COMPENSATION DISCUSSION AND ANALYSIS
Section 4: Executive Compensation Policies
The following is a summary of our executive compensation policies, which reinforce our pay for performance philosophy and strengthen the
alignment of interests of our executives and shareholders:
|
|
|
|
|
|
|
|
|
|
|
Policy
|
|
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock ownership policy
|
|
|
|
We maintain meaningful stock ownership guidelines to reinforce the importance of Duke Energy stock ownership. These guidelines are intended to align the interests of executives and shareholders and to focus the executives on our long-term success.
Under these guidelines, each of our active NEOs must own Duke Energy shares in accordance with the following schedule:
|
|
|
|
|
|
|
Leadership Position
|
|
Value of Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEO
|
|
6x Base Salary
|
|
|
|
|
|
|
|
|
Other NEOs
|
|
3x Base Salary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock holding policy
|
|
|
|
Each NEO is required to hold 50% of all shares acquired under the LTI program (after payment of any applicable taxes) and 100% of all shares acquired upon the exercise of stock options (after payment of the exercise
price and taxes) until the applicable stock ownership requirement is satisfied. Each of our NEOs was in compliance with the stock ownership/stock holding policy during 2020.
|
|
|
Clawback policy
|
|
|
|
We maintain a "clawback policy," which would allow us to recover (i) certain cash or equity based incentive compensation tied to financial results in the event those results were restated due at least in part to the recipient's fraud or
misconduct or (ii) a payment based on an incorrect calculation.
|
|
|
Hedging or pledging policy
|
|
|
|
We have a policy that prohibits employees (including our NEOs) and directors from trading in options, warrants, puts, calls, or similar instruments in connection with Duke Energy securities, or selling Duke Energy
securities "short." Our pledging policy prohibits the pledging of any Duke Energy securities, regardless of where or how such securities are held. See "Prohibition on Hedging and Pledging" on page 33 of this proxy statement for additional
information about the hedging prohibition.
|
|
|
Equity award grant policy
|
|
|
|
In recognition of the importance of adhering to specific practices and procedures in the granting of equity awards, the Compensation and People Development Committee has adopted a policy that applies to the granting of equity awards. Under this
policy, annual grants to our NEOs may be made at any previously scheduled meeting, provided that reasonable efforts will be made to make such grants at the first regularly scheduled meeting of each calendar year, and annual grants to independent
directors may be made by the Board at any previously scheduled meeting, provided that reasonable efforts will be made to make such grants at the regularly scheduled meeting that is held in conjunction with the Annual Meeting each year.
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|
52 DUKE
ENERGY 2021
PROXY
STATEMENT
|
|
BUILDING
A SMARTER ENERGY
FUTURE®
|
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
|
|
|
|
|
|
|
|
|
|
|
Policy
|
|
|
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Risk assessment policy
|
|
|
|
In consultation with the Compensation and People Development Committee, members of management from Duke Energy's Human Resources, Legal, and Risk Management Departments assessed whether our compensation policies and
practices encourage excessive or inappropriate risk taking by our employees, including employees other than our NEOs. This assessment included a review of the risk characteristics of Duke Energy's business and the design of our incentive plans and
policies. Management reported its findings to the Compensation and People Development Committee, and after review and discussion, the Compensation and People Development Committee concluded that our plans and policies do not encourage excessive or
inappropriate risk taking.
|
|
|
Shareholder approval policy for severance
|
|
|
|
We have a policy, generally, to seek shareholder approval for any agreements with our NEOs that provide severance compensation in excess of 2.99x the executive's annual compensation or that provide for tax gross-ups in connection with a termination
event.
|
|
|
Section 5: Tax and Accounting Implications
Deductibility of Executive Compensation
|
The
Compensation and People Development Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code, which provides that Duke
Energy generally may not deduct, for federal income tax purposes, annual compensation in excess of $1 million paid to certain employees. Prior to 2018, performance-based compensation paid
pursuant to shareholder approved plans was not subject to the deduction limit as long as such compensation was approved by "outside directors" within the meaning of Section 162(m) of the
Internal Revenue Code and certain other requirements were satisfied.
The
Tax Act, which was enacted on December 22, 2017, included a number of significant changes to Section 162(m), such as the repeal of the performance-based compensation exemption and
the expansion of the definition of "covered employees" (e.g., by including the CFO and certain former NEOs as covered employees). As a result of these
changes, except as otherwise provided in the transition relief provisions of the Tax Act, compensation paid to any of our covered employees generally will no longer be deductible in 2018 or future
years, to the extent that it exceeds $1 million.
The
Compensation and People Development Committee has not adopted a policy that would have required all compensation to be deductible because the Compensation and People Development Committee wants to
preserve the ability to pay compensation to our executives in appropriate circumstances, even if such compensation would not be deductible under Section 162(m).
The
Compensation and People Development Committee will continue to consider tax implications (including the potential lack of deductibility under Section 162(m)) when making compensation
decisions, but reserves the right to make compensation decisions based on other factors believed to be in the best interests of Duke Energy and our shareholders.
Accounting for Stock-Based Compensation
|
Stock-based
compensation represents costs related to stock-based awards granted to employees and members of the Board. Duke Energy recognizes stock-based compensation based upon the estimated fair
value of the awards, net of estimated forfeitures at the date of issuance. The recognition period for these costs begins at either the applicable service inception date or grant date, and continues
throughout the requisite service period or, for certain share-based awards, until the employee becomes retirement eligible, if earlier. Compensation cost is recognized as expense or capitalized as a
component of property, plant, and equipment.
|
|
|
BUILDING
A SMARTER ENERGY
FUTURE®
|
|
DUKE
ENERGY
2021
PROXY
STATEMENT 53
|
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
Non-GAAP Financial Measures
|
As
described previously in this Compensation Discussion and Analysis, Duke Energy uses various financial measures, including adjusted EPS, cumulative adjusted EPS, and adjusted O&M expense, in
connection with short-term and long-term incentives. Adjusted EPS and cumulative adjusted EPS are non-GAAP financial measures that represent basic and diluted EPS from continuing operations available
to Duke Energy common shareholders, adjusted for the per share impact of special items. Cumulative adjusted EPS is calculated based on a cumulative three-year basis. For the years ended
December 31, 2020, 2019, and 2018, basic EPS available to Duke Energy common shareholders and diluted EPS available to Duke Energy common shareholders were equal. For 2018 and 2019, Duke Energy
used adjusted diluted EPS as a financial measure to evaluate management performance. Beginning in 2020, Duke Energy used adjusted basic EPS as the financial measure to evaluate management performance.
Adjusted basic EPS will represent basic EPS available to Duke Energy common shareholders (GAAP reported basic EPS), adjusted for the per share impact of special items. As discussed below, special
items represent certain charges and credits, which management believes are not indicative of Duke Energy's ongoing performance. A component of the operational excellence performance metric is adjusted
O&M expense. The adjusted O&M expense measure used for incentive plan purposes also is a non-GAAP financial measure as it represents GAAP O&M adjusted primarily for expenses recovered through rate
riders, certain regulatory accounting deferrals, and applicable special items. Management believes that the presentation of adjusted EPS provides useful information to investors, as it provides them
an additional relevant comparison of Duke Energy's performance across periods. Management uses this non-GAAP financial measure for planning and forecasting and for reporting financial results to the
Board, employees, shareholders, analysts, and investors. The most directly comparable GAAP measures for adjusted EPS and adjusted O&M expense measures used for incentive plan purposes are reported
basic and diluted EPS
from continuing operations available to Duke Energy common shareholders and reported O&M expense from continuing operations, which includes the impact of special items.
Special
items for the periods presented include the following, which management believes do not reflect ongoing costs:
-
-
Gas Pipeline Investments represents costs related to the cancellation of the ACP Pipeline and additional exit costs related to Constellation.
-
-
Costs to achieve mergers, which represent charges that result from strategic acquisitions.
-
-
Regulatory and legislative impacts represent charges related to Duke Energy Carolinas and Duke Energy Progress and coal ash settlement and
partial settlements in the 2019 North Carolina rate cases. In 2018, it represents charges related to the Duke Energy Progress and Duke Energy Carolinas North Carolina rate case orders and the repeal
of the South Carolina Base Load Review Act.
-
-
Impairment charges in 2019, which represents a reduction of prior year impairment at Citrus County combined cycle and an other-than-temporary
impairment of the remaining investment in Constitution Pipeline Company, LLC. For 2018, it represents an impairment at Citrus County combined cycle, a goodwill impairment at Commercial
Renewables, and an other-than-temporary impairment of an investment in Constitution Pipeline Company, LLC.
-
-
Sale of a retired plant, which represents the loss associated with selling Beckjord, a nonregulated generating facility in Ohio.
-
-
Impacts of the Tax Act, which represent amounts recognized related to the Tax Act.
