NiSource Inc.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.   )
Filed by the Registrant ☒
Filed by a Party other than the Registrant
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under Rule 14a-12
NISOURCE INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
No fee required.
 
 
 
Fee paid previously with preliminary materials.
 
 
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(4) and 0-11.


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NiSource Inc.
801 E. 86th Avenue • Merrillville, Indiana 46410 • (877) 647-5990
NOTICE OF ANNUAL MEETING
April 1, 2024
To the Holders of Our Common Stock:
The 2024 annual meeting of stockholders (the “Annual Meeting”) of NiSource Inc., a Delaware corporation, will be conducted in a virtual format only via live audio webcast on Monday, May 13, 2024, at 9:30 a.m. Central Time at www.virtualshareholdermeeting.com/NI2024, for the following purposes:
To elect twelve directors named in the proxy statement to hold office until the next annual stockholders’ meeting and until their respective successors have been elected or appointed and qualified;
To approve named executive officer compensation on an advisory basis;
To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024;
To approve our Amended and Restated Employee Stock Purchase Plan to increase the number of shares available under the plan;
To consider a stockholder proposal requesting that our Board of Directors amend bylaws requiring stockholder approval of director compensation; and
To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
The Annual Meeting will be conducted in a virtual format only to provide access to all of our stockholders regardless of geographic location. There is no in-person meeting for you to attend. A virtual-only meeting enables increased shareholder attendance and participation, improves efficiency, and reduces costs. We designed the format of the Annual Meeting to ensure that our stockholders who attend the Annual Meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting.
All stockholders of record as of the close of business on March 18, 2024, are eligible to vote at the Annual Meeting and any adjournment or postponement thereof.
This year, we are pleased to continue to help protect the environment and save costs by using the “Notice and Access” method of delivery. Instead of receiving paper copies of our proxy materials in the mail, many shareholders will receive a Notice of Internet Availability of Proxy Materials (the “Notice”).
Your vote is very important. You may vote during the Annual Meeting by following the instructions available on the meeting website, but if you are not able to attend virtually, please submit your vote as soon as possible as instructed in the Notice, proxy card or voting instruction form. You can vote via mail, telephone or the Internet. Whether or not you plan on attending the Annual Meeting, we urge you to vote and submit your proxy in advance of the Annual Meeting using one of these methods.

Kimberly S. Cuccia
Senior Vice President, General Counsel and Corporate Secretary
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting
of Stockholders to be Held on May 13, 2024

The Proxy Statement, Notice of Annual Meeting and 2023 Annual Report to Stockholders
are available at https://www.nisource.com/filings

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PROXY STATEMENT SUMMARY
This summary highlights information that may be expanded upon elsewhere in this proxy statement (“Proxy Statement”). This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement before voting. The accompanying proxy is solicited on behalf of the Board of Directors of NiSource Inc. (the “Board”) for the 2024 annual meeting of stockholders (the “Annual Meeting”).
2024 ANNUAL MEETING OF STOCKHOLDERS
Time and Date:
9:30 a.m. Central Time
on Monday, May 13, 2024
Website:
www.virtualshareholdermeeting.com/NI2024
Record Date:
March 18, 2024
Shares of Common Stock Outstanding on Record Date:
​448,187,873
Voting:
Each share is entitled to one vote for each director to be elected and on each matter to be voted upon at the Annual Meeting.
This Proxy Statement and the accompanying proxy card are first being sent to stockholders on April 1, 2024.
VOTING MATTERS AND BOARD RECOMMENDATIONS
Item
Board
Recommendations
Page
Reference
Proposal 1
To elect twelve directors named in this Proxy Statement.
For All Nominees
Proposal 2
To approve the compensation of our named executive officers (the “Named Executive Officers” or “NEOs”) on an advisory basis.
For
Proposal 3
To ratify Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for 2024.
For
Proposal 4
To approve our Amended and Restated Employee Stock Purchase Plan (the “Plan”) to increase the number of shares available under the Plan.
For
Proposal 5
To consider a stockholder proposal requesting that our Board amend bylaws requiring stockholder approval of director compensation.
Against
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PROXY STATEMENT SUMMARY
BOARD OF DIRECTORS NOMINEES
Director Nominees (12)
Board Committees(1)
Name
Age
Director
Since
Position
Audit
C&HC
Finance
SORP
ESN&G
Executive
Peter A. Altabef
64
2017
Chair & CEO,
Unisys Corporation
Sondra L. Barbour
61
2022
Retired EVP, Lockheed Martin Corporation
Theodore H. Bunting Jr.
65
2018
Retired Group President, Entergy Corporation
✔*
Eric L. Butler
63
2017
President and CEO, Aswani- Butler Investment Associates
✔*
Deborah A. Henretta
63
2015
Partner, Council Advisors; Retired Group President, Procter & Gamble Co.
✔*
Deborah A. P. Hersman
53
2019
Retired Chair, National Transportation Safety Board
Michael E. Jesanis
67
2008
Retired President & CEO, National Grid USA
✔*
William D. Johnson
70
2022
Retired President & CEO, Pacific Gas & Electric Corporation
✔*
Kevin T. Kabat
67
2015
Chair of the Board, NiSource Inc.
✔*
Cassandra S. Lee
55
2022
Chief Audit Executive, AT&T Inc.
John McAvoy
63
2024
Retired President & CEO, Consolidated Edison, Inc.
Lloyd M. Yates
63
2020
President & CEO, NiSource Inc.
*Chair of Committee
(1)
Represents current committee membership as of April 1, 2024. Prior to March 19, 2024, Mr. Johnson served on the Compensation and Human Capital Committee and Mr. Altabef served on the Executive Committee.

See “Proposal 1 – Election of Directors” for more information on our director nominees.
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PROXY STATEMENT SUMMARY
GOVERNANCE HIGHLIGHTS
Annual election of directors
Majority voting for all directors with resignation policy
No supermajority voting provisions
No stockholder rights plan (“poison pill”)
Proxy access by-law (3% ownership / 3 years duration / up to 20 stockholders / 20% of board)
Stockholder right to call special meetings
Separate chair and CEO
All directors independent, except CEO
Board committees comprised of all independent directors
Regular executive sessions of independent directors
Annual Board and committee evaluation process and ongoing evaluations of individual directors
Strategic and risk oversight by Board and committees
Annual “Say-on-Pay” advisory votes
Strong alignment between pay and performance in incentive plans
Commitment to safety and customer experience
Political contributions disclosure
Enhanced independent registered public accounting firm disclosure
Publication of ESG report
See “Corporate Governance” for more information on our corporate governance practices.
Our Company
NiSource is one of the largest fully regulated utility companies in the United States, serving approximately 3.3 million natural gas customers and 500,000 electric customers across six states through its local Columbia Gas and NIPSCO brands. Based in Merrillville, Indiana, NiSource’s approximately 7,400 employees are focused on safely delivering reliable and affordable energy to our customers and the communities we serve.
Our strategies focus on improving safety and reliability, enhancing customer service, pursuing regulatory and legislative initiatives to increase accessibility for customers currently not on our gas and electric service, ensuring customer affordability and reducing emissions while generating sustainable returns. With our strategies in mind, NiSource is committed to providing safe and reliable energy for our customers, which in turn creates value for our stockholders.
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PROXY STATEMENT SUMMARY
EXECUTIVE COMPENSATION HIGHLIGHTS
We have designed our executive compensation program to meet our business objectives, including attracting and retaining top-level executive talent, using various compensation elements and to align executive pay with the long-term and short-term interests of our shareholders. We received more than 94% shareholder support for our Say-on-Pay vote in 2023. We recognize and reward our executive officers through compensation arrangements that link their pay to the Company’s performance, and we ensure an alignment of interests with our shareholders, by including a significant portion of total compensation consisting of at-risk performance-based compensation.
We DO Have This Practice
We Do NOT Have This Practice
Incentive award metrics that are tied to key company performance measures
Repricing of options without stockholder approval
Share ownership guidelines applicable to executive officers and independent directors
Hedging or pledging transactions or short sales by executive officers or directors
Compensation recoupment policies
Tax gross ups for Named Executive Officers
Limited perquisites
Automatic single-trigger equity vesting upon a change-in-control
Prohibition against pledging unearned shares in our long-term incentive plan
Excise tax gross-ups under change-in-control agreements
Double-trigger severance benefits upon a change-in-control
Excessive pension benefits or defined benefit supplemental executive retirement plan
One-year minimum vesting for equity awards
Excessive use of non-performance-based compensation
Significant portions of the executive compensation opportunity that are variable and entirely contingent on performance against pre-established Company and individual performance goals
Excessive severance benefits
Independent compensation consultant
Annual Say-on-Pay vote by stockholders
See “Compensation Discussion and Analysis (CD&A)” and “2023 Executive Compensation” for more information on our executive compensation program.
ECONOMIC, ENVIRONMENTAL AND SOCIAL HIGHLIGHTS
We all share in the outcomes related to the future of energy and we are focused on helping ensure the work we do satisfies the long-term energy needs in a way that balances the economic, social, and environmental interests of all its stakeholders. Guiding principles that shape and inform how we make many of our decisions include, but are not limited to:
-
Requiring that people must be at the center of any effort aimed at shifting to a cleaner, more sustainable energy model.
-
Recognizing the decisions we make have a lasting and meaningful effect on its customers, employees, the communities we serve, our shareholders, and other stakeholders.
-
Having a balanced, holistic approach in identifying solutions that allow us to remain flexible and adaptable for future policy changes, advancements in technology, and changing market conditions.
We announced a goal of net-zero greenhouse gas emissions by 2040 covering both Scope 1 and Scope 2 emissions (“Net-Zero Goal”). Our Net-Zero Goal builds on greenhouse gas emission reductions achieved to-date and demonstrates that continued execution of our long-term business plan will drive further greenhouse gas emission reductions. We remain on track to achieve previously announced interim greenhouse gas emission reduction targets by reducing fugitive methane emissions from main and service lines by 50 percent from 2005 levels by 2025 and by reducing Scope 1 greenhouse gas emissions from company-wide operations by 90 percent from 2005 levels by 2030. We plan to achieve our Net-Zero Goal primarily through continuation and enhancement of existing programs, such as the retirement
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PROXY STATEMENT SUMMARY
of coal-fired electric generation, increased sourcing of renewable energy, methane reductions from priority pipeline replacement, traditional leak detection and repair, and deployment of advanced leak detection and repair. Additionally, we are active in several efforts to accelerate the development and demonstration of lower-carbon energy technologies and resources, such as hydrogen and renewable natural gas, to enable affordable pathways to economy-wide decarbonization.
For more information on environmental and related matters, see our 2023 Annual Report, our 2023 Interim ESG Report, our 2022 Climate Report and the “Sustainability” section of our website at www.nisource.com.
PROXY STATEMENT SUMMARY
We are keenly aware that in addition to being a business entity, we are also a social and community enterprise that includes our employees, partners, customers and the communities we serve. For more information about our business and strategy and about corporate responsibility diversity and sustainability efforts, see our 2023 Annual Report, our 2023 Interim ESG Report and the “Sustainability” and “Diversity, Equity and Inclusion” sections of our website at www.nisource.com.
GENERAL INFORMATION
Stock Symbol: NI
Stock Exchange: NYSE
Registrar and Transfer Agent: Computershare Investor Services
State of Incorporation: Delaware
Corporate Headquarters: 801 E. 86th Avenue, Merrillville, Indiana 46410
Corporate Website: www.nisource.com
We use the terms “NiSource,” the “Company,” “we,” “our” and “us” in this Proxy Statement to refer to NiSource Inc.
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PROXY STATEMENT
The accompanying proxy is solicited on behalf of the Board for the Annual Meeting to be held on Monday, May 13, 2024 at 9:30 a.m. Central Time, in a virtual format only via live audio webcast at www.virtualshareholdermeeting.com/NI2024. The common stock, $.01 par value per share, of the Company represented by the accompanying proxy will be voted as directed. If you return a signed proxy card without indicating how you want to vote your shares, the shares represented by the accompanying proxy will be voted as recommended by the Board:
“FOR” all of the nominees for director;
“FOR” advisory approval of the compensation of our NEOs;
“FOR” the ratification of the appointment of Deloitte as our independent registered public accounting firm for 2024;
“FOR” the Amended and Restated Employee Stock Purchase Plan (the “Plan”) to increase the number of shares available under the Plan;
“AGAINST” the stockholder proposal requesting that our Board amend bylaws requiring stockholder approval of director compensation.
This Proxy Statement and the accompanying proxy card are first being sent to stockholders on April 1, 2024. We will bear the expense of this solicitation, which may be supplemented by telephone, facsimile, email and personal solicitation by our officers, employees and agents. To aid in the solicitation of proxies, we have retained D.F. King for a fee of $11,000, plus reimbursement of expenses. We may incur additional fees if we request additional services. We will also request brokerage houses and other nominees and fiduciaries to forward proxy materials, at our expense, to the beneficial owners of stock held as of 5:00 p.m. Eastern Time on March 18, 2024, the record date for voting.
Who May Vote
Holders of shares of common stock as of the close of business on March 18, 2024, are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. As of March 18, 2024, 448,187,873 shares of common stock were issued and outstanding. Each share of common stock outstanding on that date is entitled to one vote on each matter presented at the Annual Meeting.
Voting Your Proxy
If you are a “stockholder of record” (that is, if your shares of common stock are registered directly in your name on the Company’s records), you may vote your shares by proxy in advance of the Annual Meeting using any of the following methods:
Telephoning the toll-free number listed on the proxy card;
Using the Internet website listed on the proxy card: www.proxyvote.com; or
Marking, dating, signing and returning the enclosed proxy card.
All votes must be received by the proxy tabulator by 11:59 p.m. Eastern Time on May 12, 2024. If your shares are held in a brokerage account or by a bank, broker, trust or other nominee (herein referred to as a “Broker”), you are considered a “beneficial owner” of shares held in “street name.” As a beneficial owner, you will receive proxy materials and voting instructions from the stockholder of record that holds your shares. You must follow the voting instructions in order to have your shares of common stock voted.
Discretionary Voting by Brokers and “Broker Non-Votes”
If your shares are held in street name and you do not provide the Broker with instructions as to how to vote such shares, your Broker will only be able to vote your shares at its discretion on certain “routine” matters as permitted by New York Stock Exchange (“NYSE”) rules. The proposal to ratify the appointment of our independent registered public accounting
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PROXY STATEMENT
firm is considered a routine matter and, accordingly, at the Annual Meeting, Brokers will only have discretionary authority to vote your shares regarding Proposal No. 3, the ratification of the appointment of Deloitte as our independent registered public accounting firm for 2024. A “broker non-vote” occurs when a Broker holding shares for a beneficial owner does not have discretionary authority to vote the shares and has not received instructions from the beneficial owner as to how the beneficial owner would like the shares to be voted. Brokers will not have discretionary authority to vote your shares with respect to the other proposals presented at the Annual Meeting. Therefore, it is important that you instruct your Broker or other nominee how to vote your shares. If Brokers exercise their discretionary voting authority on Proposal No. 3, such shares will be considered present at the Annual Meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting, which are considered “non-routine.”
Voting Shares Held in Our 401(k) Plan
If you hold your shares of common stock in our 401(k) Plan, those shares are held in the name of Fidelity Management Trust Company (“Fidelity”), the administrator of the 401(k) Plan. You will receive a proxy card that includes the number of shares of our common stock held in the 401(k) Plan. You should instruct Fidelity how to vote your shares by completing and returning the proxy card or by voting your shares by Internet or by telephone, as detailed above under “Voting Your Proxy.” If you do not instruct Fidelity how to vote your shares, or if you sign the proxy card with no further instructions as to how to vote your shares, Fidelity will vote your shares in the same proportion as the shares for which it receives instructions from all other participants to the extent permitted under applicable law. To allow enough time for Fidelity to vote your shares in accordance with your direction, your voting instructions must be received by Fidelity no later than 11:59 p.m. Eastern Time on May 8, 2024.
Attending and Voting During the Virtual Annual Meeting
Format of Meeting. The Annual Meeting will be conducted in a virtual format only to provide access to all our stockholders regardless of geographic location. There is no in-person meeting for you to attend. We designed the format of the Annual Meeting to ensure that our stockholders who attend the Annual Meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting.
Attending the Meeting. You are entitled to attend and participate in the Annual Meeting if you were a stockholder of record as of the close of business on March 18, 2024, the record date, or hold a legal proxy for the Annual Meeting provided by your Broker as described below. To attend and participate in the Annual Meeting, visit www.virtualshareholdermeeting.com/NI2024 and enter your 16-digit control number, which can be found on your proxy card, voting instruction form or email you received with your proxy materials. If your shares are held by a Broker and you do not have a control number, please contact your Broker as soon as possible so that you can be provided with a control number.
Voting During the Meeting. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. If your shares are held in street name by a Broker, then, to be able to vote at the Annual Meeting, you must obtain an executed legal proxy from the Broker indicating that you were the beneficial owner of the shares on March 18, 2024, the record date for voting, and that the Broker is giving you its proxy to vote the shares. If your shares are held in the 401(k) Plan, you will not be able to vote your shares at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described above under “Voting Your Proxy.” Votes cast at the Annual Meeting or represented by proxy at the Annual Meeting will be tabulated by the inspector of election.
Technical Assistance. The Annual Meeting will begin promptly at 9:30 a.m. Central Time. We encourage you to access the Annual Meeting approximately 15 minutes in advance to allow ample time for you to log in to the meeting and test your computer audio system. We recommend that you carefully review the above procedures needed to gain admission in advance. Technicians will be ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the meeting login page at www.virtualshareholdermeeting.com/NI2024.
Submitting Questions During the Meeting. As part of the Annual Meeting, we will hold a question and answer session during which we intend to answer questions submitted during the meeting that are relevant to the purposes of the meeting
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PROXY STATEMENT
and the Company’s business in accordance with the Annual Meeting procedures posted on the meeting website, as time permits. Questions may be submitted by stockholders that have used 16-digit control numbers to enter the meeting at www.virtualshareholdermeeting.com/NI2024. Questions and answers may be grouped by topic and substantially similar questions may be grouped and answered once.
Revoking Your Proxy
You may revoke your proxy at any time before a vote is taken or the authority granted is otherwise exercised. To revoke a proxy, you may send a letter to our Corporate Secretary (which must be received before a vote is taken at the Annual Meeting) indicating that you want to revoke your proxy, or you can supersede your initial proxy by submitting a duly executed proxy bearing a later date, voting by telephone or through the Internet on a later date, or attending the virtual Annual Meeting and voting during the meeting. Attending the virtual Annual Meeting will not in and of itself revoke a proxy.
Quorum for the Meeting
A quorum of stockholders is necessary to take action at the Annual Meeting. A majority of the outstanding shares of common stock, present during the virtual Annual Meeting or represented by proxy, will constitute a quorum at the Annual Meeting. The inspectors of election appointed for the Annual Meeting will determine whether a quorum is present. Abstentions are counted for purposes of determining whether a quorum is present. As explained above under “Discretionary Voting by Brokers and ‘Broker Non-Votes’,” if Brokers exercise their discretionary voting authority on Proposal No. 3, such shares will be considered present at the meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting.
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PROPOSAL 1 – ELECTION OF DIRECTORS
At the recommendation of the Environmental, Social, Nominating & Governance (“ESN&G”) Committee, the Board has nominated the persons listed below to serve as directors, each for a one-year term, beginning at the Annual Meeting on May 13, 2024, and expiring at the 2025 annual meeting of our stockholders (the “2025 Annual Meeting”) and until their successors are duly elected or appointed and qualified. The nominees include eleven independent directors, as defined in the applicable rules of the NYSE, and our President and CEO. All of the nominees currently serve on the Board and each nominee has consented to being named in the Proxy Statement and to serving, if elected. The Board does not anticipate that any of the nominees will be unable to serve, but if any nominee is unable to serve, the proxies may be voted for substitute nominees and will be voted in accordance with the judgment of the person or persons voting the proxies. Set forth below is information regarding all of our nominees.
Vote Required
To be elected, a nominee must receive more votes cast in favor of his or her election than against election. Abstentions by those present or represented by proxy will not be counted as a vote cast either “for” or “against” with respect to the election of directors and, therefore, will have no effect on the outcome. Brokers will not have discretionary authority to vote on the election of directors. Accordingly, there could be broker non-votes which will have no effect on the vote.
Under our Corporate Governance Guidelines, each nominee will tender a conditional resignation prior to the Annual Meeting, effective only if both (a) the votes “against” a nominee’s election exceed the votes “for” election (a “failed re-election”) and (b) such resignation is subsequently accepted by the Board. Any failed re-election will be referred to the ESN&G Committee, which will make a recommendation to the Board as to whether to accept or reject the resignation. The Board will decide and publicly disclose its decision, the rationale for the decision and the directors who participated in the process within 90 days after the election. The Board expects the director who has not been re-elected to abstain from participating in the ESN&G Committee or Board discussion or vote regarding whether to accept his or her resignation offer. A director who has had a failed re-election may participate in discussions or votes with respect to other directors who have had a failed re-election.
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PROPOSAL 1 – ELECTION OF DIRECTORS
Nominee Demographics, Skills and Biographies
Our director nominees are diverse and possess the necessary breadth and depth of skills and experience to oversee our business operations and long-term strategy. The following tables and biographies identify the balance of experience, skills and qualifications that the director nominees bring to the Board. The fact that a particular skill or qualification is not designated as to one or more nominees does not mean that those nominees do not also possess the specific experience and qualification.

