discretionary authority to vote your shares with regard to Proposal No. 3, the ratification of the appointment of Deloitte as our independent registered public accounting firm for 2020. A “broker non-vote” occurs when a Broker holding shares for a beneficial owner does not have discretionary authority to vote the shares and has not received instructions from the beneficial owner as to how the beneficial owner would like the shares to be voted. Brokers will not have discretionary authority to vote your shares with respect to the other proposals to be presented at the Annual Meeting. Therefore, it is important that you instruct your Broker or other nominee how to vote your shares. If Brokers exercise their discretionary voting authority on Proposal No. 3, such shares will be considered present at the Annual Meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting, which are considered “non-routine.”
Voting Shares Held in Our 401(k) Plan
If you hold your shares of common stock in our 401(k) Plan, those shares are held in the name of Fidelity Management Trust Company (“Fidelity”), the administrator of the 401(k) Plan. You will receive a proxy card that includes the number of shares of our common stock held in the 401(k) Plan. You should instruct Fidelity how to vote your shares by completing and returning the proxy card or by voting your shares by Internet or by telephone, as detailed above under “Voting Your Proxy.” If you do not instruct Fidelity how to vote your shares, or if you sign the proxy card with no further instructions as to how to vote your shares, Fidelity will vote your shares in the same proportion as the shares for which it receives instructions from all other participants, to the extent permitted under applicable law. To allow enough time for Fidelity to vote your shares in accordance with your direction, your voting instructions must be received by Fidelity no later than 11:59 p.m. Eastern Time on May 14, 2020.
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Attending and Voting During the Virtual Annual Meeting
Format of Meeting. In light of public health concerns regarding the coronavirus (“COVID-19”) outbreak, this year’s Annual Meeting will be conducted in a virtual format only in order to assist in protecting the health and well-being of our stockholders and employees and to provide access to our stockholders regardless of geographic location. There is no in-person meeting for you to attend. We designed the format of this year's Annual Meeting to ensure that our stockholders who attend the Annual Meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting.
Attending the Meeting. You are entitled to attend and participate in the Annual Meeting if you were a stockholder of record as of the close of business on March 24, 2020, the record date, or hold a legal proxy for the Annual Meeting provided by your Broker as described below. To attend and participate in the Annual Meeting, visit www.virtualshareholdermeeting.com/NI2020 and enter your 16-digit control number, which can be found on your proxy card, voting instruction form or email you received with your proxy materials. If your shares are held by a Broker and you do not have a control number, please contact your Broker as soon as possible so that you can be provided with a control number.
Voting During the Meeting. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. If your shares are held in street name by a Broker, then, in order to be able to vote at the Annual Meeting, you must obtain an executed legal proxy from the Broker indicating that you were the beneficial owner of the shares on March 24, 2020, the record date for voting, and that the Broker is giving you its proxy to vote the shares. If your shares are held in the 401(k) Plan, you will not be able to vote your shares at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described above under “Voting Your Proxy.” Votes cast at the Annual Meeting or represented by proxy at the Annual Meeting will be tabulated by the inspector of election.
Technical Assistance. The Annual Meeting will begin promptly at 1:00 p.m. Central Time. We encourage you to access the Annual Meeting approximately 15 minutes in advance to allow ample time for you to log in to the meeting and test your computer audio system. We recommend that you carefully review the above procedures needed to gain admission in advance. Technicians will be ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the meeting login page at www.virtualshareholdermeeting.com/NI2020.
Submitting Questions During the Meeting. As part of the Annual Meeting, we will hold a live question and answer session during which we intend to answer questions submitted during the meeting that are relevant to the purposes of the meeting and the Company's business in accordance with the Annual Meeting procedures posted on the meeting website, as time permits. Questions may be submitted by stockholders that have used 16-digit control numbers to enter the meeting at www.virtualshareholdermeeting.com/NI2020. Questions and answers may be grouped by topic and substantially similar questions may be grouped and answered once.
Revoking Your Proxy
You may revoke your proxy at any time before a vote is taken or the authority granted is otherwise exercised. To revoke a proxy, you may send a letter to our Corporate Secretary (which must be received before a vote is taken) indicating that you want to revoke your proxy, or you can supersede your initial proxy by submitting a duly executed proxy bearing a later date, voting by telephone or through the Internet on a later date, or attending the virtual Annual Meeting and voting during the meeting. Attending the virtual Annual Meeting will not in and of itself revoke a proxy.
Quorum for the Meeting
A quorum of stockholders is necessary to take action at the Annual Meeting. A majority of the outstanding shares of common stock, present during the virtual Annual Meeting or represented by proxy, will constitute a quorum at the Annual Meeting. The inspectors of election appointed for the Annual Meeting will determine whether or not a quorum is present. Abstentions are counted for purposes of determining whether a quorum is present. As explained above under “Discretionary Voting by Brokers and ‘Broker Non-Votes,” if Brokers exercise their discretionary voting authority on Proposal No. 3, such shares will be considered present at the meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting.
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PROPOSAL 1 — ELECTION OF DIRECTORS
At the recommendation of the Nominating and Governance Committee, the Board has nominated the persons listed below to serve as directors, each for a one-year term, beginning at the Annual Meeting on May 19, 2020, and expiring at the 2021 annual meeting of our stockholders (the “2021 Annual Meeting”) and until their successors are duly elected or appointed and qualified. The nominees include eleven independent directors, as defined in the applicable rules of the NYSE, and our President and Chief Executive Officer (“CEO”). The Board does not anticipate that any of the nominees will be unable to serve, but if any nominee is unable to serve, the proxies will be voted in accordance with the judgment of the person or persons voting the proxies. All of the nominees currently serve on the Board. Set forth below is information regarding all of our nominees (each of whom has consented to being named in the Proxy Statement and to serving, if elected).
Vote Required
In order to be elected, a nominee must receive more votes cast in favor of his or her election than against election. Abstentions by those present or represented by proxy will not be counted as a vote cast either “for” or “against” with respect to the election of directors and, therefore, will have no effect on the outcome. Brokers will not have discretionary authority to vote on the election of directors. Accordingly, there could be broker non-votes which will have no effect on the vote.
Under our Corporate Governance Guidelines, each nominee will tender a conditional resignation prior to the Annual Meeting, effective only if both (a) the votes “against” a nominee’s election exceed the votes “for” election (a “failed re-election”) and (b) such resignation is subsequently accepted by the Board. Any failed re-election will be referred to the Nominating and Governance Committee, which will make a recommendation to the Board as to whether to accept or reject the resignation. The Board will make a determination and publicly disclose its decision, the rationale for the decision and the directors who participated in the process within 90 days after the election. The Board expects the director who has not been re-elected to abstain from participating in the Nominating and Governance Committee or Board discussion or vote regarding whether to accept his or her resignation offer. A director who has had a failed re-election may participate in discussions or votes with respect to other directors who have had a failed re-election.
Biographical Information and Skills
Biographical information regarding each director nominee and his or her qualifications to serve as a director is set forth on the succeeding pages.
Our director nominees possess the necessary breadth and depth of skills and experience to oversee our business operations and long-term strategy as shown below:*
Industry Experience
 
 •
Gas Distribution or Transmission (50%)
 
 •
Electricity Distribution, Transmission or Generation (50%)
 
 •
Energy Markets or Technology (67%)
Other Operations / Customer Service (92%)
Government and Regulatory (92%)
Public Company Board (75%)
Financial or Capital Markets (83%)
Risk Management (100%)
Technology (58%)
Safety (67%)
Environmental, Sustainability, Corporate Responsibility and Ethics (100%)
Non-Profit Board / Community Service (92%)
CEO (Current or Prior) (83%)
Strategic Planning (100%)
Financial Literacy and Expertise (100%)
Talent Management (Executive Compensation and Benefits, and Talent Development) (100%)
* Percentages shown represent the portion of the Board with the indicated skill or experience.
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THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED BELOW.
Peter A. Altabef

Director Since: 2017
Standing Board Committees:
Age: 60
Environmental, Safety and Sustainability Committee
 
Finance Committee (Chair)
 
Nominating and Governance Committee



Executive Experience: Mr. Altabef currently serves as Chairman and CEO of Unisys Corporation, a global information technology company, a position he has held since January 2015 (becoming Chairman in April 2018). He also served as President from January 2015 through March 2020. Prior to his current role, he served as president and CEO of MICROS Systems, Inc., a provider of integrated software and hardware solutions to the hospitality and retail industries, from 2013 to 2014, when it was acquired by Oracle Corporation. Before that, he served as president and CEO of Perot Systems Corporation from 2004 to 2009, when it was acquired by Dell Inc. Following that transaction, Mr. Altabef served as president of Dell Services, the information technology services and business process solutions unit of Dell Inc. until his departure in 2011.
Outside Board and Other Experience: Mr. Altabef is a Chairman of the board of directors of Unisys Corporation. He is also a member of the President’s National Security Telecommunications Advisory Committee, a board member of EastWest Institute, and a member of the advisory board of Merit Energy Company, LLC and of the board of directors of Petrus Trust Company, LTA. He has previously served as a senior advisor to 2M Companies, Inc., in 2012, and as a director of MICROS Systems, Perot Systems Corporation and Belo Corporation. He is also active in community service activities, having served on the boards and committees of several cultural, medical, educational and charitable organizations and events.
Skills and Qualifications: Mr. Altabef has experience leading large organizations as CEO and a strong background in strategic planning, financial reporting, risk management, business operations and corporate governance. He also has more than 20 years of senior leadership experience at some of the world’s leading information technology companies. As a result, he has a deep understanding of the cybersecurity issues facing businesses today. His overall leadership experience and his cybersecurity background provide the Board with valuable perspective and insight into significant issues that we face.
Theodore H. Bunting, Jr.

Director Since: 2018
Standing Board Committees:
Age: 61
Audit Committee
 
Compensation Committee
 
Environmental, Safety and Sustainability Committee



Executive Experience: Mr. Bunting most recently served as group president, utility operations, at Entergy Corporation (“Entergy”), an integrated energy company, from 2012 until his retirement in 2017. Before that, he was senior vice president and chief accounting officer at Entergy from 2007 to 2012, and chief financial officer of several subsidiaries from 2000 to 2007. He held other management positions of increasing responsibility in accounting and operations at Entergy since joining the company in 1983.
Outside Board and Other Experience: Mr. Bunting has been a director of Unum Group since 2013 and is currently chairman of its regulatory compliance committee and a member of its human capital committee. He previously served as a director of Imation Corp., a global data storage and information security company. He also serves on the board of Foundation for the Mid South and previously served on the board of Hendrix College.
Skills and Qualifications: Mr. Bunting's utility industry knowledge, including his experience in customer service, safety and regulatory relations, are valuable to us as we continue to execute on our robust long-term utility infrastructure investment plans. He also brings additional public company experience in the areas of strategic finance, accounting, auditing, and capital and risk management to the Board. He is a certified public accountant.
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Eric L. Butler

Director Since: 2017
Standing Board Committees:
Age: 59
Audit Committee
 
Compensation Committee (Chair)
 
Nominating and Governance Committee



Executive Experience: Mr. Butler currently is President and CEO of Aswani-Butler Investment Associates, a private equity investment firm. Previously he served in a number of executive leadership roles at Union Pacific Corporation (“Union Pacific”), a transportation company located in Omaha, Nebraska, until his retirement in February 2018. He began his career at Union Pacific in 1985 and held leadership roles in financial planning and analysis and in marketing, sales and commercial, including as Executive Vice President and Chief Marketing Officer from March 2012 to December 2016. He also held leadership roles in supply, procurement and purchasing, including as Vice President and General Manager – Industrial Products from April 2005 to March 2012. Most recently, he was Senior Vice President of Union Pacific from December 2017, Executive Vice President and Chief Administrative Officer from December 2016 through November 2017, and Corporate Secretary from February 2017 through November 2017.
Outside Board and Other Experience: Mr. Butler was appointed to the Federal Reserve Bank of Kansas City’s Omaha Branch Board in 2015 and, in 2018, was elected chairman. Additionally, he serves on the board of the Omaha Airport Authority, which he joined in 2007.
Skills and Qualifications: Mr. Butler developed and led strategic and financial planning, marketing, sales, commercial; and supply, procurement and purchasing for one of the largest transportation companies in the world, Union Pacific. He most recently led the corporate governance, human resources, labor relations and administration functions at Union Pacific. His knowledge of the railroad transportation industry and the challenges in maintaining top-tier safety, customer service and risk management standards while providing an important part of the nation’s infrastructure provides him with unique skills and insights that are valuable to the Board. In addition, he has experience in the purchase of fuel and energy materials and equipment. As a result, Mr. Butler has an understanding of the aging infrastructure, safety, organizational and regulatory issues facing utilities today and provides a fresh viewpoint from an industry that is similarly positioned. His overall leadership experience and his regulated public company background provides the Board with another perspective on significant issues that we face.
Aristides S. Candris