-
-
Severance represents the reversal of 2018 severance charges, which were deferred as a result of a partial settlement in the Duke Energy Carolina
2019 North Carolina rate case. In 2019 and 2018, severance charges relate to company-wide initiatives, excluding merger integration, to standardize process and systems, leverage technology, and
workforce optimization.
Adjusted
EPS used in the LTI plan was adjusted for the net dilutive effect of equity issuances made in 2018 related to the Tax Act, but not adjusted for other equity issuances. Additionally,
previously approved target levels did not incorporate certain structural changes in Duke Energy's business from 2018 to 2020, including the sale of Duke Energy International and the acquisition of
Piedmont. As such, adjusted EPS used in the LTI plan incorporates an expected level of operating results for Duke Energy International and removes an expected level of operating results for Piedmont,
net of any transaction proceeds or financing impacts from such transactions.
Duke
Energy's adjusted EPS and adjusted O&M expense may not be comparable to similarly titled measures of another company because other companies may not calculate the measures in the same manner.
|
|
|
54 DUKE
ENERGY 2021
PROXY
STATEMENT
|
|
BUILDING
A SMARTER ENERGY
FUTURE®
|
Table of Contents
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The
following table provides compensation information for our CEO (Ms. Good), our CFO (Mr. Young) and our three other most highly compensated executive officers who were employed on
December 31, 2020, (Mr. Jamil, Ms. Janson, and Mr. Esamann). The table also provides compensation information for Ms. Anderson, who would have been among the three
most highly compensated executive officers if she had remained employed with Duke Energy through December 31, 2020. The table provides information for 2018 and 2019 only to the extent that each
NEO was included in the Duke Energy Summary Compensation Table for those years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)(2)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)(3)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(4)
|
|
All Other
Compensation ($)(5)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lynn J. Good
|
|
|
2020
|
|
|
1,390,500
|
|
|
0
|
|
|
11,431,738
|
|
0
|
|
1,169,578
|
|
246,046
|
|
306,536
|
|
|
14,544,398
|
|
Chair, President
|
|
|
2019
|
|
|
1,383,750
|
|
|
0
|
|
|
10,122,579
|
|
0
|
|
2,793,389
|
|
355,908
|
|
373,810
|
|
|
15,029,436
|
|
and CEO
|
|
|
2018
|
|
|
1,350,000
|
|
|
0
|
|
|
9,873,135
|
|
0
|
|
2,268,961
|
|
188,593
|
|
302,271
|
|
|
13,982,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven K. Young
|
|
|
2020
|
|
|
769,519
|
|
|
0
|
|
|
2,391,345
|
|
0
|
|
353,050
|
|
261,816
|
|
125,879
|
|
|
3,901,609
|
|
Executive Vice President
|
|
|
2019
|
|
|
734,003
|
|
|
0
|
|
|
1,792,619
|
|
0
|
|
868,773
|
|
280,504
|
|
104,100
|
|
|
3,779,999
|
|
and CFO
|
|
|
2018
|
|
|
707,438
|
|
|
0
|
|
|
1,558,502
|
|
0
|
|
616,903
|
|
161,336
|
|
88,576
|
|
|
3,132,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dhiaa M. Jamil
|
|
|
2020
|
|
|
867,458
|
|
|
0
|
|
|
2,915,910
|
|
0
|
|
397,984
|
|
267,957
|
|
138,391
|
|
|
4,587,700
|
|
Executive Vice President
|
|
|
2019
|
|
|
834,094
|
|
|
0
|
|
|
2,444,461
|
|
0
|
|
987,243
|
|
294,809
|
|
97,707
|
|
|
4,658,314
|
|
and Chief Operating Officer
|
|
|
2018
|
|
|
803,907
|
|
|
0
|
|
|
2,164,521
|
|
0
|
|
701,026
|
|
205,073
|
|
119,873
|
|
|
3,994,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julia S. Janson
|
|
|
2020
|
|
|
744,792
|
|
|
0
|
|
|
2,314,530
|
|
0
|
|
341,705
|
|
522,811
|
|
125,010
|
|
|
4,048,848
|
|
Executive Vice President,
|
|
|
2019
|
|
|
674,167
|
|
|
0
|
|
|
1,616,702
|
|
0
|
|
797,951
|
|
772,885
|
|
93,652
|
|
|
3,955,357
|
|
External Affairs and President, Carolinas Region
|
|
|
2018
|
|
|
638,021
|
|
|
0
|
|
|
1,405,548
|
|
0
|
|
566,067
|
|
0
|
|
80,040
|
|
|
2,689,676
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas F Esamann
|
|
|
2020
|
|
|
703,125
|
|
|
0
|
|
|
2,184,979
|
|
0
|
|
322,589
|
|
451,016
|
|
118,644
|
|
|
3,780,353
|
|
Executive Vice President,
|
|
|
2019
|
|
|
649,167
|
|
|
0
|
|
|
1,564,446
|
|
0
|
|
705,180
|
|
594,127
|
|
93,000
|
|
|
3,605,920
|
|
Energy Solutions and President, Midwest/Florida Regions and Natural Gas Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Melissa H. Anderson(1)
|
|
|
2020
|
|
|
366,923
|
|
|
0
|
|
|
854,647
|
|
0
|
|
149,637
|
|
0
|
|
2,174,482
|
|
|
3,545,689
|
|
Former Executive Vice
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief Human Resources Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Ms. Anderson
resigned from Duke Energy on August 31, 2020.
-
(2)
-
Grant
Date Fair Value of Stock Awards for Accounting Purposes: This column does not reflect the value of stock awards that were actually earned or received by our
NEOs during each of the years listed above. Rather, as required by applicable SEC rules, this column reflects the aggregate grant date fair value of the performance shares (based on the probable
outcome of the performance conditions as of the date of grant) and RSUs granted to our NEOs in the applicable year. The aggregate grant date fair value of the performance shares provided in 2020 to
Ms. Good, Mr. Young, Mr. Jamil, Ms. Janson, Mr. Esamann, and Ms. Anderson, assuming that the highest level of performance would be achieved, is $16,189,025;
$3,386,542; $4,129,384; $3,277,741; $3,094,297; and $1,210,308; respectively. The aggregate grant date fair value of the awards was determined in accordance with the accounting guidance for
stock-based compensation. See Note 21 of the Consolidated Financial Statements contained in our 2020 Form 10-K for an explanation of the assumptions made in valuing these awards.
-
(3)
-
With
respect to the applicable performance period, this column reflects amounts payable under the STI plan. Unless deferred, the 2020 amounts were paid in March
2021.
|
|
|
BUILDING
A SMARTER ENERGY
FUTURE®
|
|
DUKE
ENERGY
2021
PROXY
STATEMENT 55
|
Table of Contents
EXECUTIVE COMPENSATION
-
(4)
-
This
column includes the amounts listed below. The amounts listed were earned over the 12-month period ending on December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good
($)
|
|
Young
($)
|
|
Jamil
($)
|
|
Janson
($)
|
|
Esamann
($)
|
|
Anderson
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Actuarial Present Value of Accumulated Benefit Under:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCBP
|
|
|
40,128
|
|
|
68,439
|
|
|
57,950
|
|
|
135,624
|
|
|
132,192
|
|
|
0
|
|
ECBP
|
|
|
205,918
|
|
|
193,377
|
|
|
210,007
|
|
|
387,187
|
|
|
318,824
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
246,046
|
|
|
261,816
|
|
|
267,957
|
|
|
522,811
|
|
|
451,016
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(5)
-
The
All Other Compensation column includes the following for 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good
($)
|
|
Young
($)
|
|
Jamil
($)
|
|
Janson
($)
|
|
Esamann
($)
|
|
Anderson
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matching and Employer Retirement Contributions Under the Retirement Savings Plan
|
|
|
17,100
|
|
|
17,100
|
|
|
17,100
|
|
|
17,100
|
|
|
17,100
|
|
|
27,556
|
|
Make-Whole Matching, Cash Balance Contribution Credits, and Employer Retirement Contributions Under the Executive Savings Plan
|
|
|
233,933
|
|
|
102,529
|
|
|
118,191
|
|
|
96,110
|
|
|
86,889
|
|
|
27,157
|
|
Personal Use of the Corporate Aircraft*
|
|
|
49,903
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
7,088
|
|
Charitable Contributions Made in the Name of the Executive
|
|
|
2,500
|
|
|
2,500
|
|
|
2,500
|
|
|
2,500
|
|
|
2,500
|
|
|
2,500
|
|
Financial Planning Program
|
|
|
0
|
|
|
3,350
|
|
|
0
|
|
|
8,700
|
|
|
10,000
|
|
|
1,875
|
|
Cost of Basic Life Coverage
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,785
|
|
Company Paid Outplacement Services
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
30,000
|
|
Payout of Unused Vacation
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
41,582
|
|
Cash Severance Accrued at Termination of Employment**
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,997,663
|
|
Continued Health and Welfare Benefits
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
36,976
|
|
Other***
|
|
|
3,100
|
|
|
400
|
|
|
600
|
|
|
600
|
|
|
2,155
|
|
|
300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
306,536
|
|
|
125,879
|
|
|
138,391
|
|
|
125,010
|
|
|
118,644
|
|
|
2,174,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
*
-
Regarding
use of corporate aircraft, NEOs are required to reimburse Duke Energy the direct operating costs of any personal travel, except Ms. Good is not
required to reimburse Duke Energy for the cost of travel to her executive physical or to meetings of the board of directors of other companies on which she serves. With respect to flights on a leased
or chartered airplane, direct operating costs equal the amount that the third party charges Duke Energy for such trip. With respect to flights on the corporate aircraft, direct operating costs include
the amounts permitted by the Federal Aviation Regulations for non-commercial carriers, including hangar fees, fuel, crew travel expenses, airplane maintenance, aircraft depreciation, catering, labor,
and aircraft leases. NEOs are permitted to invite their spouse or other guests to accompany them on business trips when space is available; however, in such events, the NEO is imputed income in
accordance with IRS guidelines. The incremental cost included in the table above is the amount of the IRS-specified tax deduction disallowance, if any, with respect to the NEO's personal travel. Duke
Energy does not provide any tax gross-ups to the NEOs, including with respect to personal use of corporate aircraft.
