PPL Corp
For the period ended Apr 3, 2024. Filed Apr 3, 2024.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Apr 3, 2024 · Filed Apr 3, 2024
Contents
PAY VERSUS PERFORMANCE
As required by Item 402(v) of Regulation S-K, we are providing the following information on the relationship between Compensation Actually Paid (CAP) and PPL’s performance for our NEOs, including our principal executive officer. CAP is defined by the SEC and is not used by the People and Compensation Committee in its pay-for-performance assessments. See the Compensation Discussion and Analysis section for a discussion of PPL’s compensation philosophy, practices and programs.
PPL’s executive compensation programs are structured to promote a strong pay for performance culture. As noted in the CD&A, 86% of the CEO’s 2023 target compensation was “at-risk” and 72% was performance based. In June 2020, William H. Spence retired from his position as CEO, therefore he is included in the Pay versus Performance Tables as our former CEO. Mr. Sorgi was promoted to the position of President and CEO effective June 1, 2020.
In 2021, PPL reported GAAP Net Income losses for the year that were non-cash in nature and primarily related to the sale of the U.K. utility business in June 2021 and certain tax changes in the U.K. Excluding the accounting effect of these one-time events, PPL’s operating businesses and PPL on a consolidated basis had strong financial and operational performance in 2021.
Based on our approach to align executive pay closely with performance, PPL’s CAP is directionally aligned with PPL’s Corporate EPS, total shareowner return (TSR), and return on equity. For example, the CEO CAP is approximately 11% lower than SCT while PPL’s TSR declined by approximately 9% over the same period. See the table below for more details followed by a description of the relationship between CAP and select performance metrics.
PAY VERSUS PERFORMANCE TABLE
| Year · SCT Total · Comp Actually · SCT Total · Comp ActuallyPaid to · Average SCT Total for · Average CompActually Paid · Value of initial fixed $100investment based on: · Net Income · Corporate | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| for CEO · Paid to CEO(1)(4) · for Former CEO · Former CEO(4) · Non-CEO NEOs(2) · to Non-CEO NEOs(2)(4) · Company TSR · Peer Group TSR(3) · (millions) · EPS(5) | ||||||||||
| 2023 | $11,969,556 | $10,652,416 | $3,034,235 | $2,396,766 | $91 | $107 | $740 | $1.60 | ||
| 2022 | 9,146,575 | 9,088,623 | 2,706,259 | 2,888,926 | 95 | 117 | 756 | 1.41 | ||
| 2021 | 11,356,481 | 11,504,637 | 3,976,822 | 3,779,539 | 94 | 116 | (1,480) | 1.02 | ||
| 2020 | 7,774,443 | 5,057,638 | $9,926,113 | $569,444 | 3,743,503 | 1,635,344 | 84 | 99 | 1,469 | 2.49 |
Current CEO Compensation Reconciliation Footnotes
(1)
Summary Compensation Table, or SCT, Totals and CAP Totals for CEO include Mr. Sorgi, President and Chief Executive Officer. A reconciliation of total compensation from the Summary Compensation Table to CAP for our CEO and additional related information is provided in the following tables:
| Year | SCT Totalfor CEO | Total EquityAdjustment(a) | Total PensionBenefitAdjustment(b) | CAP Totalfor CEO | TotalAdjustment | Equity Driven | Pension Driven |
|---|---|---|---|---|---|---|---|
| 2023 | $11,969,556 | $419,654 | $(1,736,794) | $10,652,416 | $(1,317,140) | 19% | 81% |
| 2022 | 9,146,575 | (129,755) | 71,803 | 9,088,623 | (57,952) | 64% | 36% |
| 2021 | 11,356,481 | 1,778,997 | (1,630,841) | 11,504,637 | 148,156 | 52% | 48% |
| 2020 | 7,774,443 | (1,160,073) | (1,556,732) | 5,057,638 | (2,716,805) | 43% | 57% |
PPL CORPORATION 2024 Proxy Statement 83
(a) The following provides the adjustments for equity compensation:
| Year | SCT Total | Deduct: Value of Stock Awards in SCT | Add: FYE Fair Value of Unvested Stock Awards Grantedduring FY | Add: Year Over Year Change in Fair Value of Prior Unvested Stock Awards from Prior Years | Add: Change in Fair Value of Stock Awards from Prior Years that Vested in FY | Equity ValueIncluded in CAP | Total EquityAdjustment |