Director Since: 2012
Standing Board Committees:
Age: 68
Environmental, Safety and Sustainability Committee (Chair)
 
Finance Committee
 
Nominating and Governance Committee


Executive Experience: Dr. Candris was President and CEO of Westinghouse Electric Company (“Westinghouse”), Pittsburgh, Pennsylvania, a nuclear engineering company, which was a unit of Tokyo-based Toshiba Corp., from July 2008 until his retirement in March 2012. During his 36 years of service at Westinghouse, Dr. Candris served in various positions, including as Senior Vice President, Nuclear Fuel, from September 2006 to July 2008, and continued to serve on the board of Westinghouse until October 2012.
Outside Board and Other Experience: Dr. Candris is an advisory board member of Atomos Nuclear and Space Corporation. He is also a member of the advisory boards of the Carnegie Institute of Technology and the Wilton E. Scott Institute for Energy Innovation at Carnegie Mellon University. He also serves on the boards of trustees of Transylvania University and the Hellenic-American University and the board of directors of The Hellenic Initiative. He previously served on the boards of Westinghouse, and Kurion Inc.
Skills and Qualifications: Dr. Candris is a nuclear scientist and engineer, and has significant experience leading a global nuclear power company. His knowledge of the electric industry gives him significant insight to the issues impacting the electric utility industry. His experience managing highly technical engineering operations, and particularly his extensive experience and expertise in risk assessment and safety management systems, as well as process optimization methodologies (such as Lean/Six Sigma), are of great value as we build and maintain facilities to address increasing environmental regulations and make long-term strategic decisions on electric power generation and gas and electric delivery. His technical and management skills are helpful as we continue to build and modernize both our transmission and distribution systems. Dr. Candris has great insight from his experience developing customer focused programs and attaining excellence in business processes and behaviors, which will assist us to better meet the increasing expectations of customers and regulators.
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Wayne S. DeVeydt

Director Since: 2016
Standing Board Committees:
Age: 50
Audit Committee
 
Compensation Committee
 
Finance Committee


Executive Experience: Mr. DeVeydt has been serving as Executive Chairman of the board of directors of Surgery Partners, Inc., a healthcare services company, since January 2020. He previously served as Chief Executive Officer and member of the board of directors of Surgery Partners, Inc. from January 2018 to January 2020. Before that, he served as a Senior Advisor to the Global Healthcare division of Bain Capital, a global multi-asset alternative asset firm, from January 2017 to January 2018, and as Executive Vice President and Chief Financial Officer (“CFO”) at Anthem, Inc., a health insurance company and an independent licensee of the Blue Cross and Blue Shield Association, from May 2007 until his retirement in June 2016. He also served as Senior Vice President and Chief Accounting Officer at Anthem, Inc. beginning in 2005 and Chief of Staff to the Chairman and Chief Executive Officer from 2006 to 2007. Prior to joining Anthem, Inc., Mr. DeVeydt was a partner at PricewaterhouseCoopers LLP from 1996 to 2005, where he served in many roles in the financial services industry.
Outside Board and Other Experience: Mr. DeVeydt is Executive Chairman of the board of directors of Surgery Partners, Inc., where he has served on the board since January 2018. He served as a member of the board of directors of Grupo Notre Dame Intermedica from December 2016 until December 2019 and was chair of its audit committee. He also served as a director of Myovant Sciences Ltd. from 2016 until July 2018 and served as its lead independent director, chair of its audit committee, and a member of its compensation committee. Mr. DeVeydt is an active leader in his community through his charitable activities.
Skills and Qualifications: Mr. DeVeydt’s positions as CEO and CFO at public companies in regulated industries and as a partner at PricewaterhouseCoopers LLP provide him with strong financial acumen along with a deep understanding of regulated industry operations and extensive leadership skills, particularly in the areas of accounting and finance. His significant experience in internal controls, capital markets, corporate governance, risk management and strategic planning from both a public company and public accounting perspective make him an asset to the Board.
Joseph Hamrock

Director, President and Chief Executive Officer
Standing Board Committees:
None
Director Since: 2015
 
Age: 57


 
Executive Experience: Mr. Hamrock has been our President and CEO since July 2015. From May 2012 to June 2015, he was Executive Vice President and Group CEO for NiSource’s Gas Distribution Operations, comprised of local gas distribution companies in Kentucky, Maryland, Massachusetts, Ohio, Pennsylvania and Virginia. Prior thereto, he served in a variety of senior executive positions with American Electric Power (“AEP”), an electrical service public utility holding company in Columbus, Ohio, including as President and Chief Operating Officer of AEP Ohio from January 2008 to May 2012. He also served in leadership roles in engineering, transmission and distribution operations, customer service, marketing and information technology.
Outside Board and Other Experience: Mr. Hamrock is currently a member of the board of the American Gas Association, a gas industry trade association. He is also a board member of OhioHealth, a not-for-profit healthcare system in central Ohio, and A Kid Again, which supports families caring for children with life-threatening illnesses.
Skills and Qualifications: Mr. Hamrock has extensive knowledge of our industry from his more than 30 years of experience in a variety of positions at AEP and the Company. He began his career in the energy industry as an electrical engineer in transmission and distribution planning, and progressed to work in commercial and industrial customer services, earning a leadership role in commercial marketing, customer services, and strategic development, among other executive roles, before becoming CEO at NiSource. Consequently, he has a firm understanding of the needs of our customers and is uniquely qualified to lead a focused utility company to meet our customer commitments. Additionally, he has a solid understanding of our organization through his leadership of our gas distribution operations, where he led financial, operational, regulatory and commercial performance for the Columbia gas business. This significant industry experience provides Mr. Hamrock with a unique perspective into our operations, our markets, our people and the strategic vision needed to meet our long-term safety, customer value, business, financial and technology performance goals. In addition, he has been, and continues to be, an active supporter of educational, charitable and utility industry organizations.
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Deborah A. Henretta

Director Since: 2015
Standing Board Committees:
Age: 58
Compensation Committee
 
Environmental, Safety and Sustainability Committee
 
Finance Committee


Executive Experience: Ms. Henretta currently is a partner at G100 Companies, a C-suite learning and development company, where she serves as Senior Advisor spearheading digital transformation practice for SSA & Company, a G100 Company. She retired from Procter & Gamble Co. (“P&G”) in 2015, where she served as Group President of Global e-Business. Prior to her appointment as Group President of Global e-Business in January 2015, she held various senior positions throughout several P&G sectors, including as Group President of Global Beauty from 2012 to 2015 and as Group President of P&G Asia from 2007 to 2012. Prior to her appointment as Group President of P&G Asia, she was President Asia from 2005 to 2007 and President of Global Baby, Toddler and Adult Care from 2004 to 2005. She joined P&G in 1985.
Outside Board and Other Experience: Ms. Henretta has been a director at American Eagle Outfitters, Inc. since 2019. She has been a director at Corning Incorporated since 2013, and currently serves on its audit and corporate relations committees. She is also a director at Meritage Homes Corporation, where she serves on the nominating and corporate governance committee. Ms. Henretta served as a director of Staples, Inc. from June 2016 until September 2017 and served on its compensation committee. Additionally, she serves on the board of trustees for Xavier University and St. Bonaventure University.
Skills and Qualifications: Ms. Henretta has over 30 years of business leadership experience with P&G in a multi-jurisdictional regulatory and competitive business environment. She has experience across many markets, including P&L responsibility for multi-billion dollar businesses at P&G and responsibility for strategic planning, sales, marketing, e-business, government relations and customer service. Ms. Henretta led a dynamic business segment and is, therefore, keenly aware of the delicate balance of keeping pace with customer expectations in a changing environment, as well as maximizing the benefits that inclusion and diversity can provide. Because of this experience, Ms. Henretta brings valuable insights to the Board and strategic leadership to us as we operate in multiple regulatory environments and develop products and customer service programs to meet our customer commitments. In her partner role at G100 Companies, she assisted in establishing a Board Excellence Program, which provides board director education on board oversight and governance responsibilities, including in the areas of digital transformation and cybersecurity.
Deborah A. P. Hersman

Director Since: 2019
Standing Board Committees:
Age: 50
Environmental, Safety and Sustainability Committee
 
Finance Committee


Executive Experience: Ms. Hersman has served as a consultant at Waymo LLC, the self-driving car technology subsidiary of Alphabet Inc., since April 2020 after serving as chief safety officer from January 2019 to April 2020. In this role, she is responsible for consulting on systems safety, field safety and safety management systems across the company’s extensive testing and development programs. From 2014 to 2019, she served as president and chief executive officer of the National Safety Council, a nonprofit organization focused on eliminating preventable deaths at work, in homes and communities, and on the road through leadership, research, education and advocacy.
Outside Board and Other Experience: From 2004 to 2014, she served as a board member and then as chair at the National Transportation Safety Board (the “NTSB”). Previously, she served in a professional staff role for the U.S. Senate Commerce, Science and Transportation Committee, where she played key roles in crafting the Pipeline Safety Improvement Act of 2002 and legislation establishing a new modal administration focused on bus and truck safety.
Skills and Qualifications: Ms. Hersman is a seasoned safety executive, having previously served as the chief executive officer of the National Safety Council and as the chair and chief executive at the NTSB. She has a successful track record running complex safety-focused organizations with numerous stakeholders. A widely respected safety spokesperson driven by mission and a passion for preserving human life, Ms. Hersman also has expertise in the details of navigating crises and strong experience with safety policy legislation and advocacy. Ms. Hersman's extensive safety experience is of great value to the Board as we continue to implement our safety management system and meet our safety commitments to our customers and stakeholders.
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Michael E. Jesanis

Director Since: 2008
Standing Board Committees:
Age: 63
Audit Committee (Chair)
 
Compensation Committee
 
Nominating and Governance Committee



Executive Experience: Mr. Jesanis is a co-founder and, since July 2013, has been Managing Director of HotZero, LLC, a firm formed to develop hot water district energy systems in New England. Mr. Jesanis has served as an advisor to several startups in energy-related fields. From July 2004 through December 2006, Mr. Jesanis was President and CEO of National Grid USA, a natural gas and electric utility, and a subsidiary of National Grid plc, of which Mr. Jesanis was also an Executive Director. Prior to that position, Mr. Jesanis was COO and CFO of National Grid USA from January 2001 to July 2004 and CFO of its predecessor utility holding company from 1998 to 2000.
Outside Board and Other Experience: Mr. Jesanis previously served as a director for several electric and energy companies, including Ameresco, Inc. Mr. Jesanis is the former chair of the board of a college and a past trustee (and past chair of the audit committee) of a university.
Skills and Qualifications: By virtue of his former positions as President and CEO, COO and, prior thereto, CFO, of a major electric and gas utility holding company as well as his current role with an energy efficiency consulting firm, Mr. Jesanis has extensive experience with regulated utilities. He has strong financial acumen and extensive managerial experience, having led modernization efforts in the areas of operating infrastructure improvements, customer service enhancements and management team development. Mr. Jesanis also demonstrates a commitment to education as the former chair of the board of a college and a past trustee (and past chair of the audit committee) of a university. As a result of his former senior managerial roles and his non-profit board service, Mr. Jesanis also has particular expertise with board governance issues.
Kevin T. Kabat

