8-KLeadership Changes

DOMINION ENERGY, INC 8-K Report, Executive Changes (Jan 23, 2015)

Filed January 23, 2015For Securities:D

Summary

Dominion Energy, Inc. (D) filed an 8-K on January 23, 2015, detailing its executive compensation plans for 2015. The key information for investors revolves around the newly approved 2015 Annual Incentive Plan and the 2015 Long-Term Incentive Program. These plans are designed to align executive compensation with the company's financial performance and shareholder value creation, incorporating both short-term and long-term performance metrics. The Annual Incentive Plan offers performance-based cash awards to officers, with incentive targets tied to base salary percentages. Payouts are contingent on achieving consolidated financial operating earnings goals, with a potential funding range of 0% to 200% of target. For named executive officers, payouts will be based solely on these funding goals to maintain tax deductibility under Section 162(m) of the Internal Revenue Code. The Long-Term Incentive Program consists of restricted stock and a cash-based performance grant, both with equal value. The restricted stock vests after three years, while the performance grant payout by March 2017 is tied to relative total shareholder return and return on invested capital.

Key Highlights

  • 1Dominion Energy approved its 2015 Annual Incentive Plan, offering performance-based cash awards to officers.
  • 2The 2015 Annual Incentive Plan's funding is directly linked to consolidated financial operating earnings goals, with potential payouts ranging from 0% to 200% of target.
  • 3Named executive officers' annual incentive payouts are solely tied to funding goals to preserve tax deductibility under IRC Section 162(m).
  • 4The company also approved the 2015 Long-Term Incentive Program for its officers.
  • 5The 2015 Long-Term Incentive Program includes two equal components: a restricted stock grant and a cash-based performance grant.
  • 6Restricted stock grants under the program have a three-year cliff vesting period.
  • 7The cash-based performance grant payout is contingent on achieving relative total shareholder return (50% weight) and return on invested capital (50% weight) by March 15, 2017.

Frequently Asked Questions

The 2015 Annual Incentive Plan is designed to provide performance-based cash awards to Dominion Energy's officers, linking their short-term compensation to the company's achievement of consolidated financial operating earnings goals.

For named executive officers, the payout of their annual incentive under the 2015 plan is based solely on the achievement of consolidated financial operating earnings goals. This structure is intended to ensure the deductibility of these payouts under Section 162(m) of the Internal Revenue Code.

The 2015 Long-Term Incentive Program consists of two components of equal value: a restricted stock grant which vests after three years, and a cash-based performance grant. The payout of the performance grant is based on achieving specific financial metrics related to total shareholder return and return on invested capital.

The cash-based performance grant payout will be based on two equally weighted metrics: total shareholder return relative to companies in the Philadelphia Stock Exchange Utility Index (50%) and return on invested capital (50%).