|---|---|---|---|---|---|---|---|
| 2023 | $11,969,556 | $6,442,931 | $6,618,974 | $277,368 | $(33,757) | $6,862,585 | $419,654 |
| 2022 | 9,146,575 | 5,926,933 | 6,576,826 | (222,115) | (557,533) | 5,797,178 | (129,755) |
| 2021 | 11,356,481 | 5,111,866 | 6,926,098 | 120,260 | (155,495) | 6,890,863 | 1,778,997 |
| 2020 | 7,774,443 | 3,514,187 | 3,653,495 | (820,292) | (479,089) | 2,354,114 | (1,160,073) |
(b) The following provides the adjustments for pension and defined benefit plan compensation:
| Year | SCT Total | Deduct: SCT Aggregate Change in Value of Accumulated Benefits Under Defined Benefit Pension Plans | Add: Aggregate Value of the Service Cost Attributable to CEO Under the Defined Benefit Pension Plan for Services during FY and Prior Service Cost of Benefits Granted in a Defined Benefit Pension Plan Amendment Attributable to CEO for Services in Years Prior to Amendment | Total PensionBenefitAdjustment |
|---|---|---|---|---|
| 2023 | $11,969,556 | $2,198,654 | $461,860 | $(1,736,794) |
| 2022 | 9,146,575 | — | 71,803 | 71,803 |
| 2021 | 11,356,481 | 2,361,092 | 730,251 | (1,630,841) |
| 2020 | 7,774,443 | 1,940,207 | 383,475 | (1,556,732) |
Non-CEO NEO Average Compensation Reconciliation Footnotes
(2)Average SCT Totals and Average CAP Totals for Non-CEO NEOs include:
for 2020, Mr. Bergstein; Paul W. Thompson, former President and CEO of LKE; Joanne H. Raphael, former Executive Vice President, General Counsel and Corporate Secretary; and Gregory N. Dudkin, former President of PPL Electric
for 2021, Mr. Bergstein, Mr. Dudkin, former Chief Operating Officer, Mr. Thompson, Ms. Stark and Philip Swift, former Chief Executive of Western Power Distribution
for 2022, Mr. Bergstein, Mr. Dudkin, Ms. Stark and Mr. Crockett
for 2023, Mr. Bergstein, Mr. Sullivan, Ms. Stark, Mr. Crockett and Ms. Raymond
A reconciliation of average total compensation from the SCT to CAP for our non-CEO NEOs and additional related information is provided in the following tables:
| Year | SCT Total fornon-CEO NEOs | Total EquityAdjustment(a) | Total PensionBenefitAdjustment(b) | CAP Total fornon-CEO NEOs | TotalAdjustment | Equity Driven | Pension Driven |
|---|---|---|---|---|---|---|---|
| 2023 | $3,034,235 | $(462,044) | $(1,206,616) | $2,396,766 | $(1,668,660) | 28% | 72% |
| 2022 | 2,706,259 | 23,558 | 159,109 | 2,888,926 | 182,667 | 13% | 87% |
| 2021 | 3,976,822 | 253,256 | (450,539) | 3,779,539 | (197,283) | 36% | 64% |
| 2020 | 3,743,503 | (812,826) | (1,295,333) | 1,635,344 | (2,108,159) | 39% | 61% |
84 PPL CORPORATION 2024 Proxy Statement
(a) The following provides the adjustments for equity compensation:
| Year | SCT Total | Deduct: Value of Stock and Option Awards in SCT | Add: FYE Fair Value of Unvested Stock Awards Granted during FY | Add: Year Over Year Change in Fair Value of Unvested Stock Awards from Prior Years | Add: Change in Fair Value of Stock Awards from Prior Years that Vested in FY | Add: Average Prior Year End Fair Value of Awards from Prior Years Forfeited in Covered Year | Add: Value of Dividends or other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value(i) | Equity ValueIncluded in CAP | Total EquityAdjustment |
|---|---|---|---|---|---|---|---|---|---|
| 2023 | $3,034,235 | $1,385,421 | $1,167,912 | $(3,010) | $(29,606) | $(212,855) | $936 | $923,377 | $(462,044) |
| 2022 | 2,706,259 | 1,431,279 | 1,588,222 | (45,074) | (89,392) | 1,082 | 1,454,837 | 23,558 | |
| 2021 | 3,976,822 | 1,115,932 | 1,289,371 | 26,497 | 52,120 | 1,199 | 1,369,187 | 253,256 | |
| 2020 | 3,743,503 | 1,108,663 | 1,016,334 | (422,772) | (298,929) | 1,204 | 295,837 | (812,826) |
(i) Certain non-CEO NEOs received cash dividends for awards granted under the applicable plan.