Chairman of the Board
Standing Board Committees:
Director Since: 2015
Nominating and Governance Committee
Age: 63


Executive Experience: From April 2007 to November 2015, Mr. Kabat was CEO of Fifth Third Bancorp, a bank holding company. He continued to serve as Vice Chairman of the board of directors of Fifth Third Bancorp until his retirement in April 2016. Before becoming CEO, he served as Fifth Third Bancorp’s President from June 2006 to September 2012 and as Executive Vice President from December 2003 to June 2006. Additionally, he was previously President and CEO of Fifth Third Bank (Michigan). Prior to that position, he was Vice Chairman and President of Old Kent Bank, which was acquired by Fifth Third Bancorp in 2001.
Outside Board and Other Experience: Mr. Kabat has been a director of Unum Group since 2008 and is currently chairman of the board and chair of its governance committee. In 2016, Mr. Kabat became the lead independent director of E*Trade Financial Corporation and is a member of its bank board and its compensation and governance committees. He has also held leadership positions on the boards and committees of local business, educational, cultural and charitable organizations and campaigns.
Skills and Qualifications: Mr. Kabat has significant leadership experience as a CEO in a regulated industry at a public company. As a result, he has a deep understanding of operating in a regulatory environment and balancing the interests of many stakeholders. His extensive experience in strategic planning, risk management, financial reporting, internal controls and capital markets makes him an asset to the Board, as he is able to provide unique strategic insight, financial expertise and risk management skills. In addition, he has broad corporate governance skills and perspective gained from his service in leadership positions on the boards of other publicly traded companies.
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Carolyn Y. Woo

Director Since: 1998
Standing Board Committees:
Age: 65
Audit Committee
 
Environmental, Safety and Sustainability Committee
 
Nominating and Governance Committee (Chair)

Executive Experience: Dr. Woo was President and CEO of Catholic Relief Services, an international humanitarian agency serving over 100 countries, from January 2012 until her retirement in December 2016. Prior thereto, Dr. Woo was dean and a professor of Entrepreneurial Studies at the Mendoza College of Business, University of Notre Dame in Notre Dame, Indiana.
Outside Board and Other Experience: In addition to serving on our Board, Dr. Woo has been a director at AON plc since 1998, and currently serves on its audit, compliance, and organization and compensation committees. She is also on the board of Arabesque. Since July 2019, she also serves on the International Advisory Group of Equinor ASA. She has previously served on the boards of directors of four additional public companies: Circuit City, St. Joseph Capital Bank, Arvin Industries and Bindley-Western Industries. She is also a current and past board member of several non-profit organizations, including an international relief organization, a large multi-hospital health system, business school accreditation organization, leadership development organizations and an educational organization.
Skills and Qualifications: Dr. Woo’s experience as President and CEO of an international organization provides her with knowledge and experience in managing a large organization. From her experiences at Aon and Catholic Relief Services, she is also familiar with trends and approaches related to global risks. Her experience as the dean of a major business school and her research as a professor of entrepreneurship provides her with a deep understanding of business principles and extensive expertise with management and strategic planning issues. Through her current and previous service on the boards of directors, audit committees and compensation committees of public companies, including a global reinsurance and risk management consulting company, a pharmaceutical distribution company, an international automotive manufacturer and a financial institution, Dr. Woo has developed an excellent understanding of corporate governance, internal control, financial and strategic analysis and risk management issues. Dr. Woo is a leader in the areas of corporate social responsibility, sustainability and ethics, which adds an important perspective to the Board. In 2017, she was named to the Top 100 Most Influential in Business Ethics by the Ethisphere Institute. Dr. Woo’s commitment to social and educational organizations provides her with an important perspective on the various community and social issues confronting us in the communities that we serve.
Lloyd M. Yates

Director Since: 2020
Standing Board Committees:
Age: 59
None



Executive Experience: Mr. Yates retired in 2019 from Duke Energy Corporation (“Duke Energy”), where he most recently served as Executive Vice President, Customer and Delivery Operations, and President, Carolinas Region, since 2014. In this role, he was responsible for aligning customer-focused products and services to deliver a personalized end-to-end customer experience to position Duke Energy for long-term growth, as well as for the profit/loss, strategic direction and performance of Duke Energy’s regulated utilities in North Carolina and South Carolina. Previously, he served as Executive Vice President of Regulated Utilities at Duke Energy, overseeing Duke Energy’s utility operations in six states, federal government affairs, and environmental and energy policy at the state and federal levels, as well as Executive Vice President, Customer Operations, where he led the transmission, distribution, customer services, gas operations and grid modernization functions for millions of utility customers. He held various senior leadership roles at Progress Energy, Inc., prior to its merger with Duke Energy, from 2000 to 2012.
Outside Board and Other Experience: Mr. Yates currently serves on the board of directors of American Water Works Company, Inc., Marsh & McLennan Companies, Inc. and Sonoco Products Company.
Skills and Qualifications: Mr. Yates brings significant energy and regulated utility experience to our Board. He has over 38 years in the energy industry, including in the areas of profit/loss management, customer service, nuclear and fossil generation and energy delivery. At Duke Energy, he used his operational experience to improve safety, reliability and the overall customer experience for millions of customers. He has expertise overseeing regulated utility operations, working with state regulators, and managing consumer and community affairs. He also has experience managing gas and grid modernization functions, which is valuable to our Board as we execute our business strategies. In addition, his experience as a director for other prominent public companies will benefit our Board by bringing additional perspective to a variety of important areas of governance and strategic planning.
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CORPORATE GOVERNANCE
Director Independence
Under our Corporate Governance Guidelines, a majority of the Board must be comprised of “independent directors.” In order to assist the Board in making its determination of director independence, the Board has adopted categorical standards of independence consistent with the standards contained in Section 303A.02 of the NYSE Listed Company Manual. The Board also has adopted an additional independence standard providing that a director who is an executive officer or director of a company that receives payments from us in an amount which exceeds 1% of such other company’s consolidated gross revenues is not “independent” until three years after falling below such threshold. A copy of our Corporate Governance Guidelines is posted on our website at https://www.nisource.com/investors/governance.
The Board has affirmatively determined that, with the exception of Mr. Hamrock, all of the members of the Board and all nominees are “independent directors” as defined in Section 303A.02 of the NYSE Listed Company Manual and meet the additional standard for independence set by the Board.
Policies and Procedures with Respect to Transactions with Related Persons
We have established policies and procedures with respect to the review, approval and ratification of any transactions with related persons.
Under its charter, the Nominating and Governance Committee reviews reports and disclosures of insider and related person transactions. Under our Code of Business Conduct, the following situations may present a conflict of interest and must be reviewed by the Nominating and Governance Committee to determine if they involve a direct or indirect interest of any director, executive officer or employee (including immediate family members) or otherwise present a conflict of interest:
owning more than a 10% equity interest or a general partner interest in any entity that transacts business with the Company (including lending or leasing transactions, but excluding the receipt of utility service from the Company at tariff rates), if the total amount involved in such transactions may exceed $120,000;
selling anything to the Company or buying anything from the Company (including lending or leasing transactions, but excluding the receipt of utility service from the Company at tariff rates), if the total amount involved in such transactions may exceed $120,000;
consulting for or being employed by a competitor of the Company; and
being in the position of supervising, reviewing or having any influence on the job evaluation, pay or benefit of any immediate family member employed by the Company.
Related person transactions are annually reviewed and, if appropriate, ratified by the Nominating and Governance Committee. Directors, individuals subject to Section 16 (“Section 16 Officer(s)”) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and senior executive officers are expected to raise any potential transactions involving a conflict of interest that relate to them with the Nominating and Governance Committee so that they may be reviewed in a prompt manner.
There were no transactions between the Company and any officer, director or nominee for director, or any affiliate of or person related to any of them, since January 1, 2019, of the type or amount required to be disclosed under the applicable Securities and Exchange Commission (“SEC”) rules.
Communications with the Board and Non-Management Directors
Stockholders and other interested persons may communicate any concerns they may have regarding the Company as follows:
Communications to the Board may be made to the Board generally, any director individually, the non-management directors as a group, or the Chairman of the Board, by writing to the following address:
NiSource Inc.
Attention: Board of Directors, or any Board member, or non-management directors, or Chairman
of the Board
c/o Corporate Secretary
801 East 86th Avenue
Merrillville, Indiana 46410
The Audit Committee has approved procedures with respect to the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or audit matters. Communications regarding such matters may be made by contacting our Ethics and Compliance Officer at ethics@nisource.com, calling the business ethics hotline at 1-800-457-2814, or writing to:
NiSource Inc.
Attention: Director, Corporate Ethics
801 East 86th Avenue
Merrillville, Indiana 46410
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Stockholder Engagement
We are committed to engaging with our stockholders and soliciting their views and input on important governance, environmental, social, executive compensation and other matters. Our Nominating and Governance Committee is responsible for overseeing the stockholder engagement process and the periodic review and assessment of stockholder input on governance matters. Our independent directors are available to engage in dialogue with stockholders on matters of significance in order to understand stockholders’ views. In addition, management regularly participates in investor and industry conferences throughout the year to discuss performance and share its perspective on the Company and industry developments.
Code of Business Conduct
We have a Code of Business Conduct to promote: (i) ethical behavior, including the ethical handling of conflicts of interest; (ii) full, fair, accurate, timely and understandable financial disclosure; (iii) compliance with applicable laws, rules and regulations; (iv) accountability for adherence to our code; and (v) prompt internal reporting of violations of our code. Our Code of Business Conduct satisfies applicable SEC and NYSE requirements and applies to all directors, officers (including our principal executive officer, principal financial officer, principal accounting officer and controller), as well as to our employees of and our affiliates. A copy of our Code of Business Conduct is available on our website at https://www.nisource.com/investors/governance and also is available to any stockholder upon written request to our Corporate Secretary at the address noted above under the heading “Communications with the Board and Non-Management Directors.”
Any waiver of our Code of Business Conduct for any director, executive officer or Section 16 officer may be made only by the Audit Committee of the Board and must be promptly disclosed to the extent and in the manner required by the SEC or the NYSE and posted on our website. No such waivers have been granted.
Corporate Governance Guidelines
The Nominating and Governance Committee is responsible for annually reviewing and reassessing the Corporate Governance Guidelines and submitting any recommended changes to the Board for its approval. A copy of the Corporate Governance Guidelines can be found on our website at https://www.nisource.com/investors/governance and is also available to any stockholder upon written request to our Corporate Secretary.
Board Leadership Structure
Our Corporate Governance Guidelines state that we should remain free to configure leadership of the Board in the way that best serves our interests at the time and, accordingly, the Board has no fixed policy with respect to combining or separating the offices of Chairman and CEO. If the Chairman is not an independent director, an independent Lead Director will be chosen annually by the Board, taking into account the recommendation of the Nominating and Governance Committee. The Chairman or, if the Chairman is not an independent director, the Lead Director will be the presiding director of executive sessions of the Board. To promote open discussion among the non-management directors, the Board schedules regular executive sessions at meetings of the Board and each of its committees.
Since late 2006, the offices of Chairman and CEO of the Company have been held by different individuals, with the Chairman being an independent director.
The duties of the Chairman of the Board are as follows:
providing leadership to the Board and management, and monitoring the discharge of their duties;
presiding at meetings of stockholders and the Board, including executive sessions of the Board and meetings of the independent directors;
serving as a liaison between the independent directors and management;
in consultation with the CEO, setting agendas for the meetings of the Board, and developing annual Board meeting schedules for approval by the Board;
ensuring proper flow of information to the Board;
having the authority to call special meetings of the Board and independent directors;
being available for consultation and direct communication with stockholders and other key stakeholders, as appropriate; and
having such other responsibilities and perform such duties as may from time to time be assigned to him or her by the Board.
The Board periodically reviews the structure and the division of responsibilities between the role of independent Chairman and CEO. The structure and division of responsibilities is intended to maintain the integrity of the oversight function of the Board by providing a separate framework of responsibilities for the independent Chairman as set forth above.
Board Oversight of Risk
The Board takes an active role in monitoring and assessing our strategic, compliance, operational and financial risks, as well as cybersecurity risks. The Board administers its oversight function through utilization of its various committees. Our Risk Management Committee, which consists of members of our senior management, is responsible for oversight of our risk management process. Senior management regularly provides reports on our risks to the Board, the Audit Committee and the Board committees that oversee the applicable risks. Additionally, the Audit Committee discusses with management and the independent registered public accounting firm the effect of regulatory and accounting initiatives on our financial statements and is responsible
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for review and evaluation of our major risk exposures, including cybersecurity and supplier risks, and the steps management has taken to monitor and control such exposures. In addition, the Compensation Committee, the Environmental, Safety and Sustainability (“ESS”) Committee, the Finance Committee and the Nominating and Governance Committee are each charged with overseeing the risks associated with their respective areas of responsibility.
Meetings and Committees of the Board
The Board met 19 times during 2019. Each incumbent director attended at least 89% of the total number of meetings of the Board and of the committees of the Board on which he or she served, and in each case, during the periods that he or she served. Pursuant to our Corporate Governance Guidelines, directors are expected to attend all Board meetings, to spend the time needed to discharge their responsibilities as directors, and to attend the annual meeting of stockholders. All then-serving directors attended the 2019 annual meeting of stockholders.
Pursuant to our Corporate Governance Guidelines, the Board expects that our senior officers will regularly attend Board and Committee meetings, present proposals and otherwise assist in the work of the Board. Members of the Board have direct access to all of our employees, outside advisors and independent registered public accounting firm.
The Board has established five standing committees to assist the Board in carrying out its duties: the Audit Committee, the Compensation Committee, the ESS Committee, the Finance Committee and the Nominating and Governance Committee. The Board also established a Search Committee, an ad hoc committee to assist the Nominating and Governance Committee and the Board in identifying qualified director candidates. The Search Committee did not meet during 2019. The Board evaluates the structure and membership of its committees on an annual basis, appoints the independent members of the Board to serve on the committees and elects committee chairs following the annual meeting of stockholders. The following table shows the composition of each standing Board committee as of the date of this proxy statement. Mr. Hamrock does not serve on any committee, but is invited to attend various committee meetings. Mr. Kabat, Chairman of the Board, is invited to attend all meetings of each of the committees.
Board Committee Composition
Director
Audit
Compensation
ESS
Finance
Nominating
and
Governance
Peter A. Altabef
 