-
**
-
lncludes
interest on severance payment that is deferred under applicable tax rules. In addition, under the terms of the Executive Severance Plan, Ms. Anderson
received additional vesting of RSUs and performance shares with a value of $410,016 and $1,717,216 (assuming target performance), respectively. See page 69 for additional information.
-
***
-
lncludes
the cost of benefits under the executive physical exam program, an airline club membership, and reimbursement of a portion of the monthly expense for a
personal mobile device.
|
|
|
56 DUKE
ENERGY 2021
PROXY
STATEMENT
|
|
BUILDING
A SMARTER ENERGY
FUTURE®
|
Table of Contents
EXECUTIVE COMPENSATION
GRANTS OF PLAN-BASED AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)
|
|
|
|
|
|
|
|
|
|
Estimated Possible
Payouts Under Non-Equity
Incentive Plan Awards
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards
|
|
Grant
Date Fair
Value
of Stock
Awards
($)(4)
|
|
Name
|
|
Grant Type
|
|
Grant Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lynn J. Good
|
|
Cash STI(1)
|
|
|
|
|
1,089,804
|
|
|
2,294,325
|
|
|
4,215,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTI Perf. Shares(2)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
34,550
|
|
|
76,778
|
|
|
153,556
|
|
|
|
|
|
8,094,513
|
|
|
|
RSUs(3)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,905
|
|
|
3,337,225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven K. Young
|
|
Cash STI(1)
|
|
|
|
|
328,969
|
|
|
692,567
|
|
|
1,272,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTI Perf. Shares(2)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
7,227
|
|
|
16,061
|
|
|
32,122
|
|
|
|
|
|
1,693,271
|
|
|
|
RSUs(3)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,883
|
|
|
698,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dhiaa M. Jamil
|
|
Cash STI(1)
|
|
|
|
|
370,838
|
|
|
780,712
|
|
|
1,434,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTI Perf. Shares(2)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
8,813
|
|
|
19,584
|
|
|
39,168
|
|
|
|
|
|
2,064,692
|
|
|
|
RSUs(3)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,393
|
|
|
851,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julia S. Janson
|
|
Cash STI(1)
|
|
|
|
|
318,398
|
|
|
670,313
|
|
|
1,231,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTI Perf. Shares(2)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
6,995
|
|
|
15,545
|
|
|
31,090
|
|
|
|
|
|
1,638,870
|
|
|
|
RSUs(3)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,662
|
|
|
675,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas F Esamann
|
|
Cash STI(1)
|
|
|
|
|
300,586
|
|
|
632,813
|
|
|
1,162,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTI Perf. Shares(2)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
6,604
|
|
|
14,675
|
|
|
29,350
|
|
|
|
|
|
1,547,149
|
|
|
|
RSUs(3)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,289
|
|
|
637,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Melissa H. Anderson
|
|
Cash STI(1)
|
|
|
|
|
139,431
|
|
|
293,539
|
|
|
539,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTI Perf. Shares(2)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
2,583
|
|
|
5,740
|
|
|
11,480
|
|
|
|
|
|
605,154
|
|
|
|
RSUs(3)
|
|
2/19/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,460
|
|
|
249,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Reflects
the STI opportunity granted to our NEOs in 2020 under the Duke Energy Corporation Executive Short-Term Incentive Plan. The information included in the
"Threshold," "Target," and "Maximum" columns reflects the range of potential payouts under the plan established by the Compensation and People Development Committee. The actual amounts earned by each
executive under the terms of such plan are disclosed in the Summary Compensation Table on page 55.
-
(2)
-
Reflects
the performance shares granted to our NEOs on February 19, 2020, under the LTI program, pursuant to the terms of the Duke Energy Corporation 2015
Long-Term Incentive Plan. The information included in the "Threshold," "Target," and "Maximum" columns reflects the range of potential payouts established by the Compensation and People Development
Committee. Earned performance shares will be paid following the end of the 2020 - 2022 performance period, based on the extent to which the performance goals have been achieved. Any
shares not earned are forfeited. In addition, following a determination that the performance goals have been achieved, participants will receive a cash payment equal to the amount of cash dividends
paid on one share of Duke Energy common stock during the performance period multiplied by the number of performance shares earned. In connection with her termination of employment, Ms. Anderson
will receive a pro-rated portion of the performance shares reflected above as disclosed in the Outstanding Equity Awards at Fiscal Year-End Table on page 58.
-
(3)
-
Reflects
RSUs granted to our NEOs on February 19, 2020, under our LTI program, pursuant to the terms of the Duke Energy Corporation 2015 Long-Term Incentive
Plan. These RSUs generally vest in equal portions on each of the first three anniversaries of the grant date, provided the recipient continues to be employed by Duke Energy on each vesting date. If
dividends are paid during the vesting period, then the participants will receive a current cash payment equal to the amount of cash dividends paid on one share of Duke Energy common stock during the
vesting period multiplied by the number of unvested RSUs. In connection with her termination of employment, Ms. Anderson will receive a pro-rated portion of the RSUs reflected above as
disclosed in the Option Exercises and Stock Vested Table on page 59.
-
(4)
-
Reflects
the grant date fair value of each RSU and performance share award (based on the probable outcome of the performance conditions as of the date of grant)
granted to our NEOs in 2020, as computed in accordance with the accounting guidance for stock-based compensation.
|
|
|
BUILDING
A SMARTER ENERGY
FUTURE®
|
|
DUKE
ENERGY
2021
PROXY
STATEMENT 57
|
Table of Contents
EXECUTIVE COMPENSATION
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table shows the outstanding equity awards held by our NEOs as of December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
Grant Type
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(1)
|
|
Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(2)
|
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)(3)
|
|
Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lynn J. Good
|
|
RSUs
|
|
|
69,706
|
|
|
|
6,382,281
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Shares (2019 - 2021)
|
|
|
|
|
|
|
|
|
|
|
81,767
|
|
|
|
7,486,587
|
|
|
|
|
Performance Shares (2020 - 2022)
|
|
|
|
|
|
|
|
|
|
|
153,556
|
|
|
|
14,059,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven K. Young
|
|
RSUs
|
|
|
13,143
|
|
|
|
1,203,373
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Shares (2019 - 2021)
|
|
|
|
|
|
|
|
|
|
|
14,480
|
|
|
|
1,325,789
|
|
|
|
|
Performance Shares (2020 - 2022)
|
|
|
|
|
|
|
|
|
|
|
32,122
|
|
|
|
2,941,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dhiaa M. Jamil
|
|
RSUs
|
|
|
16,982
|
|
|
|
1,554,872
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Shares (2019 - 2021)
|
|
|
|
|
|
|
|
|
|
|
19,746
|
|
|
|
1,807,944
|
|
|
|
|
Performance Shares (2020 - 2022)
|
|
|
|
|
|
|
|
|
|
|
39,168
|
|
|
|
3,586,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julia S. Janson
|
|
RSUs
|
|
|
12,308
|
|
|
|
1,126,920
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Shares (2019 - 2021)
|
|
|
|
|
|
|
|
|
|
|
13,059
|
|
|
|
1,195,682
|
|
|
|
|
Performance Shares (2020 - 2022)
|
|
|
|
|
|
|
|
|
|
|
31,090
|
|
|
|
2,846,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas F Esamann
|
|
RSUs
|
|
|
11,770
|
|
|
|
1,077,661
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Shares (2019 - 2021)
|
|
|
|
|
|
|
|
|
|
|
12,637
|
|
|
|
1,157,044
|
|
|
|
|
Performance Shares (2020 - 2022)
|
|
|
|
|
|
|
|
|
|
|
29,350
|
|
|
|
2,687,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Melissa H. Anderson
|
|
Performance Shares (2019 - 2021)
|
|
|
|
|
|
|
|
|
|
|
6,331
|
|
|
|
579,666
|
|
|
|
|
Performance Shares (2020 - 2022)
|
|
|
|
|
|
|
|
|
|
|
10,202
|
|
|
|
934,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Ms. Good,
Mr. Young, Mr. Jamil, Ms. Janson, Mr. Esamann, and Ms. Anderson received RSUs on February 28, 2018,
February 27, 2019, and February 19, 2020, which vest, subject to certain exceptions, in equal installments on the first three anniversaries of the date of grant. All RSUs held by
Ms. Anderson immediately prior to her termination of employment have vested or been forfeited.