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PROPOSAL 1 – ELECTION OF DIRECTORS

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PROPOSAL 1 – ELECTION OF DIRECTORS

* Percentages shown in this table represent the portion of the Board with the indicated skill or experience.
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PROPOSAL 1 – ELECTION OF DIRECTORS
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES LISTED BELOW.
PETER A. ALTABEF

  
Age: 64

Director Since: 2017

Standing Board Committees:
 Finance Committee
(Chair*)
 Environmental, Social, Nominating and
Governance Committee
 Executive Committee*
*Until March 19, 2024
Executive Experience: Mr. Altabef currently serves as Chair and CEO of Unisys Corporation, a global information technology company, a position he has held since January 2015 (becoming Chair in April 2018). He also served as President from January 2015 through March 2020 and from November 2021 to May 2022. Prior to his current role, he served as president and CEO of MICROS Systems, Inc., a provider of integrated software and hardware solutions to the hospitality and retail industries, from 2013 to 2014, when it was acquired by Oracle Corporation. Before that, he served as president and CEO of Perot Systems Corporation from 2004 to 2009, when it was acquired by Dell Inc. Following that transaction, Mr. Altabef served as president of Dell Services, the information technology services and business process solutions unit of Dell Inc., until his departure in 2011.

Outside Board and Other Experience: Mr. Altabef is Chair of the board of directors of Unisys Corporation. He is also a member of the President’s National Security Telecommunications Advisory Committee (NSTAC), a trustee of the Committee for Economic Development (CED), a member of the advisory board of Merit Energy Company, LLC and of the board of directors of Petrus Trust Company, LTA. He has previously served as a senior advisor to 2M Companies, Inc., in 2012, and as a director of MICROS Systems, Perot Systems Corporation and Belo Corporation. He is also active in community service activities, having served on the boards and committees of several cultural, medical, educational and charitable organizations and events.

Skills and Qualifications: Mr. Altabef has experience leading large organizations as CEO and a strong background in strategic planning, financial reporting, risk management, business operations and corporate governance. He also has more than 25 years of senior leadership experience at some of the world’s leading information technology companies. As a result, he has a deep understanding of the cybersecurity issues facing businesses today. His overall leadership experience and his cybersecurity background provide the Board with valuable perspective and insight into significant issues that we face.
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PROPOSAL 1 – ELECTION OF DIRECTORS
SONDRA L. BARBOUR

  
Age: 61

Director Since: 2022

Standing Board Committees:
 Audit Committee
 Environmental, Social, Nominating and
Governance Committee
Executive Experience: Ms. Barbour retired as Executive Vice President, Information Systems and Global Solutions, of Lockheed Martin Corporation (“Lockheed Martin”) in 2016 and served in a transition role at Leidos Holdings until her retirement in 2017. Ms. Barbour joined Lockheed Martin in 1986 and served in various leadership capacities and has extensive technology experience, notably in the design and development of large-scale information systems. From 2008 to 2013, Ms. Barbour served as Senior Vice President, Enterprise Business Services and Chief Information Officer, heading all of Lockheed Martin’s internal information technology operations, including protecting the company’s infrastructure and information from cyber threats. Prior to that role, Ms. Barbour served as Vice President, Corporate Shared Services and Vice President, Corporate Internal Audit providing oversight of supply chain activities, internal controls, and risk management.

Outside Board and Other Experience: Ms. Barbour serves as a director of AGCO Corporation, where she chairs the Audit Committee, and is also a member of the Finance, Talent & Compensation and Executive Committees. Ms. Barbour previously served as a director for each of 3M Company and Perspecta Inc.

Skills and Qualifications: Ms. Barbour’s significant experience with information technology systems and cybersecurity is valuable in helping steer our development of technology and management of cyber risks. Ms. Barbour brings 30 years of leadership experience at Lockheed Martin where she oversaw complex information technology systems of a 110,000+ employee business. She brings significant risk management knowledge related to technology and supply chain oversight, which are of key importance to our success. Ms. Barbour also enhances the Board’s public company experience in the areas of internal controls, accounting, audit, risk management and cybersecurity.
THEODORE H. BUNTING, JR.

  
Age: 65

Director Since: 2018

Standing Board
Committees:

 Audit Committee
(Chair)
 Compensation and
Human Capital
Committee
 Executive Committee
Executive Experience: Mr. Bunting most recently served as group president, utility operations, at Entergy Corporation (“Entergy”), an integrated energy company, from 2012 until his retirement in 2017. Before that, he was senior vice president and chief accounting officer at Entergy from 2007 to 2012 and chief financial officer (“CFO”) of several subsidiaries from 2000 to 2007. He held other management positions of increasing responsibility in accounting and operations at Entergy since joining the company in 1983.

Outside Board and Other Experience: Mr. Bunting has been a director of Unum Group since 2013 and is currently chair of its Regulatory Compliance Committee and a member of its Audit committee. Mr. Bunting has been a director of the Hanover Group since 2020 and is a member of the Audit Committee. Mr. Bunting previously served as a director of IEA from 2021 until October 2022 and as a member of the ESN&G and C&HC Committees. He previously served as a director of Imation Corp., a global data storage and information security company. He also serves on the board of Foundation for the Mid South and previously served on the board of Hendrix College.

Skills and Qualifications: Mr. Bunting’s utility industry knowledge, including his experience in customer service, safety and regulatory relations, are valuable to us as we continue to execute on our robust long-term utility infrastructure investment plans. He also brings additional public company experience in the areas of strategic finance, accounting, auditing, and capital and risk management to the Board. He is a certified public accountant.
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PROPOSAL 1 – ELECTION OF DIRECTORS
ERIC L. BUTLER

  
Age: 63

Director Since: 2017

Standing Board Committees:
 Compensation and Human Capital
Committee (Chair)
 Audit Committee
 Executive Committee
Executive Experience: Mr. Butler currently is President and CEO of Aswani-Butler Investment Associates, a private equity investment firm. Previously he served in a number of executive leadership roles at Union Pacific Corporation (“Union Pacific”), a transportation company located in Omaha, Nebraska, until his retirement in February 2018. He began his career at Union Pacific in 1986 and held leadership roles in finance, accounting, marketing and sales, supply, operations research and planning and human resources. He was Vice President of Financial Planning and Analysis from 1997 to 2000, Vice President of Purchasing and Supply Chain from 2000 to 2003, Vice President and General Manager of the Automotive Business from 2003 to 2005 and Vice President and General Manager of the Industrial Products Business from 2005 to 2012. He was Executive Vice President of Marketing and Sales and Chief Commercial Officer and ran the worldwide Commercial business from 2012 to 2017. He served as Executive Vice President, Chief Administrative Officer and Corporate Secretary from 2017 until his retirement..

Outside Board and Other Experience: Mr. Butler was appointed to the Federal Reserve Bank of Kansas City’s Omaha Branch Board in 2015 and in 2018 was elected chair. His term on the Federal Reserve board ended in December 2020. He currently serves on the board of the Omaha Airport Authority, which he joined in 2007, and the Eastman Chemical Company Board, which he joined in 2022, and the West Fraser Timber Co. Ltd, which he joined in 2023..