 
✔*
Theodore H. Bunting, Jr.(1)
 
 
Eric L. Butler
✔*
 
 
Aristides S. Candris
 
 
✔*
Wayne S. DeVeydt(1)
 
 
Deborah A. Henretta
 
 
Deborah A. P. Hersman
 
 
 
Michael E. Jesanis(1)
✔*
 
 
Kevin T. Kabat(2)
 
 
 
 
Carolyn Y. Woo
 
 
✔*
Lloyd M. Yates
 
 
 
 
 
*
Committee Chair
(1)
Audit Committee Financial Expert, as defined by SEC rules.
(2)
Independent Chairman of the Board.
The summaries below are qualified by reference to the entire charter for each of the Audit, Compensation, ESS, Finance and Nominating and Governance Committees; each of which can be found on our website at https://www.nisource.com/investors/governance and is also available to any stockholder upon written request to our Corporate Secretary. Additionally, any committee may perform other duties and responsibilities, consistent with their respective charters, our Amended and Restated Bylaws (our “Bylaws”), governing law, the rules of the NYSE, the federal securities laws and such other requirements applicable to us, delegated to any committee by the Board, or in the case of the Compensation Committee, under any provision of any of our benefit or compensation plans.
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 Audit Committee
The Audit Committee met nine times in 2019. Our Audit Committee is responsible for the oversight of our internal audit function and financial reporting process. The Audit Committee has the sole authority to appoint, retain or replace our independent registered public accounting firm and is responsible for, among other things:
reviewing our independent registered public accounting firm’s qualifications and independence and compensating our independent registered public accounting firm;
overseeing the performance of our internal audit function and our independent registered public accounting firm;
reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements before earnings announcements;
reviewing and discussing with management our annual and quarterly earnings press releases;
reviewing and discussing with management and our independent registered public accounting firm major issues regarding accounting principles and financial statement presentations, adequacy of internal controls, and any critical judgments or accounting estimates made in connection with the preparation of financial statements;
reviewing and evaluating our major risk exposures, including cybersecurity and supplier risks, and the steps management has taken to monitor and control such exposures, including discussion of our risk assessment and risk management policies; and
overseeing our compliance with legal and regulatory requirements.
The Board has determined that all of the members of the Audit Committee are independent as defined under the applicable NYSE and SEC rules, including the additional independence standard for audit committee members, and meet our additional independence standard set forth in our Corporate Governance Guidelines.
For more information regarding the Audit Committee, see “Audit Committee Report,” “Proposal 3 — Ratification of Independent Registered Public Accounting Firm” and “Independent Registered Public Accounting Firm Fees” below.
 Compensation Committee
The Compensation Committee met six times in 2019. The Compensation Committee apprises the Board with respect to the evaluation, compensation and benefits of our executives. Its responsibilities include, among others:
evaluating the performance of our CEO and other executive officers in light of our goals and objectives;
reviewing and approving the corporate goals and objectives relevant to CEO and executive officer compensation;
making recommendations to the independent Board members regarding CEO compensation and approving compensation of the other executive officers;
reviewing and approving periodically a general compensation policy for our other officers and officers of our principal subsidiaries;
approving, or if appropriate, making recommendations to the Board with respect to incentive compensation plans and equity-based plans;
reviewing our officer candidates for election by the Board;
reviewing and evaluating the executive officers’ development and succession plan (other than our CEO’s succession plan, which is reviewed by the Nominating and Governance Committee);
evaluating the risks associated with our compensation policies and practices and the steps management has taken to monitor and control such risks; and
overseeing equal employment opportunity and diversity initiatives.
The Compensation Committee has authority to delegate its responsibilities to subcommittees as deemed appropriate, provided the subcommittees are composed entirely of independent directors who also meet the other requirements for membership of the Compensation Committee.
All of the directors serving on the Compensation Committee are: (i) independent as defined under the applicable NYSE and SEC rules and meet the additional independence standard set forth in the Corporate Governance Guidelines and the additional NYSE independence standard for members of compensation committees and (ii) “non-employee directors” as defined under Rule 16b-3 of the Exchange Act. For additional information regarding the Compensation Committee's principles, policies and practices, please see the discussion under “Executive Compensation - Compensation Discussion and Analysis”.
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 Environmental, Safety and Sustainability Committee
The ESS Committee met five times during 2019. The ESS Committee assists the Board in overseeing the programs, performance and risks relative to environmental, safety and sustainability matters. Its responsibilities include, among others:
evaluating our environmental and sustainability policies, practices and performance;
evaluating our safety policies, practices and performance relating to our employees, contractors and the general public;
reviewing and assessing stockholder proposals related to the environment, safety and sustainability;
reviewing and evaluating our programs, policies, practices and performance with respect to health and safety compliance auditing; and
assessing major legislation, regulation and other external influences that pertain to the ESS Committee’s responsibilities and assessing the impact on us.
 Finance Committee
The Finance Committee met six times during 2019. Its responsibilities include the following, among others:
reviewing and evaluating our financial plans, capital structure, equity and debt levels, dividend policy and financial policies;
reviewing our corporate insurance programs;
reviewing our investment strategy and investments;
reviewing and evaluating our financial, tax, third party credit and commodity risks and the steps management has taken to monitor and control such risks;
reviewing our annual earnings guidance and capital budgets and recommending approval to the Board; and
reviewing our hedging policies and exempt swap transactions.
 Nominating and Governance Committee
The Nominating and Governance Committee met five times in 2019. Its responsibilities include, among others:
identifying individuals qualified to become Board members, consistent with criteria approved by the Board;
recommending to the Board director nominees for election at the next annual meeting of the stockholders;
developing and recommending to the Board the Corporate Governance Guidelines;
consulting with management to determine the appropriate response to stockholder proposals submitted pursuant to SEC rules;
reviewing and evaluating risks to our reputation and the steps management has taken to monitor and control such risks;
reviewing and evaluating our CEO succession plan and working with the Board to evaluate potential successors to our CEO;
reviewing and overseeing, at least annually, corporate and business unit political spending;
evaluating any resignation tendered by a director and making recommendations to the Board about whether to accept such resignation; and
overseeing the evaluation of the performance of the Board and its committees.
The Nominating and Governance Committee, with the assistance of the independent compensation consultant, annually reviews the amount and composition of non-employee director compensation. Please see the discussion under the heading “Director Compensation” for a description of the compensation we provide to our non-employee directors.
Director Selection Process. The Nominating and Governance Committee identifies and screens candidates for director and makes its recommendations for director to the Board. At times the Board may establish an ad hoc search committee to assist the Nominating and Governance Committee in this process. Additionally, the Nominating and Governance Committee has the authority to retain a search firm to help it identify director candidates to the extent it deems necessary or appropriate. The Board established a search committee to assist the Nominating and Governance Committee and the Board in identifying qualified director candidates. The Nominating and Governance Committee has also engaged the firm of Heidrick & Struggles International, Inc., which firm recommended Ms. Hersman for director. In considering candidates for director, the Nominating and Governance Committee considers the skills, expertise, experience and qualifications that will best complement the overall mix of skills and expertise of the Board in view of the strategy of, and the risks and opportunities that we face, as well as each candidate’s relevant business, academic and industry experience, professional background, age, current employment, community service, other board service and other factors. In addition, the Nominating and Governance Committee takes into account the racial, ethnic and gender diversity of the Board and actively seeks minority and female candidates.
The Nominating and Governance Committee seeks to identify and recommend candidates with a reputation for, and record of, integrity and good business judgment who have experience in positions with a high degree of responsibility and are leaders in the organizations with which they are affiliated; are effective in working in complex collegial settings; are free from conflicts of interest that could interfere with a director’s duties to us and our stockholders; and are willing and able to make the necessary commitment of time and attention required for effective service on the Board, including
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limiting their service on other boards to a reasonable number. The Nominating and Governance Committee also takes into account the candidate’s level of financial literacy. The Nominating and Governance Committee monitors the mix of skills and experience of the directors in order to assess whether the Board has the necessary tools to perform its oversight function effectively. The Nominating and Governance Committee also assesses the diversity of the Board as a part of its annual self-assessment process as described in more detail below. The Nominating and Governance Committee will consider nominees for directors recommended by stockholders and will use the same criteria to evaluate candidates proposed by stockholders as it uses to evaluate the candidates identified by the Board.
The Board has determined that all of the members of the Nominating and Governance Committee are independent as defined under the applicable NYSE rules and meet the additional independence standard set forth in the Corporate Governance Guidelines.
For information on how to nominate a person for election as a director at the 2021 Annual Meeting, please see the discussion under the heading “Stockholder Proposals and Nominations for 2021 Annual Meeting.”
Board Evaluation Process.  The Nominating and Governance Committee oversees the self-evaluation process, which is used by the Board and by each committee of the Board to determine effectiveness and identify opportunities for improvement. Annually at its meeting in March, the Nominating and Governance Committee initiates the self-evaluation process and approves the form of written evaluation questionnaires that are distributed to each director for completion. The written evaluation questionnaires are updated each year as necessary to reflect changes identified in the prior year, any committee charter changes and any suggestions from the directors. The questionnaires solicit feedback on Board composition, Board meeting mechanics including information received, core responsibilities, relationship with management, committee functioning and other relevant matters. In addition, on an ongoing basis, the Chairman meets with each director individually to solicit feedback with respect to both the full Board and any committee on which the director serves, in addition to individual director performance and Board dynamics. Our Board utilizes the results of these evaluations in making decisions on Board agendas, Board structure, committee responsibilities and agendas, information presented to the Board, and continued service of individual directors on the Board.
No Mandatory Retirement Age or Term Limits. Our Corporate Governance Guidelines set forth that we do not believe that mandatory retirement ages or term limits serve our needs. The Board periodically evaluates the performance and qualifications of individual directors in connection with the nomination process. In addition, although the Nominating and Governance Committee will consider length of service in recommending candidates for re-election, the Board does not believe that adopting a set term limit for directors serves our interests. Such limits may result in the loss of contributions from directors who have been able to develop, over a period of time, increasing insight into our operations and our strategic direction. The Nominating and Governance Committee reviews these policies as part of its annual governance review and will consider modifications to these policies as deemed necessary and in our best interests and the best interests of our stockholders.
DIRECTOR COMPENSATION
Director Compensation. This section describes compensation for our non-employee directors. To attract and retain highly qualified candidates to serve on the Board, we provide a combination of cash and equity awards. Our non-employee director compensation is reviewed annually by our Nominating and Governance Committee with the assistance of Meridian Compensation Partners, LLC (“Meridian”), the Compensation Committee's independent compensation consultant. The Nominating and Governance Committee, with the assistance of Meridian, reviewed the amount and composition of director compensation for 2019 and recommended no changes as compared to 2018. A full-time employee who serves as a director does not receive any additional compensation for service on the Board. Accordingly, because Mr. Hamrock is also our President and CEO, he does not receive additional compensation for his service as a Board member.