-
(2)
-
Market
value is based on the closing price per share of our common stock on December 31, 2020, of $91.56.
-
(3)
-
Ms. Good,
Mr. Young, Mr. Jamil, Ms. Janson, Mr. Esamann, and Ms. Anderson received performance shares on
February 27, 2019, and on February 19, 2020, that, subject to certain exceptions, are eligible for vesting on December 31, 2021, and December 31, 2022, respectively.
Pursuant to applicable SEC rules, the performance shares granted in 2019 are listed at the target number of shares and the performance shares granted in 2020 are listed at maximum. As described in
more detail on page 69, performance shares held by Ms. Anderson are eligible to vest following her termination on a pro-rated basis, subject to the actual achievement of pre-determined
performance measures and compliance with restrictive covenants.
|
|
|
58 DUKE
ENERGY 2021
PROXY
STATEMENT
|
|
BUILDING
A SMARTER ENERGY
FUTURE®
|
Table of Contents
EXECUTIVE COMPENSATION
OPTION EXERCISES AND STOCK VESTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares
Acquired on
Vesting
(#)(1)
|
|
Value Realized
on Vesting
($)(2)
|
|
|
|
|
|
|
|
Lynn J. Good
|
|
|
232,796
|
|
|
|
23,554,067
|
|
|
Steven K. Young
|
|
|
26,219
|
|
|
|
2,637,978
|
|
|
Dhiaa M. Jamil
|
|
|
44,534
|
|
|
|
4,495,846
|
|
|
Julia S. Janson
|
|
|
30,212
|
|
|
|
3,051,655
|
|
|
Douglas F Esamann
|
|
|
20,256
|
|
|
|
2,032,975
|
|
|
Melissa H. Anderson
|
|
|
19,269
|
|
|
|
1,890,201
|
|
|
|
|
|
|
|
|
-
(1)
-
Includes
vested RSUs and performance shares covering the 2018 - 2020 performance period, for all NEOs along with vested performance-based RSUs for
Ms. Good, Mr. Young, Mr. Jamil, Ms. Janson, and Ms. Anderson. On February 9, 2021, the Compensation and People Development Committee certified the achievement
of the applicable performance measures for the performance share cycle ending in 2020. Also includes the value of RSUs held by Ms. Anderson that became vested in connection with her termination
of employment, which shares generally are payable six months following her separation from service date, as required by applicable tax laws.
-
(2)
-
The
value realized upon vesting of stock awards was calculated based on the closing price of a share of Duke Energy common stock on the respective vesting date and
includes the following cash payments for dividend equivalents on earned performance shares: Ms. Good: $1,106,851; Mr. Young: $174,724; Mr. Jamil: $242,656; Ms. Janson:
$157,568; Mr. Esamann: $153,970; and Ms. Anderson: $85,686. Dividend equivalents for the first quarter of 2021 are not included above but were paid due to the fact that the vested
performance shares were not distributed until after the certification of performance results on February 9, 2021.
PENSION BENEFITS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Plan
Name
|
|
Number of Years
Credited Service
(#)
|
|
Present Value
of Accumulated
Benefit
($)
|
|
Payments
During Last
Fiscal Year
($)
|
|
|
|
|
|
|
|
|
|
Lynn J. Good
|
|
RCBP
|
|
|
17.67
|
|
|
|
450,634
|
|
|
0
|
|
|
ECBP
|
|
|
17.42
|
|
|
|
6,656,380
|
|
|
0
|
|
|
|
|
|
|
|
|
|
Steven K. Young
|
|
RCBP
|
|
|
40.51
|
|
|
|
945,735
|
|
|
0
|
|
|
ECBP
|
|
|
40.26
|
|
|
|
1,450,232
|
|
|
0
|
|
|
|
|
|
|
|
|
|
Dhiaa M. Jamil
|
|
RCBP
|
|
|
39.34
|
|
|
|
961,063
|
|
|
0
|
|
|
ECBP
|
|
|
39.09
|
|
|
|
1,861,697
|
|
|
0
|
|
|
|
|
|
|
|
|
|
Julia S. Janson
|
|
RCBP
|
|
|
33.00
|
|
|
|
1,802,314
|
|
|
0
|
|
|
ECBP
|
|
|
32.75
|
|
|
|
4,523,086
|
|
|
0
|
|
|
|
|
|
|
|
|
|
Douglas F Esamann
|
|
RCBP
|
|
|
38.00
|
|
|
|
1,969,626
|
|
|
0
|
|
|
ECBP
|
|
|
37.75
|
|
|
|
4,567,045
|
|
|
0
|
|
|
|
|
|
|
|
|
|
Melissa H. Anderson
|
|
Not eligible to participate in a pension plan
|
|
|
0
|
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
Duke
Energy provides pension benefits that are intended to assist our retirees with their retirement income needs. A more detailed description of the plans that comprise Duke Energy's pension program
follows.
Duke Energy Retirement Cash Balance Plan
Ms. Good,
Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann actively participate in the RCBP, which is a noncontributory, defined benefit retirement plan that is
intended to satisfy the requirements for qualification under Section 401(a) of the Internal Revenue Code. The RCBP generally covers employees of Duke Energy and affiliates, with certain
exceptions for individuals employed or re-employed on or after January 1, 2014. The RCBP currently provides benefits under a "cash balance account" formula. Certain prior plan formulas are
described below. Ms. Good, Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann have satisfied the eligibility requirements to receive his or her RCBP account benefit
upon termination of employment. The RCBP benefit is payable in the form of a lump sum in the amount credited to a hypothetical account at the time of benefit commencement. Payment is also available in
annuity
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EXECUTIVE COMPENSATION
forms
based on the actuarial equivalent of the account balance.
The
amount credited to the hypothetical account is increased with monthly pay credits equal to: (i) for participants with combined age and service of less than 35 points, 4% of eligible monthly
compensation; (ii) for participants with combined age and service of 35 to 49 points, 5% of eligible monthly compensation; (iii) for participants with combined age and service of 50 to
64 points, 6% of eligible monthly compensation; and (iv) for participants with combined age and service of 65 or more points, 7% of eligible monthly compensation. If the participant earns more
than the Social Security wage base, the account is credited with additional pay credits equal to 4% of eligible compensation above the Social Security wage base. Interest credits are credited monthly.
The interest rate for benefits accrued after 2012 is based on an annual interest factor of 4% and for benefits accrued before 2013 is based generally on the annual yield on the 30-year Treasury rate
(determined quarterly), subject to a minimum of 4% and a maximum of 9%.
For
the RCBP, eligible monthly compensation is equal to Form W-2 wages, plus elective deferrals under a 401(k), cafeteria, or 132(f) transportation plan, and deferrals under the Executive
Savings Plan. Compensation does not include severance pay, payment for unused vacation (including banked vacation and banked time), expense reimbursements, allowances, cash or noncash fringe benefits,
moving expenses, bonuses for performance periods in excess of one year, transition pay, LTI compensation (including income resulting from any stock-based awards such as stock options, stock
appreciation rights, RSUs, or restricted stock), military leave of absence pay (including differential wage payments), and other compensation items to the extent described as not included for purposes
of benefit plans or the RCBP. The benefit under the RCBP is limited by maximum benefits and compensation limits under the Internal Revenue Code.
Effective
at the end of 2012, the Cinergy Plan was merged into the RCBP. The balances that Ms. Good, Ms. Janson, and Mr. Esamann had under the Cinergy Plan's "cash balance
account" formula at the end of 2012 were credited to their hypothetical accounts under the RCBP. Prior to 2011, the Cinergy Plan also provided benefits under the Traditional Program formula, which
provides benefits based on service and FAP. Pursuant to a choice program offered to all non-union participants in the Traditional Program formula in 2006, Ms. Janson and Mr. Esamann
elected to participate in the Cinergy Plan's cash balance account formula. Their accrued benefit under the Traditional Program, which is based on service through April 1, 2007, and on pay
through December 31, 2016, (with banked vacation taken into account at December 31, 2016) was retained in the plan as well. Ms. Good has always participated in the Cinergy Plan's
cash balance account formula.