Skills and Qualifications: Mr. Butler developed and led strategic and financial planning, marketing, sales, commercial, and supply, procurement and purchasing for one of the largest transportation companies in the world, Union Pacific. He most recently led the corporate governance, human resources, labor relations and administration functions at Union Pacific. His knowledge of the railroad transportation industry and the challenges in maintaining top-tier safety, customer service and risk management standards while providing an important part of the nation’s infrastructure provides him with unique skills and insights that are valuable to the Board. In addition, he has experience in the purchase of fuel and energy materials and equipment. As a result, Mr. Butler has an understanding of the aging infrastructure, safety, organizational and regulatory issues facing utilities today and provides a viewpoint from an industry that is similarly positioned. His overall leadership experience and his regulated public company background provides the Board with another perspective on significant issues that we face.
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PROPOSAL 1 – ELECTION OF DIRECTORS
DEBORAH A. HENRETTA

  
Age: 63

Director Since: 2015

Standing Board Committees:
 Environmental, Social, Nominating and Governance Committee
(Chair)
 Compensation and Human Capital
Committee
 Executive Committee
Executive Experience: Ms. Henretta currently is a partner at Council Advisors company, where she serves as Senior Advisor spearheading digital transformation practice for SSA & Company, and is a senior advisor for G100 Companies, a C-suite learning and development company. She retired from Procter & Gamble Co. (“P&G”) in 2015, where she served as Group President of Global e-Business. Prior to her appointment as Group President of Global e-Business in January 2015, she held various senior positions throughout several P&G sectors, including as Group President of Global Beauty from 2012 to 2015 and as Group President of P&G Asia from 2007 to 2012. Prior to her appointment as Group President of P&G Asia, she was President of P&G’s business in ASEAN, Australia and India from 2005 to 2007. She joined P&G in 1985.

Outside Board and Other Experience: Ms. Henretta has been a director at American Eagle Outfitters, Inc. since 2019, a director at Meritage Homes since 2017 and a director at Corning Incorporated since 2013. Ms. Henretta previously served as a director of Staples, Inc. from June 2016 until September 2017 and served on its C&HC Committee. Additionally, she serves on the board of trustees for Syracuse University.

Skills and Qualifications: Ms. Henretta has over 30 years of business leadership experience with P&G in a multi-jurisdictional regulatory and competitive business environment. She has experience across many markets, including profit and loss responsibility for multi-billion-dollar businesses at P&G and responsibility for strategic planning, sales, marketing, e-business, government relations and customer service. Ms. Henretta led a dynamic business segment and is, therefore, keenly aware of the delicate balance of keeping pace with customer expectations in a changing environment, as well as maximizing the benefits that inclusion and diversity can provide. Because of this experience, Ms. Henretta brings valuable insights to the Board and strategic leadership to us as we operate in multiple regulatory environments and develop products and customer service programs to meet our customer commitments. In her previous partner role at G100 Companies where she continues as a senior advisor, she assisted in establishing a Board Excellence Program, which provides board director education.
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PROPOSAL 1 – ELECTION OF DIRECTORS
DEBORAH A. P. HERSMAN

  
Age: 53

Director Since: 2019

Standing Board Committees:
 Safety, Operations, Regulatory and Policy
Committee
 Finance Committee
Executive Experience: Ms. Hersman served as Chief Safety Officer and advisor at Waymo LLC, the self-driving car technology subsidiary of Alphabet Inc., from January 2019 to December 2020. From 2014 to 2019, she served as president and CEO of the National Safety Council, a nonprofit organization focused on eliminating preventable deaths at work, in homes and communities, and on the road through leadership, research, education and advocacy.

Outside Board and Other Experience: From 2004 to 2014, Ms. Hersman served as a board member and from 2009-2014 as chair of the National Transportation Safety Board (the “NTSB”). Previously she served in a professional staff role for the U.S. Senate Commerce, Science and Transportation Committee where she played key roles in crafting the Pipeline Safety Improvement Act of 2002 and legislation establishing a new modal administration focused on bus and truck safety. On June 29, 2023, she was appointed to the Board of One Gas (NYSE: OGS). She previously served on the Board of Velodyne (NASDAQ: VLDR).

Skills and Qualifications: Ms. Hersman is a seasoned executive, having previously served as the CEO of the National Safety Council and as the chair and chief executive at the NTSB. She has a successful track record running complex safety-focused organizations with numerous stakeholders. A widely respected safety leader driven by mission and a passion for preserving human life, Ms. Hersman also has expertise in the details of navigating crises and strong experience with safety policy legislation and advocacy. Ms. Hersman’s extensive safety experience is of great value to the Board as we continue to implement our safety management system and meet our safety commitments to our customers and stakeholders.
MICHAEL E. JESANIS

  
Age: 67

Director Since: 2008

Standing Board Committees:
 Finance Committee
(Chair*)
 Safety, Operations, Regulatory and Policy
Committee
 Executive Committee*
*Effective March 19, 2024
Executive Experience: Mr. Jesanis co-founded and was from 2013 to 2021 Managing Director of HotZero, LLC, a firm formed to develop hot water district energy systems in New England. Mr. Jesanis has served as an advisor to several startups in energy-related fields. From July 2004 through December 2006, Mr. Jesanis was President and CEO of National Grid USA, a natural gas and electric utility, and a subsidiary of National Grid plc, of which Mr. Jesanis was also an Executive Director. Prior to that position, Mr. Jesanis was COO and CFO of National Grid USA from January 2001 to July 2004 and CFO of its predecessor utility holding company from 1998 to 2000.

Outside Board and Other Experience: Mr. Jesanis is a board member of El Paso Electric Company. He previously served as a director for several electric and energy companies, including Ameresco, Inc. Mr. Jesanis is the former chair of the board of a college and a past trustee (and past chair of the audit committee) of a university.

Skills and Qualifications: By virtue of his former positions as President and CEO, COO and, prior thereto CFO, of a major electric and gas utility holding company as well as his role with an energy efficiency consulting firm, Mr. Jesanis has extensive experience with regulated utilities. He has strong financial acumen and extensive managerial experience, having led modernization efforts in the areas of operating infrastructure improvements, customer service enhancements and management team development. Mr. Jesanis also demonstrates a commitment to education as the former chair of the board of a college and a past trustee (and past chair of the audit committee) of a university. As a result of his former senior managerial roles and his non-profit board service, Mr. Jesanis also has expertise with board governance issues.
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PROPOSAL 1 – ELECTION OF DIRECTORS
WILLIAM D. JOHNSON

  
Age: 70

Director Since: 2022

Standing Board Committees:
 Compensation and Human Capital
Committee*
 Environmental, Social, Nominating and Governance
Committee**
 Safety, Operations, Regulatory and Policy Committee
(Chair**)
 Executive Committee**
*Until March 19, 2024
**Effective March 19, 2024
Executive Experience: Mr. Johnson most recently served as President and Chief Executive Officer of Pacific Gas & Electric Corporation, a utility company, from May 2019 through June 2020. Mr. Johnson also served as President and Chief Executive Officer of Tennessee Valley Authority, an electric utility company, from January 2013 to May 2019. Prior to joining Tennessee Valley Authority, Mr. Johnson held the positions of Chairman, President and CEO of Progress Energy, Inc. (“Progress”) from October 2007 to July 2012, and previously to that as President and Chief Operating Officer from 2005 to 2007. His career at Progress included leadership roles of increasing responsibility including as President, Energy Delivery from 2004 to 2005, President and Chief Executive Officer from 2002 to 2003, and Executive Vice President and General Counsel from 2000 to 2002 of Progress Energy Service Company. Mr. Johnson’s career began in 1992 at Carolina Power & Light Company (predecessor to Progress) where he held increasing senior management roles of Associate General Counsel and Manager, Legal Department; Vice President, Senior Counsel and Corporate Secretary and Senior Vice President and Corporate Secretary.

Outside Board and Other Experience: Mr. Johnson has been a director of TC Energy Corp. since June 2021, where he currently serves on the Audit Committee and Human Resources Committee. Mr. Johnson previously served on the boards of the following utility industry groups or associations: Edison Electric Institute as Vice Chair, Nuclear Energy Institute as Chair, Institute of Nuclear Power Operations, World Association of Nuclear Operators as Governor and Nuclear Electric Insurance Limited.

Skills and Qualifications: Mr. Johnson brings three decades of industry and leadership expertise to the Board. Mr. Johnson’s multiple tenures as CEO and vast experience with industry groups related to gas, electric, nuclear and other utilities provide him with extensive leadership skills in the utilities industry and a deep understanding of regulated industry operations. Mr. Johnson guided Pacific Gas & Electric Corporation through its emergence from bankruptcy and served as CEO of Progress during its merger with Duke Energy, through which he gained significant experience in complex corporate restructuring, transactions, and strategy. His experience has also informed an understanding of safety and risk oversight in the utilities industry that the Board values. This extensive experience and depth of knowledge gives Mr. Johnson a strong perspective on strategic operations within the industry and makes Mr. Johnson a valuable asset to the Board.
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PROPOSAL 1 – ELECTION OF DIRECTORS
KEVIN T. KABAT

  
Age: 67

Director Since: 2015

Chair of the Board

Standing Board Committees:

 Environmental, Social, Nominating and
Governance Committee
 Executive Committee
(Chair)
Executive Experience: From April 2007 to November 2015, Mr. Kabat was CEO of Fifth Third Bancorp, a bank holding company. He continued to serve as Vice Chair of the board of directors of Fifth Third Bancorp until his retirement in April 2016. Before becoming CEO, he served as Fifth Third Bancorp’s President from June 2006 to September 2012 and as Executive Vice President from December 2003 to June 2006. Additionally, he was previously President and CEO of Fifth Third Bank (Michigan). Prior to that position, he was Vice Chair and President of Old Kent Bank, which was acquired by Fifth Third Bancorp in 2001.

Outside Board and Other Experience: Mr. Kabat has been a director of Unum Group since 2008 and is currently chair of the board. Mr. Kabat has been the director of Crown Castle Inc. since August 1, 2023. He previously served as a chair of the board of AltiGlobal Inc. from January 2023 to August 2023. He also previously served as the lead independent director of E*TRADE Financial Corporation. He has also held leadership positions on the boards and committees of local business, educational, cultural and charitable organizations and campaigns.

Skills and Qualifications: Mr. Kabat has significant leadership experience as a CEO in a regulated industry at a public company. As a result, he has a deep understanding of operating in a regulatory environment and balancing the interests of many stakeholders. His extensive experience in strategic planning, risk management, financial reporting, internal controls and capital markets makes him an asset to the Board, as he is able to provide unique strategic insight, financial expertise and risk management skills. In addition, he has broad corporate governance skills and perspective gained from his service in leadership positions on the boards of other publicly traded companies.
CASSANDRA S. LEE

  
Age: 55

Director Since: 2022

Standing Board Committees:
 Audit Committee
 Finance Committee
Executive Experience: Ms. Lee is an experienced financial and operational leader with extensive knowledge of the telecommunication industry, currently serving as Senior Vice President and Chief Audit Executive for AT&T Inc. (“AT&T”), a position she has held since 2021. Ms. Lee joined AT&T in 1993 and has served in various leadership capacities, including Senior Vice President and Chief Financial Officer, AT&T Network, Technology and Capital Management from 2018 to 2021.

Outside Board and Other Experience: Ms. Lee currently serves on the Board of Directors of Andretti Acquisition Corp., a special purpose acquisition company, where she chairs the Audit Committee.

Skills and Qualifications: In more than three decades with AT&T, Ms. Lee has acquired a wealth of expertise in various areas including retail operations, distribution strategy, global supply chain, mergers, acquisitions, and integration, capital management, network and other capacity planning, and shared services operations. Her vast and multifaceted experience in the telecommunication industry translates well in her service on the Board. Ms. Lee also has significant public company financial oversight and leadership experience that strengthens the Board’s depth of financial acumen. Ms. Lee is a certified public accountant and veteran of the United States Army.
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PROPOSAL 1 – ELECTION OF DIRECTORS
JOHN MCAVOY


Age: 63

Director Since: 2024

Retired President
& CEO, Consolidated
Edison, Inc.

Standing Board Committees:
 Compensation and Human Capital
Committee
 Safety, Operations, Regulatory and Policy Committee
Executive Experience: Mr. McAvoy most recently served as President and Chief Executive Officer of Consolidated Edison, Inc. (“ConEdison”) and Chief Executive Officer of Consolidated Edison Company of New York, Inc. (“ConEdison of New York”) from December 2013 through December 28, 2020. He continued to serve as director of ConEdison until his retirement in May 2023 after forty three years of experience with ConEdison, including serving as Non-executive Chairman of the Board of ConEdison and the Board of ConEdison of New York from January 2021 until December 2021 as well as Chairman of the Board of ConEdison and ConEdison New York from May 2014 until December 2020. Prior to Mr. McAvoy’s service as President and Chief Executive Officer, he was President and Chief Executive Officer of Orange and Rockland Utilities, Inc., a subsidiary of Consolidated Edison, Inc. from January 2013 to December 2013. Prior to that, Mr. McAvoy was Senior Vice President of Central Operations for Consolidated Edison Company of New York, Inc. from February 2009 to December 2012.

Outside Board and Other Experience: Mr. McAvoy was a Trustee of the Intrepid Sea, Air & Space Museum and of Manhattan College until December 2023 and October 2023 respectively. Until January 2021, Mr. McAvoy served as a Director or Trustee of the American Gas Association, the Edison Electric Institute, the Mayor’s Fund to Advance New York City, the Partnership for New York City, and the Electric Power Research Institute. Mr. McAvoy also served as a Director and Chairman of the Board of Directors of Orange & Rockland until December 2020, and as a Director of the New York State Energy Research and Development Authority until 2018 and the Business Council of New York State Inc. until 2016. Mr. McAvoy was also a member of the Electric Subsector Coordinating Council and Chairman of the Members Executive Committee for the Electricity Information Sharing and Analysis Center.

Skills and Qualifications: Mr. McAvoy has leadership, engineering, financial, and operations experience, as well as knowledge of the utility industry. Mr. McAvoy’s experience from his leadership positions at a public company and within a public utility, and his service on other boards, is critical to support in the Board’s oversight of the management, financial, operations, and strategic planning activities and relationships with stakeholders.
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PROPOSAL 1 – ELECTION OF DIRECTORS
LLOYD M. YATES

  
Age: 63

Director Since: 2020

President and CEO
since 2022


Standing Board Committees:
 None
Executive Experience: Mr. Yates has served as President and CEO of NiSource since February 2022. Mr. Yates retired in 2019 from Duke Energy, where he most recently served as Executive Vice President, Customer and Delivery Operations, and President, Carolinas Region, since 2014. In this role, he was responsible for aligning customer-focused products and services to deliver a personalized end-to-end customer experience to position Duke Energy for long-term growth, as well as for the profit/loss, strategic direction and performance of Duke Energy’s regulated utilities in North Carolina and South Carolina. Previously, he served as Executive Vice President of Regulated Utilities at Duke Energy, overseeing Duke Energy’s utility operations in six states, federal government affairs, and environmental and energy policy at the state and federal levels, as well as Executive Vice President, Customer Operations, where he led the transmission, distribution, customer services, gas operations and grid modernization functions for millions of utility customers. He held various senior leadership roles at Progress Energy, Inc., prior to its merger with Duke Energy, from 2000 to 2012.