For 2019, each non-employee director received an annual retainer of $235,000, consisting of $97,500 in cash and an award of restricted stock units valued at $137,500 at the time of grant. The cash retainer is paid in arrears in four equal installments at the end of each calendar quarter.
Restricted stock units are awarded annually, and the number of restricted stock units is determined by dividing the value of the grant by the closing price of our common stock on the grant date. The 2019 restricted stock units were granted to non-employee directors under the NiSource Inc. 2010 Omnibus Incentive Plan (“Omnibus Plan”). Unless the non-employee director elects to defer receipt of his or her restricted stock unit awards, the restricted stock units are payable in shares of our common stock on the earlier to occur of: (a) the last day of the director’s annual term for which the restricted stock units are awarded; or (b) the date that the director separates from the Board due to a “Change-in-Control” (as defined in the Omnibus Plan); provided, however, that any director that commences service on the Board after the start of an annual term will vest on the first anniversary of the initial grant. The restricted stock unit awards also contain pro-rata vesting provisions for a separation from the Board due to retirement, death or disability. Restricted stock units accrue dividends prior to settlement in shares of our common stock. If a non-employee director elects to defer receipt of his or her restricted stock units, then such deferred stock units will be paid in shares of our common stock upon the non-employee director's separation from the Board or such other date selected by the non-employee director.
Each non-employee director who serves as chair of a Board committee receives compensation for the additional responsibilities associated with such service. The 2019 committee chair fees were $20,000 for each of the standing committees. The Chairman of the Board received additional annual compensation of $160,000 for his role and the Vice Chairman of the Board received additional annual compensation of $75,000 for his role. These fees are paid in cash in arrears in four equal installments and are prorated in the case of partial year service.
All Other Compensation. The compensation included under the column “All Other Compensation” in the 2019 Director Compensation Table below consists of matching contributions made by the NiSource Charitable Foundation.
Director Stock Ownership. The Board maintains stock ownership requirements for directors that are included in our Corporate Governance Guidelines. Within five years of becoming a non-employee director, each non-employee director is required to hold an amount of our stock with a value equal to five times the annual cash retainer paid to directors. Company stock that counts towards satisfaction of this requirement includes shares
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purchased on the open market, awards of restricted stock or restricted stock units through the prior Non-Employee Director Stock Incentive Plan or Omnibus Plan, and shares beneficially owned in a trust or by a spouse or other immediate family member residing in the same household. All of the non-employee director nominees are in compliance with the stock ownership guideline or are within the five-year transition period included in the Corporate Governance Guidelines.
Each director has a significant portion of his or her compensation directly aligned with long-term stockholder value. Approximately fifty-nine percent (59%) of a non-employee director’s 2019 annual retainer (valued as of the time of award and excluding committee retainers) consisted of restricted stock units, which are converted into common stock when vested and distributed to the director.
2019 Director Compensation
The table below sets forth all compensation earned by or paid to our non-employee directors in 2019. Our CEO did not receive any additional compensation for his service on the Board. His compensation for serving as CEO is discussed in the Executive Compensation section of this Proxy Statement.
Name
Fees Earned or
Paid in Cash
($)(1)
Stock Awards
($)(2)(3)
All Other
Compensation
($)(4)
Total
($)
Peter A. Altabef
117,500
137,500
10,000
265,000
Theodore H. Bunting, Jr.
97,500
137,500
235,000
Eric L. Butler
110,511
137,500
248,011
Aristides S. Candris
117,500
137,500
10,000
265,000
Wayne S. DeVeydt
97,500
137,500
10,000
245,000
Deborah A. Henretta
97,500
137,500
235,000
Deborah A. P. Hersman(5)
55,792
131,113
10,000
196,905
Michael E. Jesanis
117,500
137,500
255,000
Kevin T. Kabat
234,785
137,500
372,285
Richard L. Thompson(6)
90,679
90,679
Carolyn Y. Woo
117,500
137,500
10,500
265,500
(1)
The fees shown include the annual cash retainer and any Board and chair fees paid during the year to each non-employee director. With respect to Ms. Hersman and Mr. Thompson, the fees were prorated for partial year service on the Board; with respect to Messrs. Butler, Kabat and Thompson the fees were prorated for partial year service as committee chairs. Mr. Thompson, who did not stand for reelection in 2019, served on the Board until May 7, 2019. Ms. Hersman was appointed to the Board on June 5, 2019.
(2)
The amounts shown reflect the grant date fair value of awards computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For restricted stock units, the grant date fair value is the number of shares multiplied by the closing price of our stock on the award date. Each non-employee director who was elected on May 7, 2019, received an award of restricted stock units valued at $137,500 which was equal to approximately 4,957 restricted stock units valued at $27.74 per unit, the closing price of our common stock on that date.
(3)
As of December 31, 2019, the number of equity awards (in the form of restricted stock units or deferred stock units) that were outstanding for each non-employee director was as follows: Mr. Altabef, 5,029; Mr. Bunting, 8,522; Mr. Butler, 5,029; Dr. Candris, 44,339; Mr. DeVeydt, 16,555; Ms. Henretta, 28,879; Ms. Hersman, 4,666; Mr. Jesanis, 5,029; Mr. Kabat, 5,029; Mr. Thompson, 2,902; and Dr. Woo, 39,793.
(4)
The amounts shown reflect matching contributions made by the NiSource Charitable Foundation under the Director Charitable Match Program. The Foundation matches up to $10,000 annually in contributions by any non-employee director to approved tax-exempt charitable organizations. Any amount not utilized for the match in the year it is first available is carried over to the following year.
(5)
The amount shown in the Stock Awards column for Ms. Hersman is a pro-rated award which was equal to approximately 4,599 restricted stock units valued at $28.51 per unit, the closing price of our common stock on June 5, 2019, the date of her appointment to the Board.
(6)
Mr. Thompson served on the Board until May 7, 2019.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows as of March 24, 2020, the number of shares of our outstanding common stock beneficially owned by: (i) each of our directors; (ii) each of the Named Executive Officers; (iii) our directors and executive officers as a group; and (iv) beneficial owners of more than 5% of our outstanding common stock (based solely on the Schedule 13G filings and any amendments thereto filed with the SEC on or before March 24, 2020) except as noted below. None of the Named Executive Officers or directors has any outstanding stock options as of that date. The business address of each of our directors and executive officers is our address.
Name and Address of Beneficial Owner
Number of Shares of
Common Stock
Beneficially Owned
Percent of Class
Outstanding
5% Owners
T. Rowe Price Associates, Inc.(1)
100 E. Pratt Street
Baltimore, MD 21202
52,937,405
14.1%
The Vanguard Group(2)
100 Vanguard Blvd.
Malvern, PA 19355
44,449,680
11.9%
BlackRock, Inc.(3)
55 East 52nd Street
New York, NY 10055
31,832,354
8.5%
State Street Corporation(4)
One Lincoln Street
Boston, MA 02111
20,149,187
5.4%
Directors and Executive Officers
Peter A. Altabef(5)
17,871
*
Donald E. Brown(6)
89,350
*
Theodore H. Bunting, Jr(5)
3,447
*
Eric L. Butler(5)
18,948
*
Aristides S. Candris(5)
15,245
*
Wayne S. DeVeydt(5)
22,604
*
Joseph Hamrock(6)
453,095
*
Deborah A. Henretta(5)
2,408
*
Deborah A. P. Hersman(5)
2,350
*
Carrie J. Hightman (6)(7)
342,604
*
Michael E. Jesanis(5)
33,104
*
Kevin T. Kabat(5)
27,711
*
Violet G. Sistovaris(6)
135,547
*
Pablo A. Vegas(6)
44,052
*
Carolyn Y. Woo(5)
46,230
*
Lloyd M. Yates(5)
10,980
*
All directors and executive officers as a group (21 persons)
1,327,902
*
*
Less than 1%
(1)
As reported on an amendment to statement on Schedule 13G/A filed with the SEC on behalf of T. Rowe Price Associates, Inc. on February 14, 2020. T. Rowe Price Associates, Inc. reported sole voting power with respect to 17,000,191 shares and sole dispositive power with respect to 52,937,405 shares.
(2)
As reported on an amendment to statement on Schedule 13G/A filed with the SEC on behalf of The Vanguard Group on February 12, 2020. The Vanguard Group reported sole voting power with respect to 648,425 shares, shared voting power with respect to 193,686 shares, sole dispositive power with respect to 43,732,886 shares and shared dispositive power with respect to 716,794 shares.
(3)
As reported on an amendment to statement on Schedule 13G/A filed with the SEC on behalf of BlackRock, Inc. on February 5, 2020. BlackRock, Inc. reported sole voting power with respect to 28,700,999 shares and sole dispositive power with respect to 31,832,354 shares reported.
(4)
As reported on Schedule 13G filed with the SEC on behalf of State Street Corporation on February 14, 2020. State Street Corporation has shared voting power with respect to 17,341,826 shares and shared dispositive power with respect to 20,094,350 shares reported as beneficially owned.
(5)
Does not include restricted stock units issued under the Omnibus Plan and the former Non-Employee Director Stock Incentive Plan unless the shares have been distributed or the non-employee director has the right to acquire the shares within 60 days of March 24, 2020.
(6)
Includes shares held in our 401(k) Plan and shares that are distributable within 60 days of March 24, 2020.
(7)
Includes shares owned by a trust over which Ms. Hightman maintains investment control and of which one or more of her immediate family members are the sole beneficiaries.
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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS (CD&A)
Introduction
This CD&A describes our compensation philosophy and the material elements of our 2019 executive compensation program applicable to the Named Executive Officers.
The Named Executive Officers in 2019 were:
Joseph Hamrock- President and CEO
Donald E. Brown- Executive Vice President and CFO
Carrie J. Hightman- Executive Vice President and Chief Legal Officer (“CLO”)
Violet G. Sistovaris- Executive Vice President and President, Northern Indiana Public Service Company LLC (“NIPSCO”)
Pablo A. Vegas- Executive Vice President and President, Gas Utilities
2019 Business Developments
During 2019, we continued to execute on our established infrastructure investment-driven business strategy and remained deeply focused on our top priority- safety. We continue to invest in safety improvements, implement policies and procedures, develop technical training and guidelines for our employees and leverage new tools and technology to improve our maps, records and infrastructure performance. Importantly, we followed through on our commitment to accelerate and enhance our schedule for implementation of a Safety Management System (“SMS”) across all of our operating companies. Key developments during 2019 included:
Installing over-pressurization protection on low pressure systems across our seven-state service territory, including the completion of those upgrades in Massachusetts and Virginia.
Implementing an Incident Command Structure (ICS) aligned with Federal Emergency Management Agency standards and providing ICS training to nearly all our employees, enhancing our emergency preparedness and response capability.
Introducing a corrective action program which offers a simple way for employees and contractors to report safety concerns and supports our systematic process to review, prioritize, and track progress to reduce risk.
Training 86% of gas employees on SMS, with the completion of the training of the rest of our gas employees targeted for 2020.
Appointing an independent quality review board to oversee our safety programs.
Investing approximately $1.9 billion of capital across our Columbia Gas and NIPSCO operating companies in support of long-term safety and service reliability for our customers and communities.
Replacing approximately 337 miles of priority gas pipelines across seven states, with the goal of enhancing gas system safety and reliability, and reducing methane emissions.
Replacing approximately 33 miles of underground electric cable and more than 1900 electric poles in Indiana to further support increased electric reliability.
Advancing our electric generation strategy in Indiana, consistent with our 2018 Integrated Resource Plan by obtaining approval for wind projects announced in 2019 and completing our Coal Combustion Residuals (CCR) capital investments.
Achieving significant industry and national recognition, including: being named to the Dow Jones Sustainability-North America Index for the sixth consecutive year; being named to the Bloomberg Gender Equality Index for the second consecutive year; listed as one of America’s Best Large Employers by Forbes magazine for the fourth consecutive year; and, once again, being named to the FTSE4Good index, an index that measures the performance of companies demonstrating strong environmental, social and governance practices.
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Our total shareholder return was twelve percent for 2019 and reflected a significant improvement, as compared to 2018, although we underperformed both major utility indices.