Under
the Traditional Program, in which Ms. Janson and Mr. Esamann participated prior to April 1, 2007, and which was frozen as of December 31, 2016, each participant earns
a benefit under a final average pay formula, which calculates pension benefits based on a participant's "highest average earnings" and years of plan participation. The Traditional Program benefit is
payable following normal retirement at age 65, following early retirement at or after age 50 with three or more years of service (with reduction in the life annuity for commencement before age 62 in
accordance with
prescribed factors) and at or after age 55 with combined age and service of 85 points (with no reduction in the life annuity for commencement before normal retirement age). Ms. Janson and
Mr. Esamann are eligible for an early retirement benefit, the amount of which would not be reduced as of December 31, 2020, for early commencement. Payments to Ms. Janson and
Mr. Esamann are available in a variety of annuity forms and in the form of a lump sum that is the actuarial equivalent of the benefit payable to them under the Traditional Program.
The
Traditional Program benefit formula is the sum of (a), (b), and (c), where (a) is 1.1% of FAP times years of participation (up to a maximum of 35 years); (b) is 0.5% times FAP
in excess of monthly Social Security covered compensation times years of participation (up to a maximum of 35 years); and (c) is 1.55% of FAP times years of participation in excess of
35. The benefit under the Traditional Program will not be less than the minimum formula, which is the sum of (x) and (y), where (x) is the lesser of (i) 1.12% of FAP times years
of participation (up to a maximum of 35 years) plus 0.5% times FAP in excess of monthly Social Security covered compensation times years of participation (up to a maximum of 35 years),
or (ii) 1.163% of FAP times years of participation (up to a maximum of 35 years); and (y) is 1.492% of FAP times years of participation over 35 years. Social Security
covered compensation is the average of the Social Security wage bases during the 35 calendar years ending in the year the participant reaches Social Security retirement age.
Under
the Traditional Program, as part of the administrative record keeping process established in 1998, creditable service for Ms. Janson, Mr. Esamann, and similarly situated employees
was established from the beginning of the year of hire. The number of actual years of service by Ms. Janson and Mr. Esamann with us or an affiliated company, established from the
beginning of the year of hire, is the same as the number of credited years of service under the RCBP (and the ECBP), and, therefore, no benefit augmentation resulted under the RCBP (and the ECBP) to
Ms. Janson and Mr. Esamann as a result of any difference in the number of years of actual and credited service. Ms. Janson's and Mr. Esamann's years of participation under
the Traditional Program are frozen as of April 1, 2007.
FAP
is the average of the participant's total pay during the three consecutive years of highest pay from the last ten years of participation at December 31, 2016, (including banked vacation
taken into account at December 31, 2016, determined by multiplying the participant's weeks of unused banked vacation as of December 31, 2016, by the participant's rate of pay as of
December 31, 2016). This is determined, at December 31, 2016, using the three consecutive calendar years or last 36 months of participation
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EXECUTIVE COMPENSATION
that
yield the highest FAP. Ms. Janson's and Mr. Esamann's FAPs under the Traditional Program are frozen as of December 31, 2016.
Total
pay under the Traditional Program includes base salary or wages, overtime pay, shift premiums, work schedule recognition pay, holiday premiums, retirement bank vacation pay, performance lump-sum
pay, annual cash incentive plan awards, and annual performance cash awards. Total pay does not include reimbursements or other expense allowances, imputed income, fringe benefits, moving and
relocation expenses, deferred compensation, welfare benefits, long-term performance awards, and executive individual incentive awards. The benefit under the Traditional Program is limited by maximum
benefits and compensation limits under the Internal Revenue Code.
Duke Energy Corporation Executive Cash Balance Plan
Mr. Young,
Mr. Jamil, Ms. Janson, and Mr. Esamann actively participated, until September 30, 2020, in the ECBP, which is a noncontributory, defined benefit
retirement plan that is not intended to satisfy the requirements for qualification under Section 401(a) of the Internal Revenue Code. Effective September 30, 2020, the ECBP was frozen
with respect to future pay credits, but interest credits continue to be credited on ECBP account balances after September 30, 2020. Prior to this freeze in future benefits, the ECBP generally
provided benefits to all employees who participated in the RCBP and whose compensation exceeded the limits under the Internal Revenue Code, including the NEOs listed above. As described on
page 63, effective October 1, 2020, each employee who was eligible to earn a benefit under the ECBP as in effect immediately prior to October 1, 2020, became eligible to earn a
corresponding benefit under the Executive Savings Plan. Prior to the freeze, benefits earned under the ECBP were attributable to (i) compensation in excess of the annual compensation limit
under the Internal Revenue Code that applies to the determination of pay credits under the RCBP; (ii) restoration of benefits in excess of a defined benefit plan maximum annual benefit limit
under the Internal Revenue Code that applies to the RCBP; and (iii) supplemental benefits granted to a particular participant. Generally, benefits earned under the RCBP and the ECBP vest upon
completion of three years of service, and, with certain exceptions, vested benefits generally become payable upon termination of employment with Duke Energy.
Amounts
were credited to a hypothetical account established for Ms. Good under the ECBP pursuant to an amendment to her prior employment agreement that was negotiated in connection with the
merger of Cinergy Corp. and Duke Energy. Ms. Good will not earn any additional benefits under any nonqualified defined benefit plan (other than future interest credits under the ECBP) unless
and until she continues employment with Duke Energy past age 62.
Present Value Assumptions
Because the pension amounts shown in the Pension Benefits Table on page 59 are the present values of current accrued retirement benefits, numerous
assumptions must be applied. The values are based on the same assumptions as used in our Annual Report, except as required by applicable SEC rules. Such assumptions include a 2.6% discount rate and an
interest crediting rate of 4.00% for all cash balance accounts. The assumed form of payment for the RCBP is that a lump sum will be elected 86% of the time and an annuity
(i.e., single life annuity, if single, and 100% joint and survivor annuity, if married) will be elected 14% of the time, and the assumed form of payment
under the ECBP is a lump sum. The post-retirement mortality assumption is consistent with that used in our 2020 Form 10-K. Benefits are assumed to commence at age 55 for Ms. Janson and
Mr. Esamann, age 62 for Ms. Good, and at age 65 for Mr. Young and Mr. Jamil or the NEO's current age (if later), and each NEO is assumed to remain employed until that age.
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Table of Contents
EXECUTIVE COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in Last FY
($)(1)
|
|
Registrant
Contributions
in Last FY
($)(2)
|
|
Aggregate
Earnings
in Last FY
($)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
Last FYE
($)(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lynn J. Good
|
|
|
153,605
|
|
|
|
233,933
|
|
|
|
305,832
|
|
|
|
0
|
|
|
|
4,421,344
|
|
|
Executive Savings Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven K. Young
|
|
|
67,354
|
|
|
|
102,529
|
|
|
|
254,170
|
|
|
|
0
|
|
|
|
2,035,758
|
|
|
Executive Savings Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dhiaa M. Jamil
|
|
|
99,496
|
|
|
|
118,191
|
|
|
|
497,110
|
|
|
|
0
|
|
|
|
5,281,014
|
|
|
Executive Savings Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julia S. Janson
|
|
|
65,190
|
|
|
|
96,110
|
|
|
|
229,198
|
|
|
|
0
|
|
|
|
1,981,807
|
|
|
Executive Savings Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas F Esamann
|
|
|
136,897
|
|
|
|
86,889
|
|
|
|
425,286
|
|
|
|
0
|
|
|
|
3,123,329
|
|
|
Executive Savings Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Melissa H. Anderson
|
|
|
14,677
|
|
|
|
27,157
|
|
|
|
75,226
|
|
|
|
0
|
|
|
|
591,699
|
|
|
Executive Savings Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Includes $83,430; $46,171; $44,688; $56,250; and $14,677 of salary deferrals credited to the plan in 2020 on behalf of Ms. Good,
Mr. Young, Ms. Janson, Mr. Esamann, and Ms. Anderson, respectively, which are included in the salary column of the Summary Compensation Table on page 55. Includes
$70,175; $21,183; $99,496; $20,502; and $80,647 of STI deferrals earned in 2020 and credited to the plan in 2021 on behalf of Ms. Good, Mr. Young, Mr. Jamil, Ms. Janson,
and Mr. Esamann, respectively, which are included in the Non-Equity Incentive Compensation Plan column of the Summary Compensation Table.