Outside Board and Other Experience: Mr. Yates currently serves on the board of directors of Marsh & McLennan Companies. He previously served on the board of directors of American Water Works Company Inc. and Sonoco Products Company.

Skills and Qualifications: Mr. Yates brings significant energy and regulated utility experience to our Board. He has over 40 years of experience in the energy industry, including in the areas of profit/loss management, customer service, nuclear and fossil generation and energy delivery. At Duke Energy, he used his operational experience to improve safety, reliability and the overall customer experience for millions of customers. He has expertise overseeing regulated utility operations, working with state regulators, and managing consumer and community affairs. He also has experience managing gas and grid modernization functions, which is valuable to our Board as we execute our business strategies. In addition, his experience as a director for other prominent public companies benefits our Board by bringing additional perspective to a variety of important areas of governance and strategic planning.
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CORPORATE GOVERNANCE
Corporate Governance Enhancements
In 2022, there was significant Board and governance refreshment, which included a reconstitution of the committees and the addition of three new independent directors. More recently, John McAvoy was appointed as an independent director to our Board to replace a retiring director. All of our committees remain fully independent.
Director Independence
Under our Corporate Governance Guidelines, a majority of the Board must be comprised of “independent directors.” In order to assist the Board in making its determination of director independence, the Board has adopted categorical standards of independence consistent with the standards contained in Section 303A.02 of the NYSE Listed Company Manual. A copy of our Corporate Governance Guidelines is posted on our website at https://www.nisource.com/investors/governance.
In considering Mr. Johnson’s independence, the Board considered the ordinary course and arms-length business relationship between subsidiaries of the Company and TC Energy Corp., where Mr. Johnson serves as a member of the board of directors. The Board has affirmatively determined that, with the exception of Mr. Yates, all of the members of the Board and all nominees are “independent directors” as defined in Section 303A.02 of the NYSE Listed Company Manual and our Corporate Governance Guidelines.
Policies and Procedures with Respect to Transactions with Related Persons
We have established policies and procedures with respect to the review, approval and ratification of any transactions with related persons.
Under its charter, the ESN&G Committee reviews reports and disclosures of insider and related person transactions. Under our Conflicts of Interest policy, the following situations may present a conflict of interest and must be reviewed to determine if they involve a direct or indirect interest of any director, executive officer or employee (including immediate family members) or otherwise present a conflict of interest:
owning more than a 10% equity interest or a general partner interest in any entity that transacts business with the Company (including lending or leasing transactions, but excluding the receipt of utility service from the Company at tariff rates), if the total amount involved in such transactions may exceed $120,000;
selling anything to the Company or buying anything from the Company (including lending or leasing transactions, but excluding the receipt of utility service from the Company at tariff rates), if the total amount involved in such transactions may exceed $120,000;
consulting for or being employed by a competitor of the Company; and
being in the position of supervising, reviewing or having any influence on the job evaluation, pay or benefit of any immediate family member employed by the Company.
Related person transactions are subject to a prior review and in certain circumstances as may be necessary, are ratified by the ESN&G Committee. Directors are expected to raise any potential transactions involving a conflict of interest that relate to them with the ESN&G Committee so that they may be reviewed in a prompt manner. Additionally, officers are expected to raise any potential transactions involving a conflict of interest that relate to them with the General Counsel so that they may be reviewed in a prompt manner. The General Counsel’s office will review with the ESN&G Committee situations that may present a conflict of interest. Related person transactions are reviewed annually.
There were no transactions between the Company and any officer, director or nominee for director, or any affiliate of or person related to any of them, since January 1, 2023, of the type or amount required to be disclosed under the applicable Securities and Exchange Commission (“SEC”) rules.
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CORPORATE GOVERNANCE
Communications with the Board and Non-Management Directors
Stockholders and other interested persons may communicate any concerns they may have regarding the Company as follows:
Communications to the Board may be made to the Board generally, any director individually, the non-management directors as a group, or the Chair of the Board, by writing to the below address. The Corporate Secretary will review and forward, as appropriate, such correspondence in order to facilitate communication with the Board, its committees, the independent directors, or individual members.
NiSource Inc.
Attention: Board of Directors, or any Board member, or non-management directors, or Chair
of the Board
c/o Corporate Secretary
801 East 86th Avenue
Merrillville, Indiana 46410
The Audit Committee has approved procedures with respect to the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or audit matters. Communications regarding such matters may be made by contacting our Ethics department at ethics@nisource.com, calling the business ethics hotline at 1-800-457-2814, or writing to:
NiSource Inc.
Attention: Director, Corporate Ethics
801 East 86th Avenue
Merrillville, Indiana 46410
Stockholder Engagement
We are committed to engaging with our stockholders and soliciting their views and input on important governance, environmental, social, executive compensation and other matters. Our ESN&G Committee is responsible for overseeing the stockholder engagement process and the periodic review and assessment of stockholder input on governance matters. In 2023, management held conversations with stockholders on a variety of corporate governance topics, including Board composition, the Board’s annual evaluation process, executive compensation and other matters. The information obtained from stockholders was shared with our ESN&G Committee and used to enhance our disclosures. We intend to continue stockholder engagement on governance each year outside of the proxy season. Our independent directors are available to engage in dialogue with stockholders on matters of significance to understand stockholders’ views. In addition, management regularly participates in investor and industry conferences throughout the year to discuss performance and share its perspective on the Company and industry developments.
Code of Business Conduct
We have a Code of Business Conduct to promote: (i) ethical behavior, including the ethical handling of conflicts of interest; (ii) full, fair, accurate, timely and understandable financial disclosure; (iii) compliance with applicable laws, rules and regulations; (iv) accountability for adherence to our Code of Business Conduct; and (v) prompt internal reporting of violations of our code. Our Code of Business Conduct satisfies applicable SEC and NYSE requirements and applies to all directors, officers (including our principal executive officer, principal financial officer, principal accounting officer and controller), as well as to our employees of and our affiliates. A copy of our Code of Business Conduct is available on our website at https://www.nisource.com/investors/governance and also is available to any stockholder upon written request to our Corporate Secretary at the address noted above under the heading “Communications with the Board and Non-Management Directors.”
Any waiver of our Code of Business Conduct for any director, executive officer or Section 16 Officer may be made only by the Audit Committee of the Board and must be promptly disclosed to the extent and in the manner required by the SEC or the NYSE and posted on our website. No such waivers have been granted.
To instill and reinforce our values and culture, we require our employees to participate in regular training on rotating ethics and compliance topics each year, including, among others, raising concerns, treating others with respect, preventing
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discrimination in the workplace, anti-bribery and corruption, data protection, unconscious biases, harassment, conflicts of interest, and the anonymous ethics and compliance hotline. All employees receive training on our Code of Business Conduct biannually or more frequently if there is a material change in content. Our business ethics program, including the employee training program, is reviewed annually by our executive leadership team and the Audit Committee of the Board. Our Audit Committee receives regular updates throughout the year.
Corporate Governance Guidelines
The ESN&G Committee is responsible for annually reviewing and reassessing the Corporate Governance Guidelines and submitting any recommended changes to the Board for its approval. A copy of the Corporate Governance Guidelines can be found on our website at https://www.nisource.com/investors/governance and is also available to any stockholder upon written request to our Corporate Secretary.
Board Leadership Structure
Our Corporate Governance Guidelines state that we reserve the right to consider leadership of the Board in the way that best serves our interests at the time and, accordingly, the Board has no fixed policy with respect to combining or separating the offices of Chair and CEO. If the Chair is not an independent director, an independent Lead Director will be chosen annually by the Board, taking into account the recommendation of the ESN&G Committee. The Chair or, if the Chair is not an independent director, the Lead Director, will be the presiding director of executive sessions of the Board. To promote open discussion among the non-management directors, the Board schedules regular executive sessions at meetings of the Board and each of its committees.
Since late 2006, the offices of Chair and CEO of the Company have been held by different individuals, with the Chair being an independent director.
The duties of the Chair of the Board are as follows:
providing leadership to the Board and management, and monitoring the discharge of their duties;
presiding at meetings of stockholders and the Board, including executive sessions of the Board and meetings of the independent directors;
serving as a liaison between the independent directors and management;
in consultation with the CEO, setting agendas for the meetings of the Board, and developing annual Board meeting schedules for approval by the Board;
ensuring proper flow of information to the Board;
having the authority to call special meetings of the Board and independent directors;
being available for consultation and direct communication with stockholders and other key stakeholders, as appropriate; and
having such other responsibilities and performing such duties as may from time to time be assigned to him or her by the Board.
The Board periodically reviews the structure and the division of responsibilities between the role of independent Chair and CEO. The structure and division of responsibilities is intended to maintain the integrity of the oversight function of the Board by providing a separate framework of responsibilities for the independent Chair as set forth above.
Board Oversight of Risk
The Board takes an active role in monitoring and assessing our strategic, compliance, operational and financial risks, as well as cybersecurity risks. The Board has oversight over risks related to Environmental, Social and Governance (“ESG”) strategy and governance, including assuring that ESG risks and opportunities are directly tied to our business strategy and understanding how we are measuring progress toward goals as part of our ESG strategy. The Board administers its oversight function through utilization of its various committees.
Board oversight includes consideration of management’s process for assessing risks and emerging risks and the policies management has implemented to monitor and control such risks and elevate major and emerging risks for discussion
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with the Board, which includes the Company’s Risk Management Committee. Our Risk Management Committee, which consists of members of our senior management, is responsible for oversight of our risk management process. Senior management regularly provide reports on our risks and emerging risks to the Board, the Audit Committee and the other Board committees that oversee the applicable risks. Additionally, the Audit Committee discusses with management and the independent registered public accounting firm the effect of regulatory and accounting initiatives on our financial statements and is responsible for review and evaluation of our major risk exposures, including cybersecurity and supplier risks, and the steps management has taken to monitor and control such exposures.
The C&HC Committee, the Safety, Operations, Regulatory and Policy (“SORP”) Committee, the Finance Committee and the ESN&G Committee are each charged with overseeing the risks associated with their respective areas of responsibility. The C&HC Committee oversees risks related to executive compensation and human capital management matters, including incentive compensation, succession planning, diversity, employee engagement, culture and talent management. The SORP Committee oversees risks related to safety and operations. The Finance Committee oversees risks related to capital management and allocation and investor relations. The ESN&G Committee oversees risks related to environmental, social, sustainability and climate change matters, public company governance, CEO succession planning, political spending and stockholder engagement. For more information regarding the oversight responsibilities of the Board Committees, see the descriptions of the committees below.
Generally, at each Board meeting, the chairs of each committee provide a report to the Board on any key items and risks discussed at the respective committee meetings. In addition, the Board regularly discusses the Company’s short-, medium-, and long-term strategy and risks. Shorter term risks and related matters are generally discussed at meetings of the Board and applicable committee on a regular and recurring basis, whereas longer term risks are discussed at least annually and as appropriate throughout the course of the year. Our Board or applicable committee receives information from external advisors and others, including the Company’s independent auditors, legal counsel, compensation consultant, and financial advisors, to advise on key risks and other issues relevant to the Company.
Oversight of Cybersecurity
As noted above, the Board is responsible for overseeing our risks and this oversight is administered through the utilization of its committees. Specifically, the Audit Committee is primarily responsible for oversight of the cybersecurity program and risks from cybersecurity threats, with input from the Company’s Risk Management Committee through our cybersecurity program. The cybersecurity program includes a variety of security controls and measures designed to identify, assess, and manage material cybersecurity risks. The key components of the cybersecurity program are risk assessment, third-party risk management, security controls and incident response.
The Audit Committee meets quarterly, and as needed, reviews the Company’s cybersecurity posture and make recommendations for improvement. The Chief Information Security Officer (CISO) regularly briefs the Audit Committee on cybersecurity risks and the efforts to address them. In addition, the Board of Directors is briefed regularly, through written reports and updates by the Audit Committee, about key and emerging cybersecurity risks.
At the management level, the CISO leads the cybersecurity program and is responsible for assessing and managing cybersecurity risks. The CISO is supported by the NiSource Enterprise Security team which performs the cybersecurity function and engages directly on the prevention, detection, mitigation, and remediation of cybersecurity incidents.
NiSource monitors the increasing sophistication of cybersecurity threats and continues to contribute resources to improve its cybersecurity program to protect its information systems and assets. No cybersecurity program is effective to identify and mitigate all threats, and NiSource cannot guarantee that it will be able to prevent all cybersecurity incidents.
Succession Planning
Our management team performs succession planning quarterly for officer-level and critical roles to ensure that we develop and sustain a strong bench of talent capable of performing at the highest levels. Not only is talent identified, but potential paths of development are discussed to ensure that employees have an opportunity to build their skills and are well prepared for future roles. We maintain formal succession plans for our CEO and key executive officers. The succession plan for our CEO is reviewed by the ESN&G Committee and the succession plans for executive officers (other than the CEO) are reviewed by the C&HC Committee annually or more frequently as needed.
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CORPORATE GOVERNANCE
Meetings and Committees of the Board
The Board met 12 times during 2023. Each incumbent director attended at least 75% of the total number of meetings of the Board and of the committees of the Board on which he or she served, and in each case, during the periods that he or she served. Pursuant to our Corporate Governance Guidelines, directors are expected to attend all Board meetings to spend the time needed to discharge their responsibilities as directors and to attend the annual meeting of stockholders.
All then-serving directors attended the 2023 annual meeting of stockholders.
Pursuant to our Corporate Governance Guidelines, the Board expects that our senior officers will regularly attend Board and Committee meetings, present proposals and otherwise assist in the work of the Board. Members of the Board have direct access to all of our employees, outside advisors and independent registered public accounting firm.
The Board has established six standing committees to assist the Board in carrying out its duties: the Audit Committee, the C&HC Committee, the ESN&G Committee, the Executive Committee, the Finance Committee and the SORP Committee. The Board generally evaluates the structure and membership of its committees on an annual basis, appoints the independent members of the Board to serve on the committees and elects committee chairs following the annual meeting of stockholders.
The following table shows the composition of each standing Board committee as of the date of this Proxy Statement. Mr. Yates does not serve on any committee but is invited to attend various committee meetings. Mr. Kabat, Chair of the Board, serves on the ESN&G committee and is invited to attend all meetings of each of the other committees.
Board Committee Composition(1)
Director
Audit
C&HC
SORP
Finance
ESN&G
Executive
Peter A. Altabef
Sondra L. Barbour(2)
Theodore H. Bunting, Jr.(2)
✔*
Eric L. Butler
✔*
Deborah A. Henretta
✔*
Deborah A. P. Hersman
Michael E. Jesanis
✔*
William D. Johnson
✔*
Kevin T. Kabat(3)
✔*
Cassandra S. Lee(2)
​John McAvoy
Lloyd M. Yates
*
Committee Chair
(1)
Represents current committee membership as of April 1, 2024. Prior to March 19, 2024, Mr. Johnson served on the Compensation and Human Capital Committee; and Mr. Altabef served on the Executive Committee (as Chair of the Finance Committee). Beginning March 19, 2024, Mr. Johnson serves on the Environmental, Social, Nominating and Governance Committee; and Mr. Jesanis and Mr. Johnson serve on the Executive Committee (as Chair of Finance Committee and Safety, Operations, Regulatory and Policy Committee, respectively).
(2)
Audit Committee Financial Expert, as defined by SEC rules.
(3)
Independent Chair of the Board.
The summaries below are qualified by reference to the entire charter for each of the Audit, C&HC, ESN&G, Executive, Finance and SORP Committees; each of which can be found on our website at https://www.nisource.com/investors/governance and is also available to any stockholder upon written request to our Corporate Secretary. Additionally, any committee may perform other duties and responsibilities, consistent with their respective charters, our Amended and Restated Bylaws (our “Bylaws”), governing law, the rules of the NYSE, the federal securities laws and such other requirements applicable to us, delegated to any committee by the Board, or in the case of the C&HC Committee, under any provision of any of our benefit or compensation plans.
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Audit Committee
The Audit Committee met 11 times in 2023. Our Audit Committee is responsible for the oversight of our internal audit function and financial reporting process. The Audit Committee has the sole authority to appoint, retain or replace our independent registered public accounting firm and is responsible for, among other things:
monitoring the integrity of the financial statements of the Company;
reviewing our independent registered public accounting firm’s qualifications and independence and compensating our independent registered public accounting firm;
overseeing the performance of our internal audit function and our independent registered public accounting firm;
reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements before earnings announcements;
reviewing and discussing with management our annual and quarterly earnings press releases;
