8-KLeadership ChangesExhibits & Filings

SEMPRA 8-K Report, Executive Changes (Jul 1, 2011)

Filed July 1, 2011For Securities:SRESREA

Summary

Sempra Energy (SRE) filed an 8-K on July 1, 2011, reporting a significant leadership transition. Effective June 27, 2011, Debra L. Reed was elected Chief Executive Officer, succeeding Donald E. Felsinger, who will transition to Executive Chairman until his retirement in late 2012. This change signals a new phase for Sempra, with a long-tenured executive taking the helm. Ms. Reed's extensive experience within Sempra's regulated utilities, including as CEO of San Diego Gas & Electric and Southern California Gas Company, positions her well for the top role. The filing also details Ms. Reed's updated compensation package, reflecting her new CEO responsibilities, which includes an increased salary, bonus targets, and a substantial equity award. Furthermore, the report outlines an amended and restated severance pay agreement for Ms. Reed, detailing benefits in the event of involuntary termination, particularly following a change in control. These provisions appear designed to align executive interests and provide security during leadership transitions.

Key Highlights

  • 1Debra L. Reed appointed as the new Chief Executive Officer of Sempra Energy, effective June 27, 2011.
  • 2Donald E. Felsinger transitions from CEO to Executive Chairman, planning to retire in late 2012.
  • 3Neal E. Schmale, President and COO, will remain in his role until his retirement later in 2011.
  • 4Debra L. Reed also appointed as a Director to the Sempra Energy Board, which was expanded to 13 members.
  • 5Ms. Reed's compensation package was updated with a $1,000,000 annual salary, a 100% target bonus, and a $2,000,000 performance-based restricted stock unit award.
  • 6An amended and restated severance pay agreement for Ms. Reed was approved, outlining terms for involuntary termination, including enhanced benefits in the event of a Change in Control.
  • 7The severance agreement includes provisions for lump sum cash payments, continued benefits, outplacement services, and accelerated vesting of equity awards under certain circumstances.

Frequently Asked Questions

Debra L. Reed was elected as the new Chief Executive Officer of Sempra Energy, effective June 27, 2011.

Donald E. Felsinger will continue as the Executive Chairman of the Board until his planned retirement in late 2012.

Ms. Reed's compensation includes an increased annual salary of $1,000,000, a target bonus of 100% of her salary, and an incremental award of performance-based restricted stock units valued at $2,000,000. Her target for future annual long-term incentive awards was increased to 400% of her annual salary.

The agreement provides severance benefits in case of involuntary termination (termination by the company without cause, or resignation for good reason). These benefits include lump sum cash severance, continuation of health insurance, outplacement and financial planning services. If termination occurs on or within two years after a Change in Control, the severance benefits are significantly enhanced, including double the cash severance, immediate vesting of equity awards, and additional retirement benefits.