8-KLeadership Changes

DOMINION ENERGY, INC 8-K Report, Executive Changes (Jan 27, 2017)

Filed January 27, 2017For Securities:D

Summary

Dominion Energy, Inc. (D) filed an 8-K on January 26, 2017, detailing its executive compensation plans for 2017. The company's Compensation, Governance and Nominating Committee approved the 2017 Annual Incentive Plan and the 2017 Long-Term Incentive Program. The annual plan offers performance-based cash awards tied to consolidated financial operating earnings goals, with payouts also contingent on achieving various business unit and operational objectives for most officers. The long-term program includes restricted stock with a three-year cliff vesting period and cash-based performance grants. These performance grants are based on total shareholder return relative to peers and return on invested capital over a three-year performance period.

Key Highlights

  • 1Approval of the 2017 Annual Incentive Plan (Plan) for officers, providing performance-based cash awards.
  • 2Target incentive awards under the 2017 Plan range from 90% to 125% of base salary for named executive officers.
  • 3Plan funding is based on consolidated financial operating earnings goals, with potential payouts from 0% to 200% of target.
  • 4Approval of the 2017 Long-Term Incentive Program (Program) for officers, comprising restricted stock and cash-based performance grants.
  • 5Restricted stock under the Program has a three-year cliff vesting period.
  • 6Cash-based performance grants are tied to relative total shareholder return (50%) and return on invested capital (50%) over a three-year performance period.
  • 7A one-time transition performance grant was approved to bridge the gap created by extending the performance period for long-term grants from two to three years.

Frequently Asked Questions

The 2017 Annual Incentive Plan is designed to provide Dominion's officers with performance-based cash awards. The payout is linked to the achievement of consolidated financial operating earnings goals and other business-specific operational and stewardship objectives.

The 2017 Long-Term Incentive Program consists of two components: restricted stock that vests after three years, and cash-based performance grants. These performance grants are evaluated over a three-year period based on total shareholder return relative to a peer group and return on invested capital.

The company extended the performance period for its long-term cash-based incentive grants from two to three years. This change was made to better align the awards with the objective of incentivizing employees to achieve long-term performance goals and to maintain award opportunities during the transition, a one-time transition grant was also approved.

No, payouts under both the annual and long-term incentive plans are performance-based. Funding for the annual plan is dependent on achieving financial operating earnings goals, and payouts for most officers are subject to additional business and operational goals. Long-term grants are contingent on achieving specific relative shareholder return and return on invested capital metrics. The Compensation, Governance and Nominating Committee also retains negative discretion to reduce payouts.