reviewing and discussing with management and our independent registered public accounting firm major issues regarding accounting principles and financial statement presentations, adequacy of internal controls, and any critical judgments or accounting estimates made in connection with the preparation of financial statements;
reviewing and evaluating our major risk exposures, including cybersecurity and supplier risks, and the steps management has taken to monitor and control such exposures, including discussion of our risk assessment and risk management policies; and
overseeing our compliance with legal and regulatory requirements.
The Board has determined that all of the members of the Audit Committee are independent as defined under the applicable NYSE and SEC rules, including the additional independence standard for audit committee members, and under our Corporate Governance Guidelines.
For more information regarding the Audit Committee, see “Audit Committee Report,” “Proposal 3 — Ratification of Independent Registered Public Accounting Firm” and “Independent Registered Public Accounting Firm Fees” below.
Compensation and Human Capital (“C&HC”) Committee
The C&HC Committee met five times in 2023. The C&HC Committee is responsible for reviewing our human capital management function and programs, including related procedures, programs, policies and practices, and to make recommendations to management with respect to equal employment opportunity and diversity, equity and inclusion (“DE&I”) initiatives, employee engagement and corporate culture and talent management. The C&HC Committee also apprises the Board with respect to the evaluation, compensation and benefits of our executives. In addition to the previously stated responsibilities above, its additional responsibilities include, among others:
evaluating the performance of our CEO and other executive officers in light of our goals and objectives;
reviewing and approving the corporate goals and objectives relevant to CEO and executive officer compensation;
making recommendations to the independent Board members regarding CEO compensation and approving compensation of the other executive officers;
reviewing and approving periodically a general compensation policy for our other officers and officers of our principal subsidiaries;
approving, or if appropriate, making recommendations to the Board with respect to incentive compensation plans and equity-based plans;
reviewing our officer candidates for election by the Board;
reviewing and evaluating the executive officers’ development and succession plan (other than our CEO’s succession plan, which is reviewed by the ESN&G Committee); and
evaluating the risks associated with our compensation policies and practices and the steps management has taken to monitor and control such risks.
overseeing the Company’s human capital management function, including procedures, programs, policies and practices with respect to equal employment opportunity and DE&I initiatives; employee engagement and corporate culture; and talent management.
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All of the directors serving on the C&HC Committee are: (i) independent as defined under the applicable NYSE and SEC rules and under our Corporate Governance Guidelines and the additional NYSE independence standard for members of compensation committees and (ii) “non-employee directors” as defined under Rule 16b-3 of the Exchange Act. For additional information regarding the C&HC Committee’s principles, policies and practices, please see the discussion under “Compensation Discussion and Analysis (CD&A)”.
SORP Committee
The SORP Committee met five times during 2023. The SORP Committee assists the Board in overseeing the programs, performance and risks relative to the oversight and review of our operations, including safety, performance and regulatory compliance matters. Its responsibilities include, among others:
overseeing the overall performance of our utility company operations;
evaluating our safety policies, practices and performance relating to our employees, contractors and the general public;
reviewing and assessing stockholder proposals related to safety, operations, regulatory or policy;
monitoring our relationships with regulatory and governmental authorities;
reviewing and monitoring major legislation, regulation and other external influences that pertain to the SORP Committee’s responsibilities and assessing the impact on us; and
reviewing and evaluating our programs, policies, practices and performance with respect to health and safety compliance auditing.
Finance Committee
The Finance Committee met five times during 2023. Its responsibilities include the following, among others:
reviewing and evaluating our financial plans, capital structure, equity and debt levels, dividend policy and financial policies;
reviewing our corporate insurance programs;
reviewing our investment strategy and investments;
reviewing and evaluating our financial, tax, third party credit and commodity risks and the steps management has taken to monitor and control such risks;
reviewing our annual earnings guidance and capital budgets and recommending approval to the Board; and
reviewing our hedging policies and exempt swap transactions.
ESN&G Committee
The ESN&G Committee met five times in 2023. Its responsibilities include, among others:
identifying individuals qualified to become Board members, consistent with criteria approved by the Board;
recommending to the Board director nominees for election at the next annual meeting of the stockholders;
developing and recommending to the Board the Corporate Governance Guidelines;
consulting with management to determine the appropriate response to stockholder proposals submitted pursuant to SEC rules;
reviewing and evaluating our reports, programs, policies, practices and performance with respect to environmental, sustainability and social matters, including polices and initiatives related to corporate social responsibility issues and DE&I;
overseeing our ESG-related stockholder engagement process and periodically reviewing stockholder input on corporate governance matters;
reviewing and evaluating our CEO succession plan and working with the Board to evaluate potential successors to our CEO;
reviewing and overseeing, at least annually, corporate and business unit political spending;
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reviewing reports and disclosures of insider and related person transactions;
reviewing and evaluating our strategy, efforts, programs, policies, practices and performance with respect to environmental, social, sustainability and climate change matters;
reviewing our sustainability targets and our progress towards achieving such targets;
monitoring risks and opportunities related to environmental, social, sustainability and climate change matters;
evaluating any resignation tendered by a director and making recommendations to the Board about whether to accept such resignation; and
overseeing the evaluation of the performance of the Board and its committees.
The ESN&G Committee, with the assistance of the independent compensation consultant, annually reviews the amount and composition of non-employee director compensation. Please see the discussion under the heading “2023 Director Compensation” for a description of the compensation we provide to our non-employee directors. The ESN&G Committee also leads the processes set forth below.
Director Selection Process. The ESN&G Committee identifies and screens candidates for director and makes its recommendations for director to the Board. At times the Board may establish an ad hoc search committee to assist the ESN&G Committee in this process. Additionally, the ESN&G Committee has the authority to retain a search firm to help it identify director candidates to the extent it deems necessary or appropriate. Any search firm that is engaged will include women and minority candidates in the pool from which the ESN&G Committee selects director candidates. In considering candidates for director, the ESN&G Committee considers the skills, expertise, experience and qualifications that will best complement the overall mix of skills and expertise of the Board in view of the strategy of, and the risks and opportunities that we face, as well as each candidate’s relevant business, academic and industry experience, professional background, age, current employment, community service, other board service and other factors. In addition, the ESN&G Committee takes into account the racial, ethnic and gender diversity of the Board and actively seeks minority and female candidates.
The ESN&G Committee seeks to identify and recommend candidates with a reputation for, and record of, integrity and good business judgment who have experience in positions with a high degree of responsibility and are leaders in the organizations with which they are affiliated; are effective in working in complex collegial settings; are free from conflicts of interest that could interfere with a director’s duties to us and our stockholders; and are willing and able to make the necessary commitment of time and attention required for effective service on the Board, including limiting their service on other boards to a reasonable number. The ESN&G Committee also takes into account the candidate’s level of financial literacy. The ESN&G Committee monitors the mix of skills and experience of the directors in order to assess whether the Board has the necessary tools to perform its oversight function effectively. The ESN&G Committee also assesses the diversity of the Board as a part of its annual self-assessment process as described in more detail below. The ESN&G Committee will consider nominees for directors recommended by stockholders and will use the same criteria to evaluate candidates proposed by stockholders as it uses to evaluate the candidates identified by the Board. Mr. John McAvoy is standing for election by the shareholders for the first time at this Annual Meeting and is the only director nominee for the Annual Meeting who is standing for election by the shareholders for the first time. Mr. McAvoy was initially identified as a potential nominee with the assistance of a third party. Mr. McAvoy was appointed to the Board effective March 19, 2024.
The Board has determined that all of the members of the ESN&G Committee are independent as defined under the applicable NYSE rules and our Corporate Governance Guidelines.
For information on how to nominate a person for election as a director at the 2025 Annual Meeting, please see the discussion under the heading “Stockholder Proposals and Nominations for 2025 Annual Meeting.”
Evaluation Processes. The Board recognizes that a robust and constructive performance evaluation process is an essential component of Board effectiveness. As such, the Board conducts (a) director and (b) board and committee annual performance evaluations that are intended to determine whether the Board, each of its committees, and individual Board members are functioning effectively and to provide them with an opportunity to reflect upon and improve processes and effectiveness. The ESN&G Committee oversees these evaluation processes. Annually at its meeting in March, the ESN&G Committee initiates the board and committee self-evaluation process and approves the form of written evaluation questionnaires that are distributed to each director for completion. The written evaluation
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questionnaires are updated each year as necessary to reflect changes identified in the prior year, any committee charter changes and any suggestions from the directors. The questionnaires solicit feedback on Board composition, Board meeting mechanics, including information received, core responsibilities, relationship with management, committee functioning and other relevant matters. Annually at its meeting in October, the ESN&G Committee initiates the director evaluation process and approves the form of written evaluation questionnaires that are distributed to each director for completion. Similar to the board and committee evaluations, the director evaluation questionnaires are reviewed and updated annually, as needed to reflect changes identified since the prior year, any committee charter changes and any suggestions from the directors. On an ongoing basis, the ESN&G Chair meets with each director individually to solicit feedback with respect to both the full Board and any committee on which the director serves, in addition to individual director performance and Board dynamics. Our Board utilizes the results of these evaluations in making decisions on Board agendas, Board structure, committee responsibilities and agendas, information presented to the Board, and continued service of individual directors on the Board. This information is then shared with the Board, and appropriate actions or changes are then identified.
Director Education. At the Company’s expense, all directors are encouraged to periodically attend director continuing education programs offered by various organizations. The Company also maintains an orientation program that consists of written materials, oral presentations, and site visits. In addition to orientation, we maintain an internal director education program where corporate and industry information is disseminated through various mediums, including presentations and written materials, webinars and seminars and site visits.
Retirement Age; No Term Limits. The Board periodically evaluates the performance and qualifications of individual directors in connection with the nomination process, including the appropriate time for retirement of directors. However, no director after having attained the age of 72 years will be nominated for re-election to the Board unless the Board determines that the nomination is in the best interests of the Company. In addition, although the ESN&G Committee will consider length of service in recommending candidates for re-election, the Board does not believe that adopting a set term limit for directors serves our interests. Such limits may result in the loss of contributions from directors who have been able to develop, over a period of time, increasing insight into our operations and our strategic direction. The ESN&G Committee reviews these policies as part of its annual governance review and will consider modifications to these policies as deemed necessary and in our best interests and the best interests of our stockholders.
Director Compensation. This section describes compensation for our non-employee directors. To attract and retain highly qualified candidates to serve on the Board, we provide a combination of cash and equity awards. Our non-employee director compensation is reviewed annually by our ESN&G Committee with the assistance of Meridian Compensation Partners, LLC (“Meridian”), the C&HC Committee’s independent compensation consultant. A full-time employee who serves as a director does not receive any additional compensation for service on the Board.
For 2023, each non-employee director received an annual retainer of $275,000, consisting of $110,000 in cash and an award of restricted stock units (“RSUs”) valued at $165,000 at the time of grant. The cash retainer is paid in arrears in four equal installments at the end of each calendar quarter.
RSUs are awarded annually, and the number of RSUs is determined by dividing the value of the grant by the closing price of our common stock on the grant date. The RSUs granted at and after the 2020 annual meetings of stockholders were granted under the NiSource Inc. 2020 Omnibus Incentive Plan (“2020 Omnibus Plan”), while RSU awards granted prior to the 2020 annual meeting of stockholders were granted under the NiSource Inc. 2010 Omnibus Incentive Plan (“2010 Omnibus Plan”). Unless the non-employee director elects to defer receipt of his or her RSU awards, the RSUs are payable in shares of our common stock on the earlier to occur of: (a) the last day of the director’s annual term for which the RSUs are awarded; or (b) the date that the director separates from the Board due to a “Change-in-Control” (as defined in the 2020 Omnibus Plan or 2010 Omnibus Plan (the “Omnibus Plan”), as applicable); provided, however, that any director that commences service on the Board after the start of an annual term will vest on the first anniversary of the initial grant. The RSU awards also contain pro-rata vesting provisions for a separation from the Board due to retirement, death or disability. RSUs accrue dividends prior to settlement in shares of our common stock. If a non-employee director elects to defer receipt of his or her RSUs, then such deferred stock units will be paid in shares of our common stock upon the non-employee director’s separation from the Board or such other date selected by the non-employee director.
Each non-employee director who serves as chair of a Board committee receives compensation for the additional responsibilities associated with such service. The 2023 committee chair fees were $20,000 for each of the standing
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committees. The Chair of the Board received additional annual compensation of $160,000 for his role. These fees are paid in cash in arrears in four equal installments and are prorated in the case of partial year service.
All Other Compensation. The compensation included under the column “All Other Compensation” in the 2023 Director Compensation Table below consists of matching contributions made by the NiSource Charitable Foundation (the “Foundation”).
Director Stock Ownership. The Board maintains stock ownership requirements for directors that are included in our Corporate Governance Guidelines. Within five years of becoming a non-employee director, each non-employee director is required to hold an amount of our stock with a value equal to five times the annual cash retainer paid to directors. Company stock that counts towards satisfaction of this requirement includes shares purchased on the open market, awards of restricted stock or RSUs, and shares beneficially owned in a trust or by a spouse or other immediate family member residing in the same household. All of the non-employee director nominees are in compliance with the stock ownership guideline or are within the five-year transition period included in the Corporate Governance Guidelines.
Each director has a significant portion of his or her compensation directly aligned with long-term stockholder value. Approximately sixty percent (60%) of a non-employee director’s 2023 annual retainer (valued as of the time of award and excluding committee retainers) consisted of RSUs, which are converted into common stock when vested and distributed to the director.
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2023 Director Compensation
The table below sets forth all compensation earned by or paid to our non-employee directors in 2023. Mr. Yates did not receive any additional compensation for his service on the Board. Mr. Yates’ compensation for serving as President and CEO during 2023 is discussed in the Executive Compensation section of this Proxy Statement.
Name
Fees Earned or
Paid in Cash
($)(1)
Stock Awards
($)(2)(3)
All Other
Compensation
($)(4)
Total
($)
Peter A. Altabef
130,000
165,000
5,000
300,000
Sondra L. Barbour
110,000
165,000
275,000
Theodore H. Bunting, Jr.
130,000
165,000
295,000
Eric L. Butler
130,000
165,000
295,000
Aristides S. Candris
130,000
165,000
10,000
305,000
Deborah A. Henretta
130,000
165,000
295,000
Deborah A.P. Hersman
110,000
165,000
3,000
278,000
Michael E. Jesanis
110,000
165,000
9,000
284,000
William D. Johnson
110,000
165,000
275,000
Kevin T. Kabat
270,000
165,000
435,000
Cassandra S. Lee
110,000
165,000
275,000
(1)
The fees shown include the annual cash retainer and any Board and chair fees paid during the year to each non-employee director. Dr. Candris, who did not stand for reelection in 2024, served on the Board until March 19, 2024.
(2)
The amounts shown reflect the grant date fair value of awards computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. For RSUs, the grant date fair value is the number of shares multiplied by the closing price of our stock on the award date. On May 23 2023, each non-employee director received an award of RSUs valued at $165,000, which was equal to approximately 6,031 RSUs valued at $27.36 per unit, the closing price of our common stock on that date. For information on the valuation assumptions used in these computations, see Note 17 to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
(3)
As of December 31, 2023, the number of equity awards (in the form of RSUs or deferred stock units) that were outstanding for each non-employee director was as follows: Mr. Altabef, 6,146.431; Ms. Barbour, 13,465.424, Mr. Bunting, 22,109.502; Mr. Butler, 6,146.431; Dr. Candris, 75,862.1510; Ms. Henretta, 58,100.0740; Ms. Hersman, 30,282.3980; Mr. Jesanis, 6,146.431; Mr. Johnson, 12,749.884, Mr. Kabat, 6,146.431; and Ms. Lee, 13,256.846. For Mr. Yates, the number of RSUs or deferred stock units he received while serving as a non-employee director which were outstanding as of December 31, 2023 was 14,320.551.
(4)
The amounts shown reflect matching contributions made by the Foundation under the Director Charitable Match Program. The Foundation matches up to $10,000 annually in contributions by any non-employee director to approved tax-exempt charitable organizations. Any amount not utilized for the match in the year it is first available is carried over to the following year.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows as of March 18, 2024, the number of shares of our outstanding common stock beneficially owned by (which includes any shares that would be distributable within 60 days of March 18, 2024): (i) beneficial owners of more than 5% of our outstanding common stock (based solely on the Schedule 13G filings and any amendments thereto filed with the SEC on or before March 18, 2024) except as noted below; (ii) each of our directors and NEOs; and (iii) our directors and executive officers as a group. None of the NEOs or directors has any outstanding stock options as of that date. The business address of each of our directors and executive officers is our address.
Name and Address of Beneficial Owner
Number of Shares of
Common Stock
Beneficially Owned
Percent of Class
Outstanding
5% Owners
The Vanguard Group(1)
100 Vanguard Blvd.
Malvern, PA 19355
53,932,502
13.05%
BlackRock, Inc.(2)
50 Hudson Yards
New York, NY 10001
39,359,834
9.50%
State Street Corporation(3)
State Street Financial Center
1 Congress Street
Boston, MA 02114
22,022,502
5.33%