Total shareholder return shown in the chart above is calculated by stock price appreciation plus the annual dividend amount. The NiSource 2015 stock price appreciation and total shareholder return shown in the charts above are based on a 2014 year-end closing price calculated utilizing the Bloomberg separation formula taking into account the separation of Columbia Pipeline Group, Inc. from the Company on July 1, 2015 (the “Separation”).
2019 Compensation Committee Notable Actions
During 2019, the Compensation Committee made the following key decisions with respect to 2019 compensation:
Approved increases in base salary and the target grant date fair value of the 2019 annual long-term equity incentive opportunities for all of the Named Executive Officers other than our CEO, for the reasons explained in “Compensation Committee Actions Related to 2019 Compensation” in the sections entitled “2019 Base Salaries,” and “2019 LTIP Awards,” respectively.
Refined the performance-based restricted stock unit (“PSU”) performance goals by eliminating the discretionary assessment of individual performance that was used to determine vesting for 20% of the target 2018 PSUs. We continued to drive accountability for operational performance by tying the vesting of 20% of the target PSUs to the achievement of key business imperatives, subject to the achievement of a financial vesting trigger, as further explained in the sections entitled “Long-Term Incentive Program” and “2019 LTIP Awards.” In addition, we continue to drive individual accountability as individual performance is evaluated prior to grant to determine the sizing of the LTIP award, in recognition of individual performance.
Increased the CEO stock ownership guideline from 5x base salary to 6x base salary, as further described below under “Stock Ownership and Retention Guidelines.”
Our Executive Compensation Philosophy
The key design priorities of our 2019 executive compensation program were to:
Maintain a financially responsible program that is aligned with our strategic plan to build stockholder value and support long-term, sustainable earnings and dividend growth.
Provide a total compensation package that is aligned with the standards in our industry thereby enhancing our ability to:

Attract and retain executives with competitive compensation opportunities.

Motivate and reward executives for sustaining high performance.

Ensure that significant portions of pay opportunity remain at-risk for failure to achieve business objectives relating to financial performance, safety and customer care.
Reward executives based upon level of responsibility and individual performance.
Provide compensation that is both competitive with the market for executive talent and appropriately correlated to Company performance so that the executive receives increased payouts under our incentive programs when Company performance is high and decreased payouts under our incentive programs when our performance is low.
Comply with applicable laws and regulations.
The Compensation Committee believes that our executive compensation program is thoughtfully and effectively constructed to fulfill our compensation objectives and reward effective leadership decisions that create value for our stockholders, customers and other key stakeholders.
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Overview of Our 2019 Executive Compensation Program
We design our executive compensation program to attract, retain and motivate highly-qualified executive talent. We believe highly-qualified executive talent is an essential driver of the successful achievement of our business objectives.
The principal elements of compensation that we provide to our executives, including all of the Named Executive Officers, are: base salary; annual short-term performance-based cash incentives; and long-term performance-based and service-based equity incentive awards. We use short- and long-term performance-based compensation to motivate our executives to meet and exceed our business objectives over both time horizons. To emphasize safety as a priority throughout the organization, safety-related criteria are included as performance goals in both our Annual Performance-Based Cash Incentive Plan and our Customer Value Framework, as described below. We also include service-based equity in the form of service-based restricted stock units (“RSUs”) in order to enhance the attractiveness and talent retention aspects of our executive compensation program.
Our long-term incentive program is denominated entirely in common stock to align the interests of executives with those of our stockholders as the ultimate value of our long-term incentive compensation is determined by the performance of our stock. The principal elements of our 2019 total compensation program, time horizon and design objectives of each element are shown below.

We generally target total compensation (base salary, target annual short-term performance-based cash incentives and target long-term equity incentive awards) to be competitive with the compensation paid to similarly positioned executives at companies within our compensation peer group (the “Comparator Group”) as described in the section entitled “Our Executive Compensation Process - Competitive Market Review.” We do not, however, manage pay to a stipulated percentile of the Comparator Group practices.
2019 Say-on-Pay Vote Outcome
When making decisions about our executive compensation program, the Compensation Committee takes into account the stockholders’ view of such matters. In 2019, approximately 97% of the votes cast by our investors were voted in favor of our Say-on-Pay Proposal at our 2019 annual meeting of stockholders. No changes were made to the design of our executive compensation program in response to the 2019 Say-on-Pay vote.
Our Executive Compensation Mix
We believe that a significant percentage of total compensation for the Named Executive Officers should consist of variable and at-risk compensation. The Compensation Committee believes the appropriate mix of compensation elements should take into account our financial and strategic objectives, the competitive environment, retentive elements, Company performance, individual performance and responsibilities, and evolving governance practices. Additionally, the Compensation Committee reviews and assesses total Named Executive Officer compensation to evaluate whether we offer well-balanced incentives for senior executives to focus on serving both Company and stockholder interests.
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The following charts show the proportion of 2019 target total compensation for our CEO and the other Named Executive Officers payable in fixed compensation (base salary) and variable and at-risk compensation (target annual performance-based cash incentives and the target grant date fair value of the annual long-term performance-based equity incentive awards) formats.

The following table shows 2019 target total compensation and each element of target total compensation for each Named Executive Officer.
Target Total Compensation
Named Executive Officer
Annualized
Base Salary
($)
Annual
Cash Incentive
Target
($)
RSUs
($)
PSUs
Target
($)
Total
($)
Joseph Hamrock
President and CEO
1,000,000
1,200,000
860,000
3,440,000
6,500,000
Donald E. Brown
Executive Vice President and CFO
600,000
450,000
220,000
880,000
2,150,000
Carrie J. Hightman
Executive Vice President and CLO
500,000
300,000
160,000
640,000
1,600,000
Violet G. Sistovaris
Executive Vice President and President, NIPSCO
500,000
350,000
150,000
600,000
1,600,000
Pablo A. Vegas
Executive Vice President and President, Gas Utilities
600,000
450,000
220,000
880,000
2,150,000
Principal Elements of Our 2019 Executive Compensation Program
Base Salary
Base salary is designed to provide all our employees, including the Named Executive Officers, with a level of fixed pay that is commensurate with the employee’s role and responsibility. We believe that by delivering base salaries that are designed to be reflective of market norms, we are well-positioned to attract, retain and motivate top caliber executives in an increasingly competitive labor environment. The Compensation Committee annually reviews the base salaries of the Named Executive Officers, along with the salaries of all our other senior executives, to evaluate whether they are competitive within our industry. In reviewing the base salaries, the Compensation Committee considers the base salaries of similarly situated executives in the Comparator Group. See the section entitled “Our Executive Compensation Process - Competitive Market Review.”
The Compensation Committee determines any base salary changes for all our senior executives, including the Named Executive Officers, based on a combination of factors that include: competitive pay standards; level of responsibility; experience; internal pay equity considerations; and historical compensation. Additionally, the Compensation Committee considers recommendations from our CEO, Mr. Hamrock, reflecting his assessment of individual Named Executive Officer performance and their contributions to the achievement of business objectives. CEO pay is evaluated separately by the Compensation Committee, taking into account those factors reviewed for all other senior executives other than the recommendation from Mr. Hamrock. The Compensation Committee then provides its recommendation regarding CEO compensation to the independent members of the Board for approval. See the section below entitled “Compensation Committee Actions Related to 2019 Compensation - 2019 Base Salaries” for more information.
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Annual Performance-Based Cash Incentive Plan (“Cash Incentive Plan”)
The Cash Incentive Plan provides the Named Executive Officers with the opportunity to earn a cash incentive award tied to both Company performance and their individual contributions to our performance. A threshold financial trigger of net operating earnings per share (“NOEPS”) must be met before any award may be paid under the Cash Incentive Plan. Once the financial trigger is met, awards to all of our senior executives, including the Named Executive Officers, are subject to one corporate financial performance goal (weighted 75%) and four operational goals related to key business imperatives of safety and customer care (weighted 25%).
The NOEPS financial performance goal is determined based on the Company’s annual financial plan, which is approved by the Board at the beginning of the year, and is designed to achieve our goal of creating sustainable stockholder value by growing earnings and providing a strong dividend. The safety and customer care goals are designed to incent achievement of key business imperatives. In addition, under the terms of the Omnibus Plan, the Compensation Committee retains discretion to adjust Cash Incentive Plan awards downward, either on a formulaic or discretionary basis, as the Compensation Committee determines to be appropriate to reflect other items of Company or individual performance deemed relevant by the Compensation Committee.