-
(2)
-
Includes $233,933; $81,198; $94,182; $75,465; and $67,398 of make-whole matching contribution credits made under the Executive Savings Plan on
behalf of Ms. Good, Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann, respectively, as well as $21,331; $24,009; $20,645; and $19,491 of make-whole cash balance
contribution credits on behalf of Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann, respectively, and $27,157 of employer retirement contributions on behalf of
Ms. Anderson, all of which are included in the All Other Compensation column of the Summary Compensation Table.
-
(3)
-
The aggregate balance as of December 31, 2020, for each NEO includes the following aggregate amount of prior deferrals of base salary
and STI, as well as employer make-whole matching contributions, that were previously earned and reported as compensation on the Summary Compensation Table for the years 2008 through 2019:
(i) Ms. Good $2,964,993; (ii) Mr. Young $649,869; (iii) Mr. Jamil $1,909,514;
(iv) Ms. Janson $579,928; and (v) Mr. Esamann $281,360. These amounts have since been adjusted, pursuant to the terms of the
Executive Savings Plan for investment performance (i.e., earnings and losses), deferrals, contributions, and distributions. The aggregate balance as of
December 31, 2020, also includes amounts earned in 2020 but credited to the plan in 2021, including the amounts described in footnotes 1 and 2 above.
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EXECUTIVE COMPENSATION
Duke Energy Corporation Executive Savings Plan
The
Executive Savings Plan generally provides all employees who participate in the Retirement Savings Plan and whose compensation exceeds the limits under the Internal Revenue Code, including the
NEOs, with the ability to elect to defer a portion of their base salary and STI compensation. Participants actively employed as of the end of the year also receive a company matching contribution in
excess of the contribution limits prescribed by the Internal Revenue Code under the Retirement Savings Plan, which is the 401(k) plan in which the NEOs participate.* Effective October 1, 2020,
participants also became eligible to receive monthly company cash balance contributions to the Executive Savings Plan in excess of the contribution limits prescribed by the Internal Revenue Code under
the RCBP, which is the pension plan in which the NEOs (other than Ms. Anderson) participate.** Similar make-whole cash balance contribution credits were provided, prior to October 1,
2020, under the ECBP, as described on page 61. The amendments to the Executive Savings Plan and ECBP, effective as of October 1, 2020, streamline the administration of the plans and do
not change the contribution formula used to calculate benefits. Because Ms. Anderson was not eligible for the RCBP, she was entitled under the Retirement Savings Plan to an additional annual
employer contribution equal to 4% of her eligible earnings.
In
general, payments are made following termination of employment or death in the form of a lump sum or installments, as selected by the participant. Participants may direct the deemed investment of
their account (with certain exceptions) among investment options available under the Retirement Savings Plan, including the Duke Energy Common Stock Fund. Participants may change their investment
elections on a daily basis. The benefits payable under the plan are unfunded and subject to the claims of Duke Energy's creditors.
-
*
-
The Retirement Savings Plan is a tax-qualified "401(k) plan" that provides a means for employees to save for retirement on a tax-favored basis
and to receive an employer matching contribution. The employer matching contribution is equal to 100% of the NEO's before-tax and Roth 401(k) contributions (excluding "catch-up" contributions) with
respect to 6% of eligible pay. For this purpose, "eligible pay" includes base salary and STI compensation. Earnings on amounts credited to the Retirement Savings Plan are determined based on the
performance of investment funds (including a Duke Energy Common Stock Fund) selected by each participant.
-
**
-
The RCBP is a tax-qualified "cash balance" pension plan that provides a hypothetical account for each participant to which pay credits are
credited monthly and to which interest credits are also credited. The Executive Savings Plan does not provide for interest credits, but, instead, allows for participants to direct the investment of
their cash balance contributions. See the "Pension Benefits" section for a detailed description of the RCBP.
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Table of Contents
EXECUTIVE COMPENSATION
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Under
certain circumstances, each NEO would be entitled to compensation in the event his or her employment terminates or upon a change in control. The amount of the compensation is contingent upon a
variety of factors, including the circumstances under which he or she terminates employment. The relevant agreements that each NEO has entered into with Duke Energy are described below, followed by a
table on page 68 that quantifies the amount that would become payable to each NEO as a result of his or her termination of employment.
Except
with respect to Ms. Anderson, who resigned from Duke Energy during 2020, the amounts shown assume that such termination was effective as of December 31, 2020, and are merely
estimates of the amounts that would be paid to our NEOs upon their termination. The actual amounts to be paid can only be determined at the time of such NEO's termination of employment.
The
table shown on page 68 does not include certain amounts that have been earned and that are payable without regard to the NEO's termination of employment. Such amounts, however, are described
immediately following the table.
For
a summary of the severance payment and benefits provided to Ms. Anderson in connection with her resignation in Duke Energy in August 2020, please see the sub-heading "Severance Payment for
Ms. Anderson" on page 69.
Under
each of the compensation arrangements described below for Ms. Good, Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann, "change in control" generally means the
occurrence of one of the following: (i) the date any person or group becomes the beneficial owner of 30% or more of the combined voting power of Duke Energy's then outstanding securities;
(ii) during any period of two consecutive years, the directors serving at the beginning of such period or who are elected thereafter with the support of not less than two-thirds of those
directors cease for any reason other than death, disability, or retirement to constitute at least a majority thereof; (iii) the consummation of a merger, consolidation, reorganization, or
similar corporate transaction, which has been approved by the shareholders of Duke Energy, regardless of whether Duke Energy is the surviving company, unless Duke Energy's outstanding voting
securities immediately prior to the transaction continue to represent at least 50% of the combined voting power of the outstanding voting securities of the surviving entity immediately after the
transaction; (iv) the consummation of a sale of all or substantially all of the assets of Duke Energy or a complete liquidation or dissolution, which has been approved by the shareholders of
Duke Energy; or (v) under certain arrangements, the date of any other event that the Board determines should constitute a change in control.
Employment Agreement with Ms. Good
Effective
July 1, 2013, Duke Energy entered into an employment agreement with Ms. Good that contained a three-year initial term and automatically renews for additional one-year periods
at the end of the initial term unless either party provides 120 days' advance notice. In the event of a change in control of Duke Energy, the term automatically extends to a period of two
years. Upon a termination of Ms. Good's employment by Duke Energy without "cause" or by Ms. Good for "good reason" (each as defined below), the following severance payments and benefits
would be payable: (i) a lump-sum payment equal to a pro rata amount of her annual bonus for the portion of the year that the termination of employment occurs during which she was employed,
determined based on the actual achievement of performance goals; (ii) a lump-sum payment equal to 2.99 times the sum of her annual base salary and target annual bonus opportunity;
(iii) continued access to medical and dental benefits for 2.99 years, with monthly amounts relating to Duke Energy's portion of the costs of such coverage paid by Duke Energy (reduced by
coverage provided by future employers, if any) and a lump-sum payment equal to the cost of basic life insurance coverage for 2.99 years; (iv) one year of outplacement services;
(v) if termination occurs within 30 days prior to, or two years after a change in control of Duke Energy, vesting in unvested retirement plan benefits that would have vested during the
two years following the change in control and a lump-sum payment equal to the maximum contributions and allocations that would have been made or allocated if she had remained employed for an
additional 2.99 years; and (vi) 2.99 additional years of vesting with respect to equity awards and an extended period to exercise outstanding vested stock options following termination
of employment.
Ms. Good
is not entitled to any form of tax gross-up in connection with Sections 280G and 4999 of the Internal Revenue Code. Instead, in the event that the severance payments or benefits
otherwise would constitute an "excess parachute payment" (as defined in Section 280G of the Internal Revenue Code), the amount of payments or benefits would be reduced to the maximum level that
would not result in an excise tax under Section 4999 of the Internal Revenue Code if such reduction would cause Ms. Good to retain an
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EXECUTIVE COMPENSATION
after-tax
amount in excess of what would be retained if no reduction were made.
Under
Ms. Good's employment agreement, "cause" generally means, unless cured within 30 days, (i) a material failure by Ms. Good to carry out, or malfeasance or gross
insubordination in carrying out, reasonably assigned duties or instructions consistent with her position; (ii) the final conviction of Ms. Good of a felony or crime involving moral
turpitude; (iii) an egregious act of dishonesty by Ms. Good in connection with employment, or a malicious action by Ms. Good toward the customers or employees of Duke Energy;
(iv) a material breach by Ms. Good of Duke Energy's Code of Business Ethics; or (v) the failure of Ms. Good to cooperate fully with governmental investigations involving
Duke Energy. "Good reason," for this purpose, generally means, unless cured within 30 days, (i) a material reduction in Ms. Good's annual base salary or target annual bonus
opportunity (exclusive of any across-the-board reduction similarly affecting substantially all similarly situated employees); or (ii) a material diminution in Ms. Good's positions
(including status, offices, titles, and reporting relationships), authority, duties or responsibilities or any failure by the Board to nominate Ms. Good for re-election as a member of the
Board.