Directors and Named Executive Officers
Shawn Anderson(5)
48,222
*
Peter A. Altabef(4)
35,691
*
Sondra L. Barbour(4)
7,394
*
Melody Birmingham
5,598
*
Donald E. Brown(5)
170,421
*
Theodore H. Bunting, Jr.(4)
28,412
*
Eric L. Butler(4)
46,768
*
Aristides S. Candris
22,301
*
Deborah A. Henretta(4)
4,645
*
Deborah A.P. Hersman(4)
14,660
*
William Jefferson, Jr.
4,875
*
Michael E. Jesanis(4)
41,925
*
William D. Johnson(4)
6,671
*
Kevin K. Kabat(4)
45,531
*
Cassandra S. Lee(4)
7,183
*
Michael Luhrs(6)
877
*
Lloyd M. Yates(4)(6)
60,159
*
All directors and executive officers as a group (20 persons)
593,555
*
* Less than 1%
(1)
As reported on an amendment to statement on Schedule 13G/A filed with the SEC on behalf of The Vanguard Group on February 13, 2024. The Vanguard Group reported shared voting power with respect to 703,062 shares, sole dispositive power with respect to 51,971,358 shares and shared dispositive power with respect to 1,961,144 shares.
(2)
As reported on an amendment to statement on Schedule 13G/A filed with the SEC on behalf of BlackRock, Inc. on
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January 24, 2024. BlackRock, Inc. reported sole voting power with respect to 36,385,285 shares and sole dispositive power with respect to 39,359,834 shares.
(3)
As reported on an amendment to statement on Schedule 13G/A filed with the SEC on behalf of State Street Corporation on January 29, 2024. State Street Corporation reported shared voting power with respect to 13,866,868 shares and shared dispositive power with respect to 21,944,502 shares.
(4)
Does not include RSUs issued under the Omnibus Plan unless the shares have been distributed or the non-employee director has the right to acquire the shares within 60 days of March 18, 2024.
(5)
Includes shares held in our 401(k) Plan.
(6)
These individuals participate in our ESPP. This table excludes shares that may be distributable within 60 days of March 18, 2024. The actual number of shares that may be acquired under the ESPP will not be determinable until the end of the offering period.
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COMPENSATION DISCUSSION AND ANALYSIS (CD&A)
The CD&A describes and discusses our executive compensation programs, including objectives and elements, as well as determinations made by the Compensation and Human Capital (“C&HC”) Committee regarding the compensation of our Named Executive Officers (“NEOs”).
Our Named Executive Officers (NEOs)
As of December 31, 2023, the NEOs are:

Lloyd Yates
President and Chief Executive
Officer(“CEO”)

Shawn Anderson
Executive Vice President and
Chief Financial Officer (“CFO”)

Donald Brown
Executive Vice President and Chief
Innovation Officer and Former CFO

Melody Bimingham
Executive Vice President and
President, Nisource Utilities

William (“Bill”) Jefferson
Executive Vice President, Operations
and Chief Safety Officer

Michael Luhrs
Executive Vice President,
Strategy and Risk and
Chief Commercial Officer
Executive Overview
As a trusted, reliable energy partner, NiSource is committed to putting our shareholders, customers, employees, and the communities we serve at the forefront of everything we do.
Leadership Changes
On March 27, 2023, President and CEO Lloyd Yates reconfigured his leadership team with the appointment of Michael Luhrs as Executive Vice President, Strategy and Risk and Chief Commercial Officer who has nearly 25 years of experience in the energy industry. In addition, Melody Birmingham was appointed the Executive Vice President and President, NiSource Utilities, Shawn Anderson was appointed the Executive Vice President and Chief Financial Officer, and Donald Brown was appointed the Executive Vice President and Chief Innovation Officer. We previously announced that Donald Brown is departing the Company effective April 1, 2024. Also, effective April 1, 2024, Bill Jefferson's title is EVP, Chief Operating and Safety Officer.
Company Performance Highlights Impacting Compensation Outcomes for 2023
Our executive compensation program is intended to attract and retain the best leadership talent in the industry and align our executives’ interests with those of stockholders to achieve our goals and continued successes.
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COMPENSATION DISCUSSION AND ANALYSIS
2023 achievements were driven by strong leadership who implemented a clear strategy and consistently executed on our business and financial commitments, which contributed to near and long-term value for stakeholders. We are committed to continuously improving the way we work through operational excellence in the areas most important to our stakeholders: employee and public safety, reliability, affordability and environmental sustainability. We care about our customers and work every day to listen, anticipate their needs, earn their trust and deliver safe and reliable energy with convenience and at a cost they value. Below you will find key drivers and highlights of our i) 2023 STI results, ii) long-term results and iii) additional 2023 accomplishments.

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We believe that our performance highlights reflect a successful year of commitment to our stockholders while maintaining a focus on our Company’s shared commitment to safety, reliability, affordability, and sustainability. For additional details on our numerous achievements of 2023, we invite you to read our 2023 Annual Report. We pay for performance. The C&HC Committee believes that 2023 compensation awards and outcomes were appropriate and are reflective of a year of exceptional performance.
Detailed results are outlined in the Components of 2023 Executive Compensation Program section below.
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COMPENSATION DISCUSSION AND ANALYSIS
Long-Term Stock Performance
Total shareholder return shown in the chart below reflects growth in the price of a share of our common stock, assuming dividends are reinvested.

2023 Executive Compensation Pay Mix Summary
For 2023, the C&HC Committee approved a mix of pay that balanced short-term and long-term incentives and focused the efforts of our NEOs on the achievement of both short-term business objectives and long-term strategic objectives. The majority of our NEOs’ total target direct compensation was in the form of equity awards to align the interests of our NEOs with those of our stockholders. The mix of key elements of compensation (expressed as a proportion of total compensation) awarded to our NEOs, including the CEO, reflects a significant portion of the total target direct compensation being both performance-based and at-risk, which is consistent with our pay for performance philosophy. For more information, see “Components of 2023 Executive Compensation Program”.
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COMPENSATION DISCUSSION AND ANALYSIS
The following charts show the mix of 2023 total target direct compensation for our CEO, the average total target direct compensation for other NEOs and the portion that is performance based and/or at-risk.


Overview of Target Total Direct Compensation
The following table shows the C&HC Committee approved annualized 2023 total target direct compensation and each component of total target direct compensation for the listed NEOs.
NEO1
Base Salary
as of
12/31/23
($)
Annual Short-
Term Incentive
Target as
% of Base
Salary
Annual Short-
Term Incentive
Target as
of 12/31/23
($)
PSUs at
Target
($)
RSUs
($)
Total Target
Direct
Compensation
($)
Lloyd Yates
1,050,000
115%
1,207,500
4,000,000
1,000,000
7,257,500
Shawn Anderson
550,000
75%
412,500
880,000
220,000
2,062,500
Donald Brown
645,000
75%
483,750
1,032,000
258,000
2,418,750
Melody Birmingham
645,000
75%
483,750
1,032,000
258,000
2,418,750
William Jefferson
550,000
75%
412,500
880,000
220,000
2,062,500
Michael Luhrs
550,000
75%
412,500
880,000
220,000
2,062,500
(1)
The table above does not include new hire awards that were granted as such awards do not represent an annual component of our executive compensation program. For more information regarding these awards, see the “New Hire Award” section under “Components of 2023 Executive Compensation Program.” To reflect the value of Mr. Anderson’s Total Target Direct Compensation, this table reflects the awards granted in his former role plus the incremental awards granted in March 2023 when he was promoted to CFO.
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COMPENSATION DISCUSSION AND ANALYSIS
Components of 2023 Executive Compensation Program
2023 Base Salary
Salary provides fixed pay commensurate with each NEO’s role and responsibilities. In January, the C&HC Committee approved the following increases by reviewing Pay Factors (defined below), the pay competitiveness, industry experience, individual and Company performance, and the CEO’s recommendation when determining the salary increases for the other NEOs. The C&HC Committee evaluated and made a recommendation to the Board of Directors who approved a base salary increase for Mr. Yates. In March, the C&HC Committee approved an additional salary increase to Mr. Anderson commensurate with his promotion to CFO. Mr. Luhrs joined the Company on March 27, 2023.
NEO
Base Salary as
of 12/31/22 ($)
% Change
Date of
Increase
Base Salary as
of 12/31/23 ($)
Lloyd Yates
1,000,000
5.00%
3/1/2023
1,050,000
Shawn Anderson
400,000
12.50%
3/1/2023
550,000
​22.22%
​3/27/2023
Donald Brown
630,360
2.32%
3/1/2023
645,000
Melody Birmingham
625,000
3.20%
3/1/2023
645,000
William Jefferson
475,000
15.79%
3/1/2023
550,000
Michael Luhrs
550,000
See the section entitled “Establishing Executive Compensation – Role of the Compensation & Human Capital Committee” for Pay Factors definition.
2023 Short-Term Incentive (STI) Program Design and Results
The 2023 STI program provides the NEOs with the opportunity to earn a cash incentive award tied to achievement of goals in the categories of financial performance, operational excellence, occupational health and safety, and customer satisfaction over a one-year performance period. The result of each goal is calculated, and the sum of the weighted results creates the formulaic incentive opportunity. If threshold performance was not achieved with respect to a performance measure, then no STI award would have been paid for that specific measure. The C&HC Committee retains discretion to adjust STI awards, either on a formulaic or discretionary basis.
The C&HC Committee reviewed the Pay Factors (defined below) and peer group data to establish the STI target percentage (expressed as a percentage of base salary) for NEOs except for Mr. Yates. The C&HC Committee evaluated and made a recommendation to the Board of Directors who approved the STI target percentage for Mr. Yates, which was unchanged from last year. To reflect peer group practice and help ensure retention of our executive talent, the C&HC Committee approved an increase in Mr. Anderson’s STI target percentage from 60% to 75% and Mr. Jefferson’s STI target percentage from 70% to 75%.
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2023 STI Performance Measures. In January 2023, the C&HC Committee approved the following performance measures to be used to determine the 2023 STI payouts for the NEOs. These measures were chosen because they align with our commitment to deliver safe, reliable energy to our customers.
Performance Measure
Description
NOEPS
(Net Operating Earnings Per Share)
The C&HC Committee selected NOEPS as a financial measure because it is representative of our fundamental profitability, aligned with stockholder value creation, used internally for budgeting and reporting to the Board, and generally consistent with our external reporting of results.

