Summary
Dominion Energy, Inc. (D) filed an 8-K on January 29, 2009, detailing its 2009 executive compensation plans. The company's Compensation, Governance and Nominating Committee approved the 2009 Annual Incentive Plan and the 2009 Long-Term Incentive Program. These plans are designed to incentivize officers, including named executive officers, through performance-based cash awards and a combination of restricted stock and cash performance grants, respectively. The incentive structures are tied to the achievement of specific financial, operational, safety, and shareholder return metrics.
Key Highlights
- 1Approval of the 2009 Annual Incentive Plan for officers, offering performance-based cash awards tied to base salary percentages.
- 22009 Annual Incentive Plan funding is based on consolidated operating earnings goals (0%-200% of target funding).
- 3Specific performance metrics for annual incentives include financial, safety, operating, and stewardship goals, with 5% of payouts linked to safety.
- 4Introduction of the 2009 Long-Term Incentive Program, comprising restricted stock with a three-year cliff vesting and a cash-based performance grant.
- 5Long-term performance grant metrics include relative total shareholder return (50%), return on invested capital (40%), and book value per share (10%).
- 6The Compensation Committee exercised negative discretion to reduce 2007 performance grant payouts by 12% for named executive officers, aligning them with other officers.
- 7Both the annual and long-term incentive plans include provisions for clawbacks in cases of fraudulent misconduct leading to financial restatements or affecting business operations.
Frequently Asked Questions
Dominion approved two main compensation plans for 2009: the Annual Incentive Plan, which offers performance-based cash awards tied to base salary and operational/financial goals, and the Long-Term Incentive Program, which consists of restricted stock grants with a three-year vesting period and a cash performance grant based on relative total shareholder return, return on invested capital, and book value per share.
Both plans are heavily performance-based. The Annual Incentive Plan's funding depends on consolidated operating earnings and individual officer payouts are subject to financial, safety, and operational goals. The Long-Term Incentive Program's cash component is directly tied to relative total shareholder return, return on invested capital, and book value per share over a three-year period.
Yes, both the 2009 Annual Incentive Plan and the 2009 Long-Term Incentive Program include provisions that allow the Compensation, Governance and Nominating Committee to require repayment of incentives from any participant found to have engaged in fraudulent or intentional misconduct that directly causes a financial restatement or materially affects the company's business operations.
Yes, for the 2007 Long-Term Compensation Program, the Committee certified performance metric achievement and exercised negative discretion to lower the payout levels for named executive officers by 12%, ensuring consistency with the payout levels for other officers.