Consolidated Edison, Inc.
Shareholder Annual Meeting in a DEF 14A on 04/05/2021   Download
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DEF 14A 1 d197237ddef14a.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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 §240.14a-12

CONSOLIDATED EDISON, INC.

 

 

(Name of Registrant as Specified In Its Charter)

NOT APPLICABLE

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

  (1)

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  (2)

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Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

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LOGO


LOGO

Consolidated Edison, Inc.

4 Irving Place

New York, NY 10003

John McAvoy

Chairman of the Board

Timothy P. Cawley

Chief Executive Officer

April 5, 2021

Dear Stockholders:

The Annual Meeting of Stockholders of Consolidated Edison, Inc. with the Board of Directors and the Company’s management is scheduled for Monday, May 17, 2021, at 10:00 a.m., Eastern Daylight Time, remotely by visiting www.virtualshareholdermeeting.com/ED2021. We encourage stockholders to log into the virtual meeting by following the instructions provided in the proxy materials. The virtual meeting offers the same participation opportunities as an in-person meeting.

The accompanying Proxy Statement, provided to stockholders on or about April 5, 2021, contains information about matters to be considered at the Annual Meeting. At the Annual Meeting, stockholders will be asked to vote on the election of Directors, to ratify the appointment of independent accountants for 2021, and to approve, on an advisory basis, named executive officer compensation. So as to ensure that as many shares as possible are represented, we strongly recommend that you vote in advance of the Annual Meeting, even if you plan to attend remotely.

Due to the ongoing impact of the novel coronavirus disease, COVID-19, we plan to hold the Annual Meeting by means of remote communications only (i.e., a virtual-only annual meeting). As of the date of this letter, a state disaster emergency has been declared relating to COVID-19 in the State of New York, and the requirement under New York law that annual meetings be noticed and held at a physical location has been temporarily suspended. The declaration of a state disaster emergency and the related suspension are renewed on a monthly basis. In the event that the state disaster emergency and suspension are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we may also hold the Annual Meeting in person. We will announce the location of the in-person component of the meeting by press release and posting on our proxy website (www.conedison.com/shareholders), as well as the filing of additional proxy materials with the Securities and Exchange Commission.

Sincerely,

 

LOGO   LOGO
John McAvoy   Timothy P. Cawley


LOGO

Consolidated Edison, Inc.

4 Irving Place, New York, NY 10003

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

  Date:    

Monday, May 17, 2021, at 10:00 a.m., Eastern Daylight Time

 

Virtual Annual Meeting

Website Address:

 

 

 

www.virtualshareholdermeeting.com/ED2021.

§   If you hold your shares through an intermediary (i.e., a broker, bank, or other financial institution), please use the 16-digit voting control number that can be found on your voting instruction form, Notice of Internet Availability of proxy materials or email, as applicable, provided with your proxy materials to access the virtual annual meeting website.

§   If you are a registered holder of Company Common Stock (i.e., you hold your shares through our transfer agent, Computershare) or participate in the Company’s Stock Purchase Plan, please note that the virtual annual meeting website will be hosted on a different website than the Computershare voting websites. The 15-digit control number you received allows you to vote your shares but does not provide direct access to the virtual annual meeting website. To access the virtual annual meeting website, you must request a 16-digit virtual meeting access (“VMA”) control number in advance. Advanced registration requests for VMA control numbers must be received no later than 5:00 p.m., EDT, on Monday, May, 10, 2021 to allow adequate time for processing.

(See “Questions and Answers About the 2021 Annual Meeting and Voting—Annual Meeting Information” beginning on page 86 for additional information about the virtual annual meeting website and how to obtain a VMA control number.)

 
In Person
Location:

 
 

Due to the ongoing impact of COVID-19, we plan to hold the Annual Meeting by means of remote communications only (i.e., a virtual-only annual meeting). However, if required by applicable law, we may also hold the Annual Meeting in person. In the event that the state disaster emergency and related temporary suspension of the requirement under New York law that annual meetings be noticed and held at a physical location are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we will announce the location of the in-person component of the meeting by press release and posting on our proxy website (www.conedison.com/shareholders), as well as the filing of additional proxy materials with the Securities and Exchange Commission.

 

   
  Items of Business:    

a.   To elect as the members of the Board of Directors the twelve nominees named in the Proxy Statement (attached hereto and incorporated herein by reference);

 

b.   To ratify the appointment of PricewaterhouseCoopers LLP as independent accountants for 2021;

 

c.   To approve, on an advisory basis, named executive officer compensation; and

 

d.   To transact such other business as may properly come before the meeting, or any adjournment or postponement of the meeting.

By Order of the Board of Directors,

 

LOGO

Sylvia V. Dooley

Vice President and Corporate Secretary

Dated: April 5, 2021

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

STOCKHOLDERS’ MEETING TO BE HELD ON MONDAY, MAY 17, 2021. THE COMPANY’S PROXY STATEMENT AND ANNUAL REPORT, PROVIDED TO STOCKHOLDERS ON OR ABOUT APRIL 5, 2021, ARE AVAILABLE AT

WWW.CONEDISON.COM/SHAREHOLDERS

 

IMPORTANT!

Whether or not you plan to attend the meeting, we urge you to vote your shares of Company Common Stock by telephone, by Internet, or by completing and returning a proxy card or a voter instruction form, so that your shares will be represented at the Annual Meeting.


LOGO    Table of Contents

 

 

TABLE OF CONTENTS

 

SUMMARY

        

Proxy Statement Summary

     1  

§   2021 Annual Meeting of Stockholders

     1  

§   Stockholder Voting Matters

     2  

§   Corporate Governance Practices

     3  

§   Changes to Executive Compensation Program for 2021

     5  

§   Compensation Policies and Governance Practices

     6  
  

PROXY STATEMENT

        

Election of Directors

     7  

§   Proposal No. 1        Election of Directors

     7  

§   Information about the Director Nominees

     8  
  

The Board of Directors

     16  

§   Meetings and Board Members’ Attendance

     16  

§   Corporate Governance

     16  

§   Leadership Structure

     16  

§   Risk Oversight

     17  

§   Corporate Sustainability

     17  

§   Diversity, Equity, and Inclusion

     18  

§   Human Capital

     18  

§   Proxy Access

     19  

§   Related Person Transactions and Policy

     19  

§   Board Members’ Independence

     20  

§   Standing Committees of the Board

     21  

§   Selection of Director Candidates

     26  

§   Employee Succession Planning and Talent Management

     26  

§   Compensation Consultant

     27  

§   Communications with the Board of Directors

     28  
  

Stockholder Engagement

     29  

§   Overview

     29  

§   Stockholder Engagement Highlights

     29  
  

Director Compensation

     31  

§   Overview

     31  

§   Elements of Compensation

     31  

§   Stock Ownership Guidelines

     32  

§   Long Term Incentive Plan

     32  

§   Stock Purchase Plan

     32  

§   Director Compensation Table

     33  
  

Stock Ownership

     34  

§   Stock Ownership of Directors and Executive Officers

     34  

§   Stock Ownership of Certain Beneficial Owners

     35  
  

Independent Accountants Ratification

     36  

§   Proposal No. 2        Ratification of the Appointment of Independent Accountants

     36  
  

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

i


LOGO    Table of Contents

 

Audit Committee Matters

     37  

§   Audit Committee Report

     37  

§   Fees Paid to PricewaterhouseCoopers LLP

     37  
  

Advisory Vote

     38  

§   Proposal No. 3        Advisory Vote to Approve Named Executive Officer Compensation

     38  
  

Compensation Discussion and Analysis

     39  

§   CD&A Table of Contents

     39  

§   Introduction

     40  

§   Executive Summary

     40  

§   Executive Compensation Philosophy and Objectives

     42  

§   Role of Compensation Committee and Others in Determining Executive Compensation

     47  

§   Compensation Elements

     47  

§   Retirement and Other Benefits

     63  

§   Risk Mitigation

     65  

§   Tax Deductibility of Pay

     66  
  

Summary Compensation Table

     67  
  

Grants of Plan-Based Awards Table

     69  
  

Outstanding Equity Awards Table

     71  
  

Option Exercises and Stock Vested Table

     72  
  

Pension Benefits

     73  

§   Pension Plan Benefits

     73  

§   Defined Benefit Pension Table

     74  
  

Non-Qualified Deferred Compensation

     75  

§   Deferred Income Plan

     75  

§   Savings Plan

     75  

§   Non-Qualified Deferred Compensation Table

     76  
  

Potential Payments Upon Termination of Employment or Change of Control

     78  

§   Equity Acceleration

     79  

§   Incremental Retirement Amounts

     79  

§   Termination Without Cause or a Resignation for Good Reason

     80  

§   Payments Upon Termination of Employment in Connection with a Change of Control

     80  

§   Section 280G Reduction

     80  

§   Death Benefit

     80  

§   Payment Upon Retirement for John McAvoy

     80  
  

Compensation Committee Report

     81  
  

Compensation Risk Management

     81  
  

Pay Ratio

     82  
  

 

 

ii

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Table of Contents

 

Certain Information as to Insurance and Indemnification

     82  
  

Questions and Answers About the 2021 Annual Meeting and Voting

     83  

§   Proxy Materials

     83  

§   Voting and Related Matters

     84  

§   Annual Meeting Information

     86  
  

Stockholder Proposals for the 2022 Annual Meeting

     89  

§   Proposals for Inclusion in 2022 Proxy Statement

     89  

§   Director Nominations for Inclusion in 2022 Proxy Statement (Proxy Access)

     89  

§   Other Proposals or Nominations to Come Before the 2022 Annual Meeting

     89  
  

Other Matters to Come Before the Meeting

     89  
  

Appendix A

     90  
  

Appendix B

     93  

Forward-Looking Statements

This proxy statement contains forward-looking statements that are intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectations and not facts. Words such as “forecasts,” “expects,” “estimates,” “anticipates,” “intends,” “believes,” “plans,” “will,” and similar expressions identify forward-looking statements. The forward-looking statements reflect information available and assumptions at the time the statements are made and speak only as of that time. Actual results or developments might differ materially from those included in the forward-looking statements because of various factors including, but not limited to, those discussed under “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

iii


LOGO    Proxy Statement Summary

 

 
PROXY STATEMENT SUMMARY

This section highlights the proposals to be acted upon, as well as information about Consolidated Edison, Inc. (the “Company”), that can be found in this Proxy Statement and does not contain all of the information that you need to consider. Before voting, please carefully review the complete Proxy Statement and the Annual Report to Stockholders of the Company provided to stockholders on or about April 5, 2021, which includes the consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2020, and other information relating to the Company’s financial condition and results of operations. References to “Con Edison of New York,” “Orange & Rockland,” “Clean Energy Businesses,” and “Con Edison Transmission” throughout this Proxy Statement refer to the Company’s subsidiaries, Consolidated Edison Company of New York, Inc., Orange and Rockland Utilities, Inc., Con Edison Clean Energy Businesses, Inc. and its subsidiaries, and Con Edison Transmission, Inc. and its subsidiaries, respectively.

2021 Annual Meeting of Stockholders (“Annual Meeting”)

Due to the ongoing impact of COVID-19, we plan to hold the Annual Meeting by means of remote communication only. The virtual meeting offers the same participation opportunities as an in-person meeting. In the event that the state disaster emergency and related temporary suspension of the requirement under New York law that annual meetings be noticed and held at a physical location are lifted prior to the date fixed for the Annual Meeting and it is not, therefore, legally permissible for us to hold a completely virtual annual meeting under New York law, we will announce the location of the in-person component of the meeting by press release and posting on our proxy website (www.conedison.com/shareholders), as well as the filing of additional proxy materials with the Securities and Exchange Commission (the “SEC”).

 

§    Date and Time

  Monday, May 17, 2021, at 10:00 a.m., Eastern Daylight Time

§    Virtual Annual Meeting   Website Address

 

www.virtualshareholdermeeting.com/ED2021.

 

§   If you hold your shares through an intermediary (i.e., a broker, bank, or other financial institution), please use the 16-digit voting control number that can be found on your voting instruction form, Notice of Internet Availability of proxy materials or email, as applicable, provided with your proxy materials to access the virtual annual meeting website.

 

§   If you are a registered holder of Company Common Stock (i.e., you hold your shares through our transfer agent, Computershare) or participate in the Company’s Stock Purchase Plan, please note that the virtual annual meeting website will be hosted on a different website than the Computershare voting websites. The 15-digit control number you received allows you to vote your shares but does not provide direct access to the virtual annual meeting website. To access the virtual meeting website, you must request a 16-digit virtual meeting access (“VMA”) control number in advance. To obtain a VMA control number, please call Computershare at 1-800-522-5522 to initiate the request for a VMA control number. Advanced registration requests for VMA control numbers must be received no later than 5:00 p.m., EDT, on Monday, May 10, 2021 to allow adequate time for processing.

 

(See “Questions and Answers About the 2021 Annual Meeting and Voting—Annual Meeting Information” beginning on page 86 for additional information about the virtual annual meeting website and how to obtain a VMA control number.)

§    In Person Location, If   Required by Applicable   Law

  If required by applicable law, the location of the in-person component of the meeting will be announced by press release and posting on our proxy website www.conedison.com/shareholders, as well as the filing of additional proxy materials with the SEC.

§   Record Date & Voting

  Stockholders of record at the close of business on March 22, 2021 are entitled to vote. On the record date, 342,688,334 shares of Company Common Stock were outstanding. Each outstanding share of Common Stock is entitled to one vote.

§   Admission

  Please follow the instructions contained in “Who Can Attend The Annual Meeting?” and “If Required By Applicable Law And The Annual Meeting Is Also Held In Person, Do I Need A Ticket To Attend The Annual Meeting?” on pages 86 and 87, respectively.

§   Proxy Website

 

www.conedison.com/shareholders

 

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

1


LOGO    Proxy Statement Summary

 

Stockholder Voting Matters

 

Management Proposals   Board’s Voting
Recommendation
  Vote Required
For Approval*
  Broker
Discretionary
Voting Allowed
    Page References  
(for more detail)

§   Proposal No. 1

   Election of Directors   For Each
Nominee
  Majority of Votes Cast   No   7 through 15

§  Proposal No. 2

   Ratification of the Appointment of Independent Accountants   For   Majority of Votes Cast   Yes   36

§   Proposal No. 3

   Advisory Vote to Approve Named Executive Officer Compensation   For   Majority of Votes Cast   No   38

Footnote:

 

  *

The presence at the Annual Meeting, either by means of remote communication, by proxy, or in person (if it is not legally permissible for us to hold a completely virtual annual meeting under New York law), of holders of a majority of the outstanding shares of Company Common Stock is required to constitute a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes (shares held by a broker or nominee that does not have discretionary authority to vote on a particular matter and has not received voting instructions from its clients) are counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting but are not considered votes cast with respect to the Election of Directors (Proposal No. 1) and the Advisory Vote to Approve Named Executive Officer Compensation (Proposal No. 3) and have no effect on the vote. Abstentions are not considered as votes cast with respect to the Ratification of the Appointment of Independent Accountants (Proposal No. 2) and have no effect on the vote.

 

    

 

Director Nominees

 

    
    

Name / Age /

Tenure /

Independence

  Primary Occupation /
Career Highlight
  Committee
Membership
 

Other U.S.-Listed         

Public Company         

Boards         

       

LOGO

 

Timothy P. Cawley, 56

Director since 2020

Not Independent

  President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York (effective December 29, 2020); former President of Con Edison of New York (through December 31, 2020)     0       
       

LOGO

 

 

Ellen V. Futter, 71

Director since 1997

Not Independent

  President, American Museum of Natural History  

§   Executive

§   Safety, Environment, Operations and Sustainability (Co-Chair through December 31, 2020)

  1       
       

LOGO

 

John F. Killian, 66

Director since 2007

Independent

  Former Executive Vice President and Chief Financial Officer, Verizon Communications Inc.  

§   Audit (Chair)

§   Corporate Governance and Nominating

§   Executive

§   Management Development and Compensation

  2       
       

LOGO

 

Karol V. Mason, 63

Director since 2021

Independent

  President, John Jay College of Criminal Justice  

§   Corporate Governance and Nominating (effective January 1, 2021)

§   Safety, Environment, Operations and Sustainability (effective January 1, 2021)

  0       
       

LOGO

 

John McAvoy, 60

Director since 2013

Not Independent

Non-executive Chairman of the Board

  Chairman of the Board; former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York (through December 28, 2020)  

§   Executive (Chair)

  0       
       

LOGO

 

Dwight A. McBride, 53

Director since 2021

Independent

  President, The New School  

§   Management Development and Compensation (effective January 1, 2021)

§   Safety, Environment, Operations and Sustainability (effective January 1, 2021)

  0       
       

LOGO

 

William J. Mulrow, 65

Director since 2017

Independent

  Senior Advisory Director, The Blackstone Group  

§   Finance

§   Management Development and Compensation

§   Safety, Environment, Operations and Sustainability

  1       
       

LOGO

 

Armando J. Olivera, 71

Director since 2014

Independent

  Former President and Chief Executive Officer, Florida Power & Light Company  

§   Audit

§   Executive (effective immediately following the retirement of George Campbell, Jr. from the Board)

§   Finance

§   Safety, Environment, Operations and Sustainability (Chair, effective January 1, 2021)

  2       

 

 

2

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Proxy Statement Summary

 

    

Name / Age /

Tenure /

Independence

  Primary Occupation /
Career Highlight
  Committee
Membership
 

Other U.S.-Listed         

Public Company         

Boards         

       

LOGO

 

Michael W. Ranger, 63

Director since 2008

Independent

Lead Director

  President and Chief Executive Officer, Covanta Holding Corporation (effective October 29, 2020); Senior Managing Director, Diamond Castle Holdings LLC  

§   Audit

§   Corporate Governance and Nominating
(Chair and Lead Director)

§   Executive

§   Finance

§   Management Development and Compensation

  1     
       

LOGO

 

Linda S. Sanford, 68

Director since 2015

Independent

  Former Senior Vice President, Enterprise Transformation, International Business Machines Corporation  

§   Audit

§   Corporate Governance and Nominating

§   Finance

  3     
       

LOGO

 

 

Deirdre Stanley, 56

Director since 2017

Independent

  Executive Vice President and General Counsel, The Estée Lauder Companies, Inc.  

§   Corporate Governance and Nominating

§   Management Development and Compensation (Chair, effective immediately following the retirement of George Campbell, Jr. from the Board)

§   Safety, Environment, Operations and Sustainability (through December 31, 2020)

  0     
       

LOGO

 

L. Frederick Sutherland, 69

Director since 2006

Independent

  Former Executive Vice President and Chief Financial Officer, Aramark Corporation  

§   Audit

§   Finance (Chair)

§   Management Development and Compensation

  1     

 

§  

Proposal No. 1: Election of Directors. The Board of Directors has nominated twelve Directors for election at the Annual Meeting and recommends the election of each of the twelve nominees. The table above provides certain information about the Director nominees.

 

§  

Proposal No. 2: Ratification of the Appointment of Independent Accountants. The Board recommends ratification of the appointment of PricewaterhouseCoopers LLP as independent accountants for 2021.

 

§  

Proposal No. 3: Advisory Vote to Approve Named Executive Officer Compensation. The Board recommends the approval of, on an advisory basis, the compensation of the Named Executive Officers. The Company’s Named Executive Officers are identified in the “Compensation Discussion and Analysis–Introduction” on page 40.

Corporate Governance Practices

 

§  

Active, Year-Round, Stockholder Engagement. The Company engages with stockholders and accepts invitations to discuss matters of interest to them. Throughout 2020, due to COVID-19, the Company met with stockholders virtually and discussed numerous issues, including Con Edison of New York’s Climate Change Vulnerability Study, the Company’s corporate strategy, diversity, equity, and inclusion, disclosure practices, corporate governance, executive compensation, political spending and lobbying practices, operations and financial matters (including issues raised by COVID-19), and environmental, social and governance (“ESG”) standardized reporting. The Company’s stockholder engagement team reports the results of their annual activities to the Corporate Governance and Nominating Committee and the Board to convey the feedback received from stockholders and to propose implementation of appropriate responses. During 2020, the Company engaged virtually with stockholders holding in aggregate 43% of shares outstanding and 30% of the Company’s debentures. (See “Stockholder Engagement” on pages 29 through 30 for additional information on stockholder engagement.)