The definition of NOEPS is income from continuing operations determined in accordance with GAAP, including, without limitation, the impact of incentive payouts and adjusted for certain items, such as fluctuations in weather and other significant unusual events disclosed in our earnings reports (examples of which may include transaction-related costs, debt extinguishment costs or certain income tax items). Appendix A to this Proxy Statement contains a full reconciliation of GAAP earnings per share to NOEPS.
Operational Excellence
The C&HC Committee selected Operational Excellence as a performance measure to emphasize the on-going mandate for the company to maintain safe operations and processes.

Operational Excellence is measured against the number of significant injuries or fatalities (SIF) or Pipeline and Hazardous Materials Safety Administration (PHMSA) reportable incidents due to operations or process failures.
Occupational Health and Safety
The C&HC Committee selected Occupational Health and Safety (“OHS”) as a performance measure to drive the company toward top performance.

OHS was composed of two performance measures: Days Away, Restricted or Transferred (“DART”) rate and Preventable Vehicle Collisions (“PVC”) rate.

DART and PVC rate goals were based upon a 5-year glidepath for the company to be top decile of American Gas Association (“AGA”) gas and electric combined utilities by 2026.
○  DART: incident rate relates to all injuries meeting OSHA reportability that require an employee to not report to work, to restrict their duties or transfer to another role due to the injury
○ PVC: rate relates to all vehicle crashes deemed to be the responsibility of the company-employed driver
Customer Satisfaction
The C&HC Committee selected Customer Satisfaction as a performance measure to ensure that our customers’ needs and expectations are met.

The Customer Satisfaction Survey measures five post-transactional customer channels (Customer Service Representatives, Field Service, Interactive Voice Response, Online, and Project Work/Site Restoration) and one customer relationship survey that measures our customer’s overall satisfaction with our Columbia Gas companies and NIPSCO.
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2023 STI Scorecard: Performance Goals and Achieved Results. The table below shows each performance measure, goals, results and percentage of target earned. The 2023 overall scorecard results were 170% of target.
Measure
Threshold
Target
Stretch
Result(1)
Weight
Formulaic
Result as %
Target(1)
Weighted %
Achievement
NOEPS
$1.51
$1.56
$1.61
$1.60(2)
70%
180%
126%
Operational Excellence
0
0
10%
100%
10%
Occupational Health and Safety
--DART
0.74
0.70
0.63
0.65
5%
171%
9%
--PVC
1.73
1.65
1.49
1.49
5%
200%
10%
Customer Satisfaction
67%
70%
73%
71.5%
10%
150%
15%
Overall STI
Scorecard
Result
170%
(1)
If performance results fall between two performance levels (for example, between target and stretch goals), the incentive opportunity is determined by interpolation where threshold is 50%, target is 100% and stretch is 200%.
(2)
Appendix A to this Proxy Statement contains a full reconciliation of GAAP earnings per share to NOEPS.
Calculation of 2023 STI Awards The 2023 STI Scorecard results, employee’s earnings during 2023, employee’s target STI percent, and employee’s Individual Performance Modifier drive the Final Annual STI Award value. For Individual Performance, employee performance is reviewed on an annual basis, and employees receive a performance rating at the end of the performance period. An employee whose performance was rated as exceptional is eligible for 110-140% of the formulaic STI award value, as effective is eligible for 80-110% of the formulaic STI award value, and if needs improvement then 0-50% of the formulaic STI award value.
The following chart and table illustrate how STI awards were calculated.


For Mr. Yates, an exceptional performance modifier was applied to recognize his leadership in 2023, completing another strong year of building upon our track record of consistent execution and growth. For Mr. Anderson, an exceptional performance modifier was applied to recognize his leadership in the execution of strengthening our balance sheet and funding ongoing capital needs associated with the renewable generation transition underway and by driving the completion of a 19.9% indirect equity interest transaction for NIPSCO with an affiliate of Blackstone Infrastructure Partners. For Mr. Jefferson, an exceptional performance modifier was applied in recognition of his leadership in driving operational excellence to support our goal of maintaining a safety and people-first mindset, in addition to driving industry-leading, risk-informed asset management. For Messrs. Brown and Luhrs and for Ms. Birmingham, their performance was rated as effective, and they were awarded within the appropriate performance range.
NEO
2023 STI
Target %
Earnings Paid
During Year
STI Scorecard
Results
Individual
Performance
Modifier
Final Annual STI
Award $
Lloyd Yates
115
$1,041,667
170%
122.76%
$2,500,000
Shawn Anderson
75
$ 518,478
170%
122.5%
$ 809,798
Donald Brown
75
$ 642,560
170%
95%
$ 778,301
Melody Birmingham
75
$ 641,667
170%
100%
$ 818,125
William Jefferson
75
$ 537,500
170%
117.5%
$ 805,242
Michael Luhrs
75
$ 422,464
170%
100%
$ 538,641
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2023 Long-Term Incentive (LTI) Program Design and Results
For 2023, the C&HC Committee approved the following mix of LTI awards granted to our NEOs:


* Mr. Anderson’s initial grant, prior to his promotion to CFO on March 27, 2023, was a mix of 70% performance share units and 30% Restricted Stock Units.
The C&HC Committee reviewed each of the Pay Factors to establish LTI target values for each NEO, other than Mr. Yates. For Mr. Yates, the C&HC Committee evaluated and made a recommendation to the Board of Directors who approved the LTI target value.
2023 Performance Share Units (“PSU”)
PSU Objectives. The key objectives of our 2023 PSU grants are to:
Motivate NEOs to achieve critical long-term financial and relative total shareholder return goals (relative to peers) and achieve critical business imperatives related to operational excellence and safety, workforce, and sustainability
Align the interests of NEOs with stockholders
Retain NEOs
Provide market competitive performance-based LTI opportunities (when aggregated with RSU grants, which are discussed below)
PSU Overview
The PSUs provide our NEOs the opportunity to earn shares of our common stock based on achievement of set performance goals over a three-year performance period ending December 31, 2025, as outlined in the table below.
Performance Goal
Description
Three Year Cumulative NOEPS
The C&HC Committee selected this measure because it aligns the interests of our NEOs with those of our stockholders, and it supports the creation of sustainable stockholder value by growing earnings and providing a strong dividend.

The target three-year cumulative NOEPS performance goal is based upon our three-year financial plan. For the definition and calculation of NOEPS, see above under “2023 STI Performance Measures.”
Three Year Relative Total Shareholder Return (RTSR)
​The C&HC Committee selected this measure because it aligns the interests of our NEOs with those of our stockholders, and it supports the creation of sustainable stockholder value.

RTSR ranks the Company’s total shareholder return over the 3-year period ending on December 31, 2025 relative to the total shareholder return of each company within a 31-company peer group.
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Workforce and Sustainability: The C&HC Committee also chose the following measures because they support our aspirations of excellence, safety, employee, and sustainability:
Employee: Engagement Index Score
The Engagement Index Score is measured over the three-year performance period through an employee survey.
Economic Inclusion: Supplier Diversity
Economic inclusion goal measures Company spend on Tier 1 and Tier 2 diverse suppliers as a proportion of total supplier spend.
Environmental: Greenhouse Gas (GHG) Reduction
This goal measures the Company’s reduction in GHG.
Annual Operational Excellence and Safety Index Scorecard: 3 Year Average
Safety Index Scorecard measures the effectiveness of our strategy to proactively mitigate risk. These measures are recognized as top-tier industry risk-reduction programs.