(b) The following provides the adjustments for pension and defined benefit plan compensation:
| Year | SCT Total | Deduct: SCT Aggregate Change in Value of Accumulated Benefits Under Defined Benefits Pension Plans | Add: Aggregate Value of the Service Cost Attributable to NEOs Under the Defined Benefit Pension Plan for Services during FY and Prior Service Cost of Benefits Granted in a Defined Benefit Pension Plan Amendment Attributable to NEOs for Services in Years Prior to Amendment | Total PensionBenefit Adjustment |
|---|---|---|---|---|
| 2023 | $3,034,235 | $1,275,015 | $68,400 | $(1,206,616) |
| 2022 | 2,706,259 | — | 159,109 | 159,109 |
| 2021 | 3,976,822 | 588,280 | 137,741 | (450,539) |
| 2020 | 3,743,503 | 1,462,632 | 167,299 | (1,295,333) |
(3)
TSR assumes $100 invested on December 31, 2019, including reinvestment of dividends. Peer TSR represents the EEI Index of Investor-owned Electric Utilities, which is the index used to show performance in our Annual Report.
(4)
In calculating CAP, PPL calculated the fair value (or change in fair value) of outstanding, vested and forfeited equity awards in accordance with SEC rules for CAP and computed in a manner consistent with the methodology for financial reporting purposes consistent with U.S. generally accepted accounting principles. For restricted stock units, CAP values are based on a closing price on applicable year-end date(s) or, in the case of vesting dates, the actual vesting price. For performance units (excluding TSR Awards), CAP values are based on the same valuation methodology as restricted stock unit awards above except year-end values are multiplied times the probability of achievement as of each such date. For TSR-based performance units, the fair value is calculated by a Monte Carlo simulation model that considers a correlation coefficient, expected stock volatility and expected life as of the applicable year-end date(s). For more information about the assumptions used to value awards on their grant date, see the “Grants of Plan-Based Awards During 2023” table on page 65. For more information about the reported value for future achievement of outstanding performance-based awards, see the “Outstanding Equity Awards at Fiscal Year End 2023” table on page 66.
(5)
Corporate EPS as adjusted for compensation purposes. See page 41 for more information on Corporate EPS and its use in our short-term incentive plans.
PPL CORPORATION 2024 Proxy Statement 85
List of Company Selected Measures
| The following table highlights PPL’s performance measures that are most closely tied to executive compensation as reported in the Pay vs. Performance Table above. See page 41 for more information on Corporate EPS, TSA Execution and Operational Goals and how they are utilized in our short-term incentive plans and Annex A for a reconciliation of financial measures presented in accordance with GAAP to non-GAAP measures used for compensation. See page 41 for more information on how TSR, EG, and ESG are utilized in our LTI plans. | Most Important Performance Measures(alphabetical ranking) | |
|---|---|---|
| Corporate Earnings Per Share | ||
| Earnings Growth | ||
| Environmental, Social and Governance | ||
| Operational Goals | ||
| Relative Total Shareowner Return | ||
| TSA Execution | ||
86 PPL CORPORATION 2024 Proxy Statement
Relationship between CAP and Performance
The following charts present a graphical comparison of CAP to our CEO(s) and the average CAP to our Other NEOs as set forth in the Pay vs. Performance Table above compared against the following performance measures: (1) (a) PPL’s TSR and (b) the peer group TSR, (2) PPL’s net income, and (3) Corporate EPS.
For purposes of these charts, CAP to PPL’s current CEO and to PPL’s former CEO are aggregated. Mr. Sorgi was elected CEO in June 2020; therefore, data for 2020 reflects a partial year.
PPL CORPORATION 2024 Proxy Statement 87
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