 

§  

Risk Oversight. The Board and its committees oversee the Company’s policies and procedures for managing risks that are identified through the Company’s enterprise risk management program. (See “The Board of Directors—Risk Oversight” on page 17 for additional information on risk oversight.)

 

§  

Strategic Planning. The Board oversees and reviews, at least annually, the Company’s strategic and business plans and objectives.

 

§  

Corporate Sustainability. The Company is firmly committed to sustainability, which is broadly overseen by the Board. The Board reviews and discusses various sustainability topics throughout the year and routinely considers environmental issues (including climate change) and assesses how they impact the Company’s operations, strategies and risk profile. (See “The Board of Directors—Corporate Sustainability” on pages 17 through 18 for additional information on corporate sustainability.)

 

§  

Diversity, Equity, and Inclusion. The Company strives to have a diverse workforce because it believes it makes the Company stronger. The Company’s diversity, equity, and inclusion strategy drives its corporate culture and informs how

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

3


LOGO    Proxy Statement Summary

 

 

its employees engage with each other, and sets the foundation for a respectful and inclusive workplace. The Company measures its progress both quantitatively and qualitatively and has four key areas of focus: (i) advancing diversity, equity, and inclusion through learning, (ii) fostering a diverse, equitable, and inclusive environment, (iii) connecting diversity, equity and inclusion throughout the Company, and (iv) communicating and engaging with employees. (See “The Board of Directors—Diversity, Equity, and Inclusion” on page 18 for additional information on the Company’s diversity, equity, and inclusion initiatives.)

 

§  

Employee Succession Planning and Talent Management. The Company has a comprehensive, formal process for identifying, assessing and developing a diverse slate of internal candidates to assume, in the future, senior roles in the organization. Its succession planning and development processes are integrated and focused on learning through experiences, leadership commitment, and targeted executive development. During succession planning and development discussions, the Company seeks to develop talented women and people of color to provide a diverse and talented group of enterprise leaders. These discussions result in development plans that are reviewed and updated annually. These succession planning and development processes apply to all upper management positions, including officer positions. The Chief Executive Officer annually reviews his succession plan with the Board. (See “The Board of Directors—Employee Succession Planning and Talent Management” on pages 26 through 27 for additional information on the succession planning process for the role of President and Chief Executive Officer of the Company.)

 

§  

Annual Election of Directors. Each Director nominee has been recommended for election by the Corporate Governance and Nominating Committee and approved and nominated for election by the Board. If elected, the Director nominees, all of whom are currently members of the Board, will serve for a one-year term expiring at the Company’s 2022 Annual Meeting of Stockholders. Each Director will hold office until his or her successor has been elected and qualified or until the Director’s earlier resignation or removal. (See “Election of Directors—Information About the Director Nominees” on pages 8 through 15 for information about the Director nominees.)

 

§  

Voting. In uncontested elections, each Director nominee may be elected by a majority of the votes cast at a meeting of the Company’s stockholders by the holders of shares entitled to vote in the election. In contested elections, each Director nominee may be elected by a plurality of the votes cast. The Company does not have a super-majority voting provision in its Restated Certificate of Incorporation.

 

§  

Board Composition. The current Directors, which include George Campbell, Jr. who has passed his 75th birthday and, as a result, is not permitted to stand for election, have the combination of skills, professional experience, and diversity necessary to oversee the Company’s business. A substantial majority (76.9%) of the current Directors are independent. The current Directors have an average age of 64.2 years, are 30.8% women, and 38.5% racially and ethnically diverse. The Board strives to maintain an appropriate balance of tenure among Directors. Of the current Directors, 38.5% have been on the Board for less than five years, 23% have been on the Board for five to ten years, and 38.5% have been on the Board for over ten years.

The Corporate Governance and Nominating Committee recommends candidates for election or re-election to the Board and reviews the qualifications of possible Director candidates. When recommending to the Board the slate of Director nominees for election at the Annual Meeting, the Corporate Governance and Nominating Committee strives to maintain an appropriate balance of tenure, diversity, and skills on the Board as evidenced by the proposed slate (which excludes Dr. Campbell) of director nominees, which are 33.3% women and 33.3% racially and ethnically diverse (as self-reported by the Director nominees). The Board and the Corporate Governance and Nominating Committee strongly believe that the Board and the Company benefit from having directors with a diversity of gender, race, ethnicity, viewpoints and experiences. The Corporate Governance and Nominating Committee identifies candidates through a variety of means, including professional search firms, recommendations from members of the Board, suggestions from senior management, and submissions by the Company’s stockholders. When a professional search firm is used, the firm is directed to provide a diverse slate of candidates, including candidates diverse with respect to gender, race, ethnicity and nationality, for the Board’s consideration. (See “The Board of Directors—Selection of Director Candidates” on page 26 for additional information on the Director nomination process.)

 

§  

Independent Lead Director. The Board has an independent Lead Director who is the Chair of the Corporate Governance and Nominating Committee and has numerous duties and significant responsibilities, including acting as a liaison between the independent Directors and the Company’s management, and chairing the executive sessions of non-management and independent Directors. (See “The Board of Directors—Leadership Structure” on pages 16 through 17 for additional information on the role of the Company’s independent Lead Director.)

 

 

4

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Proxy Statement Summary

 

§  

Frequent Executive Sessions. The Company’s independent Directors and non-management Directors meet frequently in executive sessions. (See “The Board of Directors—Meetings and Board Members’ Attendance” on page 16 for additional information on executive sessions.)

 

§  

Annual Board and Committee Self-Assessments. The Board and each of its committees perform an annual self-assessment to evaluate the effectiveness of the Board and its committees in fulfilling their respective obligations. Each committee reports the results of its self-evaluation to the Board. The Corporate Governance and Nominating Committee coordinates the self-evaluation process and, following the self-evaluations, discusses with the Board follow-up matters as appropriate.

 

§  

Membership on Public Company Boards. Directors are not permitted to serve on more than three other public company boards, and none serve on more than three other public company boards.

 

§  

Proxy Access. The Board has adopted proxy access, which enables certain stockholders of the Company to include their own director nominees in the Company’s Proxy Statement and form of proxy, along with candidates nominated by the Board if the stockholders and the nominees proposed by the stockholders meet the requirements set forth in the Company’s By-laws. (See “The Board of Directors—Proxy Access” on page 19 and “Stockholder Proposals for the 2022 Annual Meeting—Director Nomination for Inclusion in 2022 Proxy Statement (Proxy Access)” on page 89 for additional information on the Company’s proxy access framework and timeline, respectively.)

 

§  

Special Meetings. Special meetings may be called by stockholders holding at least 25% of the Company’s outstanding shares of Common Stock entitled to vote at such meeting.

Changes to Executive Compensation Program for 2021

 

§  

Long term incentive plan changes. The Company’s Named Executive Officers, identified in the “Compensation Discussion and Analysis–Introduction” on page 40, are eligible to receive annual grants of equity-based awards under the Company’s long term incentive plan. As in prior years, the number of performance units awarded to each of the Named Executive Officers will be based on the achievement of performance measures over a three-year performance period. For the 2021 performance period that began on January 1, 2021, the Compensation Committee added a new operating objective performance measure, the Diversity and Inclusion Work Plan. The measure reflects the Company’s continuing commitment to increasing the representation of women and people of color in the Company’s leadership. There is no change to the potential maximum payout for the 2021 performance units. The maximum payout of the 2021 performance units represents the weighted average of each of the performance measures, as shown in the chart below.

 

 

LOGO

 


    
   Target
Weight
       Maximum Payout    
    Relative to Target     
   Maximum Weighted
Result
        (%)    (%)    (%)
  Shareholder Return        50        200        100
  Adjusted EPS        30        200        60
 

Operating Objectives

(5% weight for each objective below)

       20        150        30
 

  Clean Energy and Electrification Work Plan

              
 

   Cyber Security Work Plan

  Diversity and Inclusion Work Plan

              
 

  Growth in Renewable Portfolio

                                
  TOTAL                              190

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

5


LOGO    Proxy Statement Summary

 

Compensation Policies and Governance Practices

The Company’s culture promotes strong compensation and governance practices that support our pay-for-performance principles and closely align the executive compensation program with the interests of our stockholders.

 

 

What We Do

  

 

   Place a significant portion of the target total direct compensation for our Named Executive Officers “at risk”

 

-   100% of long-term incentive compensation is performance-based

 

   Mitigate compensation risk by:

 

-   balancing incentives between annual and long-term goals

 

-   tying incentives to multiple goals to reduce undue weight on any one goal

 

-   for annual incentive payouts, using non-financial performance factors to counterbalance financial performance goals

 

-   discouraging excessive focus on annual results and focusing on sustainable performance by providing significant long-term incentives

 

-   subjecting annual and long-term incentive plans to payment caps

 

-   giving Compensation Committee discretion to reduce payouts

 

-   performing an annual risk assessment for annual and long-term incentive plans

 

   Maintain stock ownership guidelines for Directors and senior officers

 

   Maintain a compensation recoupment (clawback) policy covering all officers of the Company and its subsidiaries for incentive-based compensation

 

   Hold annual say-on-pay votes (with 93.4% support in 2020)

 

What We

Don’t Do

  

 

  Enter into employment agreements

 

  Offer excessive executive perquisites

 

  Dilute stockholder value by issuing excessive equity compensation

 

  Grant stock options or have outstanding options

 

  Reprice options or buyout underwater options without stockholder approval

 

  Recycle shares for future awards except under limited circumstances

 

  Provide golden parachute excise tax gross-ups

 

  Offer excessive change in control severance benefits

 

  Negotiate equity awards with special treatment upon a change of control

 

  Provide single-trigger acceleration of vesting of outstanding equity awards

 

  Permit Directors, officers, financial personnel, and certain other individuals to:

 

-  short, hedge or pledge Company securities or

 

-   hold Company securities in a margin account as collateral

 

 

6

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Election of Directors

 

 
ELECTION OF DIRECTORS

Proposal 1    Election of Directors

Twelve Directors are to be elected at the Annual Meeting to hold office until the next annual meeting and until their respective successors are elected and qualified. (See “Information About the Director Nominees” on pages 8 through 15.) Directors are not permitted to stand for election after having passed his or her 75th birthday. Of the Board members standing for election, Timothy P. Cawley is the only member who is an officer of the Company. George Campbell, Jr. has passed his 75th birthday and, as a result, is not permitted to stand for election. All of the nominees were elected Directors at the last annual meeting of stockholders, other than Mr. Cawley, Karol V. Mason, and Dwight A. McBride. Mr. Cawley was appointed to the Board of Directors by the Board effective December 29, 2020, at the time of his appointment as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York. Ms. Mason and Dr. McBride were appointed to the Board of Directors by the Board effective January 1, 2021. A professional search firm assisted the Corporate Governance and Nominating Committee in connection with its recommendation of Ms. Mason and Dr. McBride. In keeping with the process described in “The Board of Directors—Selection of Director Candidates” on page 26, the Corporate Governance and Nominating Committee directed the professional search firm to provide it with a diverse slate of candidates, which included Ms. Mason and Dr. McBride.

The Corporate Governance and Nominating Committee recommends candidates for election or re-election to the Board and reviews the qualifications of possible Director candidates. When recommending to the Board the slate of Director nominees for election at the Annual Meeting, the Corporate Governance and Nominating Committee strives to maintain an appropriate balance of tenure, diversity, and skills on the Board as evidenced by the proposed slate of director nominees, which are 33.3% women and 33.3% racially and ethnically diverse (as self-reported by the Director nominees). The Corporate Governance and Nominating Committee also strives to ensure that the Board is composed of Directors who bring diverse viewpoints, perspectives, professional experiences and backgrounds, and effectively represent the long-term interests of stockholders. The Board and the Corporate Governance and Nominating Committee strongly believe that the Board and the Company benefit from having directors with a diversity of gender, race, ethnicity, viewpoints, and experiences. The Board and the Corporate Governance and Nominating Committee believe that striking an appropriate balance between fresh perspectives and ideas and the valuable experience and familiarity contributed by longer-serving Directors is critical to a forward-looking and strategic Board. The Corporate Governance and Nominating Committee identifies candidates through a variety of means, including professional search firms, recommendations from members of the Board, suggestions from senior management, and submissions by the Company’s stockholders. When a professional search firm is used, the firm is directed to provide a diverse slate of candidates, including candidates diverse with respect to gender, race and ethnicity, for the Board’s consideration. (See “The Board of Directors—Selection of Director Candidates” on page 26 for additional information on the Director nomination process.)

Each nominee was selected by the Corporate Governance and Nominating Committee and approved by the Board for submission to the Company’s stockholders. The Company believes that all of the nominees will be able and willing to serve as Directors of the Company. All of the Directors also serve as Trustees of the Company’s subsidiary, Con Edison of New York.

Shares represented by every properly executed proxy will be voted at the Annual Meeting for or against the election of the Director nominees as specified by the stockholder giving the proxy. If one or more of the nominees is unable or unwilling to serve, the shares represented by the proxies will be voted for any substitute nominee or nominees as may be designated by the Board.

 

    The Board recommends FOR Proposal No. 1

 

LOGO   

  

 

Each of the twelve Director nominees must receive a majority of the votes cast at the Annual Meeting or by proxy to be elected (meaning the number of shares voted “for” a Director nominee must exceed the number of shares voted “against” that Director nominee), subject to the Board’s policy regarding resignations by Directors who do not receive a majority of “for” votes. Abstentions and broker non-votes are voted neither “for” nor “against” and have no effect on the vote.

 

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

7


LOGO    Election of Directors

 

Information About the Director Nominees

The Board and the Corporate Governance and Nominating Committee consider the qualifications of Directors and Director candidates individually and in the broader context of the Board’s overall composition and the Company’s current and future needs. The Board believes that the Board, as a whole, should possess a combination of skills, professional experience, and diversity of backgrounds necessary to oversee the Company’s business. The Board has adopted Corporate Governance Guidelines to assist it in exercising its responsibilities to the Company and its stockholders. In evaluating Director candidates and considering incumbent Directors for renomination to the Board, the Board and the Corporate Governance and Nominating Committee consider various factors. Pursuant to the Guidelines, the Corporate Governance and Nominating Committee reviews with the Board factors relating to the composition of the Board (including its size and structure), the diversity of the Board (including diversity of gender, race, ethnicity, and nationality), and the skills and characteristics of Director nominees, including independence, integrity, judgment, business experience, areas of expertise, and availability for service to assure that the Board contains an appropriate mix of Directors to best further the Company’s long-term business interests. For incumbent Directors, the Corporate Governance and Nominating Committee also considers past performance of the Director on the Board.

The current Director nominees bring to the Company the benefit of their qualifications, leadership, skills, and the diversity of their experience and backgrounds which provide the Board, as a whole, with the skills and expertise that reflect the needs of the Company. See pages 10 through 15 for information about each Director nominee, including their age as of the date of the Annual Meeting, business experience, period of service as a Director, public or investment company directorships, and other directorships.

The following graph displays information about the skills and experience of the Director nominees:

 

LOGO

 

 

8

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Election of Directors

 

The makeup of the Director nominees is set forth in the pie charts below:

 

LOGO

  

LOGO

LOGO

  

LOGO

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

9


LOGO    Election of Directors

 

LOGO

Timothy P. Cawley

 

Director since: 2020

 

Age: 56

 

Gender: Male

 

Race/Ethnicity: White

LOGO

Ellen V. Futter

 

Director since: 1997

 

Age: 71

 

Gender: Female

 

Race/Ethnicity: White

 

Board Committees:

§   Executive

§   Safety, Environment, Operations and Sustainability (Co-Chair through December 31, 2020)

 

 

Career Highlights: Mr. Cawley has been President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York since December 29, 2020. Mr. Cawley was President of Con Edison of New York from January 1, 2018 through December 31, 2020. Mr. Cawley was President and Chief Executive Officer of Orange & Rockland from December 2013 through November 2017. Mr. Cawley was Senior Vice President of Central Operations for Con Edison of New York from December 2012 through November 2013. Mr. Cawley joined Con Edison of New York in July 1987.

 

Other Directorships: Mr. Cawley is a Trustee of Con Edison of New York and Chairman of Orange & Rockland. Mr. Cawley is also a Director of the American Gas Association, the Edison Electric Institute, and the Partnership for New York City. Mr. Cawley also served as a Director of the Hudson Valley Economic Development Corporation, the Hudson Valley Pattern for Progress, the New Jersey Utilities Association, the Orange County Partnership, and the Rockland Economic Development Corporation.

 

Attributes and Skills: Mr. Cawley has leadership, engineering, financial, and operations experience, as well as knowledge of the utility industry and the Company’s business. Mr. Cawley’s experience from his leadership positions at the Company’s subsidiaries supports the Board in its oversight of the Company’s management, financial, operations, and strategic planning activities, and the Company’s relationships with stakeholders.

 

Career Highlights: Ms. Futter has been the President of the American Museum of Natural History, New York, NY, since November 1993. Previously, Ms. Futter served as the President of Barnard College, New York, NY and was a corporate attorney at the Milbank law firm (formerly known as Milbank, Tweed, Hadley & McCloy).

 

Other Directorships: Ms. Futter is a Trustee of Con Edison of New York and the American Museum of Natural History. Ms. Futter is also a Director of Evercore Inc. Ms. Futter served as a Director and Chairman of the Federal Reserve Bank of New York. Ms. Futter is a Director or Trustee of NYC & Company and the Brookings Institution and a Governing Trustee at the Memorial Sloan-Kettering Cancer Center.

 

Attributes and Skills: Ms. Futter has management and operations experience leading major New York not-for-profit entities that provide services to the public. Ms. Futter also has legal and financial experience. Ms. Futter’s experience from her leadership positions at the American Museum of Natural History and Barnard College and her legal experience support the Board in its oversight of the Company’s operations, planning and regulatory activities and the Company’s relationships with stakeholders.

 

 

10

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Election of Directors

 

LOGO

John F. Killian

 

Director since: 2007

 

Age: 66

 

Gender: Male

 

Race/Ethnicity: White

 

Board Committees:

§  Audit (Chair)

§  Corporate Governance and Nominating

§  Executive

§  Management Development and Compensation

 

LOGO

Karol V. Mason

 

Director since: 2021

 

Age: 63

 

Gender: Female

 

Race/Ethnicity: Black/African American

 

Board Committees:

§    Corporate Governance and Nominating (effective January 1, 2021)

§    Safety, Environment, Operations and Sustainability (effective January 1, 2021)

 

Career Highlights: Mr. Killian was the Executive Vice President and Chief Financial Officer of Verizon Communications Inc., a telecommunications company, from March 2009 to November 2010. Mr. Killian was the President of Verizon Business, Basking Ridge, NJ from October 2005 until February 2009, the Senior Vice President and Chief Financial Officer of Verizon Telecom from June 2003 until October 2005, and the Senior Vice President and Controller of Verizon Corporation from April 2002 until June 2003. Mr. Killian also served in executive positions at Bell Atlantic and was the President and Chief Executive Officer of NYNEX CableComms Limited.

 

Other Directorships: Mr. Killian is a Trustee of Con Edison of New York and Goldman Sachs Trust II, a Director of Houghton Mifflin Harcourt Company and a Trustee Emeriti of Providence College. Mr. Killian also served as a Trustee and Chairman of the Board of Providence College.

 

Attributes and Skills: Mr. Killian has leadership experience at regulated consumer services companies, including experience with financial reporting and internal auditing. Mr. Killian’s experience from his leadership positions at Verizon Communications, Inc., Bell Atlantic and NYNEX CableComms Limited supports the Board in its oversight of the Company’s auditing, financial, operating, and strategic planning activities, and the Company’s relationships with stakeholders.