Ms. Good's
employment agreement contains restrictive covenants related to confidentiality, mutual no disparagement, noncompetition, and nonsolicitation obligations. The noncompetition and
nonsolicitation obligations survive for two years following her termination of employment.
Other Named Executive Officers
Duke
Energy entered into a Change in Control Agreement with Mr. Young effective as of July 1, 2005, and with Mr. Jamil effective as of February 26, 2008, both of which were
amended and restated effective as of August 26, 2008, and subsequently amended effective as of January 8, 2011. Duke Energy entered into a Change in Control Agreement with
Ms. Janson effective as of December 17, 2012, and with Mr. Esamann effective as of June 1, 2015. The agreements have an initial term of two years commencing as of the
original effective date, after which the agreements automatically extend, unless six months' prior written notice is provided, on a month-to-month basis.
The
Change in Control Agreements provide for payments and benefits to the executive in the event of termination of employment within two years after a "change in control" by Duke Energy without
"cause" or by the executive for "good reason" (each as defined below) as follows: (i) a lump-sum cash payment equal to a pro rata amount of the executive's target bonus for the year in which
the termination occurs; (ii) a lump-sum cash payment equal to two times the sum of the executive's annual base salary and target annual bonus opportunity in effect immediately prior to
termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting "good reason;" (iii) continued
medical, dental, and basic life insurance coverage for a two-year period or a lump-sum cash payment of equivalent value (reduced by coverage obtained by subsequent employers); and (iv) a
lump-sum cash payment of the amount Duke Energy would have allocated or contributed to the executive's qualified and nonqualified defined benefit pension plan and defined contribution savings plan
accounts during the two years following the termination date, plus the unvested portion, if any, of the executive's accounts as of the date of termination that would have vested during the remaining
term of the agreement. The agreements also provide for enhanced benefits (i.e., two years of additional vesting) with respect to equity awards.
Under
the Change in Control Agreements, each NEO also is entitled to reimbursement of up to $50,000 for the cost of certain legal fees incurred in connection with claims under the agreements. In the
event that any of the payments or benefits provided for in the Change in Control Agreement otherwise would constitute an "excess parachute payment" (as defined in Section 280G of the Internal
Revenue Code), the amount of payments or benefits would be reduced to the maximum level that would not result in excise tax under Section 4999 of the Internal Revenue Code if such reduction
would cause the executive to retain an after-tax amount in excess of what would be retained if no reduction were made. In the event a NEO becomes entitled to payments and benefits under a Change in
Control Agreement, he or she would be subject to a one-year noncompetition and nonsolicitation provision from the date of termination, in addition to certain confidentiality and cooperation
provisions.
The
Executive Severance Plan provides certain executives, including Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann with severance payments and benefits upon a
termination of employment under certain circumstances. Pursuant to the terms of the Executive Severance Plan, Tier I Participants, which include our NEOs, would be entitled, subject to the
execution of a waiver and release of claims, to the following payments and benefits in the event of a termination of employment by (a) Duke Energy other than for "cause" (as defined below),
death, or disability, or (b) the participant for "good reason" (as defined below): (i) a lump-sum payment equal to a pro rata amount of the participant's annual bonus for the year that
the termination of employment occurs, determined based on the actual achievement of performance goals under the applicable performance-based bonus plan; (ii) a lump-sum payment equal to two
times the sum of the participant's annual base salary and target annual bonus opportunity in effect immediately prior to termination of employment or, if higher, in effect immediately prior to the
first occurrence of an event or circumstance constituting "good reason;" (iii) continued access to medical and dental insurance for a two-year period
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EXECUTIVE COMPENSATION
following
termination of employment, with monthly amounts relating to Duke Energy's portion of the costs of such coverage paid to the participant by Duke Energy (reduced by coverage provided to the
participant by future employers, if any) and a lump-sum payment equal to the cost of two years of basic life insurance coverage; (iv) one year of outplacement services; and (v) two
additional years of vesting with respect to equity awards and an extended period to exercise outstanding vested stock options following termination of employment.
The
Executive Severance Plan also provides that, in the event any of the payments or benefits provided for in the Executive Severance Plan otherwise would constitute an "excess parachute payment" (as
defined in Section 280G of the Internal Revenue Code), the amount of payments or benefits would be reduced to the maximum level that would not result in an excise tax under Section 4999
of the Internal Revenue Code if such reduction would cause the executive to retain an after-tax amount in excess of what would be retained if no reduction were made. In the event a participant becomes
entitled to payments and benefits under the Executive Severance Plan, he or she would be subject to certain restrictive covenants, including those related to noncompetition, nonsolicitation, and
confidentiality.
Duke
Energy has the right to terminate any participant's participation in the Executive Severance Plan but must provide the participant with one year's notice and the participant would continue to be
eligible for all severance payments and benefits under the Executive Severance Plan during the notice period. Any employee who is eligible for severance
payments and benefits under a separate agreement or plan maintained by Duke Energy (such as a Change of Control Agreement) would receive compensation and benefits under such other agreement or plan
(and not the Executive Severance Plan).
For
purposes of the Change in Control Agreements and the Executive Severance Plan, "cause" generally means, unless cured within 30 days, (i) a material failure by the executive to carry
out, or malfeasance or gross insubordination in carrying out, reasonably assigned duties or instructions consistent with the executive's position; (ii) the final conviction of the executive of
a felony or crime involving moral turpitude; (iii) an egregious act of dishonesty by the executive in connection with employment, or a malicious action by the executive toward the customers or
employees of Duke Energy; (iv) a material breach by the executive of Duke Energy's Code of Business Ethics; or (v) the failure of the executive to cooperate fully with governmental
investigations involving Duke Energy. "Good reason," for this purpose, generally means (i) a material reduction in the executive's annual base salary or target annual bonus opportunity as in
effect either immediately prior to the change in control or the termination under the Executive Severance Plan (exclusive of any across-the-board reduction similarly affecting substantially all
similarly situated employees); or (ii) a material diminution in the participant's positions (including status, offices, titles, and reporting relationships), authority, duties, or
responsibilities as in effect either immediately prior to the change in control or immediately prior to a Tier I Participant's termination of employment under the Executive Severance Plan.
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EXECUTIVE COMPENSATION
Equity Awards Consequences of Termination of Employment
Each
year Duke Energy grants long-term incentives to our executive officers, and the terms of these awards vary somewhat from year to year. The following table summarizes the consequences under Duke
Energy's LTI award agreements, without giving effect to Ms. Good's employment agreement, the Change in Control Agreements or the Executive Severance Plan, that would generally occur with
respect to outstanding equity awards in the event of the termination of employment of Ms. Good, Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann.
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Award Type
|
|
Event
|
|
Consequences
|
|
|
|
|
|
|
|
Retirement*
|
|
Unvested RSUs prorated and vest
|
|
|
|
|
|
|
|
Voluntary termination**
|
|
Unvested RSUs are forfeited
|
|
|
|
|
|
RSUs
|
|
Death or disability
|
|
Unvested RSUs immediately vest
|
|
|
|
|
|
|
|
Change in control
|
|
No impact absent termination of employment; immediate vesting of unvested RSUs if involuntarily terminated after a change in control
|
|
|
|
|
|
|
|
Retirement*
|
|
Prorated portion vests based on actual performance.