Importantly, eligibility for participation in the Cash Incentive Plan extends to nearly all our employees. Every eligible employee has an incentive opportunity at trigger, target and stretch levels of performance. The Compensation Committee identifies expectations for all employees, including the Named Executive Officers. With respect to the CEO, the Compensation Committee makes recommendations regarding his award opportunities for consideration and approval by the independent members of the Board. See the section below entitled “Compensation Committee Actions Related to 2019 Compensation - 2019 Cash Incentive Plan” for more information regarding the 2019 Cash Incentive Plan, including incentive opportunities, performance measures and weightings, goals and payouts for each of the Named Executive Officers.
Long-Term Incentive Program (“LTIP”)
LTIP Design Overview. The LTIP provides the Named Executive Officers and our senior executives with the opportunity to earn shares of our stock based on performance and continued service. The 2019 LTIP awards were entirely comprised of equity in the form of PSUs (80% of the 2019 target LTIP award) and RSUs (20% of the 2019 target LTIP award). The PSUs are eligible to vest based on financial performance and progress with respect to several key business imperatives that we believe build stockholder value, subject to the achievement of a threshold cumulative financial trigger. The RSUs will vest after the completion of a multi-year service condition. The 2019 LTIP award program is designed to:
Directly link earned compensation with the achievement of longer-term financial objectives through the grant of 80% of the target PSUs (65% of the 2019 target LTIP award) with vesting tied to financial performance, while still maintaining a relative performance element through the incorporation of a +/- 25% relative total stockholder return (“RTSR”) performance payout modifier with respect to this portion of the 2019 LTIP award.
Focus executives on five equally weighted operational goals that we believe build stockholder value because they are related to our key business imperatives of safety, customer care, cost containment, organizational culture and environmental impact (the “Customer Value Framework”) (as more fully described in the section “PSUs”) to drive accountability for operational performance through the grant of 20% of the target PSUs (15% of the 2019 target LTIP award) with vesting tied to achievement of the Customer Value Framework.
Enhance retention by rewarding long-term service through the grant of RSUs (20% of the 2019 target LTIP award), which vest subject to the executive’s continued employment through a multi-year service period.
The key LTIP design elements that are intended to drive Company financial and operational performance and align with stockholder interests are shown below.
PSUs
• 80% of the target long-term incentive opportunity
• Three-year performance period
• 80% of target PSUs (65% of the 2019 target LTIP award) vesting based on NOEPS performance, subject to a +/- 25% payout
  modifier based on RTSR performance
• 20% of target PSUs (15% of the 2019 target LTIP award) vesting based on Customer Value Framework performance subject to an
  NOEPS vesting trigger
RSUs
• 20% of the target long-term incentive opportunity
• Vesting subject to the executive’s continued employment through a multi-year service period (in excess of three years)
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PSUs. The 2019 PSUs (80% of the 2019 target LTIP award) are eligible for vesting only if a cumulative NOEPS performance trigger is met over a three-year performance period. The NOEPS financial performance goal is determined based on the Company’s annual financial plan, which is approved by the Board at the beginning of the performance period, and is designed to achieve our goal of creating sustainable stockholder value by growing earnings and providing a strong dividend. If the NOEPS performance trigger is achieved, 80% of the target PSUs (65% of the 2019 target LTIP award) will vest based on NOEPS performance above the trigger, as modified by our RTSR performance (which can reduce or increase the vesting level by up to 25%). The Compensation Committee selected cumulative NOEPS as a goal and RTSR as a modifier because it believes it is important that each executive has personal financial exposure to the performance of our stock and, therefore, is aligned with the financial interests of stockholders.
The Compensation Committee determined that because NOEPS continues to be viewed as a core driver of our financial performance and stockholder value creation, this measure remained appropriate for both the short-term and long-term incentive programs. As a result, the Compensation Committee utilized NOEPS as a performance measure in both the 2019 LTIP award and the 2019 Cash Incentive Plan.
The Compensation Committee continued its practice of supplementing the NOEPS measure with additional operational performance measures that we believe build stockholder value in order to strike an appropriate balance with respect to incentivizing earnings growth, non-financial business imperatives and stockholder returns over both the short-term and long-term horizons. If the NOEPS vesting trigger is achieved, the remaining 20% of the target PSUs (15% of the 2019 target LTIP award) will vest based on the Company’s successful execution of the Customer Value Framework, with each category of the Customer Value Framework equally weighted in the determination of this portion of the LTIP Award.
The Customer Value Framework represents important enterprise-wide customer value initiatives, the achievement of which requires the coordinated, cross functional efforts of the Named Executive Officers. We believe these customer value initiatives are key business imperatives that build stockholder value over the long-term. The Compensation Committee utilized NSCBS and JD Power (as defined in the section entitled “2019 Cash Incentive Plan”) as safety and customer care performance measures under the Customer Value Framework portion of the 2019 LTIP in addition to the 2019 Cash Incentive Plan to reflect the significance of these key business imperatives. Additionally, the Compensation Committee tied 2019 LTIP payouts to our performance related to our long-term impact on our employees and the environment by including organizational culture and environmental goals in the Customer Value Framework along with a cost containment measure tied to the conservation of our financial resources, thereby further aligning the 2019 LTIP with the interests of our customers and stockholders.
RSUs. The remaining 20% of the 2019 target LTIP award consists of RSUs that will vest based on the executive’s continued employment through February 28, 2022, subject to earlier vesting for certain qualifying terminations of employment prior to that date. This service-based award is designed to reward long-term service and thereby adds a retention incentive to our compensation mix. Additionally, RSUs are considered by the Compensation Committee to be at-risk and aligned with stockholder interests as the ultimate value of the RSUs will fluctuate based on our stock price performance.
Other Design Considerations. The Compensation Committee believes that the long-term incentive program promotes decision making that is consistent with our long-term business objectives. When establishing long-term equity incentive opportunity levels for our senior executives, including the Named Executive Officers, the Compensation Committee considers, among other things, the executive’s base salary, the appropriate mix of cash and equity incentive opportunities, prior awards under the LTIP and the compensation practices for similarly situated executives both within the Company and our Comparator Group. The actual value of the 2019 LTIP Award, if any, will depend upon Company performance relative to pre-established performance measures and our stock price at the time the awards are settled.
Other Compensation and Benefits
The Named Executive Officers also participate in an executive deferred compensation plan and receive executive severance and change-in-control compensation and benefits, a limited number of perquisites and a number of other employee benefits that generally are extended to our entire employee population. We believe that these other forms of compensation and benefits are generally comparable to those that are provided to similarly situated executives at other companies of our size and thereby serve the objectives of our compensation program to attract and retain our senior executives.
Severance and Change-In-Control Benefits
We provide Change-in-Control and Termination Agreements with the intent of ensuring that our senior executives continue to apply thoroughly objective judgment to appropriately safeguard stockholder value and maximize investor return in relation to any potential change-in-control. The Change-in-Control and Termination Agreements provide cash severance benefits upon a double-trigger (meaning there must be both a qualifying change-in-control and termination of employment) and do not include any “gross-up” payments to executives for excise taxes incurred with respect to a change-in-control of the Company. We maintain Change-in-Control and Termination Agreements with each of the Named Executive Officers and all the Named Executive Officers are subject to our executive severance policy.
Additionally, the Omnibus Plan provides for double-trigger vesting for equity awards that are assumed or replaced by an acquiring company upon a change-in-control. In the event equity awards are not assumed or replaced in a change-in-control, then the outstanding equity awards will vest upon the occurrence of a change-in-control alone. For further information regarding the benefits to be received upon termination of employment or change-in-control, see the table in the section entitled “Potential Payments upon Termination of Employment or a Change-in-Control of the Company” and the accompanying narrative.
Perquisites
Perquisites are not a principal element of our executive compensation program. We provide a limited number of perquisites that are intended to assist the Named Executive Officers in the performance of their duties on our behalf or to otherwise provide benefits that have a combined personal and business purpose. Generally, we do not reimburse the Named Executive Officers for the payment of personal income taxes they incur in connection with their receipt of these benefits. For information regarding 2019 perquisites, see the 2019 Summary Compensation Table and footnote (6) to that table.
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Deferred Compensation Plan
Eligible executives, including the Named Executive Officers, may elect to defer between 5% and 80% of their base salary and annual cash incentive payout under our Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). The Deferred Compensation Plan provides an opportunity for eligible executives to defer their cash compensation without regard to the limits imposed by the IRS for amounts that may be deferred under our 401(k) Plan. The material terms of the Deferred Compensation Plan are described in the narrative to the 2019 Non-qualified Deferred Compensation Table.
Pension Programs
During 2019, we maintained a tax-qualified defined benefit pension plan for nearly all salaried exempt employees hired before January 1, 2010, all non-exempt employees (both non-union and certain union employees) hired before January 1, 2013, as well as for other union employees, regardless of hire date, and a non-qualified defined benefit pension plan (the “Pension Restoration Plan”) for all eligible employees with annual compensation or pension benefits in excess of the limits imposed by the Internal Revenue Service (“IRS”), including any eligible Named Executive Officer. The Pension Restoration Plan provides for a pension benefit under the same formula provided under the tax-qualified plan but without regard to the IRS limits and reduced by amounts paid under the tax-qualified plan. The material terms of the pension programs are described in the narrative to the 2019 Pension Benefits Table.
Savings Programs
The Named Executive Officers are eligible to participate in the same tax-qualified 401(k) Plan as most employees and in a non-qualified defined contribution plan (the “Savings Restoration Plan”) maintained for eligible executive employees. The 401(k) Plan includes a Company match that varies depending on the pension plan in which the employee participates and a Company profit sharing contribution for most employees of between 0.5% and 1.5% of the employee’s eligible earnings based on achievement of the overall corporate NOEPS measure. In addition, for salaried employees hired after January 1, 2010, and non-union non-exempt employees hired after January 1, 2013, the 401(k) Plan includes a 3% Company contribution to the employee accounts. The Savings Restoration Plan provides for Company contributions in excess of IRS limits under the 401(k) Plan for eligible employees, including the Named Executive Officers. The material terms of the Savings Restoration Plan are described in the narrative to the 2019 Non-qualified Deferred Compensation Table.
Health and Welfare Benefits
We also provide the Named Executive Officers other broad-based benefits such as medical, dental, life insurance and long-term disability coverage on the same terms and conditions to all employees. We believe that these broad-based benefits enhance our reputation as an employer of choice.
Our Executive Compensation Process
The Compensation Committee is responsible for evaluating and determining the compensation of our senior executives and for overseeing the administration of our equity plans and grants. In doing so, the Compensation Committee takes into account various factors when making compensation decisions, including:
Attainment of our established business and financial goals.
Competitiveness of our compensation program based upon competitive market data.
An executive’s position, level of responsibility and performance, as measured by the individual’s contribution to the achievement of our business objectives.
The Compensation Committee reviews the performance and compensation of our CEO and his executive direct reports each year and apprises the Board accordingly. For our CEO, the Compensation Committee evaluates CEO performance in light of our goals and objectives and considers recommendations from the Compensation Committee’s independent compensation consultant, that are reflective of the Compensation Committee’s assessment of our CEO’s performance and compensation competitiveness. Following this evaluation, the Compensation Committee submits its recommendations to the independent members of the Board for review and approval.
When considering changes in compensation for senior executives that report to our CEO, including the Named Executive Officers, the Compensation Committee considers input from the CEO and the Senior Vice President, Chief Human Resources Officer, in addition to the Compensation Committee’s independent compensation consultant.
Independent Compensation Consultant
For 2019, the Compensation Committee engaged the services of Meridian as its independent compensation consultant to advise it with respect to executive compensation design, comparative compensation practices and compensation matters relating to the Board. The Compensation Committee takes recommendations from Meridian into consideration along with its evaluation of the individual performance of each executive officer. In addition, during 2019 and early 2020, Meridian assisted in the evaluation and review of the NiSource Inc. 2020 Omnibus Incentive Plan, which is described in detail in Proposal 4.
Each year, the Compensation Committee evaluates the independence and quality of the services provided by its independent compensation consultant. In reviewing Meridian’s engagement for 2019, the Compensation Committee considered the factors set forth in SEC Rule 10C-1(b)(4) and the applicable NYSE rules and determined that Meridian was independent.
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Competitive Market Review
In connection with its compensation decision making, the Compensation Committee reviews the executive compensation practices in effect at other companies in the Comparator Group. These companies comprised leading gas, electric, and multi-line utilities that were selected by the Compensation Committee for their operational comparability and because we generally compete with these companies for similar executive talent. For 2019, the Compensation Committee, with input from Meridian, added Avista Corporation, Black Hills Corporation, New Jersey Resources Corporation and Southwest Gas Holdings, Inc. to the Comparator Group to continue to align us with operationally similar companies. Additionally, due to their acquisitions, the Compensation Committee removed Piedmont Natural Gas Company, Inc., SCANA Corporation and WGL Holdings from the Comparator Group for 2019. For purposes of evaluating 2019 compensation practices, the Comparator Group included the companies shown below.
Alliant Energy Corporation
New Jersey Resources Corporation
Ameren Corporation
OGE Energy Corp.
American Electric Power Company, Inc.
ONE Gas, Inc.
Atmos Energy Corporation
PNM Resources, Inc.
Avista Corporation
PPL Corporation
Black Hills Corporation
Public Service Enterprise Group Incorporated
CenterPoint Energy, Inc.
Sempra Energy
CMS Energy Corporation
Southwest Gas Holdings, Inc.
Dominion Energy, Inc.
Spire, Inc.
DTE Energy Company
Vectren Corporation
FirstEnergy Corp.
WEC Energy Group, Inc.
Compensation Peer Group
Revenue(1)
(millions)
Market Cap(1)
(millions)
NiSource
$4,875
$9,533
NiSource Percentile Rank
50th%ile
42nd%ile
75th Percentile
$9,853
$20,654
Median
$4,738
$11,124
25th Percentile
$2,385
$4,050
(1)
The Compensation Committee selected the 2019 Compensation Peer Group in August 2018 based on fiscal year-end 2017 revenue and market capitalization data compiled and provided by Meridian.
Compensation Committee Actions Related to 2019 Executive Compensation
The Compensation Committee reviewed and, as appropriate, took action with respect to each element of total compensation for each Named Executive Officer following the principles, practices and processes described above. The Compensation Committee’s compensation determinations and recommendations were based primarily upon recognition of the roles, responsibilities and performance of each Named Executive Officer, a review of the Comparator Group and an assessment of total Named Executive Officer compensation.
 2019 Base Salaries
The Compensation Committee annually reviews the base salaries of the Named Executive Officers, and all our senior executives, to evaluate whether they are competitive and appropriately reflect performance. In setting 2019 base salary levels, the Compensation Committee considered competitive market data, the competitiveness of the annual total target compensation of each Named Executive Officer, responsibilities, experience, internal pay equity, historical compensation practices, individual performance and contributions to achievement of business objectives. Based on this assessment, the Compensation Committee (or, in the case of our CEO, the independent members of the Board) approved 2019 base salary levels, effective June 1, 2019. The Compensation Committee did not recommend a 2019 base salary increase for our CEO, noting that his cash compensation was deemed to be appropriately aligned with the competitive market. With respect to Mr. Vegas, the Compensation Committee approved an increase of approximately 14.3%, taking into account (i) his effective performance in core aspects of his role as Executive Vice President, Gas Utilities, (ii) his successful assumption of additional duties during 2018, and (iii) the need for further alignment of his cash compensation with the competitive market. Below are the 2019 and 2018 annual base salary levels for each Named Executive Officer.
Base Salary
Named Executive Officer
2019 Annual Salary ($)
2018 Annual Salary ($)
Joseph Hamrock
1,000,000
1,000,000
Donald E. Brown
600,000
575,000
Carrie J. Hightman
500,000
490,000
Violet G. Sistovaris
500,000
475,000
Pablo A. Vegas
600,000
525,000
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2019 Cash Incentive Plan
In January 2019, the Compensation Committee established performance measures and goals to be used to determine the 2019 Cash Incentive Plan payouts for the Named Executive Officers and all of our other participating employees. In addition, the Compensation Committee set each Named Executive Officer’s Cash Incentive Plan trigger, target and stretch opportunities taking into account the following factors: competitive market practice of the Comparator Group, input from Meridian, historical payouts and individual performance. Based on this assessment, the Compensation Committee made no changes to the Cash Incentive Plan opportunities for the Named Executive Officers.
The 2019 Cash Incentive Plan awards for the Named Executive Officers, and all our senior executives, were subject to achievement of one corporate financial goal, NOEPS, and four operational goals related to customer care and safety, as detailed in the table below. The Compensation Committee approved these measures for the annual performance period because they were deemed important to our success in increasing stockholder value. The incentive opportunities for the Named Executive Officers were contingent on achievement of goals relating to these measures.
Performance Goal
Description
Reason Selected
Earnings
Net Operating Earnings Per Share (“NOEPS”), a non-GAAP measure.
Income from continuing operations determined in accordance with Generally Accepted Accounting Principles (“GAAP”), including, without limitation, the impact of incentive payouts and adjusted for certain items, such as fluctuations in weather and other significant unusual events disclosed in the Company’s earnings reports, (examples of which may include transaction-related costs, debt extinguishment costs or certain income tax items).
Viewed by the Board as representative of the fundamental earnings strength and our performance and aligned with stockholder value creation.
Net operating earnings is used internally for budgeting and reporting to the Board.
Consistent with our external reporting of results
 