 

Career Highlights: Ms. Mason has been President of John Jay College of Criminal Justice, a senior liberal arts college in the City University of New York system focused on criminal justice, since August 2017. Ms. Mason was an Assistant Attorney General for the Office of Justice Programs within the United States Department of Justice from June 2013 until January 2017 and a Deputy Associate Attorney General within the United States Department of Justice from April 2009 until February 2012. Ms. Mason was an attorney at the law firm of Alston & Bird LLP from November 1983 until April 2009, where she served as a partner from January 1990 until April 2009 and served again, as a partner, from February 2012 through May 2013. Ms. Mason was a Judicial Law Clerk for The Honorable Judge John F. Grady of the United States District Court for the Northern District of Illinois from October 1982 until October 1983.

 

Other Directorships: Ms. Mason is a Trustee of Con Edison of New York and is a Director or Trustee of the Southern Poverty Law Center and the Carolina Performing Arts of the University of North Carolina at Chapel Hill. Ms. Mason served as a Trustee and Vice Chairman of the University of North Carolina at Chapel Hill and served on the Arts & Sciences Foundation and National Development Council of the University of North Carolina at Chapel Hill. Ms. Mason also served as a Director or Trustee of the Woodruff Arts Center, the Children’s HealthCare of Atlanta, the High Museum of Art, the National Black Arts Festival, Wesley Homes, and the City of Atlanta-Fulton County Recreation Authority. Ms. Mason also served on the Boards of Visitors of the University of North Carolina, the University of Michigan Law School, and Emory University.

 

Attributes and Skills: Ms. Mason has experience leading a prominent public liberal arts college that focuses on criminal justice and forensics. Ms. Mason also has legal experience. Ms. Mason’s experience from her leadership position at John Jay College of Criminal Justice, City University of New York and her legal experience support the Board in its oversight of the Company’s operations, risk management, strategic planning, and relationships with stakeholders.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

11


LOGO    Election of Directors

 

LOGO

John McAvoy

 

Director since: 2013

 

Age: 60

 

Gender: Male

 

Race/Ethnicity: White

 

Board Committee:

§  Executive (Chair)

 

LOGO

Dwight A. McBride

 

Director since: 2021

 

Age: 53

 

Gender: Male

 

Race/Ethnicity: Black/African American

 

Lesbian, Gay, Bisexual, Transgender + : Yes

 

Board Committees:

§    Management Development and Compensation (effective January 1, 2021)

§    Safety, Environment, Operations and Sustainability (effective January 1, 2021)

 

 

Career Highlights: Mr. McAvoy has been Non-executive Chairman of the Board of the Company and the Board of Con Edison of New York since December 2020. Mr. McAvoy served as Chairman of the Board of the Company and Con Edison of New York from May 2014 until December 2020. Mr. McAvoy was President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York from December 2013 through December 28, 2020. Mr. McAvoy was President and Chief Executive Officer of Orange & Rockland from January 2013 to December 2013. Mr. McAvoy was Senior Vice President of Central Operations for Con Edison of New York from February 2009 to December 2012. Mr. McAvoy has had 40 years of experience with the Company.

 

Other Directorships: Mr. McAvoy is the Non-executive Chairman and a Trustee of Con Edison of New York. Mr. McAvoy is also a Trustee of the Intrepid Sea, Air & Space Museum and of Manhattan College. Mr. McAvoy previously 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 Chairman of Orange & Rockland and as a Director of the Business Council of New York State, Inc. and the New York State Energy Research and Development Authority. 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.

 

Attributes and Skills: Mr. McAvoy has leadership, engineering, financial, and operations experience, as well as knowledge of the utility industry and the Company’s business. Mr. McAvoy’s experience from his leadership positions at the Company, and his service on other boards, supports the Board in its oversight of the Company’s management, financial, operations, and strategic planning activities, and the Company’s relationships with stakeholders.

 

Career Highlights: Dr. McBride became President of The New School in April 2020. Prior to joining The New School, Dr. McBride served as Provost and Executive Vice President for Academic Affairs at Emory University, Dean and Associate Provost for Graduate Education at Northwestern University, Dean of Liberal Arts & Sciences at the University of Illinois at Chicago, Chair of the Department of African American Studies at Northwestern University, and Head of the Department of African American Studies at the University of Illinois at Chicago—academic leadership roles that all together span more than two decades. Dr. McBride has also held faculty positions at the University of Pittsburgh, the University of Illinois at Chicago, Northwestern University, Emory University, and The New School, where he has taught various courses in English and American literatures, African American studies, gender and sexuality studies, cultural studies, and performance studies. Dr. McBride has published six books, numerous essays, and is the Founding Co-Editor of the James Baldwin Review.

 

Other Directorships: Dr. McBride is a Trustee of Con Edison of New York. Dr. McBride also served as a Trustee of The Cooper Union, a Director of the Association of American Colleges & Universities, a Director of the About Face Theater Company, a Director of the Illinois Humanities Council, and a Director of the Center on Halsted.

 

Attributes and Skills: Dr. McBride has extensive experience in higher education and leadership experience in universities and other large and complex organizations with diverse stakeholders. Dr. McBride’s executive experience from the leadership positions he has held at The New School and Emory University and his service on other boards support the Board in its oversight of the Company’s operations and management activities, strategic planning, and relationships with stakeholders.

 

 

12

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Election of Directors

 

LOGO

William J. Mulrow

 

Director since: 2017

 

Age: 65

 

Gender: Male

 

Race/Ethnicity: White

 

Board Committees:

§  Finance

§  Management Development and Compensation

§  Safety, Environment, Operations and Sustainability

LOGO

Armando J. Olivera

 

Director since: 2014

 

Age: 71

 

Gender: Male

 

Race/Ethnicity: Hispanic/Latino

 

Board Committees:

§    Audit

§    Executive (effective immediately following the retirement of Dr. Campbell from the Board)

§    Finance

§    Safety, Environment, Operations and Sustainability (Chair, effective January 1, 2021)

 

Career Highlights: Mr. Mulrow is a Senior Advisory Director since May 2017 at The Blackstone Group, the world’s largest alternative asset management firm. Previously, he served as Secretary to New York State Governor Andrew Cuomo from January 2015 to April 2017 and was a Senior Managing Director at Blackstone from April 2011 to January 2015. From 2005 to 2011, he was a Director of Citigroup Global Markets Inc. Mr. Mulrow also held various management positions at Paladin Capital Group, Gabelli Asset Management, Inc., Rothschild Inc., and Donaldson, Lufkin & Jenrette Securities Corporation. In addition, Mr. Mulrow served in a number of other government positions, including Chairman of the New York State Housing Finance Agency and State of New York Mortgage Agency.

 

Other Directorships: Mr. Mulrow is a Trustee of Con Edison of New York, and a Director of JBG Smith Properties since July 2017, and Titan Mining Corporation since 2018. Mr. Mulrow also served as a Director of Arizona Mining, Inc.

 

Attributes and Skills: Mr. Mulrow has business and leadership experience in both the public and the private sector. He also has financial, accounting and asset management experience from his leadership positions at Blackstone, New York State government, and his service on other boards which supports the Board in its oversight of the Company’s financial and strategic planning activities.

 

 

Career Highlights: Mr. Olivera is the retired President & Chief Executive Officer of Florida Power & Light Company (“FPL”), one of the largest investor-owned electric utilities in the United States. Mr. Olivera also has served as Chairman of the Boards of two non-profits: Florida Reliability Coordinating Council that focuses on the reliability and adequacy of bulk electricity in Florida, and Southeastern Electric Exchange that focuses on coordinating storm restoration services and enhancing operational and technical resources. After his retirement from FPL in May 2012, Mr. Olivera served as senior advisor at Britton Hill Partners, a private equity firm. In 2017, Mr. Olivera joined Ridge-Lane LP, a venture development firm, where he is currently a venture partner in the sustainability practice.

 

Other Directorships: Mr. Olivera is a Trustee of Con Edison of New York. Mr. Olivera also serves as a Director of Fluor Corporation and Lennar Corporation. Mr. Olivera served as a Director of AGL Resources, Inc. until July 2016. Mr. Olivera was also a Director of FPL and a Trustee and Vice Chair of Miami Dade College. Mr. Olivera is Trustee Emeritus of Cornell University and member of the Advisory Council at the Cornell Atkinson Center for Sustainability.

 

Attributes and Skills: Mr. Olivera has leadership, engineering, and operations experience, as well as knowledge of the utility industry. Mr. Olivera’s experience from his leadership positions at FPL, and his service on other boards, supports the Board in its oversight of the Company’s management, financial, operations, and strategic planning activities. Mr. Olivera’s experiences as a consultant on sustainability supports the Board in its oversight of sustainability matters.

 

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

13


LOGO    Election of Directors

 

LOGO

Michael W. Ranger

 

Director since: 2008

 

Age: 63

 

Gender: Male

 

Race/Ethnicity: White

 

Board Committees:

§    Audit

§    Corporate Governance and Nominating (Chair and Lead Director)

§    Executive

§    Finance

§    Management Development and Compensation

LOGO

Linda S. Sanford

 

Director since: 2015

 

Age: 68

 

Gender: Female

 

Race/Ethnicity: White

 

Board Committees:

§  Audit

§  Corporate Governance and Nominating

§  Finance

 

Career Highlights: Mr. Ranger has been President and Chief Executive Officer of Covanta Holding Corporation since October 29, 2020. Mr. Ranger has also been Senior Managing Director of Diamond Castle Holdings LLC, New York, NY, a private equity investment firm, since 2004. Mr. Ranger was an investment banker in the energy and power sector for twenty years, including at Credit Suisse First Boston, Donaldson, Lufkin and Jenrette, DLJ Global Energy Partners, and Drexel Burnham Lambert. Mr. Ranger was also a member of the Utility Banking Group at Bankers Trust.

 

Other Directorships: Mr. Ranger is a Trustee of Con Edison of New York and a Director of Covanta Holding Corporation. Mr. Ranger is also Chairman of the Board of Trustees and a Trustee of St. Lawrence University. Mr. Ranger also served as a Trustee of Morristown-Beard School through 2017 and Director of Bonten Media Group Inc. through 2017, Professional Directional Enterprises, Inc. through 2018, and KDC Solar LLC through 2019.

 

Attributes and Skills: Mr. Ranger has leadership experience at a private equity firm he co-founded and at various investment banking companies. Mr. Ranger has extensive investment and investment banking experience in the energy, utility, and power sector. Mr. Ranger’s experience from his investment activities in the energy and power sector and his service on other boards supports the Board in its oversight of the Company’s corporate governance and financial and strategic planning activities.

 

Career Highlights: Ms. Sanford was Senior Vice President Enterprise Transformation, International Business Machines Corporation (IBM), a multinational technology and consulting corporation, from January 2003 to December 2014. Ms. Sanford joined IBM in 1975. Ms. Sanford was also a consultant to The Carlyle Group serving as an Operating Executive from 2015 to July 2018.

 

Other Directorships: Ms. Sanford is a Trustee of Con Edison of New York, and a Director of Pitney Bowes Inc., RELX PLC (formerly Reed Elsevier PLC) and The Interpublic Group of Companies, Inc. Ms. Sanford also served as a Director of ITT Corporation. Ms. Sanford is also a Trustee of New York Hall of Science. Ms. Sanford also serves as a Trustee Emeriti of St. John’s University and Rensselaer Polytechnic Institute. Ms. Sanford also served as a Director or Trustee of the Partnership for New York City through January 2015, the State University of New York through May 2015, the Business Council of New York State through May 2015, and the ION Group through January 2021.

 

Attributes and Skills: Ms. Sanford has leadership experience at an international technology company, including experience with information technology, cybersecurity, manufacturing, customer relations, and corporate planning and transformation. Ms. Sanford’s experience from her leadership positions at IBM and her service on other boards supports the Board in its oversight of technology, relationship with stakeholders, and financial and strategic planning activities.

 

 

14

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Election of Directors

 

LOGO

Deirdre Stanley

 

Director since: 2017

 

Age: 56

 

Gender: Female

 

Race/Ethnicity: Black/African American

 

Board Committees:

§    Corporate Governance and Nominating

§    Management Development and Compensation (Chair, effective immediately following the retirement of Dr. Campbell from the Board)

§    Safety, Environment, Operations and Sustainability (through December 31, 2020)

LOGO

L. Frederick Sutherland

 

Director since: 2006

 

Age: 69

 

Gender: Male

 

Race/Ethnicity: White

 

Board Committees:

§  Audit

§  Finance (Chair)

§  Management Development and Compensation

 

Career Highlights: Ms. Stanley has been Executive Vice President and General Counsel to The Estée Lauder Companies, Inc., one of the world’s leading manufacturers and marketers of quality skin care, makeup, fragrance, and hair care products, since October 28, 2019. Ms. Stanley was Executive Vice President and General Counsel to Thomson Reuters from 2008 until October 9, 2019 where she also served as Corporate Secretary to the Board of Directors. Ms. Stanley was Senior Vice President and General Counsel to The Thomson Corporation from 2002 to 2008, when it combined with Reuters PLC to form Thomson Reuters. Prior to 2002, Ms. Stanley held various legal and senior executive positions at InterActive Corporation (previously USA Networks, Inc.) and GTE Corporation (a predecessor company to Verizon). She was also an attorney with the law firm of Cravath, Swaine & Moore.

 

Other Directorships: Ms. Stanley is a Trustee of Con Edison of New York. Ms. Stanley is also a Trustee of the Hospital for Special Surgery and a Trustee of The Dalton School. Ms. Stanley also served as a Director of Refinitiv from October 2018 through October 2019.

 

Attributes and Skills: Ms. Stanley has leadership, legal and operations experience at an international news and information company and a global consumer products company, including experience with mergers and acquisitions, corporate governance, and risk management. Ms. Stanley’s experience from her leadership positions at The Estée Lauder Companies and Thomson Reuters Corporation, her legal experience and service on other boards support the Board in its oversight of the Company’s operations, risk management, strategic planning, and relationships with stakeholders.

 

 

Career Highlights: Mr. Sutherland was the Executive Vice President and Chief Financial Officer of Aramark Corporation, Philadelphia, PA, a provider of food services, facilities management, and uniform and career apparel, from 1997 to 2015. Prior to joining Aramark in 1980, Mr. Sutherland was Vice President, Corporate Banking, at Chase Manhattan Bank, New York, NY.

 

Other Directorships: Mr. Sutherland is a Trustee of Con Edison of New York and a Director of Colliers International Group Inc. and Sterling Talent Solutions. Mr. Sutherland is also a Director of WHYY, Philadelphia’s public broadcast affiliate, Board President of Episcopal Community Services, a Philadelphia-based anti-poverty agency, and a Trustee of Duke University, the National Constitution Center, and Peoples Light, a non-profit theater.

 

Attributes and Skills: Mr. Sutherland has leadership experience at an international managed services company, including experience with financial reporting, internal auditing, mergers and acquisitions, financing, risk management, corporate compliance, and corporate planning. Mr. Sutherland also has corporate banking experience. Mr. Sutherland’s experience from his leadership positions at Aramark Corporation and Chase Manhattan Bank supports the Board in its oversight of the Company’s financial reporting, auditing, and strategic planning activities.

 

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

15


LOGO    The Board of Directors

 

 
THE BOARD OF DIRECTORS

Meetings and Board Members’ Attendance

During 2020, the Board consisted of the following members: George Campbell, Jr., Timothy P. Cawley (effective December 29, 2020), Ellen V. Futter, John F. Killian, John McAvoy, William J. Mulrow, Armando J. Olivera, Michael W. Ranger, Linda S. Sanford, Deirdre Stanley, and L. Frederick Sutherland. The Board of Directors held 9 meetings in 2020. At its meetings, the Board considers a wide variety of matters involving such things as the Company’s strategic planning, its financial condition and results of operations, its capital and operating budgets, personnel matters, human capital management, diversity, equity, and inclusion, sustainability, succession planning, risk management, industry issues, accounting practices and disclosure, and corporate governance practices.

In accordance with the Company’s Corporate Governance Guidelines, the Chair of the Corporate Governance and Nominating Committee, Mr. Ranger, serves as independent Lead Director and, as such, chairs the executive sessions of the non-management Directors and the independent Directors. The Board routinely holds executive sessions at which only non-management Directors are present, and the independent Directors meet in executive session at least once a year. The Company’s independent Directors met 2 times in executive session and the non-management Directors met 8 times in executive session during 2020.

During 2020, each member of the Board attended more than 75% of the combined meetings of the Board of Directors and the Board Committees on which he or she served during the period that he or she served. Directors are expected to attend the Annual Meeting. All of the Directors who then served on the Board attended the 2020 annual meeting of stockholders, which was held remotely due to the impact of COVID-19.

Corporate Governance

The Company’s corporate governance documents, including its Corporate Governance Guidelines, the charters of the Audit, Corporate Governance and Nominating, and Management Development and Compensation Committees, and the Standards of Business Conduct, are available on the Company’s website at www.conedison.com/shareholders. The Standards of Business Conduct apply to all Directors, officers, and employees. The Company intends to post on its website at www.conedison.com/shareholders amendments to its Standards of Business Conduct and a description of any waiver from a provision of the Standards of Business Conduct granted by the Board to any Director or executive officer of the Company within four business days after such amendment or waiver. To date, there have been no such waivers.

Leadership Structure

The Board consists of a substantial majority of independent Directors. (See “The Board of Directors—Board Members’ Independence” on page 20.) As discussed in the Corporate Governance Guidelines, the Board selects the Company’s chief executive officer and chairman of the Board in the manner that it determines to be in the best interest of the Company’s stockholders. Historically, the roles of the Company’s Chief Executive Officer and Chairman have been combined. To promote an effective and orderly Chief Executive Officer transition, the Board determined that Mr. McAvoy should continue to serve as Chairman of the Board after his retirement as Chief Executive Officer of the Company on December 28, 2020. Mr. McAvoy has been nominated to the Board for election at the Company’s Annual Meeting. The Board made this determination based on a variety of factors, including Mr. McAvoy’s long-standing knowledge of the Company and the utility industry, and his extensive engineering, financial, and operations experience. In addition, effective December 29, 2020, Mr. McAvoy no longer serves as Chief Executive Officer of Con Edison of New York, although he serves as its Non-executive Chairman of the Board, and no longer serves as the Chairman of the Board of Orange & Rockland. As Non-executive Chairman, Mr. McAvoy presides at meetings of the Company’s Board, facilitates communication between the Company’s Board and the Company’s management, assists the Chief Executive Officer in formulating long-term strategy, coordinates with the Lead Director on agendas and schedules for Board meetings, information flow to the Board, and other matters pertinent to the Company and the Board, and is available for consultation and communication with major stockholders as appropriate.

Mr. Cawley was promoted to the position of the President and Chief Executive Officer of the Company (and Chief Executive Officer of Con Edison of New York) effective December 29, 2020, upon Mr. McAvoy’s retirement, and was appointed to the

 

 

16

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    The Board of Directors

 

Company’s Board (and the Board of Con Edison of New York), also effective December 29, 2020. In addition, Mr. Cawley was appointed Chairman of the Board of Orange & Rockland, effective December 29, 2020. Mr. Cawley has been nominated to the Board of the Company for election at the Company’s Annual Meeting. As President and Chief Executive Officer, Mr. Cawley has day-to-day management responsibility for the Company and he reports to the Company’s Board.

The Board will also continue to have an independent Lead Director who is the Chair of the Corporate Governance and Nominating Committee. The Corporate Governance Guidelines provide that the Lead Director: (i) acts as a liaison between the independent Directors and the Company’s management; (ii) chairs the executive sessions of non-management and independent Directors and has the authority to call additional executive sessions as appropriate; (iii) chairs Board meetings in the Chairman’s absence; (iv) coordinates with the Chairman on agendas and schedules for Board meetings, information flow to the Board, and other matters pertinent to the Company and the Board; (v) is available for consultation and communication with major stockholders as appropriate; and (vi) performs such other duties assigned to the Lead Director by the Board.