|
Performance Share
|
|
Death & Disability
|
|
|
|
|
|
|
|
Awards
|
|
Voluntary termination**
|
|
Award is forfeited
|
|
|
|
|
|
|
|
Change in Control
|
|
No impact absent termination of employment; prorated portion vests based on actual performance if involuntarily terminated after a change
in control
|
|
|
|
|
|
-
*
-
Age
55 with at least 10 years of service. In the event a member of the Senior Management Committee (including the NEOs) retires on or after age 60 with
at least five years of service following the completion of at least one year of the performance cycle, performance shares granted after 2019 continue to vest (without proration) based on actual
performance
-
**
-
Not
retirement eligible
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EXECUTIVE COMPENSATION
POTENTIAL PAYMENTS UPON TERMINATION OR
A CHANGE IN CONTROL*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Triggering Event
|
|
Cash
Severance
Payment
($)(1)
|
|
Incremental
Retirement
Plan Benefit
($)(2)
|
|
Welfare
and Other
Benefits
($)(3)
|
|
Stock
Awards
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lynn J. Good
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary termination without good reason
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
16,375,467
|
|
Involuntary or good reason termination under Employment Agreement
|
|
|
11,017,627
|
|
|
0
|
|
|
69,219
|
|
|
22,823,177
|
|
Involuntary or good reason termination after a change in control
|
|
|
11,017,627
|
|
|
740,696
|
|
|
69,219
|
|
|
22,067,826
|
|
Death or Disability(4)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
14,644,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven K. Young
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary termination without good reason
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3,162,310
|
|
Involuntary or good reason termination under Executive Severance Plan
|
|
|
2,947,565
|
|
|
0
|
|
|
34,822
|
|
|
4,341,662
|
|
Involuntary or good reason termination after a change in control
|
|
|
2,947,565
|
|
|
489,470
|
|
|
41,074
|
|
|
4,220,045
|
|
Death or Disability(4)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2,751,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dhiaa M. Jamil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary termination without good reason
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
4,050,908
|
|
Involuntary or good reason termination under Executive Severance Plan
|
|
|
3,317,607
|
|
|
0
|
|
|
16,896
|
|
|
5,598,107
|
|
Involuntary or good reason termination after a change in control
|
|
|
3,317,607
|
|
|
552,377
|
|
|
23,272
|
|
|
5,443,711
|
|
Death or Disability(4)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3,586,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Julia S. Janson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary termination without good reason
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,905,795
|
|
Involuntary or good reason termination under Executive Severance Plan
|
|
|
2,852,850
|
|
|
0
|
|
|
39,662
|
|
|
4,065,395
|
|
Involuntary or good reason termination after a change in control
|
|
|
2,852,850
|
|
|
473,369
|
|
|
45,498
|
|
|
3,950,443
|
|
Death or Disability(4)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2,559,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas F Esamann
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary termination without good reason
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2,836,701
|
|
Involuntary or good reason termination under Executive Severance Plan
|
|
|
2,693,250
|
|
|
0
|
|
|
28,440
|
|
|
3,883,718
|
|
Involuntary or good reason termination after a change in control
|
|
|
2,693,250
|
|
|
446,237
|
|
|
51,068
|
|
|
3,774,275
|
|
Death or Disability(4)
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2,451,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The amounts listed under "Cash Severance Payment" are payable under (i) the terms of Ms. Good's employment agreement;
(ii) the Change in Control Agreements of Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann; or (iii) the Executive Severance Plan.
-
(2)
-
The amounts listed under Incremental Retirement Plan Benefit are payable under the terms of Ms. Good's employment agreement and the
Change in Control Agreements of Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann. They represent the additional amount that would have been contributed to the RCBP, ECBP,
Retirement Savings Plan, and the Executive Savings Plan in the event the NEO had continued to be employed by Duke Energy for (i) 2.99 years for Ms. Good or (ii) two
additional years after the actual date of termination for the other NEOs.
-
(3)
-
The amounts listed under "Welfare and Other Benefits" include the amount that would be paid to each NEO in lieu of providing continued welfare
benefits and basic life coverage. This continued coverage represents (i) 2.99 years for Ms. Good or (ii) two years for the other NEOs. In addition to the amounts shown
above, access to outplacement services for a period of up to one year after termination will be provided to Ms. Good if terminating under her employment agreement or to any NEO terminating
under the Executive Severance Plan.
-
(4)
-
In the event of a termination of employment due to long-term disability, because the payment of RSUs would be delayed for an additional six
months as required by applicable tax rules, additional dividend equivalent payments would be made in the amount of $99,707; $19,108; $24,509; $17,964; and $17,146 for Ms. Good,
Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann, respectively.
-
*
-
Ms. Anderson is not included in the table above because she resigned from Duke Energy in 2020, and therefore the amounts payable to her
is known. Ms. Anderson is entitled to severance compensation under the Executive Severance Plan as described in the "Severance Payment for Ms. Anderson" section on the next page.
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EXECUTIVE COMPENSATION
Assumptions and Other Considerations
The
amounts listed on the previous page have been determined based on a variety of assumptions, including with respect to the limits on qualified retirement plan benefits under the Internal Revenue
Code. The actual amounts to be paid out can only be determined at the time of each NEO's termination of employment. The amounts described in the table do not include compensation to which each NEO
would be entitled without regard to his or her termination of employment, including (i) base salary and STI that have been earned but not yet paid; (ii) amounts that have been earned,
but not yet paid, under the terms of the plans listed under the Pension Benefits and Nonqualified Deferred Compensation tables; (iii) unused vacation; and (iv) the potential
reimbursement of legal fees.
The
amounts shown on the previous page do not reflect the fact that, under Ms. Good's employment agreement and under the Change in Control Agreements that Duke Energy has entered into with
Mr. Young, Mr. Jamil, Ms. Janson, and Mr. Esamann, in the event that payments to any such executive in connection with a change in control otherwise would result in a
golden parachute excise tax and lost tax deduction under Sections 280G and 4999 of the Internal Revenue Code, such amounts would be reduced under certain circumstances so that such tax would
not apply.
The
amounts shown on the previous page with respect to stock awards were calculated based on a variety of assumptions, including the following: (i) the NEO terminated employment on
December 31, 2020; (ii) a stock price for Duke Energy common stock equal to $91.56, which was the closing price on December 31, 2020; (iii) the continuation of Duke
Energy's dividend at the rate in effect during the first quarter of 2021; and (iv) performance at the target level with respect to performance shares.
Severance Payment for Ms. Anderson
On
August 31, 2020, in connection with a restructuring of roles and responsibilities among the executive team, Ms. Anderson resigned from Duke Energy under circumstances that the
Compensation and People Development Committee determined constituted "good reason" and she therefore was eligible to receive severance benefits under the Executive Severance Plan. In consideration for
a waiver and release of claims, and an agreement to non-competition, non-solicitation, and confidentiality covenants, Ms. Anderson is entitled to a cash severance payment equal to two times the
sum of her annual base salary and target annual cash bonus, a pro-rated STI payment for 2020, continued health and welfare benefits for two years, access to outplacement services for one year, and two
additional years of vesting with respect to stock awards. The following table quantifies the severance benefits provided to Ms. Anderson.
|
|
|
|
|
Payments and Benefits
|
|
Ms. Anderson
|
|
|
|
|
|
|
Cash Severance, with interest
|
|
$
|
1,997,663
|
|
Pro-rated STI payment
|
|
$
|
149,637
|
|
Continued Health and Welfare Benefits
|
|
$
|
36,976
|
|
Outplacement Services
|
|
$
|
30,000
|
|
Vesting of RSUs
|
|
$
|
410,016
|
|
Vesting of Performance Shares
|
|
$
|
1,717,216
|
|
|
|
|
|
|
Total
|
|
$
|
4,341,508
|
|
The amounts shown in the "Payments and Benefits" table with respect to stock awards were calculated based on a variety of assumptions, including the following:
(i) a stock price for Duke Energy common stock equal to the closing price of a share of Duke Energy common stock on the date of termination (i.e,
$80.34); and (ii) the continuation of Duke Energy's dividend at the rate in effect during the first quarter of 2021. The performance share amounts are based on an assumption that target
performance is achieved; payments (if any) under these awards only will be made to the extent that the shares are earned based on actual performance.
In
addition, Ms. Anderson is entitled to her accrued and unpaid benefits under Duke Energy's retirement and deferred compensation plans, as well as a payout for her unused vacation.
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Table of Contents
EXECUTIVE COMPENSATION
Chief Executive Officer Pay Ratio
As
required by SEC rules, we are providing the following information about the ratio of the 2020 annual total compensation of Lynn Good, our CEO, to the annual total compensation of our median
employee.
We
estimated the median of the 2020 annual total compensation of our employees, excluding our CEO, to be $125,812. The annual total compensation of our CEO was $14,544,398. The ratio of the annual
total compensation of our CEO to the estimated median of the annual total compensation of our employees was 116 to 1.
The
SEC rules permit us to identify our median employee once every three years. If, however, we determine it is not appropriate to use the median employee identified in one year (2019) in a subsequent
year (2020) because of a change in circumstances that would result in a significant change in the pay ratio disclosure, then we are permitted to select another median employee whose compensation is
substantially similar to the original median employee. The median employee we used for 2020 is the same as the median employee we identified for 2019.
To
identify the median employee, we reviewed our employee population as of October 31, 2019. We used wages reported in Box 1 of IRS Form W-2 during the ten-month period ending on
October 31, 2019, as a consistently applied compensation measure. We did not annualize the wages or make cost of living adjustments. Based on this methodology, we identified a group of
employees whose compensation was at the median of the employee data. From this group, we selected another individual who we reasonably believed represented our median employee.
We
calculated the annual total compensation using the rules applicable to the Summary Compensation Table. With respect to the annual total compensation of our CEO, we used the amount reported in the
"Total" column for 2020 in the Summary Compensation Table on page 55.
The
pay ratio rules provide companies with flexibility to select the methodology and assumptions used to identify the median employee, calculate the median employee's compensation and estimate the pay
ratio. As a result, our methodology may differ from those used by other companies, which likely will make it very difficult to compare pay ratios with other companies, including those within our
industry.
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