What is the primary purpose of Dominion Energy's 2019 incentive plans?

The primary purpose of the 2019 Annual Incentive Plan and the 2019 Long-Term Incentive Program is to align executive compensation with the company's financial performance and the creation of shareholder value. They are designed to incentivize officers to achieve specific financial, operational, and strategic goals.

How will the 2019 Annual Incentive Plan be funded and what determines the payout?

The Annual Incentive Plan's funding is based on the achievement of consolidated financial operating earnings goals, with potential funding ranging from 0% to 200% of the target. The actual payout to officers is then subject to the achievement of these funded amounts, along with applicable consolidated financial, business unit financial, and operational and stewardship goals, which include safety, diversity, and environmental targets.

What are the key components of the 2019 Long-Term Incentive Program?

The 2019 Long-Term Incentive Program consists of two main components: a restricted stock grant that vests after three years (cliff vesting), and a performance grant. The performance grant's payout is primarily based on Dominion Energy's total shareholder return (TSR) relative to peer companies and its return on invested capital, with a performance period concluding on December 31, 2021.

How is executive compensation linked to shareholder value in the long-term program?

The long-term program directly links executive compensation to shareholder value through its performance grant component. Fifty percent of the performance grant payout is determined by Dominion Energy's total shareholder return (TSR) relative to a selected group of peer companies. An additional opportunity to earn awards is also provided based on the company's absolute TSR and its price-earnings ratio performance.

D 8-K: Leadership Changes

Summary

Dominion Energy, Inc. (D) filed an 8-K on January 30, 2019, detailing its 2019 incentive compensation plans for officers. The company's Compensation, Governance and Nominating Committee approved both an Annual Incentive Plan and a Long-Term Incentive Program. These plans aim to align executive compensation with company performance and shareholder value creation. The Annual Incentive Plan offers performance-based cash awards for officers, with target incentives tied to a percentage of base salary. The overall funding of this plan is contingent on achieving consolidated financial operating earnings goals, with payouts further dependent on financial, business unit, operational, and stewardship objectives, including safety, diversity, and environmental targets. The Long-Term Incentive Program combines restricted stock grants with a three-year cliff vesting period and performance grants tied to relative total shareholder return (TSR) and return on invested capital. This program also includes provisions for absolute TSR and price-earnings ratio performance, with a performance period extending through December 31, 2021.

Key Highlights

1Dominion Energy approved its 2019 Annual Incentive Plan and 2019 Long-Term Incentive Program.
2The Annual Incentive Plan is performance-based, with cash awards for officers tied to base salary percentages.
3Annual incentive plan funding is based on consolidated financial operating earnings goals (0%-200% of target funding).
4Payouts for the annual plan also depend on consolidated financial, business unit, operating, safety, diversity, and environmental goals.
5The Long-Term Incentive Program includes restricted stock with a three-year cliff vesting period.
6Performance grants within the long-term program are based 50% on relative TSR and 50% on return on invested capital.
7Performance grants have an additional opportunity based on absolute TSR and P/E ratio, with a performance period ending December 31, 2021.

DOMINION ENERGY, INC 8-K Report, Executive Changes (Jan 30, 2019)

Summary

Key Highlights

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