Pursuant to the Company’s Corporate Governance Guidelines, the Board has oversight responsibility for reviewing the Company’s strategic plans, objectives, and risks, including sustainability, environmental, social, and governance matters. Each of the standing committees of the Board, other than the Executive Committee, is chaired by non-management Directors. (See “The Board of Directors—Standing Committees of the Board” on pages 21 through 25).

Risk Oversight

The Board’s primary function is one of oversight. In connection with its oversight function, the Board oversees the Company’s policies and procedures for managing risk. The Board administers its risk oversight function primarily through its Committees that report to the Board. Board Committees have assumed oversight of various risks that have been identified through the Company’s enterprise risk management program. The Audit Committee reviews the Company’s risk assessment and risk management policies and reports to the Board on the Company’s risk management program. Management regularly provides reports to the Board and its Committees concerning risks identified through the Company’s enterprise risk management program. Those risks have been assessed by the Company as important to it, and are reported to the Board on a regular cadence. Among those risks, cybersecurity has been identified as a key enterprise risk for the Company. An annual presentation on cybersecurity risks is provided to the Board and the Audit Committee reviews more in-depth cybersecurity matters on a semi-annual basis. In addition, the Board receives regular updates as to cybersecurity risks from management. A description of the various risks facing the Company can be found under “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Corporate Sustainability

The Company is firmly committed to sustainability, which is broadly overseen by the Board. The Board reviews and discusses various sustainability topics throughout the year and routinely considers environmental issues (including climate change) and assesses how they impact the Company’s operations, strategies and risk profile. In 2020, the Board received reports or presentations on several sustainability and climate change-related topics, including advancing the Company’s clean energy future, diversity, equity, and inclusion and supply chain diversity and sustainability. In addition, a presentation regarding the Company’s immediate response and long-term plans to address racism, bias, and inequity following the killing of George Floyd and the Black Lives Matter protests was provided to the Board during 2020. In 2020, the Board’s strategy meeting focused on ESG topics. The Board received a presentation on the role of ESG considerations in the investment process from a large institutional investor in the Company, as well as a presentation that addressed ESG matters and the Company’s strategy with respect thereto, including its commitments to a clean energy future, pursuing a zero-harm culture, and maintaining a diverse and engaged workforce. During its strategy session, the Board also received: (i) an update on the utilities’ strategy that covered New York and New Jersey’s clean energy goals and the Company’s plans for achieving these, (ii) a strategy update for its Clean Energy Businesses subsidiary, that addressed, among other ESG topics, the evolving renewables market and the Clean Energy Businesses’ role therein, and (iii) a strategy update for its Con Edison Transmission subsidiary that focused on its steps to contribute to the Company’s decarbonization plan. In addition, the Board has delegated to the appropriate committees responsibility for the specific sustainability categories relating to the oversight of risks with which such committees are charged. The Safety, Environment, Operations and Sustainability Committee oversees sustainability matters relating to safety and the environment (including climate change) and reviews the Company’s Annual Sustainability Report prior to its publication. In discharging its responsibilities, the

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

17


LOGO    The Board of Directors

 

Safety, Environment, Operations and Sustainability Committee reviews, at each of its meetings, certain key performance indicators relating to climate risk, including energy efficiency and environmental beneficial electrification. In 2020, the Safety, Environment, Operations and Sustainability Committee also reviewed and discussed an update on transportation electrification, the impact of new technology on preventing high hazard injuries and an ESG update and Sustainability Report review. The Corporate Governance and Nominating Committee is charged with sustainability matters relating to governance and in 2020 reviewed and discussed general governance matters. The Management, Development, and Compensation Committee’s responsibilities include oversight of sustainability matters relating to human capital management and in 2020 reviewed and discussed compensation governance during COVID-19 and proposed diversity, equity, and inclusion metrics for executive compensation purposes. The Management, Development, and Compensation Committee annually reviews performance results as well as proposed performance indicators for the following year. Committees not specifically tasked with oversight of sustainability also periodically review matters related to sustainability.

Diversity, Equity, and Inclusion

The Company strives to be a workplace where the diversity of its employees creates a stronger, higher performing organization. The Company’s diversity, equity, and inclusion strategy sets out priorities that demonstrate the value it places on differences across all demographic dimensions. The diversity, equity, and inclusion strategy drives its corporate culture through four key areas of focus: (i) advancing diversity, equity, and inclusion through learning, (ii) fostering a diverse, equitable, and inclusive environment, (iii) connecting diversity, equity, and inclusion throughout the Company, and (iv) communicating and engaging with employees.

On December 31, 2020, the Company and its subsidiaries had 14,071 employees, based entirely in the United States, including 12,477 at Con Edison of New York, 1,118 at Orange & Rockland, 468 at the Clean Energy Businesses, and 8 at Con Edison Transmission. The gender, racial, and ethnic composition of the workforce as compared to upper management and officers as of the end of 2020 are set forth in the bar charts below.

 

LOGO

 

   LOGO

Human Capital

The Company is committed to attracting, developing, and retaining a talented and diverse workforce. It values and supports a wide range of employee needs and interests. The Company’s skilled and experienced workforce enables it to maintain best-in-class reliability and progress towards achieving a clean energy future. Human capital measures focus on employee safety, hiring the right talent, employee development and retention, diversity, equity, and inclusion, emergency response, and providing essential services to customers while protecting employees during the COVID-19 pandemic.

As a result of the COVID-19 pandemic, 60% of the total workforce was working remotely as of December 31, 2020. The viability of a mobile workforce was made possible by digital software and smart device capabilities that helped employees collaborate with each other and remain productive while complying with health requirements. Even as the Company continues to respond to the pandemic, the entire Con Edison of New York and Orange & Rockland workforce is available in the event of an emergency that requires on-site presence. During 2020, the Company and its subsidiaries managed their operations and resources while avoiding lay-offs and furloughs and continued to recruit, interview, and hire internal and external applicants to fill critical positions. The Company and its subsidiaries support employee health through mandatory pre-entry symptom surveys for employees arriving at all company locations, regular cleaning and disinfecting of all work and common areas, promoting social distancing, requiring face coverings, and directing employees to work remotely whenever possible.

 

 

18

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    The Board of Directors

 

Despite the uncertainty and upheaval as a result of COVID-19, the Company’s employees continued to give their time and resources to support those in need. The Company launched virtual volunteer opportunities throughout the year, and once it was safe to gather in person with the appropriate safety measures and in keeping with applicable public health guidelines, the Company adapted small, outdoor events to serve the needs of its employees and communities. In 2020, 163 Company employees collectively volunteered 1,256 hours at various community service events and programs throughout the Company’s service territory. The virtual events included mentoring and tutoring, mock interviewing and judging at constitutional debate programs. When employees were safely able to volunteer outdoors, they cleaned up parks and planted tulips.

Proxy Access

The Company has implemented a proxy access framework that allows a stockholder or a group of up to 20 stockholders who have owned at least 3% of the outstanding shares of the Company for at least three years to submit nominees for up to 20% of the Board, or two nominees, whichever is greater, for inclusion in the Company’s Proxy Statement and form of proxy, subject to complying with the requirements identified in the Company’s By-laws.

Related Person Transactions and Policy

The Company has adopted a written policy for approval of transactions between the Company and its Directors, Director nominees, executive officers, greater-than-five-percent (5%) beneficial owners of the Company’s Common Stock, and their respective immediate family members, where the amount involved in the transaction since the beginning of the Company’s last completed fiscal year exceeds or is expected to exceed $120,000 per year.

The policy provides that the Corporate Governance and Nominating Committee review certain transactions subject to the policy and determine whether or not to approve or ratify those transactions. In doing so, the Corporate Governance and Nominating Committee takes into account, among other factors it deems appropriate, whether the transaction is on terms that are no less favorable to the Company than terms generally available to an unaffiliated third party under the same or similar circumstances, the extent of the related person’s interest in the transaction, whether the transaction would impair the independence of an otherwise independent director and the business reason for the company to enter into the transaction. Transactions are brought to the attention of the Corporate Governance and Nominating Committee by the Company. Annually and as needed, the Company distributes questionnaires to executive officers, directors and director nominees. The Company reviews the disclosures made by these individuals to identify all transactions requiring the approval. In addition, the Company distributes previously submitted disclosures to executive officers quarterly for review and requests that any and all updates be provided so that responses can be reviewed. All new transactions requiring approval following the quarterly review are identified and brought to the Corporate Governance and Nominating Committee’s attention. In addition, the Board has delegated authority to the Chair of the Corporate Governance and Nominating Committee to pre-approve or ratify any transaction with a related person in which the aggregate amount involved is expected to be less than $1.0 million per year. The Corporate Governance and Nominating Committee ratified and approved the 2020 compensation of David Sanchez and John DeLaBastide on November 19, 2020 and Jennifer Ketschke on February 18, 2021, each as disclosed below. A summary of any new transactions pre-approved or ratified by the Chair is provided to the full Corporate Governance and Nominating Committee for its review in connection with a regularly scheduled committee meeting.

The Corporate Governance and Nominating Committee has considered and adopted standing pre-approvals under the policy for limited transactions with related persons. Pre-approved transactions include:

 

(i)

transactions with other companies at which a related person’s only relationship is as an employee (other than an executive officer), if the amount involved is less than $1.0 million, or two percent (2%) of such other company’s consolidated gross annual revenues, whichever is greater; and

 

(ii)

contributions to non-profit organizations at which a related person’s only relationship is as an employee (other than an executive officer) if the aggregate amount involved is less than both $1.0 million and two percent (2%) of the organization’s consolidated gross annual revenues.

David Sanchez, the brother of Robert Sanchez, President and Chief Executive Officer of Orange & Rockland, is employed by Con Edison of New York, serving as a project specialist. In 2020, he was paid approximately $135,000. This amount includes salary and short-term incentive payments. Jennifer Ketschke, the spouse of Matthew Ketschke, President of Con

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

19


LOGO    The Board of Directors

 

Edison of New York effective January 1, 2021, is employed by Con Edison of New York, serving as a project manager. In 2020, she was paid approximately $213,000. This amount includes salary, and long-term and short-term incentive payments. John DeLaBastide, the brother-in-law of Lore de la Bastide, Senior Vice President—Utility Shared Services of Con Edison of New York, was employed by Con Edison of New York until March 31, 2021 and served as an assistant controller. In 2020, he was paid approximately $363,000. This amount includes salary, and long-term and short-term incentive payments. Each individual participated in other regular and customary employee benefit programs generally available to all Con Edison of New York employees. In addition, the amount of salary and incentive payments were determined in accordance with the Company’s standard compensation practices applicable to similarly-situated employees.

Board Members’ Independence

The Company’s Corporate Governance Guidelines provide that the Board of Directors consist of a substantial majority of Directors who meet the New York Stock Exchange definition of independence, as determined by the Board in accordance with the standards described in the Guidelines below. The Board of Directors has affirmatively determined that the following Directors are “independent” as defined in the New York Stock Exchange’s listing standards: George Campbell, Jr. (until his retirement), John F. Killian, Karol V. Mason, Dwight A. McBride, William J. Mulrow, Armando J. Olivera, Michael W. Ranger, Linda S. Sanford, Deirdre Stanley, and L. Frederick Sutherland.

The Board monitors the independence of its members on an ongoing basis and, to assist it in making determinations of Director independence, the Board has adopted independence standards. These standards are set forth in the Company’s Corporate Governance Guidelines, available on the Company’s website at www.conedison.com/shareholders. Under these standards, the Board has determined that each of the following relationships is categorically immaterial and therefore, by itself, does not preclude a Director from being independent:

 

(i)

(a) the Director has an immediate family member who is a current employee of the Company’s internal or external auditor, but the immediate family member does not personally work on the Company’s audit; or (b) the Director or an immediate family member was, within the last three years, a partner or employee of such a firm but no longer works at the firm and did not personally work on the Company’s audit within that time;

 

(ii)

the Director or an immediate family member is, or has been within the last three years, employed at another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee, but the Director or the Director’s immediate family member is not an executive officer of the other company and his or her compensation is not determined or reviewed by that company’s compensation committee;

 

(iii)

the Director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in any of the last three fiscal years, but the total payments in each year were less than $1.0 million, or two percent (2%) of such other company’s consolidated gross revenues, whichever is greater;

 

(iv)

the Director is a partner or the owner of five percent (5%) or more of the voting stock of another company that has made payments to, or received payments from, the Company for property or services in any of the last three fiscal years, but the total payments in each year were less than $1.0 million, or two percent (2%) of such other company’s consolidated gross revenues, whichever is greater;

 

(v)

the Director is a partner, the owner of five percent (5%) or more of the voting stock or an executive officer of another company which is indebted to the Company, or to which the Company is indebted, but the total amount of the indebtedness in each of the last three fiscal years was less than $1.0 million, or two percent (2%) of such other company’s consolidated gross revenues, whichever is greater; and

 

(vi)

the Director or an immediate family member is a director or an executive officer of a non-profit organization to which the Company has made contributions in any of the last three fiscal years, but the Company’s total contributions to the organization in each year were less than $1.0 million, or two percent (2%) of such organization’s consolidated gross revenues, whichever is greater.

 

 

20

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    The Board of Directors

 

Standing Committees of the Board

 

 

Audit Committee

 

Members

John F. Killian (Chair)

Armando J. Olivera

Michael W. Ranger

Linda S. Sanford

L. Frederick Sutherland

 

Independent Directors: 5   

 

Meetings Held in 2020: 6

 

 

Role & Responsibilities

The primary responsibility of the Audit Committee is to assist the Board in fulfilling its oversight responsibility for:

§  The integrity of the Company’s financial statements;

§  The Company’s compliance with legal, regulatory, and ethical requirements;

§  The qualifications, independence, and performance of the Company’s independent auditors; and

§  The performance of the Company’s internal audit function.

 

The Audit Committee’s responsibilities also include:

§   The appointment, compensation, retention, oversight, and termination of the work of the Company’s independent auditors;

§   Pre-approving all auditing services and non-audit services permitted by law to be provided to the Company by its independent auditors;

§   Evaluating, at least once every five years, whether it is appropriate to rotate the Company’s independent auditors;

§   Meeting with the Company’s management, including the General Counsel, Con Edison of New York’s General Auditor, and the Company’s independent auditors, several times a year to discuss internal controls and accounting matters, the Company’s financial statements, filings with the SEC, earnings press releases and the scope and results of the auditing programs of the Company’s independent auditors and of Con Edison of New York’s internal auditing department;

§   Overseeing the Company’s risk assessment, risk management processes and the management of such risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties, and responsibilities of the Audit Committee; and

§   Reviewing, at least semi-annually, cybersecurity matters.

 

Financial Expertise

The Board of Directors of the Company has determined that each member of the Audit Committee is financially literate and that John F. Killian, Armando J. Olivera, Michael W. Ranger, and L. Frederick Sutherland are each an “audit committee financial expert” as the term is defined in Item 407(d)(5) of Regulation S-K of the Securities Exchange Act of 1934.

 

Independence

The Board has affirmatively determined that each member of the Audit Committee meets the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. In addition, each member of the Audit Committee is “independent” as defined in Rule 10A-3 of the Securities Exchange Act of 1934.

 

Appointment of Independent Accountants

The Audit Committee is directly responsible for the appointment of the Company’s independent accountants, subject to stockholder ratification at the Annual Meeting. The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent accountants for the fiscal year 2021. If the appointment of PwC is not ratified, the Audit Committee will take this into consideration in the future selection of independent accountants.

 

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

21


LOGO    The Board of Directors

 

 

Corporate Governance and Nominating Committee

 

Members

Michael W. Ranger
(Chair & Lead Director)

George Campbell, Jr.

(until retirement)

John F. Killian

Karol V. Mason

(effective January 1, 2021)

Linda S. Sanford

Deirdre Stanley

 

Independent Directors: 6    until Dr. Campbell’s retirement; 5 following his retirement

 

Meetings Held in 2020: 5

 

 

Role & Responsibilities

The responsibilities of the Corporate Governance and Nominating Committee include:

§   Annually reviewing the Company’s Corporate Governance Guidelines adopted by the Board that address the size, composition and responsibilities of the Board and making recommendations, if appropriate, for revisions or additions thereto;

§   Annually reviewing the Board Committee charters and proposed changes thereto;

§   Establishing and recommending to the Board criteria for selecting new Directors, which will, among other things, reflect factors relating to the diversity of the Board (including gender, ethnicity, race and national origin);

§   Reviewing the qualifications of possible Director candidates against the criteria developed, including candidates duly suggested by stockholders;

§   Recommending to the Board candidates to fill vacancies on the Board;

§   Recommending to the Board candidates for election or re-election to the Board;

§   Recommending to the Board whether to accept any Director resignations;

§   Recommending to the Board candidates and chairs for appointment to the Board’s committees;

§   Recommending to the Board standards to assist it in making determinations of independence in accordance with the New York Stock Exchange listing standards;

§   Overseeing related person transactions and the related policies;

§   Bi-annually reviewing Board and Committee compensation and recommending changes, if appropriate, to the Board;

§   Overseeing the evaluation of the Board and management, including the establishment of criteria and processes for the annual performance self-evaluation of the Board and each committee of the Board;

§   Overseeing the Company’s management of risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties, and responsibilities of the Corporate Governance and Nominating Committee; and

§   Reviewing and making recommendations to the Board on any stockholder proposals and other practices relative to stockholder engagement and corporate governance matters.

 

Independence

The Board has affirmatively determined that each member of the Corporate Governance and Nominating Committee meets the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. In addition, each member of the Corporate Governance and Nominating Committee meets the additional, heightened independence criteria required by law and the New York Stock Exchange’s listing standards.

 

 

 

22

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    The Board of Directors

 

 

Executive Committee

 

Members

John McAvoy (Chair)

George Campbell, Jr.

(until retirement)

Ellen V. Futter

John F. Killian

Armando J. Olivera

(effective immediately following the retirement of Dr. Campbell from the Board)

Michael W. Ranger

 

Independent Directors: 3    until Dr. Campbell’s retirement; 3 following his retirement and Mr. Olivera’s appointment

 

Meetings Held in 2020: 0

 

 

Role & Responsibilities

The Executive Committee may exercise, during intervals between Board meetings, all the powers vested in the Board, except for certain specified matters.

 

Independence

The Board has affirmatively determined that the following members of the Executive Committee meet the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines: George Campbell, Jr. (until his retirement), John F. Killian, Armando J. Olivera (effective immediately following the retirement of Dr. Campbell from the Board), and Michael W. Ranger.

 

 

Finance Committee

 

Members

L. Frederick Sutherland (Chair)

William J. Mulrow

Armando J. Olivera

Michael W. Ranger

Linda S. Sanford

 

Independent Directors: 5

 

Meetings Held in 2020: 7

 

 

Role & Responsibilities

The primary responsibility of the Finance Committee is to review and make recommendations to the Board with respect to the Company’s financial condition and plans.

 

The Finance Committee’s responsibilities also include:

§   Reviewing the annual operating and capital budgets of the Company;

§   Reviewing and approving certain expenditures;

§   Reviewing the Company’s five-year forecast;

§   Reviewing periodic financial reports to be submitted to the Board;

§   Reviewing dividend policy and actions;

§   Annually reviewing the Company’s arrangements for credit;

§   Annually reviewing the Company’s and its subsidiaries’ plans for issuances of securities and other proposed financings;

§   Consistent with Board authorization of such transaction, approving the specific terms of each Company security issue, financing, redemption or repurchase of securities;

§   Reviewing the Company’s and its subsidiaries’ investment policies for cash investments;

§   Overseeing the Company’s strategic business plan;

§   Reviewing certain procurement contracts and purchases and sales of assets;

§   Reviewing certain real estate transactions and litigation settlements; and

§   Overseeing the Company’s management of risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties and responsibilities of the Finance Committee.