The 2023 goals relate to the following measures: (i) ILI Miles, (ii) Pipe Installed, (iii) SAIFI, (iv) electric poles inspected, (v) Cross Bore Inspections and (vi) Cyber Behavior Accountability. The 2024 and 2025 goals will be determined by the C&HC Committee at the beginning of 2024 and 2025.
Depending on the level of achieved performance, an NEO may earn up to 200% of the NEO’s target PSUs. If threshold performance is not achieved with respect to a performance measure, then no PSUs would be paid for that measure. The number of PSUs earned and vested at the end of the three-year performance period will be settled in a like number of shares of our common stock.
Annual PSUs granted in 2023 will vest on February 27, 2026 for all NEOs as long as the NEO is continuously employed through that date except Mr. Yates who must be continuously employed through January 1, 2026. Special vesting rules apply in the event of death, disability, retirement, termination from January 1, 2024 - December 31, 2025 in the case of Mr. Yates only, or a qualifying termination following a change in control of the Company prior to the vesting date. Termination for any other reason prior to such NEO’s continuous employment date will result in forfeiture of the 2023 PSUs. The number of PSUs that vest at the end of the service period will be settled in a like number of shares of our common stock.
If the Company declares a cash dividend or distribution on Shares, dividend equivalent rights will be credited on each PSU and will be deemed to be reinvested in additional PSUs, which will be subject to the same terms regarding vesting and forfeiture as the underlying award. Any credited dividend equivalents are paid in cash at the time the underlying PSUs are settled.
2023 PSU Performance Measures. In January 2023, the C&HC Committee approved the following performance measures and goals to determine each NEO’s payouts under their respective 2023 PSU grants.
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2023 PSU Performance Measures and Goals
Measures
Weight
Threshold
Target
Stretch
Three-Year Cumulative
NOEPS
50%
$4.86
$5.01
$5.16
RTSR
25%
30th Percentile
50th Percentile
80th Percentile
Operational Excellence and Safety
Annual Operational Excellence and Safety Index Scorecard: 3 Year Average
10%
See performance measures outlined above
Workforce and Sustainability
Employee: Engagement Index Score
5%
77%
79%
81%
Economic Inclusion: Supplier Diversity Spend (as a proportion of total supplier spend)
5%
22%
25%
30%
Environmental: Greenhouse Gas Emission Reduction
5%
Greenhouse Gas Emission Reduction relates to the level we are able to successfully reduce vented methane emissions from retiring NIPSCO R.M. Schahfer Generating Station coal units and reducing LDC fugitive and vented methane emissions
2023 Restricted Stock Units (“RSU”)
The C&HC Committee chose to grant RSUs to the NEOs because RSUs reward long-term service, help to retain NEOs over a multi-year service period, and align the interests of our NEOs with those of our stockholders.
Annual RSUs granted in 2023 will vest on February 27, 2026 for all NEOs as long as the NEO is continuously employed through that date except Mr. Yates who must be continuously employed through January 1, 2026. Special vesting rules apply in the event of death, disability, retirement, termination from January 1, 2024 - December 31, 2025 in the case of Mr. Yates only, or a qualifying termination following a change in control of the Company prior to the vesting date. Termination for any other reason prior to such NEO’s continuous employment date will result in forfeiture of the 2023 RSUs. The RSUs that vest at the end of the service period will be settled in a like number of shares of our common stock.
If the Company declares a cash dividend or distribution on shares, the NEOs will be entitled to receive a cash payment equal to the amount of the cash dividend, subject to the same terms regarding vesting and forfeiture as the underlying award.
New Hire Award
Upon his hire, Mr. Luhrs received an inducement award of RSUs with a grant value of $300,000. These RSUs vest upon Mr. Luhrs’ completion of two years of service (March 27, 2025). The RSUs that vest at the end of the two-year service period will be settled in a like number of shares of our common stock.
Promotional Award
Upon his promotion in March 2023, Mr. Anderson received an incremental grant under the Company’s long-term incentive program with a grant date fair value of $425,000. This grant was awarded as a combination of service-based RSUs (20%) and performance-based PSUs (80%) that will vest in the first quarter of 2026.
Final Settlement of 2021-2023 PSU Awards
In 2021, the C&HC Committee approved LTI awards to Messrs. Anderson and Brown (the only two of the current NEOs at NiSource at that time) in the form of PSUs. The Company achieved a Three-Year Cumulative NOEPS of $4.44, resulting in 173% of the target achievement. The Company achieved RTSR at the 75th percentile, resulting in 183% of target achievement. For purposes of calculating RTSR achievement, the Company utilized a performance peer group consisting of the following companies: Alliant Energy Corp, Ameren Corporation, Avista Corporation, Black Hills Corporation, CenterPoint Energy, Inc., CMS Energy Corporation, Consolidated Edison, Inc., Dominion Energy, DTE
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Energy Company Inc, Duke Energy Corporation, Edison International, Entergy Corporation, Eversource Energy, FirstEnergy Corp., New Jersey Resources Corporation, MDU Resources Group, Inc., NextEra Energy, Inc., OGE Energy Corp., ONE Gas, Inc., Pinnacle West Capital Corporation, PNM Resources, Inc., PPL Corporation, Public Service Enterprise Group Inc, Sempra, Southern Company, Southwest Gas Holdings, Inc., Spire Inc., UGI Corporation, WEC Energy Group Inc, Xcel Energy Inc. After the application of the performance modifier for safety (104% average safety scorecard results for 4% achievement), environmental (reduction of CO2 emissions by 10.2 million tonnes and reduction of methane emissions by 215,243 tonnes, each over a 2005 baseline, for 10% achievement), and DE&I goals (8 categories met for -10% achievement), an aggregate of 186% of the target PSUs vested.
Vesting of the 2021 PSUs remained subject to the executive’s continued employment through February 28, 2024. The following table shows the target number of shares subject to the 2021 PSUs as well as the number of shares of common stock that vested pursuant to the terms of the 2021 PSUs.
NEO
Target Number of 2021 PSUs
Awarded
Number of 2021 PSUs
Vested
Shawn Anderson
10,420
19,381
Donald Brown
43,302
80,542
Final Settlement of 2021-2023 Special PSU Awards
2021 Special PSUs. In January 2021, the C&HC Committee granted special PSU awards to Messrs. Anderson and Brown. The Company achieved RTSR at the 75th percentile, resulting in 157% of target achievement. For purposes of calculating RTSR achievement, the Company utilized a performance peer group consistent with the peer group disclosed above in the “Final Settlement of the 2021-2023 PSU Awards” section. After the application of the performance modifier for safety (104% average safety scorecard results for 4% achievement), an aggregate of 164% of the target special PSUs vested.
Vesting of the 2021 Special PSUs remained subject to the executive’s continued employment through February 28, 2024. The following table shows the target number of shares of 2021 Special PSUs award and the number of shares of common stock that vested pursuant to the terms of the 2021 Special PSUs.
NEO(1)
Target Number of 2021
Special PSUs Originally
Awarded
Number of 2021 Special
PSUs Distributed(1) After
Two-Year Performance
Period
Number of 2021 Special
PSUs Distributed(2) After
Three-Year Performance
Period
Shawn Anderson
7,442
8,726
3,479
Donald Brown
27,064
31,731
12,654
(1)
After the two-year performance period ending 12/31/22, 67% of the original PSUs awarded vested at 175% target.
(2)
After the three-year performance period ending 12/31/23, per the award agreements, the original PSU award was calculated at 164% of target then the number of PSUs eligible to vest was reduced by the number of PSUs that vested referred to in footnote (1).
Establishing Executive Compensation
2023 Say-on-Pay Results
When making decisions about our executive compensation program, the C&HC Committee considers the stockholders’ views of such matters. In 2023, approximately 94% of the votes cast by our investors were voted in favor of our say-on-pay proposal at our 2023 annual meeting of stockholders. No changes were made to the design of our executive compensation program in response to the 2023 say-on-pay advisory vote.
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Compensation Philosophy and Objectives
Our executive compensation programs are designed to attract, reward, and retain highly talented individuals with diverse backgrounds and experiences who are committed to deliver safe, reliable energy to our customers. We do this by focusing on the following:
Pay for performance - A significant portion of pay for senior leaders is variable and directly linked to individual and Company performance, including operational and financial performance that drives the creation of long-term stockholder value.
Commitment to aspirations - Pay opportunities are directly linked to the executives’ commitment to excellence, safety, sustainability, employees, customers, and financial measures, and incorporate specific and measurable metrics in our incentive programs.
Market driven competitive compensation - Pay is viewed in relation to peers as a starting point, with flexibility to adjust compensation elements based on a range of factors, including individual job requirements and scope, business needs, experience, qualifications, and performance to attract and retain critical talent.
Long term focus - Pay is heavily weighted to long-term stock-based components to ensure significant portions of pay opportunity are aligned with our strategy and stockholder value creation driving focus on strategic long-term priorities. Short- and long-term incentives are designed with multi-year business plans in mind.
Role of the Compensation & Human Capital Committee
The C&HC Committee is responsible for establishing, implementing, and monitoring our executive compensation program objectives and assuring alignment with our business objectives. In overseeing our executive compensation programs, the C&HC Committee identifies and approves performance measures and goals under our STI and LTI programs. Additionally, the C&HC Committee approves annual long-term equity incentive awards and periodic long-term equity incentive awards granted to newly hired and promoted executive officers. The C&HC Committee also oversees the administration of our equity plans.
The C&HC Committee evaluates and determines the compensation of our executive leadership team, which is composed of senior executives who directly report to our CEO. The C&HC Committee reviews the performance and compensation of our CEO and our executive leadership team each year with input from Meridian and apprises the Board accordingly. For our CEO, the C&HC Committee evaluates CEO performance and submits its compensation recommendations to the independent members of the Board for review and approval. When considering changes in compensation for our executive leadership team, including the NEOs, the C&HC Committee considers input from the CEO, the Senior Vice President, Chief Human Resources Officer and Meridian. Our CEO is not involved in making recommendations with respect to his compensation.
The C&HC Committee also has continuous involvement with our human resources talent management initiatives regarding our CEO and our executive leadership team. The C&HC Committee also leads our development and succession efforts by providing strategic direction as we identify key executive skill and capability talent priorities. The C&HC Committee reviews the performance of our CEO and executive leadership team against leadership skills and capability requirements designed to identify, attract and develop highly-qualified executives that promote continuous learning; foster our culture of equality, inclusion and diversity; deliver safety, reliability and environmental performance improvements; and ultimately support our long-term strategy to build value for all our stakeholders, including our customers, employees, communities and stockholders.
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The C&HC Committee is responsible for annually reviewing and approving (or, in the case of our CEO, recommending to the independent members of the Board for approval) each element of total target direct compensation for our executive officers including our NEOs. All of the executive compensation decisions made by the C&HC Committee were based primarily on the following factors (“Pay Factors”):
Pay Factors
■ Corporate performance and attainment of our established business and financial goals
■ Competitiveness of our compensation program (each NEO’s total target direct compensation and each element of compensation) based upon competitive market data
■ Executive officer’s/NEO’s position, experience, role, responsibilities, and performance relative to achievement of business goals
■ Internal pay equity
■ Mix of variable at-risk versus fixed pay
■ Mix of cash versus equity pay
Independent Compensation Consultant
For 2023, the C&HC Committee engaged the services of Meridian Compensation Partners as its independent compensation consultant to advise it with respect to executive compensation design, comparative compensation practices and compensation matters relating to the Board. The C&HC Committee takes recommendations from Meridian into consideration along with its evaluation of the individual performance of each executive officer.
Each year, the C&HC Committee evaluates the independence and quality of the services provided by its independent compensation consultant. In reviewing Meridian’s engagement for 2023, the C&HC Committee considered the factors set forth in SEC Rule 10C-1(b)(4) and the applicable NYSE rules and determined that Meridian was independent and there were no conflicts of interest with respect to Meridian’s work for the C&HC Committee.
Competitive Market Review
In connection with its compensation decision making, the C&HC Committee reviews the executive compensation practices in effect at other companies in the Comparator Group. The compensation data is provided by Meridian and other third-party data and is used to obtain a general understanding of current market practices when designing our executive compensation program – it is not used exclusively, but rather as a reference point in conjunction with other factors.
The Comparator Group consists of a mix of gas, electric, and multi-line utilities that are operationally similar to us, with which we compete for similar executive talent, and with similar trailing 12-month revenue and market capitalization data. For 2023, the C&HC Committee determined no changes were necessary to the prior year’s Comparator Group. The Comparator Group for purposes of evaluating 2023 compensation practices is shown below.
Compensation Comparator Group
Alliant Energy Corporation
CMS Energy Corporation
ONE Gas, Inc.
Ameren Corporation
Dominion Energy, Inc.
PNM Resources, Inc.
American Electric Power Company, Inc.
DTE Energy Company
PPL Corporation
Atmos Energy Corporation
Eversource Energy
Sempra Energy
Avista Corporation
FirstEnergy Corp.
Southwest Gas Holdings, Inc.
Black Hills Corporation
New Jersey Resources Corporation
Spire, Inc.
CenterPoint Energy, Inc.
OGE Energy Corp.
WEC Energy Group, Inc.
Other Compensation and Benefits
Our NEOs also may elect to participate in an executive deferred compensation plan, have change-in-control agreements, and are eligible for an executive severance policy. In addition, we provide our NEOs with a limited number
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of perquisites and other broad-based employee benefits that are generally extended to our entire employee population. We believe that these other forms of compensation and benefits are aligned with our compensation objectives and are generally comparable to those that are provided to similarly situated executives at other comparable companies.
Severance and Change-in-Control Benefits. Each NEO is covered under a separate change-in-control and termination agreement (“CIC Agreement”). The CIC Agreements are intended to ensure that the NEOs continue to apply thoroughly objective judgment to appropriately safeguard stockholder value and maximize investor return in relation to any potential change-in-control. The CIC Agreements provide cash severance benefits upon a double-trigger (meaning there must be both a qualifying change-in-control and termination of employment) and do not include any “gross-up” payments to cover an executive’s excise taxes incurred by an executive with respect to the receipt of payments in connection with a change-in-control. Each NEO is subject to our executive severance policy.
Our 2020 Omnibus Plan provides for double-trigger vesting for equity awards that are assumed or replaced by an acquiring company upon a change-in-control. In the event equity awards are not assumed or replaced in a change-in-control, then the outstanding equity awards will vest upon the occurrence of such change-in-control.
For further information regarding the benefits to be received upon termination of employment or change-in-control, see the section entitled “2023 Executive Compensation – Potential Payments upon Termination of Employment or a Change-in-Control of the Company.”
Perquisites. Perquisites are not a principal element of our executive compensation program. We provide a limited number of perquisites to each NEO. We do not reimburse NEOs for the payment of individual income taxes they might incur in connection with their receipt of these benefits. For information regarding 2023 perquisites, see the 2023 Summary Compensation Table and footnote (6) to that table.
Deferred Compensation Plan. Eligible executives, including the NEOs, may elect to defer between 5% and 80% of their base salary and/or STI payout under our Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). The Deferred Compensation Plan provides an opportunity for eligible executives to defer their cash compensation without regard to the limits imposed by the Internal Revenue Service (“IRS”) for amounts that may be deferred under our 401(k) Plan. For information regarding the Deferred Compensation Plan, see the 2023 Non-Qualified Deferred Compensation table and accompanying narrative.
Savings Programs. The NEOs are eligible to participate in the same tax-qualified 401(k) Plan as most employees and in a non-qualified defined contribution plan (the “Savings Restoration Plan”) maintained for eligible executives. The 401(k) Plan includes a Company match that varies depending on the pension plan in which the employee participates and a Company profit sharing contribution for most employees of between 0.5% and 1.5% of the employee’s eligible earnings based on achievement of the overall STI results. In addition, for salaried employees hired after January 1, 2010 and non-union non-exempt employees hired after January 1, 2013, the 401(k) Plan now includes a 4.5% Company contribution to the employee accounts. The Savings Restoration Plan provides for Company contributions in excess of IRS limits under the 401(k) Plan for eligible employees, including the NEOs. For information regarding the Savings Restoration Plan, see the 2023 Non-Qualified Deferred Compensation table and accompanying narrative.
Health and Welfare Benefits. We also provide the NEOs other broad-based benefits such as medical, dental, life insurance and long-term disability coverage on the same terms and conditions to all employees.
Stock Ownership and Retention Guidelines
Our executive leadership team, which includes the NEOs, and other senior leaders are subject to stock ownership and retention guidelines. We maintain these guidelines to ensure that our executive leadership and senior leaders maintain a significant investment in our stock, which in turn helps to align the interests of our executive leadership and senior leaders with those of our stockholders.
Our executive leadership team and senior leaders are generally expected to satisfy their applicable ownership guideline (as described below) within five years of becoming subject to the guidelines. Once applicable share ownership levels are satisfied, the senior executive must continue to own enough shares to remain in compliance. Until such time as the
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applicable stock ownership guideline is satisfied, the CEO and Executive Vice Presidents are required to hold at least 50% of the shares of common stock received upon the vesting of equity awards. As of the record date, the NEOs are on a path to achieving the applicable ownership guideline within the 5-year requirement. Shares counted toward ownership targets include common stock held and unvested RSUs.
Executive Level
Stock Ownership Level
CEO
6x base salary
Executive Vice President
3x base salary
Senior Vice President
2x base salary
Risk Management Policies and Guidelines
Trading Windows/Trading Plans. We restrict the ability of directors, executive officers and employees who work in designated areas to freely trade in our common stock because of their periodic access to our material non-public information. Under our insider trading policy, such persons are prohibited from trading in our securities during quarterly blackout periods, and at such other times as the General Counsel may deem appropriate.
Anti-Hedging Policy/Pledging. Under our Securities Transaction Compliance Policy for Certain Employees and our Securities Transaction Compliance Policy for Directors and Executive Officers, all directors, executive officers, and employees who work in designated areas are prohibited from engaging in short sales of our equity securities or buying or selling puts or calls or other options on our securities. We do not have such a policy for employees who work in areas other than the designated areas.
Compensation Recovery for Misconduct. Included in our 2020 Omnibus Plan is a “clawback” provision that states the employee shall reimburse the Company amounts received under STI and LTI awards if we are required to prepare an accounting restatement as a result of the employee’s misconduct. Our Board has also adopted a standalone executive compensation recoupment policy consistent with the requirements of Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rule 10D-1 and the NYSE listing standards thereunder, to help ensure that incentive compensation is paid based on accurate financial and operating data, and the correct calculation of performance against incentive targets.
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COMPENSATION AND HUMAN CAPITAL COMMITTEE REPORT
The C&HC Committee of the Board (the “Committee”) has furnished the following report in accordance with rules adopted by the Securities and Exchange Commission.
The Committee states that it reviewed and discussed with management the Company’s Compensation Discussion and Analysis contained in this Proxy Statement.
Based upon the review and discussions referred to above, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
This report is submitted on behalf of the members of the Committee:
Eric L. Butler, Chair
Theodore H. Bunting
Deborah A. Henretta
William D. Johnson
Note: Effective March 19, 2024, the Committee is made up of Messrs. Butler, Bunting and McAvoy and Ms. Henretta.
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COMPENSATION AND HUMAN CAPITAL COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2023, Messrs. Bunting, Butler, Johnson and Ms. Henretta served on the C&HC Committee. None of these persons had ever been an officer or employee of the Company or any of its subsidiaries while serving on the C&HC Committee. No executive officer of the Company served on the board of directors or compensation committee of any other entity that had one or more executive officers who served as a member of the C&HC Committee during 2023.
ASSESSMENT OF RISK
We perform an annual risk assessment of our compensation program. We concluded our programs are not reasonably likely to have a material adverse effect on the Company, based on the following:
Executive/Board Oversight—Our executive leadership and board regularly monitor our programs and people to ensure decisions are made with integrity and in the best long-term interests of the Company;
Strategic Consistency—Our compensation program is aligned with our goals without promoting excessive risk;
Sound Performance Criteria—Performance measures for incentive awards are consistent with long-term stockholder value and operational excellence; measures and underlying goals are approved by the C&HC Committee of the Board;
Long-term Focus—Executive compensation is weighted toward LTI, aligning executives with long-term results and stockholders;
Performance Focus—LTI awards for executives are predominately performance-based;
Stock Ownership Guidelines—Executives are subject to stock ownership guidelines set by the C&HC Committee; this further reinforces the need for a long-term view in decision making;
Operational Excellence and Safety—Incentive compensation is partially tied to safety and other operational metrics to encourage a strong culture of safety and motivate the prioritization of safe operations; and
Clawback Policy—Policies are in place to recoup compensation and help ensure that incentive compensation is paid based on accurate financial and operating data, and the correct calculation of performance against incentive
targets.
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