(1)For 2019, a pre-tax adjustment of $233.6 million was included in GAAP earnings and attributable to costs incurred for estimated third-party claims and related other expenses as a result of the Greater Lawrence Incident, net of insurance recoveries recorded. Additionally, a pre-tax adjustment of $414.5 million was excluded from GAAP earnings and attributable to impairments of goodwill and franchise rights related to Columbia of Massachusetts. For details regarding the Greater Lawrence Incident please see Note 19-E to our consolidated financial statements included in our Annual Report on Form 10-K. For details regarding the impairments of both goodwill and franchise rights, please see Note 6 to our consolidated financial statements included in our Annual Report on Form 10-K.
 
 
Customer Care
2019 JD Power Gas and Electric Utility Residential Customer Satisfaction Studies (“JD Power Studies”)
Measures relative performance of our operating companies as compared to peer companies within each operating company’s jurisdiction (based on company size and geographic region), as reported in the 2019 JD Power Studies, with the target set using the Company’s 2018 performance as the baseline. Threshold, target and maximum performance goals are based on the scoring set forth in the JD Power Studies.
Designed to track our progress in delivering satisfaction to our customers relative to our peers.
Aligned with our stakeholder commitment of top-tier customer satisfaction and brand perception.

2019 MSR Group overall post transaction customer satisfaction survey results (“MSR Group Survey”)
Measures our operating companies’ performance in a post transaction survey designed to assess the customer experience. Threshold, target and maximum performance goals are set using the Company’s 2018 performance as the baseline.
Designed to track our progress in delivering satisfaction to our customers relative to our prior performance.
Aligned with our stakeholder commitment of top-tier customer satisfaction and brand perception.
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Performance Goal
Description
Reason Selected
Safety
DART Rate
Measures the rate of employee injuries that resulted in work days missed or restricted or an employee transfer, with the target set using industry benchmark of top decile.
Designed to track our progress in achieving the optimum employee safety climate.
2019 National Safety Council Barometer Survey developed by the National Safety Council (“NSCBS”)
A survey that gauges employee perception of our safety programs and benchmarks results against a proprietary database of over 800 companies, with the target set using the Company’s 2018 performance as the baseline. Threshold, target and maximum performance goals are based on our percentile ranking as compared to the other surveyed companies.
Designed to track our progress in achieving the optimum safety climate supported by the appropriate activities while also gauging management, supervisor and employee engagement.
The 2019 performance measures, performance goals, associated weighting of each performance measure, and formulaic results as a percentage of the target Cash Incentive Plan opportunity are shown below.
Corporate Measures(1)
Weight
Trigger
Target
Stretch
Result(2)
Weighted
Achievement(3)
Formulaic
Result
% of Target
NOEPS
75%
$1.30
$1.33
$1.36
1.32
60%
62%
Customer Care (JD Power Studies)
10%
744
746
749
736
0%
Customer Care (MSR Group Survey)
5%
90%
91%
92%
90%
2%
Safety (DART Rate)
5%
.53
0.44
.22
1.08
0%
Safety (NSCBS)
5%
90%
92%
95%
86%
0%
(1)
For performance between two performance levels (for example, between target and stretch goals), the incentive opportunity is determined by interpolation and is expressed as a percentage of the target opportunity.
(2)
The 2019 results were calculated as discussed above under “2019 Cash Incentive Plan.”
(3)
Weighted achievement is determined by multiplying the weight by the achievement percentage.
2019 Cash Incentive Plan Payouts to the Named Executive Officers
The 2019 Cash Incentive Plan opportunities and actual payout amounts as approved by the Compensation Committee (and with respect to the CEO, by the independent members of the Board) are shown below.
Named Executive Officer
2019
Salary
($)
Target
(% of Salary)(1)
Formulaic
Result
(% of Target)(2)
Formulaic
Amount
($)(3)
2019
Award
($)(4)
Joseph Hamrock
1,000,000
120%
62%
744,000
720,000(4)
Donald E. Brown
600,000
75%
62%
279,000
279,000
Carrie J. Hightman
500,000
60%
62%
186,000
186,000
Violet G. Sistovaris
500,000
70%
62%
217,000
217,000
Pablo A. Vegas
600,000
75%
62%
279,000
279,000
(1)
Each Named Executive Officer has a trigger bonus opportunity equal to 40% of target and a stretch bonus opportunity equal to 160% of target.
(2)
Formulaic Result reflects the percentage of Target payable to the Named Executive Officers based on the Company’s 2019 results as determined by the pre-established performance goals.
(3)
The Formulaic Amounts were calculated as follows: 2019 annual salary multiplied by his or her Target (% of Salary) multiplied by the applicable Formulaic Result (% of Target).
(4)
In accordance with the terms of the 2019 Cash Incentive Plan, the Compensation Committee exercised discretion to reduce Mr. Hamrock’s formulaic payout by $24,000, reflecting a payout of approximately 60% of Target.
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2019 LTIP Awards
In January 2019, the Compensation Committee approved a grant of PSUs to our senior executives including each of the Named Executive Officers. For 2019, the Compensation Committee retained the design used for the 2018 LTIP awards, except it eliminated the discretionary assessment of individual performance included in 2018 LTIP with respect to 20% of the target PSUs (15% of the LTIP award) that were tied to key business imperatives. In doing so, the Compensation Committee increased the emphasis on the achievement of certain key business imperatives, tying payout to their achievement regardless of individual considerations and contingent on our financial performance, thus seeking to further align incentive payouts with stockholder interests. Consistent with the philosophy and principles articulated above, the Compensation Committee believes that the 2019 LTIP awards:
Align the interests of executives with our stockholders as the ultimate value of the award is dependent upon the value of our stock.
Support our philosophy of paying for performance because the PSUs are not eligible to vest unless the Company achieves a threshold financial performance goal over the three-year performance period.
Provide competitive compensation to recruit and retain executive talent by including a long-term equity incentive component with vesting based on a multi-year service condition, subject to earlier vesting in the event of certain qualifying terminations of employment.
Offers compensation that emphasizes the value of continuous long-term service.
Endorses the enterprise-wide customer value initiatives and drives accountability by aligning the actual value of the award to the achievement of the Customer Value Framework.
In determining the 2019 LTIP award values awarded to the Named Executive Officers and all our senior executives in January 2019, the Compensation Committee considered the competitive pay practices of our Comparator Group, input from Meridian, the historical mix of fixed compensation versus variable incentive compensation, internal pay equity and the expectations of the executive’s role in driving our strategic and financial objectives and individual performance. Based on this assessment, the Compensation Committee (or, in the case of our CEO, the independent members of the Board) approved the 2019 LTIP award values for each Named Executive Officer.
All our Named Executive Officers received increased 2019 LTIP award values except for our CEO. The Compensation Committee did not recommend an increase for 2019, noting that the CEO’s 2018 LTIP value and total CEO compensation was deemed appropriate and market competitive. In the case of Messrs. Brown and Vegas and Ms. Hightman, in considering increases from their 2018 award values, the Compensation Committee noted their successful assumption of additional duties, in addition to consistent strong performance in 2018, sustained leadership in each executive's role in driving our strategic and financial objectives, historical award levels and the market competiveness of their total compensation. The 2019 and 2018 LTIP award values for each Named Executive Officer are shown below.
LTIP Award Values
Named Executive Officer
2019 Grant Date Face Value ($)
2018 Grant Date Face Value ($)
Joseph Hamrock
4,300,000
4,300,000
Donald E. Brown
1,100,000
950,000
Carrie J. Hightman
800,000
700,000
Violet G. Sistovaris
750,000
700,000
Pablo A. Vegas
1,100,000
950,000
The 2019 LTIP award values shown above were granted in the form of PSUs (80% of the 2019 LTIP award) and in the form of RSUs (20% of the 2019 LTIP award) as shown below. Vesting of the 2019 PSUs is dependent on our meeting certain financial performance measures over the 2019-2021 performance period (the “performance period”) and the executive’s continued employment through February 28, 2022. Vesting of the RSUs is dependent on the executive’s continued employment through February 28, 2022. Special vesting rules apply to both the PSUs and RSUs in the event of death, “Retirement,” “Disability” or a “Change-in-Control” (each as defined in the Omnibus Plan). Termination for any other reason prior to February 28, 2022, will result in forfeiture of the entire 2019 LTIP award.
The 2019 LTIP awards to Named Executive Officers are shown below.
Named Executive Officer
Target
Number of PSUs Awarded(1)
Number of RSUs Awarded