 

Independence

The Board has affirmatively determined that each member of the Finance Committee meets the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines.

 

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

23


LOGO    The Board of Directors

 

 

Management

Development and

Compensation

Committee

 

Members

George Campbell, Jr.

(Chair, until retirement)

John F. Killian

Dwight A. McBride

William J. Mulrow

Michael W. Ranger

Deirdre Stanley

(Chair, effective immediately following the retirement of Dr. Campbell from the Board)

L. Frederick Sutherland

 

Independent Directors: 7    until Dr. Campbell’s retirement; 6 following his retirement

 

Meetings Held in 2020: 6 (with Mercer attending 3 meetings)

 

 

Role & Responsibilities

The responsibilities of the Management Development and Compensation Committee (the “Compensation Committee”) include:

§   Reviewing and approving, at least annually, the Company’s goals and objectives relevant to the compensation of the Company’s Named Executive Officers, including the Chief Executive Officer;

§   Leading the performance evaluation and setting the compensation level of the Company’s Chief Executive Officer and other executives;

§   Reviewing and making recommendations to the Board relating to officer and senior management appointments;

§   Reviewing and making recommendations to the Board regarding the Company’s annual incentive plan and equity plans;

§   Reviewing the recommendations of management with respect to new plans, plan amendments and plan terminations;

§   Reviewing the Company’s Compensation Discussion and Analysis (“CD&A”), related disclosures that are required, by SEC rules, to be included in the Company’s annual report and proxy statement and other disclosures that may be necessary or desirable;

§   Recommending whether the Company’s CD&A should be included in the Company’s annual report and proxy statement;

§   Providing the compensation committee report the SEC rules require to be included in the Company’s annual report and proxy statement;

§   Assessing the independence of compensation consultants;

§   Overseeing the Company’s management of risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties and responsibilities of the Management Development and Compensation Committee;

§   Reviewing and making recommendations as necessary to provide for orderly succession and transition in the senior management of the Company, including leadership training;

§   Receiving reports and reviewing the Company’s human capital management systems and policies;

§   Making recommendations to help maintain equal employment opportunity, a diverse and inclusive workforce, adequate executive management and compensation, and orderly management succession;

§   Overseeing the Company’s policies and strategies relating to talent development and human capital management, including diversity and inclusion;

§   Reviewing reports of plan officials and the Company’s General Auditor and General Counsel as to the plan’s compliance with ERISA; and

§   Reviewing the audited financial statements of the plans and reports of management and plan officials with respect to the administration and performance of the pension and other benefit funds.

 

Independence

The Board has affirmatively determined that each member of the Management Development and Compensation Committee meets the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines. In addition, each of the members of the Compensation Committee is “independent,” as defined in the New York Stock Exchange’s listing standards under Rule 10C-1 of the Securities Exchange Act of 1934, and meets the “outside director” criteria of Section 162(m) of the Internal Revenue Code and the “Non-Employee” Director criteria of Rule 16b-3 under the Securities Exchange Act of 1934.

 

 

 

24

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    The Board of Directors

 

 

Safety, Environment, Operations and

Sustainability Committee

 

Members

Armando J. Olivera

(Chair, effective January 1, 2021)

George Campbell, Jr.

(until retirement)

Ellen V. Futter (Co-Chair through December 31, 2020)

Karol V. Mason

(effective January 1, 2021)

Dwight A. McBride

(effective January 1, 2021)

William J. Mulrow

Deirdre Stanley

(through December 31, 2020)

 

Independent Directors: 6    until Dr. Campbell’s retirement; 5 following his retirement

 

Meetings Held In 2020: 5

 

 

Role & Responsibilities

The primary responsibility of the Safety, Environment, Operations and Sustainability Committee is to oversee the Company’s efforts relating to corporate responsibility and sustainability, which includes operating in a safe, environmentally sensitive and socially responsible manner, guarding the health and safety of Company employees and the public, supporting the development and success of Company employees, delivering value to customers and fostering growth to meet the expectations of investors.

 

The Safety, Environment, Operations and Sustainability Committee’s responsibilities also include:

§   Reviewing significant issues identified by the Company relating to: (i) the Company’s subsidiaries’ environment, health and safety programs, (ii) the Company’s subsidiaries’ compliance with environment, health and safety laws and regulations, (iii) the Company’s corporate environment, health and safety policies and procedures, and (iv) the Company’s subsidiaries’ operating systems;

§   Providing advice and counsel to the Company’s management on: (i) corporate environment, health and safety policies and matters, and (ii) other sustainability matters;

§   Providing oversight to the Company’s management on the design, operation, maintenance and performance of the Company’s operating systems and reviewing significant issues identified by the Company relating to the reliable operation of the Company’s operating systems;

§   Reviewing significant developments and emerging issues and risks identified by the Company relating to the Company’s sustainability priorities;

§   Annually reviewing the Company’s Annual Sustainability Report; and

§   Overseeing the Company’s management of risks that have been identified through the Company’s enterprise risk management program, relating to the purpose, duties and responsibilities of the Safety, Environment, Operations and Sustainability Committee.

 

Independence

The Board has affirmatively determined that the following members of the Safety, Environment, Operations and Sustainability Committee meet the independence requirements of the New York Stock Exchange and the Company’s Corporate Governance Guidelines: Armando J. Olivera, George Campbell, Jr. (until his retirement), Karol V. Mason (effective January 1, 2021), Dwight A. McBride (effective January 1, 2021), William J. Mulrow, and Deirdre Stanley (through December 31, 2020).

 

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

25


LOGO    The Board of Directors

 

Selection of Director Candidates

The Corporate Governance and Nominating Committee reviews the skills and characteristics of Director candidates, including their independence, integrity, judgment, areas of business expertise, availability for service, and diversity (including, but not limited to, gender, race, ethnicity, and nationality) and such other factors as it deems appropriate. The Company values diversity and respect within the Board, and affirms its policy of non-discrimination based on race, color, religion, creed, national origin, sex, age, marital status, sexual orientation, pregnancy, genetic information, gender identity, disability, citizenship, veteran status, or other legally protected characteristics. Director candidates are also evaluated in light of their service on other boards, as well as considerations relating to the size, structure, and needs of the Board.

The Corporate Governance and Nominating Committee has the authority under its charter to hire advisors to assist it in its decisions. The Corporate Governance and Nominating Committee identifies director candidates through a variety of means, including: (i) professional search firms, (ii) recommendations from members of the Board, (iii) suggestions from senior management, and (iv) submissions by the Company’s stockholders.

When using a professional search firm, the Corporate Governance and Nominating Committee directs the firm to include in each director search qualified candidates who reflect diverse backgrounds, including diversity of gender, race, ethnicity, and nationality. The firm assists in developing criteria for potential Board members to complement the Board’s existing strengths. Based on such criteria, the firm is directed to provide for review and consideration a diverse slate of candidates, including candidates diverse with respect to gender, nationality, race, and ethnicity. After consulting with the Corporate Governance and Nominating Committee, the firm further screens and interviews candidates as directed to determine their qualifications, interest and any potential conflicts of interest and provides its results to the Committee. In keeping with this established process, the Corporate Governance and Nominating Committee directed a professional search firm to provide it with a diverse slate of candidates, which included Karol V. Mason and Dwight A. McBride, who were both appointed to the Board of Directors effective January 1, 2021.

The Corporate Governance and Nominating Committee also considers candidates recommended by stockholders. There are no differences in the manner in which the Corporate Governance and Nominating Committee evaluates candidates recommended by stockholders versus those recommended through other means. The Corporate Governance and Nominating Committee makes an initial determination as to whether a particular candidate meets the Company’s criteria for Board membership, and then further considers candidates that do.

Stockholder recommendations for candidates, accompanied by biographical material for evaluation, may be sent to the Vice President and Corporate Secretary of the Company. Each recommendation should include information as to the qualifications of the candidate and should be accompanied by a written statement (presented to the Vice President and Corporate Secretary of the Company) from the suggested candidate to the effect that the candidate is willing to serve.

Employee Succession Planning and Talent Management

The Company has a comprehensive, formal process for identifying, assessing and developing a diverse slate of internal candidates to assume, in the future, senior roles in the organization. Its succession planning and development processes are integrated and focused on learning through experiences, leadership commitment, and targeted executive development. During succession planning and development discussions, the Company seeks to develop high potential women and people of color to ensure a diverse and talented group of enterprise leaders. Development plans are reviewed and updated annually. Succession planning and development processes apply to all upper management positions, including officer positions. The Chief Executive Officer annually reviews his succession plan with the Board.

 

 

26

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    The Board of Directors

 

The gender, racial and ethnic composition of promotions in the workforce as compared to upper management and officers that occurred during 2020 are set forth in the bar charts below.

 

LOGO    LOGO
   1Hawaiian/Other Pacific Islander is less than 0.50% and therefore is rounded to zero.

The Board is committed to diversity and directs any search firm retained in connection with chief executive officer succession planning to provide a diverse slate of candidates for the Board’s consideration. In keeping with this process, the Board retained a search firm from 2019 to 2020, to assist it with identifying a diverse slate of candidates for the chief executive officer position formerly held by John McAvoy. After reviewing the candidates identified by the search firm, the Board determined that, based upon Timothy P. Cawley’s extensive experience in the energy industry, his proven leadership abilities, and his understanding of the needs of the Company’s customers, employees and stakeholders, he was the best candidate to guide the Company into the future.

Compensation Consultant

Director Compensation Consultant

The Corporate Governance and Nominating Committee has retained Mercer, a wholly-owned subsidiary of Marsh & McLennan Companies, Inc., to provide information, analyses, and objective advice regarding director compensation. The Corporate Governance and Nominating Committee directs Mercer to: (i) assist it by providing competitive market information on the design of the director compensation program; (ii) advise it on the design of the director compensation program and also provide advice on the administration of the program; and (iii) brief it on director compensation trends among the Company’s compensation peer group and broader industry. The Board members, including the chief executive officer, consider the recommendations of the Corporate Governance and Nominating Committee. The decisions may reflect factors and considerations in addition to the information and advice provided by Mercer.

Executive Compensation Consultant

The Compensation Committee has the authority, under its charter, to engage the services of outside advisors, experts, and others to assist it. The Compensation Committee engages Mercer to provide information, analyses, and objective advice regarding our executive compensation program. The Compensation Committee directs Mercer to: (i) assist with the development and assessment of the Company’s compensation peer group for the purposes of providing competitive market information for the design of the executive compensation program; (ii) compare the Company’s chief executive officer’s base salary, annual incentive, and long-term incentive compensation to that of the chief executive officers of the compensation peer group and broader industry; (iii) advise on the level of officers’ base salaries, annual incentives, and long-term incentives; (iv) advise on the design of the Company’s annual and long-term incentive plans and on the administration of the plans; (v) advise on executive compensation trends among the Company’s compensation peer group and broader industry; and (vi) assist with the preparation of the Compensation Discussion and Analysis for this Proxy Statement.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

27


LOGO    The Board of Directors

 

Compensation Consultant Disclosure

Mercer’s fees for executive and director compensation consulting to the committees in 2020 were approximately $622,800.

The Compensation Committee considered the independence of Mercer under the rules of the SEC and the listing standards of the New York Stock Exchange. The Compensation Committee concluded that the services provided by the Marsh & McLennan affiliates (other than Mercer) did not raise any conflicts of interest and did not impair Mercer’s ability to provide independent advice to the Compensation Committee concerning executive or director compensation matters.

Compensation Consultant Interlocks and Insider Participation

George Campbell, Jr. (Chair, until retirement), John F. Killian, William J. Mulrow, Michael W. Ranger, Deirdre Stanley (Chair, effective immediately following the retirement of Dr. Campbell from the Board), and L. Frederick Sutherland were on the Company’s Compensation Committee during 2020. The Company believes that there are no interlocks with the members of the Compensation Committee.

Communications with the Board of Directors

Interested parties may communicate directly with the members of the Company’s Board of Directors, including the non-management Directors as a group, by writing to them, care of the Company’s Vice President and Corporate Secretary, at the Company’s principal executive office at 4 Irving Place, New York, New York 10003. The Vice President and Corporate Secretary will forward communications to the Director or the Directors indicated.

 

 

28

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Stockholder Engagement

 

 

STOCKHOLDER ENGAGEMENT

Overview

Recognizing that regular communication with our stockholders enables the Company to better understand their viewpoints and to obtain feedback regarding issues that are of interest to them, the Company continued to engage virtually with stockholders due to COVID-19. The Company values stockholder input and is committed to taking such input into consideration in making executive compensation and governance decisions.

The chart below represents certain actions that the Company takes before, during and after the annual meeting.

 

 

1

 

Annual Meeting

  

 

2

 

Post-Annual

Meeting

  

 

3

 

Off-season

Engagement and Evaluation of

Best Practices

  

 

4

 

Engagement Prior to

Annual Meeting

 

§  Stockholders may engage with Board members and senior management

 

§  Stockholders may ask questions and voice opinions about the Company, its practices, policies, and operations

 

§  Voting results for management and stockholder proposals are determined

  

 

§  Review voting results in light of existing practices, as well as feedback received from stockholders during proxy engagement season and annual meeting

 

§  Review corporate governance trends, regulatory developments and the Company’s corporate governance documents, policies, and procedures

 

§  Determine topics for discussion during off-season stockholder engagement

  

 

§  Engage with stockholders to better understand their viewpoints and inform Board and committee discussions

 

§  Explore corporate ESG best practices

 

§  Report results of stockholder engagement team activities to Corporate Governance and Nominating Committee and the Board

 

§  Evaluate and discuss potential changes to Company executive compensation and governance practices and disclosures

 

  

 

§  Seek feedback on potential matters for stockholder consideration at the annual meeting

 

§  Discuss stockholder proposals with proponents, when appropriate

 

§  Publish annual report and proxy statement

Stockholder Engagement Highlights

During 2020, the Company held its inaugural ESG webinar, participated in 22 investor conferences and 12 virtual roadshows targeting the U.S., Europe, Japan, Australia, and Canada, engaging with a broad range of stockholders, including index funds, union and public pension funds, actively-managed funds, and stockholder advisory firms.

During 2020, the Company engaged virtually with stockholders holding in aggregate 43% of shares outstanding and 30% of the Company’s debentures.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

29


LOGO    Stockholder Engagement

 

Key topics of shareholder engagement included Con Edison of New York’s Climate Change Vulnerability Study, the Company’s corporate strategy, diversity, equity, and inclusion, disclosure practices, corporate governance, executive compensation, political spending and lobbying practices, operations and financial matters (including issues raised by COVID-19), and ESG standardized reporting. In response to stockholder feedback received during 2020, the Company: (i) enhanced disclosures concerning political contributions and lobbying, resulting in an increase in the Company’s CPA-Zicklin Index for Corporate Political Disclosure and Accountability score to 94.3 from 90; (ii) added new standardized ESG reporting formats: Task Force on Climate-Related Financial Disclosures (“TCFD”), Sustainability Accounting Standards Board (“SASB”), and the Carbon Disclosure Project (“CDP”); (iii) added a new operating objective performance measure, Diversity and Inclusion Work Plan, to its long term incentive plan for 2021; and (iv) further refined the disclosures in its proxy to, among other things, provide clearer and more accessible information on Board diversity, tenure, skills, and experience. In addition, in 2020, the Company’s subsidiary, Con Edison of New York, completed a Climate Change Implementation Plan following the Climate Change Vulnerability Study.

 

Members of Core Stockholder Engagement Team    Others Included in Stockholder Engagement Efforts

§  Chief Financial Officer

§  Treasurer

§  Investor Relations

  

§  Finance

§  Office of the Corporate Secretary

§  Environment, Health & Safety Department

§  Corporate Affairs

§  Strategic Planning

In addition, the Company’s Lead Director, the Chief Executive Officer of the Company, the Presidents of each of the Company’s subsidiaries, and other senior Company officers participate in meetings with stockholders during the year.

Throughout the year, the Company communicates stockholder feedback to the Board and its committees and the Board considers this feedback in making its decisions.

 

 

30

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Director Compensation

 

 

DIRECTOR COMPENSATION

Overview

The Corporate Governance and Nominating Committee reviews director compensation bi-annually. The Corporate Governance and Nominating Committee reviewed director compensation in 2020. The Corporate Governance and Nominating Committee considers information, analyses, and objective advice regarding director compensation provided by Mercer. Director compensation is assessed relative to the Company’s compensation peer group (the same group used to evaluate executive compensation), general industry trends, and the total cost of governance. The Board reviews the recommendations of the Corporate Governance and Nominating Committee when determining whether changes, if any, will be made.

In February 2020, at the request of the Corporate Governance and Nominating Committee, Mercer conducted an in-depth analysis of each element of compensation and the compensation program structure relative to the compensation peer group. Mercer’s review found that the amount of the retainer provided to the Chair of the Management Development and Compensation Committee was below the median paid to non-employee directors in the assessment group. Following the recommendation and effective April 1, 2020, the Board approved an increase in the annual retainer for the Chair of the Management Development and Compensation Committee.

In connection with the transition of John McAvoy from Executive Chairman to Non-executive Chairman, in November 2020, the Corporate Governance and Nominating Committee and the Management Development and Compensation Committee requested that Mercer conduct an in-depth analysis of market practices related to board leadership structures and non-executive chairman compensation. Mercer’s review found that non-executive chairman compensation is typically calibrated at a premium to general Board member compensation. Based on Mercer’s review, the Board approved an annual retainer for the Non-executive Chairman at approximately the median, effective December 29, 2020.

Compensation for individual Directors approximates the median of compensation for Directors in similar positions at the compensation peer group.

Elements of Compensation

In 2020, non-employee Directors were eligible to receive the following:

                   Amount  
                       ($)  
 

Annual Retainer

 

 

 

 

 

 

       115,000  
 

Non-executive Chairman Retainer(1)

 

 

 

 

 

 

       160,000  
 

Lead Director Retainer

 

 

 

 

 

 

       35,000  
 

Chair of Audit Committee Retainer

 

 

 

 

 

 

       30,000  
 

Member of Audit Committee Retainer (excluding the Audit Committee Chair)

 

 

 

 

 

 

       15,000  
 

Chair of Corporate Governance and Nominating Committee Retainer

 

 

 

 

 

 

       15,000  
 

Chair of Finance Committee Retainer

 

 

 

 

 

 

       15,000  
 

Chair of Management Development and Compensation Committee Retainer(2)

 

 

 

 

 

 

       20,000  
 

Retainers for each of the Co-Chairs of the Safety, Environment, Operations and Sustainability Committee(3)

 

 

 

 

 

 

       7,500  
 

Acting Committee Chair Fee (where the regular Chair is absent)

 

 

 

 

 

 

       200  
 

Annual equity award (deferred stock units)

   

 

   

 

   

 

       150,000  

Footnotes:

 

(1)

Effective December 29, 2020.

 

(2)

Effective April 1, 2020, the annual retainer for the Chair of the Management Development and Compensation Committee was increased from $15,000 to $20,000.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

31


LOGO    Director Compensation

 

(3)

Effective January 1, 2021, a single Chair of the Safety, Environment, Operations and Sustainability Committee was appointed. As a result, Co-Chair retainers of $7,500 were provided until December 31, 2020 and the annual retainer for the single Chair of the Safety, Environment, Operations and Sustainability Committee became $15,000 as of January 1, 2021.

In 2020, the Company reimbursed non-employee Directors for reasonable expenses incurred in attending Board and Committee meetings.

No person who served on both the Company Board and on the Board of its subsidiary, Con Edison of New York, and corresponding Committees, was paid additional compensation for concurrent service. Directors who are employees of the Company or its subsidiaries do not receive retainers or annual equity awards for their service on the Board.

Stock Ownership Guidelines

The Company has stock ownership guidelines for non-employee Directors which provide that, within five years of joining the Board, each Director should own, and continue to hold during his or her tenure on the Board, shares (including stock equivalents and restricted stock units) with a value (measured at the time the shares are acquired) equal to five times the annual retainer (not including committee and/or committee chair fees) paid to such Director during the previous fiscal year. As of December 31, 2020, all Directors have either exceeded their stock ownership guideline requirement or are in the five year grace period and making satisfactory progress towards meeting the requirement.

Long Term Incentive Plan

Non-employee Directors participate in the Company’s long term incentive plan. Pursuant to the long term incentive plan, each non-employee Director then serving was allocated an annual equity award of $150,000 of deferred stock units on the first business day following the 2020 Annual Meeting. If a non-employee Director is first appointed to the Board after an annual meeting, his or her first annual equity award will be prorated.

Settlement of the 2020 annual equity awards of stock units was automatically deferred until the Director’s termination of service from the Board of Directors. Each non-employee Director may elect to receive some or all of his or her 2020 annual equity awards of stock units on another date or to further defer any other prior annual equity award of stock units, including any related dividend equivalents earned on such prior annual equity awards of stock units.

Each non-employee Director may also elect to defer all or a portion of his or her 2020 retainer(s) into additional deferred stock units, which are deferred until the Director’s termination of service.

Dividend equivalents are payable on 2020 deferred stock units in the amount and at the time that dividends are paid on Company Common Stock and are credited in the form of additional deferred stock units which are fully vested as of the date the dividends would have been paid to the Director or, at the Director’s option, are paid in cash.

All payments on account of deferred stock units will be made in shares of Company Common Stock. The long term incentive plan provides that cash compensation deferred into stock units, annual equity awards, and dividend equivalents granted to non-employee Directors that are credited in the form of additional deferred stock units, are fully vested, and payable in a single one-time payment of whole shares (rounded to the nearest whole share) within 60 days following separation from Board service, unless the Director has elected to defer distribution to another date.

Stock Purchase Plan

Directors are eligible to participate in the stock purchase plan, which is described in Note N to the financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

 

 

32

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Director Compensation

 

Director Compensation Table

The following table sets forth the compensation for the members of the Company’s Board of Directors for the fiscal year ended December 31, 2020.

 

         

  Fees Earned or  

Paid in Cash

Stock

  Awards(1)  

All Other

  Compensation(2)  

        Total         
Name         ($) ($)   ($)   ($)
     

Timothy P. Cawley(4)

 

 

 

 

  —     —     —     —  
     

George Campbell, Jr.

 

 

 

 

  133,750   150,000   5,000 (3)    288,750
     

Ellen V. Futter

 

 

 

 

  122,500   150,000   5,000   277,500
     

John F. Killian

 

 

 

 

  145,000   150,000   —     295,000
     

John McAvoy(5)

 

 

 

 

  2,260   62,600   5,000   69,760
     

William J. Mulrow

 

 

 

 

  115,000   150,000   5,000   270,000
     

Armando J. Olivera

 

 

 

 

  137,500   150,000   5,000   292,500
     

Michael W. Ranger

 

 

 

 

  180,000   150,000   —     330,000
     

Linda S. Sanford

 

 

 

 

  130,000   150,000   —     280,000
     

Deirdre Stanley

 

 

 

 

  115,000   150,000   —     265,000
     

L. Frederick Sutherland

 

 

 

 

  145,000   150,000   —     295,000

Footnotes:

 

(1)

On May 19, 2020, each of the non-employee Directors who was elected at the 2020 Annual Meeting received a grant of 2,052 stock units valued at $73.11 per share, the equivalent of $150,000. Mr. McAvoy received a pro rated grant of 878 stock units, valued at $71.26 per share, as a non-employee Director, effective December 29, 2020. The stock units were fully vested at the time of grant. Pursuant to the Company’s long term incentive plan, and as indicated in Note N to the financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, the stock units are valued in accordance with FASB ASC Topic 718. The aggregate number of stock units outstanding for each non-employee director as of December 31, 2020 is as follows: Dr. Campbell—43,327; Ms. Futter—36,633; Mr. Killian—29,342; Mr. McAvoy—878; Mr. Mulrow—7,063; Mr. Olivera—16,187; Mr. Ranger—65,556; Ms. Sanford—13,457; Ms. Stanley—11,797, and Mr. Sutherland—65,674.

 

(2)

The “All Other Compensation” column includes matching contributions made by the Company to qualified institutions under its matching gift program. All directors and employees are eligible to participate in this program. Under the Company’s matching gift program, the Company matches up to a total of $5,000 per eligible participant on a one-for-one basis to qualified institutions per calendar year.

 

(3)

The amounts reported in the “All Other Compensation” column include amounts matched by the Company at the end of 2019 and paid in 2020 under the Company’s matching gift program.

 

(4)

Mr. Cawley became President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 29, 2020. He was also appointed to the Board of Directors effective December 29, 2020 and did not receive any director compensation because he is an employee of the Company.

 

(5)

Mr. McAvoy retired as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 28, 2020. He became a non-employee Director effective December 29, 2020 and the Non-executive Chairman of the Board of the Company and Con Edison of New York.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

33


LOGO    Stock Ownership

 

 

STOCK OWNERSHIP

Stock Ownership of Directors and Executive Officers

The following table provides, as of February 28, 2021, the amount of shares of Company Common Stock beneficially owned by each Director, each Named Executive Officer, and by all Directors and executive officers of the Company as a group, and information about the amount of their other Company equity-based holdings.

 

Name      

  Shares Beneficially  

Owned(1)

  Other Equity-Based  

Holdings(2)

Total(3)
(#) (#) (#)
   

George Campbell, Jr.

 

 

 

  33,575           13,911           47,486
   

Ellen V. Futter

 

 

 

  31,255           7,724           38,979
   

John F. Killian

 

 

 

  18,019           11,323           29,342
   

Karol V. Mason

 

 

 

  138           554           692
   

John McAvoy(4)

 

 

 

  10,998           129,838           140,836     
   

Dwight A. McBride

 

 

 

  692           —             692
   

William J. Mulrow

 

 

 

  —             7,063           7,063
   

Armando J. Olivera

 

 

 

  16,687           —             16,687
   

Michael W. Ranger

 

 

 

  65,556           —             65,556
   

Linda S. Sanford

 

 

 

  15,857           —             15,857
   

Deirdre Stanley

 

 

 

  8,690           3,107           11,797
   

L. Frederick Sutherland

 

 

 

  62,077           7,597           69,674
   

Timothy P. Cawley

 

 

 

  3,860           12,499           16,359
   

Robert Hoglund

 

 

 

  12,480           30,000           42,480
   

Deneen L. Donnley

 

 

 

  640           —             640
   

Robert Sanchez

 

 

 

  3,668           3,369           7,037
   

Mark Noyes

 

 

 

  18           8,242           8,260
   
Directors and Executive Officers as a group, including the above-named persons (26 persons)

 

 

 

  307,154           289,458           596,612

Footnotes:

 

(1)

The number of shares shown includes shares of Company Common Stock that are individually or jointly owned, as well as shares over which the individual has sole or shared investment or sole or shared voting power. The number of shares shown also includes vested stock units, as to which the individual may obtain investment or voting power within 60 days following separation from service: Dr. Campbell—29,416; Ms. Futter—28,909; Mr. Killian—18,019; Ms. Mason—138; Mr. McAvoy—878; Dr. McBride—692; Mr. Mulrow—0; Mr. Olivera—16,187; Mr. Ranger—65,556; Ms. Sanford—13,456; Ms. Stanley—8,690; Mr. Sutherland—58,077; Mr. Cawley—0; Mr. Hoglund—0; Ms. Donnley—0; Mr. Sanchez—0; Mr. Noyes—0; and directors and executive officers as a group—240,018.

 

(2)

Represents vested stock units, as to which the individual may not, within 60 days after February 28, 2021, obtain investment or voting power.

 

(3)

As of February 28, 2021, ownership was, in each case, less than 1% of the outstanding 342,489,578 shares.

 

(4)

Mr. McAvoy retired as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 28, 2020. He became a non-employee Director effective December 29, 2020 and the Non-executive Chairman of the Board and Con Edison of New York.

 

 

34

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Stock Ownership

 

Stock Ownership of Certain Beneficial Owners

The following table provides information, as of December 31, 2020, with respect to persons who are known to the Company to beneficially own more than 5% of Company Common Stock.

 

            Shares of Common Stock    
Beneficially Owned
          Percent  of Class          
Name and Address of Beneficial Owner       (#) (%)

BlackRock, Inc.

    55 East 52nd Street

    New York, NY 10055

37,296,050(1) 10.9

The Vanguard Group

    100 Vanguard Blvd.

    Malvern, PA 19355

29,884,610(2) 8.74

State Street Corporation

    State Street Financial Center

    One Lincoln Street

    Boston, MA 02111

22,381,107(3) 6.54

Footnotes:

 

(1)

BlackRock, Inc. stated in its Schedule 13G/A, filed on January 27, 2021 with the SEC, that it has sole voting power for 32,186,110 of these shares, shared voting power for 0 of these shares, sole dispositive power for 37,296,050 of these shares, and shared dispositive power for 0 of these shares.

 

(2)

The Vanguard Group stated in its Schedule 13G/A, filed on February 10, 2021 with the SEC, that it has sole voting power for 0 of these shares, shared voting power for 813,006 of these shares, sole dispositive power for 28,120,889 of these shares, and shared dispositive power for 1,763,721 of these shares.

 

(3)

State Street Corporation stated in its Schedule 13G, filed on February 8, 2021 with the SEC, that it has sole voting power for 0 of these shares, shared voting power for 19,635,071 of these shares, sole dispositive power for 0 of these shares, and shared dispositive power for 22,359,379 of these shares.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

35


LOGO    Ratification of the Appointment of Independent Accountants

 

 

INDEPENDENT ACCOUNTANTS RATIFICATION

Proposal No. 2    Ratification of the Appointment of Independent Accountants

At the Annual Meeting, as a matter of sound corporate governance, stockholders will be asked to ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP (“PwC”) as independent accountants for the Company for 2021. If the appointment of PwC is not ratified, the Audit Committee will take this into consideration in the future appointment of independent accountants.

PwC has acted as independent accountants for the Company for many years. The Audit Committee considered PwC’s qualifications in determining whether to appoint PwC as independent accountants for 2021. The Audit Committee reviewed PwC’s performance, as well as PwC’s reputation for integrity and for competence in the fields of accounting and auditing. The Audit Committee also reviewed a report provided by PwC regarding its quality controls, inquiries or investigations by governmental or professional authorities and independence. (See “Audit Committee Matters” on page 37.) Based on this review, the Audit Committee believes that the appointment of PwC as independent accountants for the Company for 2021 is in the best interests of the Company and its stockholders. Representatives of PwC will be present at the Annual Meeting and will be afforded the opportunity to make a statement if they desire to do so and to respond to appropriate questions.

 

    The Board recommends FOR Proposal No. 2

 

LOGO   

  

Ratification of Proposal No. 2 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting or by proxy. Abstentions are voted neither “for” nor “against,” and have no effect on the vote.

 

 

 

 

36

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Audit Committee Matters

 

 

AUDIT COMMITTEE MATTERS

Audit Committee Report

The Company’s Audit Committee is composed of five directors, all of whom meet the qualifications required by the New York Stock Exchange and Securities and Exchange Commission, and the Company’s Corporate Governance Guidelines. The Audit Committee operates under a written charter adopted by the Board of Directors that is available on the Company’s website.

The Audit Committee has reviewed and discussed with management the audited financial statements of the Company for the year ended December 31, 2020. The Audit Committee has also discussed with PricewaterhouseCoopers LLP (“PwC”), the Company’s independent registered public accountants, the matters required to be discussed under the rules adopted by the Public Company Accounting Oversight Board (“PCAOB”).

The Audit Committee has received the written disclosures and the letter from PwC required by applicable requirements of the PCAOB regarding PwC’s communications with the Audit Committee concerning independence. The Audit Committee has discussed with PwC its independence and qualifications. The Audit Committee also considered whether PwC’s provision of limited tax and non-audit services to the Company is compatible with PwC’s independence and concluded that it was.

Based on the Audit Committee’s review and discussions, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 for filing with the Securities and Exchange Commission.

Audit Committee:

John F. Killian (Chair)

Armando J. Olivera

Michael W. Ranger

Linda S. Sanford

L. Frederick Sutherland

Fees Paid to PricewaterhouseCoopers LLP

Fees paid or payable to PwC for services related to 2020 and 2019 are as follows:

 

                             2020                        2019         
           ($)                        ($)        
   

Audit Fees

 

 

 

 

 

 

             5,120,760                          5,205,590          
   

Audit-Related Fees(a)

 

 

 

 

 

 

             2,863,950                             765,000          
   

TOTAL

   

 

   

 

   

 

             7,984,710                          5,970,590          

Footnote:

 

(a)

Relates to assurance and related service fees that are reasonably related to the performance of the annual audit or quarterly reviews of the Company’s financial statements that are not specifically deemed “Audit Services.” The major items included in Audit-Related Fees in 2020 and 2019 are fees for reviews of system implementations and internal controls of the regulated entities, and audits of various solar projects of the Clean Energy Businesses.

The Audit Committee or, as delegated by the Audit Committee, the Chair of the Committee, approves in advance each auditing service and non-audit service permitted by applicable laws and regulations, including tax services, to be provided to the Company and its subsidiaries by its independent accountants.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

37


LOGO    Advisory Vote to Approve Named Executive Officer Compensation

 

 

ADVISORY VOTE

Proposal No. 3    Advisory Vote to Approve Named Executive Officer Compensation

The Company values the opinions of its stockholders, and in accordance with Section 14A of the Securities Exchange Act of 1934, the stockholders have the opportunity to approve, on an advisory basis, the compensation of the Named Executive Officers (commonly referred to as a “say-on-pay” vote) as disclosed in the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement, the related compensation disclosure tables, and the narrative discussion that accompanies the compensation disclosure tables on pages 39 through 80 and Appendix A. The Company currently conducts such votes annually. The Board recommends that the stockholders vote to approve, on an advisory basis, the compensation of the Named Executive Officers. In 2020, the Company held a say-on-pay vote and 93.4% of the shares voted were voted “for” the proposal. Following this year’s say-on-pay vote, the next such vote will be at the Company’s 2022 annual meeting of stockholders.

As discussed in the CD&A, the Company’s executive compensation program is designed to assist in attracting and retaining key executives critical to its long-term success, to motivate these executives to create value for its stockholders, and to provide safe, reliable, and efficient service for its customers. The Management Development and Compensation Committee (the “Compensation Committee”), with the assistance of its independent compensation consultant, seeks to provide base salary and performance-based compensation, including target annual cash incentive compensation and target long-term equity-based incentive compensation, that are competitive with the median level of compensation provided by the Company’s compensation peer group to effectively link pay with performance.

The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation and that most of the performance-based compensation should be in the form of long-term, rather than annual, incentives to emphasize the importance of sustained Company performance. Each year, the Compensation Committee evaluates the level of compensation, the mix of base salary, performance-based compensation and retirement, and welfare benefits provided to each Named Executive Officer.

The Compensation Committee chooses performance goals under the annual incentive plan and the long term incentive plan to support the Company’s short- and long-term business plans and strategies. In setting targets for the short- and long-term performance goals, the Compensation Committee considers the Company’s annual and long-term business plans and certain other factors, including pay-for-performance alignment, economic and industry conditions, and the practices of the compensation peer group. The Compensation Committee sets challenging, but achievable, goals for the Company and its executives to drive the achievement of short- and long-term objectives.

For the reasons indicated and more fully discussed in the CD&A, the Board recommends that the stockholders vote in favor of the following advisory resolution:

“RESOLVED, That the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion that accompany the compensation disclosure tables is hereby approved.”

 

    The Board recommends FOR Proposal No. 3

 

LOGO   

  

 

Approval of Proposal No. 3 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting or by proxy. Abstentions and broker non-votes are voted neither “for” nor “against,” and have no effect on the vote.

 

As an advisory vote, Proposal No. 3 is not binding on the Company, the Board, or the Compensation Committee. However, the Company, the Board, and the Compensation Committee will consider the voting results when making future compensation decisions for the Named Executive Officers.

 

 

 

38

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

 

COMPENSATION DISCUSSION AND ANALYSIS

 

TABLE OF CONTENTS

        

Introduction

     40  
  

Executive Summary

     40  

§   Features of the Executive Compensation Program

     40  

§   Compensation Governance Practices

     41  

§   Say-on-Pay

     41  

§  Year-Round, Stockholder Engagement

     42  

Executive Compensation Philosophy and Objectives

     42  

§   Competitive Positioning—Attraction and Retention

     43  

Compensation Peer Group

     43  

Median Level Compensation

     44          

§   Pay-for-Performance Alignment and Pay Mix

     44  

§  Determining Performance Goals

     47  

Role of Compensation Committee and Others in Determining Executive Compensation

     47  

§   Compensation Committee’s Role

     47  

§   Management’s Role

     47  

§  Compensation Consultant’s Role

     47  

Compensation Elements

     47  

§   Base Salary

     47  

§   Annual Incentive Compensation

     48  

Awards

     48  

Award Opportunity

     48  

Financial Objectives

     50  

Operating Objectives

     53  

Achievement of 2020 Financial and Operating Objectives

     54  

2020 Annual Incentive Awards

     55  

§   Long-Term Incentive Compensation

     55  

Awards

     55  

Performance-Based Equity Awards

     55  

2020 Performance Unit Awards

     56  

Calculation of Payout of 2018 Performance Unit Awards

     58  

§  Total Actual Direct Compensation

     61  

Retirement and Other Benefits

     63  

§   Pension Plans

     63  

§   Savings Plans

     64  

§   Eligibility for Pension Plans and Savings Plan

     64  

§   Stock Purchase Plan

     64  

§   Health and Welfare Plans

     64  

§   Perquisites and Personal Benefits

     64  

§   Severance and Change of Control Benefits

     65  

Risk Mitigation

     65  

§   Stock Ownership Guidelines

     65  

§   No Hedging and No Pledging

     66  

§  Recoupment (Clawback) Policy

     66  

Tax Deductibility of Pay

     66  

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

39


LOGO    Compensation Discussion and Analysis

 

Introduction

This section of the Proxy Statement provides an overview of the Company’s 2020 executive compensation program (the “executive compensation program”) and an analysis of the decisions made with respect to the compensation of the Company’s Named Executive Officers (as identified by the Company under SEC rules). The executive compensation program covers the Company’s Named Executive Officers. As of December 31, 2020, the Company’s Named Executive Officers were:

 

§  

Timothy P. Cawley, President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York effective December 29, 2020, former President of Con Edison of New York (until December 31, 2020)

 

§  

Robert Hoglund, Senior Vice President and Chief Financial Officer of the Company and Con Edison of New York

 

§  

Deneen L. Donnley, Senior Vice President and General Counsel of the Company and Con Edison of New York

 

§  

Robert Sanchez, President and Chief Executive Officer, Orange & Rockland

 

§  

Mark Noyes, President and Chief Executive Officer, Clean Energy Businesses

 

§  

John McAvoy, Non-executive Chairman of the Company, former President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York (retired effective December 28, 2020)

 

Executive Summary

The Company’s executive compensation program is designed to attract and retain key executives critical to the Company’s long-term success, to motivate these executives to create value for its stockholders, and to promote safe, reliable, and efficient service for its customers. Each year, the Management Development and Compensation Committee (the “Compensation Committee”) evaluates the level of compensation, the mix of base salary, performance-based compensation, and retirement and welfare benefits provided to each Named Executive Officer. The Compensation Committee, with the assistance of its independent compensation consultant, seeks to align pay to performance and provide base salary and performance-based compensation that is competitive with the median level of compensation provided by the Company’s compensation peer group companies. (See “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention” on page 43 and “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Compensation Peer Group” on page 43.) The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation (which includes base salary, and target annual incentive and long-term incentive compensation) to motivate strong annual and multi-year Company performance.

Features of the Executive Compensation Program

 

Type

 

  

 

Component

 

  

Objective

 

   

Performance-Based

Compensation

  

 

Annual Incentive
Compensation

  

 

Achievement of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility.

 

   Long-Term Incentive
Compensation
   Achievement, over a three-year period, of financial and operating objectives critical to the performance of the Company’s business plans and strategies. Achievement, over a three-year period, of the Company’s cumulative total shareholder return relative to the Company’s compensation peer group companies.
   

Fixed & Other

Compensation

  

 

Base Salary,
Retirement Programs,
Benefits and Perquisites

  

 

Differentiate salaries based on individual responsibility and performance. Provide retirement and other benefits that reflect the competitive practices of the industry and provide limited perquisites.

 

 

40

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

Compensation Governance Practices

The Company is committed to maintaining strong compensation governance practices to support the pay-for-performance philosophy of the executive compensation program and align the executive compensation program with the long-term interests of the Company’s stockholders:

 

§  

Pay Practices. The Company has (i) no employment agreements, (ii) no golden parachute excise tax gross-ups, and (iii) no individually negotiated equity awards with special treatment upon a change of control.

 

§  

Long-Term Incentive Compensation. The long term incentive plan: (i) prohibits the repricing of stock options or the buyout of underwater options without stockholder approval; (ii) prohibits recycling of shares for future awards except under limited circumstances; (iii) prohibits accelerated vesting of outstanding equity awards, unless both a change in control occurs and a participant’s employment is terminated under certain circumstances; and (iv) caps the maximum number of shares that may be awarded to a director, officer, or eligible employee in a calendar year. While stock options may be granted under the Company’s long term incentive plan, the Company has no outstanding stock options.

 

§  

Long-Term Incentive Mix. All Named Executive Officer long-term incentive compensation is performance-based. Based on proxy statements filed in 2020, over 50% of the Company’s compensation peer group companies granted some form of non-performance-based long-term incentive compensation (such as time-based restricted stock) to their named executive officers. (See “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Pay-for-Performance Alignment and Pay Mix” on pages 44 through 46.)

 

§  

Risk Management. The relevant features of the Company’s compensation programs that mitigate risk are:

 

     

annual and long-term incentives under the Company’s compensation programs appropriately balanced between annual and long-term financial performance goals that are expected to enhance stockholder value;

 

     

annual and long-term incentives tied to multiple performance goals to reduce undue weight on any one goal;

 

     

non-financial performance factors used in determining the actual payout of annual incentive compensation as a counterbalance to financial performance goals;

 

     

compensation programs designed to deliver a significant portion of compensation in the form of long-term incentives, discouraging excessive focus on annual results;

 

     

performance-based equity awards based on performance over a three-year period, focusing on sustainable performance over a three-year cycle rather than any one year; and

 

     

annual and long-term incentive plans that are subject to payment caps and Compensation Committee discretion to reduce payouts.

 

§  

Stock Ownership Guidelines. Stock ownership guidelines for the Company’s directors and senior officers, including the Named Executive Officers, encourage a long-term commitment to the Company’s sustained performance through stock ownership. (See “Director Compensation—Stock Ownership Guidelines” on page 32 and “Compensation Discussion and Analysis—Risk Mitigation—Stock Ownership Guidelines” on pages 65 through 66.)

 

§  

No Hedging and No Pledging. To encourage a long-term commitment to the Company’s sustained performance, the Company’s Hedging and Pledging Policy and Insider Trading Policy prohibit all directors and the Named Executive Officers, respectively, from shorting, hedging, and pledging Company securities or holding Company securities in a margin account as collateral for a loan. All officers, finance department employees, employees who receive or review drafts of the Company’s financial statements, employees who work in the Corporate Secretary’s office, and any other employee specifically designated by the General Counsel are also covered by the Insider Trading Policy’s prohibition on hedging and pledging. (See “Compensation Discussion and Analysis—Risk Mitigation—No Hedging and No Pledging” on page 66.)

 

§  

Recoupment (Clawback) Policy. The Company’s compensation recoupment policy allows the Company to recoup excess incentive-based compensation and applies to all officers of the Company and its subsidiaries and is intended to reduce potential risks associated with its executive compensation program and align the long-term interests of officers and stockholders. (See “Compensation Discussion and Analysis—Risk Mitigation—Recoupment (Clawback) Policy” on page 66.)

Say-on-Pay

In 2020, the Company held its annual vote to approve named executive officer compensation (commonly referred to as a “say-on-pay” vote) and 93.4% of the shares voted were voted “for” the proposal. The 2020 say-on-pay voting result was

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

41


LOGO    Compensation Discussion and Analysis

 

consistent with the results of the prior three years where 92.83% (in 2019), 93.95% (in 2018), and 93.5% (in 2017) of the shares voted were voted “for” the proposal. Though our say-on-pay results continue to be very strong, the Company continued its year-round stockholder engagement efforts through 2020 and early 2021. An overview of what the Company heard from stockholders during its engagement efforts and how it responded with respect to executive compensation matters is described in “Year-Round, Stockholder Engagement” below.

In 2017, the Company held a stockholder vote on the frequency of future say-on-pay votes. The Board recommended holding an annual say-on-pay vote and 85% of shares voted were voted in favor of holding such a vote. The Company intends to hold an annual say-on-pay vote unless stockholders advise the Company to change the frequency of the vote at the Company’s 2023 annual meeting of stockholders.

Year-Round, Stockholder Engagement

Stockholder engagement is a key priority of the Company and the Board. The Company engages with its investors to gain valuable insight into current and emerging issues that are of interest to them, including with respect to Con Edison of New York’s Climate Change Vulnerability Study, the Company’s corporate strategy, diversity, equity, and inclusion, disclosure practices, corporate governance, executive compensation, political spending and lobbying practices, operations and financial matters (including issues raised by COVID-19), and ESG standardized reporting. A complete discussion of the Company’s stockholder engagement process and efforts is set forth in the section titled “Stockholder Engagement” on pages 29 through 30. During 2020, the Company engaged virtually with stockholders holding in aggregate 43% of shares outstanding and 30% of the Company’s debentures. Feedback from these discussions is a key element in the development of the Company’s governance, sustainability, and executive compensation policies, as well as the ongoing evaluation of the Company’s business strategy and performance. For example, as a result of feedback received from stockholders this year, the Company: (i) enhanced its disclosures concerning political contributions and lobbying, resulting in an increase in the Company’s CPA-Zicklin Index for Corporate Political Disclosure and Accountability score to 94.3 from 90; (ii) added new standardized ESG reporting formats: TCFD, SASB, and the CDP; (iii) added a new operating performance objective, Diversity and Inclusion Work Plan, to its long term incentive plan for 2021; and (iv) further refined the disclosures in its proxy to, among other things, provide clearer and more accessible information on Board diversity, tenure, skills, and experience. In addition, in 2020, the Company’s subsidiary, Con Edison of New York, completed a Climate Change Implementation Plan following the Climate Change Vulnerability Study. The Company will continue to seek investor input in furtherance of its commitment to enhancing its executive compensation and disclosure practices and building long-term stockholder value.

Executive Compensation Philosophy and Objectives

The Compensation Committee’s philosophy and objectives governing the development and implementation of the executive compensation program are set forth in the table below. There are no material differences in the Company’s compensation policies for each Named Executive Officer.

 

 

Our executive compensation philosophy is to provide competitive, performance-based pay

 

   

 

Motivate executives to create sustainable stockholder value and promote safe, reliable and efficient service for customers

 

 

Performance-based compensation represents the most significant portion of each Named Executive Officer’s total direct compensation

   
Support the Company’s short- and long-term business plans and strategies   Annual and long-term incentive plan awards are based on achieving financial and operating objectives critical to the Company’s business plans and strategies
   
Reward increased shareholder value  

The largest portion of executive pay is delivered in long-term incentives based in part on the Company’s cumulative total shareholder return relative to the total shareholder return of the Company’s compensation peers

 

Long-term incentives are 100% performance-based

 

 

42

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

Competitive Positioning—Attraction and Retention

The executive compensation program is designed to attract and retain key executives critical to the Company’s long-term success. The Compensation Committee seeks to align pay to performance and provide “target total direct compensation” (base salary, target annual cash incentives, and target long-term equity-based incentives) that is competitive with the median level of compensation provided by the Company’s compensation peer group companies. The Company also seeks to provide retirement and other benefits that are competitive with those provided by the Company’s compensation peer group companies and to provide limited perquisites.

Compensation Peer Group

For 2020, the Compensation Committee used a compensation peer group of publicly-traded utility companies of comparable size and scope to that of the Company. The purpose of the compensation peer group is to provide benchmark information on compensation levels provided to the Company’s officers and to measure relative total shareholder returns for the vesting of performance-based equity awards. The Compensation Committee annually reviews the composition of the compensation peer group companies and the impact of acquisitions. For 2020, the Compensation Committee made no changes to the compensation peer group. The Company’s 2019 revenues approximated the 62nd percentile of the compensation peer group.

For 2020, the Company’s compensation peer group consisted of the following companies:

 

Company Name                 2019 Revenue(1)            
               ($  in millions)            
 

§  Duke Energy Corporation

       24,658
 

§  The Southern Company

       21,419
 

§  NextEra Energy, Inc.

       19,204
 

§  PG&E Corporation

       17,129
 

§  Dominion Energy, Inc.

       16,572
 

§  American Electric Power Company, Inc.

       15,561
 

§  DTE Energy Company

       12,669
 

§  Edison International

       12,347
 

§  CenterPoint Energy, Inc.

       12,301
 

§  Xcel Energy Inc.

       11,529     
 

§  Entergy Corporation

       10,879
 

§  FirstEnergy Corp.

       10,844
 

§  Sempra Energy

       10,829
 

§  Eversource Energy

       8,526
 

§  PPL Corporation

       7,769
 

§  WEC Energy Group, Inc.

       7,523
 

§  Ameren Corporation

       5,646
 

§  NiSource Inc.

 

      

 

5,209

 

 

 

Median

       11,915
 

Consolidated Edison, Inc.

       12,574
 

Percentile Rank

       62%   

Footnote:

 

(1)

Source: Capital IQ (represents net revenues, restated if applicable).

For 2021, the Compensation Committee made no change to the compensation peer group.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

43


LOGO    Compensation Discussion and Analysis

 

Median Level Compensation

In 2020, the target total direct compensation awarded to the Named Executive Officers was competitive with the median for functionally comparable positions at the Company’s compensation peer group (as disclosed in proxy statements filed in 2020).

 

    

Base Salary

as of 12/31/2020

 

 

Target Total
Cash Compensation
(Base Salary + Target
Annual Incentive)

  Target
Long-Term
Incentive Compensation
  Target
Total Direct
Compensation
  Company    

  Peer Group  

Median

  Company       Peer Group  
Median
  Company       Peer Group  
Median
  Company       Peer Group  
Median
  ($)     (%)   ($)     (%)   ($)     (%)   ($)     (%)
         

Timothy P. Cawley(1)

    1,250,000       94%     2,812,500       96%     5,625,000       90%     8,437,500       92%
         

Robert Hoglund

    814,000     123%     1,424,500     120%     1,628,000     110%     3,052,500     113%
         

Deneen L. Donnley

    612,000     102%     1,040,400     102%     918,000       77%     1,958,400       89%
         

Robert Sanchez

    515,000       97%     927,000       99%     1,030,000     116%     1,957,000     105%
         

Mark Noyes

    440,000       83%     792,000       84%     880,000       99%     1,672,000       90%
         

John McAvoy

    1,380,000     104%     3,105,000     106%     6,900,000     110%     10,005,000     109%

Footnote:

 

(1)

Mr. Cawley was promoted to President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York on December 29, 2020. Mr. Cawley was President of Con Edison of New York until December 31, 2020. Pursuant to his offer letter, Mr. Cawley receives an initial base salary of $1,250,000 and continues to participate in the Company’s annual incentive plan (with a 2021 target bonus opportunity of 125% of base salary and a maximum bonus opportunity of 195% of the target bonus). He continues to participate in the Company’s long-term incentive plan, and continues to be eligible to participate in the other benefit plans, practices, policies, and programs generally available to the Company’s senior executive officers.

Pay-for-Performance Alignment and Pay Mix

The Compensation Committee provides target total direct compensation to each Named Executive Officer through a combination of base salary (fixed compensation) and annual cash incentive compensation and long-term equity-based incentive compensation (performance-based compensation).

The Compensation Committee believes that fixed compensation should recognize each Named Executive Officer’s individual responsibility and performance. The Compensation Committee believes that performance-based compensation should represent the most significant portion of each Named Executive Officer’s target total direct compensation and that most of the performance-based compensation should be in the form of long-term, rather than annual, incentives to emphasize the importance of sustained Company performance.

Target annual cash incentive and target long-term equity-based incentive awards reflect the Compensation Committee’s desired balance between these elements, relative to the base salary paid to each Named Executive Officer. Awards under the Company’s annual incentive plan are based on the achievement of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility. Awards under the Company’s long term incentive plan are based on the achievement of financial and operating objectives critical to the Company’s business plans and strategies and the achievement, over a three-year period, of the Company’s cumulative total shareholder return relative to the total shareholder return for the Company’s compensation peer group companies.

For 2020, the mix of target total direct compensation for the Named Executive Officers meets the Compensation Committee’s objectives by being weighted heavily toward performance-based compensation, with the largest portion delivered in long-term equity-based incentives. The target total direct compensation mix of the Named Executive Officers is in line with that of the Company’s compensation peer group companies (except that the Company does not provide non-performance-based long-term incentive compensation, such as time-based restricted stock). (See “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Median Level Compensation” above.)

 

 

44

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

The following charts illustrate the average mix of target total direct compensation for the Company’s Chief Executive Officer, Mr. Cawley, and the Company’s former Chief Executive Officer, Mr. McAvoy, and for chief executive officers in the Company’s compensation peer group companies for 2020:

 

LOGO

 

LOGO

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

45


LOGO    Compensation Discussion and Analysis

 

The following charts illustrate the average mix of target total direct compensation for the Company’s other Named Executive Officers and other named executive officers in the Company’s compensation peer group companies for 2020 (see table in “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Median Level Compensation” on page 44):

 

LOGO

The following charts illustrate that all Named Executive Officer long-term incentive compensation is performance-based and that, based on proxy statements filed in 2020, over 50% of the Company’s compensation peer group companies granted some form of non-performance-based long–term incentive compensation (such as time-based restricted stock) to their named executive officers:

 

LOGO    LOGO

 

 

46

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

Determining Performance Goals

The Compensation Committee chooses performance goals under the annual and long-term incentive plans to support the Company’s short- and long-term business plans and strategies. In setting performance goals, the Compensation Committee considers the Company’s annual and long-term business plans and certain other factors, including pay-for-performance alignment, economic and industry conditions, and the pay practices of the compensation peer group companies. The Compensation Committee incents performance by setting challenging, but achievable, goals for the Company and its key executives.

Role of Compensation Committee and Others in Determining Executive Compensation

Compensation Committee’s Role

The role of the Compensation Committee is to establish and oversee the Company’s executive compensation and retirement and welfare benefit plans and policies, administer its equity plans and annual incentive plan, and review and approve annually all compensation relating to the Named Executive Officers. The Compensation Committee determines the amount and form of compensation for each of the Named Executive Officers with an annual base salary above $500,000. The base salary of the President and Chief Executive Officer of the Clean Energy Businesses is less than $500,000 and, as a result, is approved by the Chief Executive Officer of the Company.

Management’s Role

The Chief Executive Officer considers the following factors in making his compensation recommendations for each of the other Named Executive Officers:

 

§  

individual performance;

 

§  

contributions toward the Company’s long-term performance;

 

§  

the scope of each individual’s responsibilities; and

 

§  

compensation peer group company proxy statement data provided by the Compensation Committee’s independent compensation consultant.

The Company’s Human Resources department supports the Compensation Committee in its work.

Compensation Consultant’s Role

The Compensation Committee has authority under its charter to hire advisors to assist it in its compensation decisions. It has retained Mercer as its independent compensation consultant to provide information, analyses, and objective advice regarding executive compensation. The Compensation Committee periodically meets with Mercer in executive session to discuss compensation matters. The Compensation Committee’s decisions reflect factors and considerations in addition to the information and advice provided by Mercer. A discussion of Mercer’s role as the Compensation Committee’s independent compensation consultant is set forth in the section titled “The Board of Directors—Compensation Consultant—Executive Compensation Consultant” on page 27.

Compensation Elements

Base Salary

A portion of each Named Executive Officer’s annual cash compensation is paid in the form of base salary. Base salary is reviewed annually to recognize individual performance and at the time of a promotion or other change in responsibilities.

In setting base salary for the Named Executive Officers, including the Chief Executive Officer, the Compensation Committee, or, in the case of the President and Chief Executive Officer of the Clean Energy Businesses, the Chief Executive Officer of the Company, considers various factors, including:

 

§  

recommendations from the Chief Executive Officer for each of the other Named Executive Officers;

 

§  

a general assessment of each Named Executive Officer’s performance of his or her responsibilities; and

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

47


LOGO    Compensation Discussion and Analysis

 

§  

the level of base salary compared to key executives holding equivalent positions in the Company’s compensation peer group companies. (See table in “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Median Level Compensation” on page 44.)

Excluding Mr. Cawley, whose base salary reflects his promotion on December 29, 2020, base salary merit increases for the other Named Executive Officers were effective February 1, 2021 and, as a group, averaged 4.5%. The base salary of each Named Executive Officer as of February 1, 2020 and 2021, including their individual percentage increase, is set forth in the table below.

 

  Base Salary as of 2/1/2020 Base Salary as of 2/1/2021 Percentage Increase
($) ($) (%)
     

Timothy P. Cawley

1,250,000(1) 1,250,000     0    
     

Robert Hoglund

   814,000        838,400     3.0%    
     

Deneen L. Donnley

   612,000        630,400     3.0%    
     

Robert Sanchez

   515,000        530,500     3.0%    
     

Mark Noyes

   440,000        490,000     11.4%    
     

John McAvoy

1,380,000(2) Not Applicable Not Applicable

Footnotes:

 

(1)

Reflecting the base salary that was in effect for Mr. Cawley following his promotion as Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York, effective December 29, 2020.

 

(2)

Reflecting the base salary that was in effect for Mr. McAvoy as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York until his retirement on December  28, 2020.

Annual Incentive Compensation

Awards

A significant portion of the annual cash incentive compensation paid to the Named Executive Officers directly relates to the Company’s financial and operating performance, factors that the Compensation Committee believes influence stockholder value.

Individual performance is considered in setting annual cash incentive compensation through the establishment by the Compensation Committee of financial and operating objectives for which the Named Executive Officers have individual and collective responsibility.

Award Opportunity

For 2020, the Compensation Committee set the range of the award that each Named Executive Officer was eligible to receive under the annual incentive plan after considering various factors, including:

 

§  

recommendations from the Chief Executive Officer for each of the other Named Executive Officers;

 

§  

a general assessment of each Named Executive Officer’s performance of his or her responsibilities; and

 

§  

the level of annual incentive compensation compared to key executives in the Company’s compensation peer group companies. (See table in “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Median Level Compensation” on page 44.)

The range of awards included minimum, target, and maximum levels reflecting differing levels of achievement of the various financial and operating objectives. Awards are scaled to reflect relative levels of achievement of the objectives between the minimum, target, and maximum levels. The range of each Named Executive Officer’s potential award is set forth in the “Grants of Plan-Based Awards Table” on page 69. Awards under the annual incentive plan are designed to provide a competitive level of compensation if the Named Executive Officers achieve the target financial and operating objectives. The Compensation Committee has discretion but did not exercise it in 2020 to adjust (upward or downward) the annual incentive award to be paid to each Named Executive Officer. Named Executive Officers may elect to defer the receipt of the cash value of the award into the Company’s deferred income plan.

 

 

48

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

Awards under the annual incentive plan are calculated as follows:

 

LOGO

For each Named Executive Officer other than Timothy P. Cawley, “Base Salary” is their annual rate of base salary as of December 31, 2020. “Base Salary” for Mr. Cawley is his annual rate of base salary as of December 28, 2020, the day before his promotion as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York.

Target Percentage” is a percentage of Base Salary that varies based on the Named Executive Officer’s position as follows:

 

       Target Percentage             
        (%)            
 

Timothy P. Cawley

       80(1)            
 

Robert Hoglund

       75                
 

Deneen L. Donnley

       70                
 

Robert Sanchez

       80                
 

Mark Noyes

       80                
 

John McAvoy

     125(2)             

Footnotes:

 

(1)

Reflecting the target percentage that was established for Mr. Cawley based on his position as President of Con Edison of New York for 2020.

 

(2)

Reflecting the target percentage that was established for Mr. McAvoy based on his position as President and Chief Executive Officer of the Company and Chief Executive Officer of Con Edison of New York until his retirement on December 28, 2020.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

49


LOGO    Compensation Discussion and Analysis

 

Weighting Earned” is the sum of the target weightings for adjusted net income, other financial performance, and operating objectives, including any adjustments (upward or downward) as a result of performance relative to target. Target weightings for each Named Executive Officer total 100% and are comprised of the following three components:

 

 
   

Subject to actual performance relative
to target, the weighting earned
can vary as indicated below

 

LOGO  

 

§   adjusted net income

 

§   operating objectives

 

§   other financial performance

 

Ø  operating budget component for Con Edison of New York, Orange & Rockland, and Con Edison Transmission

 

Ø  Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”) component for the Clean Energy Businesses

 

 

0 to 200% 

 

Ø  capital budget component of other financial performance (excluding the impact of modifiers)

 

 

0 to 120% 

 

Financial Objectives

The financial objectives under the annual incentive plan are key performance measures that support the Company’s short- and long-term business plans and strategies and create value for the Company’s stockholders. For 2020, the financial objectives consisted of “adjusted net income” and “other financial performance” components.

The “adjusted net income” component, reflecting the financial results of the Company’s business for which its Named Executive Officers are responsible and accounting for 50% of each Named Executive Officer’s potential annual incentive award. Performance relative to this component is shown on the “Compensation Discussion and Analysis—Compensation Elements—Annual Incentive Compensation—Achievement of 2020 Financial and Operating Objectives” table on page 54.

Company Adjusted Net Income” consists of adjusted net income for the Company and its subsidiaries. “Regulated Adjusted Net Income” is the sum of Con Edison of New York’s and Orange & Rockland’s adjusted net income from ongoing operations, as applicable, after subtracting all expenses incurred, including federal and state income taxes. In all cases, net income excludes extraordinary non-recurring items identified by the Company after the applicable net income target is established and is net of the reserve that is established for the target annual incentive awards during the year-end closing. (See footnotes to the following table.) Information on how the Company calculates adjusted net income is disclosed in the “Non-GAAP Financial Measures” section (on pages 11 through 13) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020; It is referred to as adjusted earnings.

 

 

50

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

The following table shows the targets assigned to the “adjusted net income” component and, for each Named Executive Officer, the weighting earned based on achieving those targets.

 

      Performance  
Relative to
Adjusted
Net
Income
Target
  Payout
  Relative to  
Adjusted
Net Income
Target(1)
 

Company

(95.3%)(2)

 

Regulated

(93.2%)(2)

 

 

Con Edison of
New York

(92.7%)(2)

 

Orange & Rockland

(101.4%)(2)

    Performance  
Relative to
Adjusted
Net Income
Target
  Payout
  Relative to  
Adjusted
  Net
Income  
Target(1)
 

Clean Energy
Businesses

(119.3%)(2)

      Adjusted  
Net
  Income  
  Weight for
McAvoy,
Hoglund,
  and
  Donnley  
    Weight  
for
Noyes
    Adjusted  
Net
  Income  
  Weight
for
  Cawley  
    Adjusted  
Net
  Income  
  Weight
for
  Sanchez  
    Adjusted  
  Net
Income  
  Weight
for
  Sanchez  
    Adjusted
   Net
  Income  
    Weight  
for
Noyes
     (%)   (%)   ($ in
millions)
  (%)   (%)   ($ in
millions)
  (%)   ($ in
millions)
  (%)   ($ in
millions)
  (%)   ($ in
millions)
  (%)   ($ in
millions)
  (%)
 Maximum         ³ 110       200       1,614.8       100       20       1,482.8         100       1,405.8         20       77       80       ³ 125       200       103.8         80
    Target          100       100       1,468.0         50       10       1,348.0         50       1,278.0         10       70       40       100       100       83.0         40
 Minimum           90           0       1,321.2           0         0       1,213.2         0       1,150.2         0       63       0       75       0       62.3         0
 ACTUAL           —         —       1,399.0         26.5       5.3       1,256.0         16.0       1,185.0         2.7       71       45.6                   99.0           70.5

Footnotes:

 

(1)

The payout relative to the adjusted net income target is interpolated for actual performance between adjusted net income minimum, target, and maximum performance.

 

(2)

Actual performance relative to adjusted net income target.

The Compensation Committee has also established an adjusted net income “circuit breaker” for the annual incentive plan. If actual adjusted net income for 2020 had been less than 90% of the target adjusted net income, the achievement of all other financial and operating performance measures would have been disregarded and no annual incentive awards would have been made.

The “other financial performance” component, reflecting the Company’s business for which its Named Executive Officers are responsible and accounting for 25% of each Named Executive Officer’s potential annual incentive award was comprised of one or more of the budgets for Con Edison of New York, Orange & Rockland, and Con Edison Transmission, and was comprised of Adjusted EBITDA for the Clean Energy Businesses. See Appendix B for information on how the Company calculates Adjusted EBITDA for the Clean Energy Businesses. Performance relative to this component is shown on the “Compensation Discussion and Analysis—Compensation Elements—Annual Incentive Compensation—Achievement of 2020 Financial and Operating Objectives” table on page 54.

Con Edison of New York’s “other financial performance” component is allocated 10% for capital budget performance and up to 15% for operating budget performance, subject to a maximum 25% upward or downward adjustment based on the achievement of pre-established targets for 25 capital projects and programs and 12 operating and maintenance programs, respectively. The targets for the capital projects consist of completing milestones within specified budget targets, and, for the operating and maintenance programs, completing a number of units within specified per unit budget targets.

The following table shows the targets assigned to the “other financial performance” component for operating budget and, for each Named Executive Officer, the weighting earned based on achieving those targets.

 

   

  Performance  

Relative to
Operating
Budget
Target

    Payout
  Relative to  
Operating
Budget
Target(1)
 

Con Edison of New York

(97.2%)(2)

 

 

Orange & Rockland

(99.2%)(2)

 

Con Edison Transmission

(89.0%)(2)

    Operating
Budget
  Weight for
McAvoy,
Hoglund,
  and Donnley  
    Weight for  
Cawley
    Operating  
Budget
  Weight for
McAvoy,
Hoglund,
  and Donnley  
  Weight
  for Sanchez  
  Operating
Budget
  Weight for
McAvoy,
Hoglund,
  and Donnley  
      (%)     (%)     ($ in millions)     (%)   (%)     ($ in millions)     (%)   (%)     ($ in millions)     (%)
 Maximum      £ 89     200   1,470.3      24         30      196.0      2      50   7.5      2
   Target     > 99 - < 101     100   1,652.0      12         15      220.2      1      25   8.4      1
 Minimum     ³ 111         0   1,833.7        0           0      244.4      0        0   9.3      0
 ACTUAL           1,606.0   15.6(3)   19.5(3)   218.5   1.0   25.0   7.5   2.0

Footnotes:

 

(1)

The payout relative to the operating budget target is interpolated for actual performance between operating budget minimum, target, and maximum performance.

 

(2)

Actual performance relative to operating budget target.

 

(3)

In 2020, Con Edison of New York achieved pre-established performance targets for 11 out of 12 operating and maintenance programs, as a result of which the weighting earned was increased by 110 percent.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

51


LOGO    Compensation Discussion and Analysis

 

The following table shows the targets assigned to the “other financial performance” component for capital budget and, for each Named Executive Officer indicated, the weighting earned based on achieving those targets.

 

  Performance
Relative to
    Capital Budget Target     
Payout
Relative to
Capital Budget
Target(1)

Con Edison Company of New York

(97.5%)(2)

  Capital
Budget
Weight for McAvoy,
Hoglund, Cawley,
and Donnley
  (%) (%)     ($ in millions)     (%)

  Maximum

  £ 89                       120             2,932.6                  12

    Target

  > 99 - < 101                        100             3,295.0                  10

  Minimum

  ³ 111                            0             3,657.5                    0

  ACTUAL

  —                       —             3,212.0               9.3 (3) 

Footnotes:

 

(1)

The payout relative to the capital budget target is interpolated for actual performance between capital budget minimum, target, and maximum performance.

 

(2)

Actual performance relative to capital budget target.

 

(3)

In 2020, Con Edison of New York achieved 21 out of 25 pre-established performance targets for capital projects, as a result of which the weight earned was adjusted by 90 percent based on actual performance.

The following table shows the targets assigned to the “other financial performance” component for Adjusted EBITDA and, for each Named Executive Officer indicated, the weighting earned based on achieving those targets.

 

     Performance
Relative to
Adjusted
    EBITDA Target    
    Payout
Relative to
Adjusted
EBITDA
Target(1)
   

Clean Energy Businesses

(98.8%)(2)

 
     Adjusted
EBITDA
    Weight for McAvoy,
    Hoglund, and Donnley    
  Weight
for Noyes
 
     (%)     (%)         ($ in millions)         (%)   (%)  

  Maximum

    ³ 115                           200                       563.8                            2                             50          

    Target

                100                           100                       490.3                            1                             25          

  Minimum

    £ 85                                0                       416.8                            0                               0          

  ACTUAL

    —                           —                       484.2                         0.9                          23.0          

Footnotes:

 

(1)

The payout relative to the Adjusted EBITDA target is interpolated for actual performance between Adjusted EBITDA minimum, target, and maximum performance.

 

(2)

Actual performance relative to Adjusted EBITDA target.

 

 

52

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

Operating Objectives

The “operating objectives” component, reflecting the responsibilities of the Named Executive Officer and accounting for 25% of each Named Executive Officer’s potential annual incentive award was comprised of a number of key indicators that guide Con Edison of New York, Orange & Rockland, Clean Energy Businesses, and Con Edison Transmission and support the Company’s goal of providing safe, reliable, and efficient service to customers in an environmentally sound manner. The operating objectives are directly linked to specific, pre-established, and measurable goals that are selected to encourage superior performance in four main areas:

 

 

Employee and Public Safety

 

 

We are committed to achieving a zero harm workplace. We work as a team to protect the safety of the public and each one of us.

 

 

Environment and Sustainability

 

 

We value environmental stewardship and strive to make wise and effective use of natural resources while controlling costs for our customers and creating long-term value for our stockholders.

 

 

Operational Excellence

 

 

We stand behind our work and look for new ways to excel at our jobs. We talk openly about ethical choices, follow all laws, rules, and regulations, adapt to change, and invest in the skills of our employees.

 

 

Customer Experience

 

 

We consider the customer’s point of view, make customer priorities our own, and seek to elevate the experience of doing business with us.

 

The Compensation Committee believes that the operating objectives support the Company’s mission and priorities –providing a workplace that allows employees to realize their full potential, providing investors with a fair return, and improving the quality of life in the communities served by the Company. Performance relative to this component is shown on the “Compensation Discussion and Analysis—Compensation Elements—Annual Incentive Compensation—Achievement of 2020 Financial and Operating Objectives” table on page 54.

The operating objectives achieved for Con Edison of New York, Orange & Rockland, Clean Energy Businesses and Con Edison Transmission are summarized in the table below. The operating objectives for each entity are described in detail in Appendix A to this proxy statement.

 

 

Operating Objectives(1)

Key Indicators Achieved

Con Edison of    

New York    

Orange &    

Rockland    

Clean Energy    

Businesses    

Con Edison    

Transmission    

(#) (#)     (#)     (#)    

§     Employee and Public Safety

4/5   4/5     1/1     2/2    

§     Environment and Sustainability

4/4   5/5     1/1     2/2    

§     Operational Excellence

6/7   5/5     8/8     6/6    

§     Customer Experience

4/4   5/5     —     —    

TOTAL

18/20   19/20 10/10     10/10    

PAYOUT RELATIVE TO TARGET (%)

150   175     200     200    

Footnote:

 

(1)

Operating objectives were weighted equally.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

53


LOGO    Compensation Discussion and Analysis

 

The payout relative to target was determined based on the number of key operating objectives indicators achieved and the weighting earned for each of Con Edison of New York’s, Orange & Rockland’s, Clean Energy Businesses’ and Con Edison Transmission’s “operating objectives” component as indicated in the table below.

 

    Payout
  Relative to  
Target(1)
  Key
Operating
  Objectives  
Indicators
Achieved
    Weight        Weight
    Con Edison of
New York
  Orange &
Rockland
  Key
Operating
  Objectives  
Indicators
Achieved
  Clean
Energy
  Businesses  
  Clean
Energy
  Businesses  
  Con Edison
  Transmission  
    McAvoy,
  Hoglund,  
and
Donnley
    Cawley     McAvoy,
  Hoglund,  
and
Donnley
    Sanchez     McAvoy,
  Hoglund,  
and
Donnley
    Noyes    

McAvoy,
  Hoglund,  

and

Donnley

     (%)   (#)     (%)   (%)   (%)   (%)   (#)   (%)   (%)   (%)

 Maximum      

  200     20/20        44      50      2      50    10/10      2      50      2

 Target     

  100     16/20        22      25      1      25      8/10      1      25      1

 Minimum      

      0     £ 12/20          0        0      0        0   £ 5/10      0        0      0

Actual    

  —          33.0   37.5   1.8   43.8     2.0   50.0   2.0

Footnote:

 

(1)

The payout relative to target is interpolated for performance achieved between key operating objective indicators.

Achievement of 2020 Financial and Operating Objectives

The following table shows, for each Named Executive Officer, the target weight assigned to the financial and operating objectives and the weightings earned based on achieving those objectives.

 

   

McAvoy, Hoglund,

and Donnley

    Cawley     Sanchez     Noyes  
    Weight     Weight     Weight     Weight  
    Target     Earned       Target     Earned         Target     Earned         Target     Earned    
     (%)     (%)       (%)     (%)         (%)     (%)         (%)     (%)    
Financial Objectives                  

Adjusted Net Income

                 

§  Company Adjusted Net Income

    50         26.5         —         —         —         —           10             5.3    

§   Regulated Adjusted Net Income

    —         —           50         16.0         —         —         —         —    

§   Con Edison of New York Adjusted Net Income

    —         —         —         —           10             2.7         —         —    

§   Orange & Rockland Adjusted Net Income

    —         —         —         —           40           45.6         —         —    

§   Clean Energy Businesses Adjusted Net Income

    —         —         —         —         —         —           40           70.5    

Other Financial Performance

                 

§   Con Edison of New York Operating Budget

    12         15.6           15         19.5         —         —         —         —    

§   Con Edison of New York Capital Budget

    10           9.3           10           9.3         —         —         —         —    

§   Orange & Rockland Operating Budget

      1           1.0         —         —           25           25.0         —         —    

§   Clean Energy Businesses Adjusted EBITDA

      1           0.9         —         —         —         —           25           23.0    

§   Con Edison Transmission Operating Budget

      1           2.0         —         —         —         —         —         —    
Operating Objectives                  

§   Con Edison of New York

    22         33.0           25         37.5         —         —         —         —    

§   Orange & Rockland

      1           1.8         —         —           25           43.8         —         —    

§   Clean Energy Businesses

      1           2.0         —         —         —         —           25           50.0    

§   Con Edison Transmission

      1           2.0         —         —         —         —         —         —    

TOTAL

    100         94.1         100         82.3         100         117.1         100         148.8    

 

 

54

 

 

Consolidated Edison, Inc. Proxy Statement


LOGO    Compensation Discussion and Analysis

 

2020 Annual Incentive Awards

In February 2021, the Compensation Committee evaluated and determined whether the applicable financial and operating objectives were satisfied. In assessing performance against the objectives, the Compensation Committee considered actual results achieved against the specific targets associated with each objective and, based on the results, determined the 2020 annual incentive awards. The Compensation Committee did not exercise discretion to adjust (upward or downward) the annual incentive award to be paid to each Named Executive Officer.

The following table shows the calculation of the 2020 annual incentive awards for each Named Executive Officer.

 

      Base Salary   ×   Target
Percentage
  ×   Weight
Earned
   =   2020
Award
($)   (%)   (%)   ($)
   

Timothy P. Cawley

  750,000(1)   80   82.3   493,800
   

Robert Hoglund

   814,000       75   94.1   574,500
   

Deneen L. Donnley

   612,000       70   94.1   403,100
   

Robert Sanchez

   515,000       80 117.1   482,500
   

Mark Noyes

   440,000       80 148.8   523,800
   

John McAvoy

1,380,000     125   94.1   1,623,200

 

(1)

Reflects the base salary in effect for Mr. Cawley as President of Con Edison of New York, Inc.

Long-Term Incentive Compensation

Awards

Named Executive Officers are eligible to receive equity-based awards under the Company’s long term incentive plan. The Compensation Committee determines the target long-term incentive award value for each Named Executive Officer based on various factors, including:

 

§  

recommendations from the Chief Executive Officer for each of the other Named Executive Officers;

 

§  

a general assessment of each Named Executive Officer’s performance of his or her responsibilities; and

 

§  

the level of long-term incentive compensation compared to key executives in the Company’s compensation peer group companies. (See table in “Compensation Discussion and Analysis—Executive Compensation Philosophy and Objectives—Competitive Positioning—Attraction and Retention—Median Level Compensation” on page 44.)

Performance-Based Equity Awards

It is the Compensation Committee’s practice in the first quarter of each year to approve performance-based equity awards under the long term incentive plan for the Company’s Named Executive Officers. The Compensation Committee’s use of performance-based equity awards is intended to further reinforce the alignment of Named Executive Officer pay opportunities with stockholders’ interests by directly linking pay to the achievement of strong, sustained long-term financial and operating performance.

The performance units awarded to the Named Executive Officers provide for the right to receive one share of Company Common Stock and/or a cash payment equal to the fair market value of one share of Company Common Stock for each unit awarded, subject to the satisfaction of certain pre-established long-term performance measures. Named Executive Officers may elect to defer the receipt of the cash value of the award into the Company’s deferred income plan and/or to defer the receipt of the shares. Dividends are not paid and do not accrue on the units until after the Compensation Committee has approved the results of the pre-established objectives.

 

 

Consolidated Edison, Inc. Proxy Statement

  

 

55


LOGO    Compensation Discussion and Analysis

 

2020 Performance Unit Awards

The target award of performance units awarded to each of the Named Executive Officers in 2020 for the performance period that began on January 1, 2020 and ends December 31, 2022 is shown in the table below.

 

    Base Salary
as of
December 31, 2019
 

x

 

  2020 Target
Award as a
Percentage of
Base Salary
  =   2020
Target
Award
  ÷   Share
Price(1)
  =  

2020 Target

Award of

  Performance  

Units

(rounded)

     ($)        (%)        ($)        ($)        (#)
   

Timothy P. Cawley

      630,400           250           1,576,000           88.52           17,800
   

Robert Hoglund

      790,000           200           1,580,000           88.52           17,800
   

Deneen L. Donnley

      600,000           150           900,000           88.52           10,200
   

Robert Sanchez

      459,600           200           919,200           88.52           10,400
   

Mark Noyes

      391,000           200           782,000           88.52           8,800
   

John McAvoy

      1,340,000                 500                 6,700,000