CENTERPOINT ENERGY INC
For the period ended Apr 16, 2025. Filed Mar 5, 2025.
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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 16, 2025 · Filed Mar 5, 2025
Contents
Design of Executive Compensation Program
Compensation Program Key Features and Best Practices
The following are key features of our executive compensation program, which we believe are governance best practices and align the interests of management with those of our shareholders.
| | KEY FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAM | | |||
|---|---|---|---|---|---|
| | | | Strong Pay for Performance. A substantial portion of the compensation for our named executive officers is at-risk and performance-based, meaning that actual compensation realized in a given year will vary primarily depending on Company financial and stock price performance and individual performance. | | |
| | | | No Employment Agreements. We do not maintain executive employment agreements with any of our named executive officers, and our named executive officers are not entitled to guaranteed cash severance payments upon a termination of employment except pursuant to our change in control plan. | | |
| | | | “Double Trigger” Provisions for Change in Control Plan and Equity Awards. Our change in control plan and equity award agreements include a “double trigger,” whereby the executive is eligible for change in control benefits only if employment is terminated under certain circumstances within a set period before or after a change in control. | | |
| | | | Executive Severance Guidelines. The Human Capital and Compensation Committee has adopted executive severance guidelines to set forth appropriate limits on any severance payments to our named executive officers. The guidelines do not entitle any executive officer to a severance payment. | | |
| | | | No Excise Tax Gross Up Payments. Our change in control plan does not provide for excise tax gross up payments. | | |
| | | | Stock Ownership Guidelines. We have established executive stock ownership guidelines applicable to all of our officers to appropriately align the interests of our officers with our shareholders’ interests. | | |
| | | | Benchmark Pay to Market. We benchmark each major element of target compensation against the middle of the market (25th – 75th percentiles) because we believe the middle of the market is a generally accepted benchmark of external competitiveness. | | |
| | | | Recovery and Recoupment (Clawback) Policies. We have implemented an Executive Officer Recovery Policy in compliance with the NYSE listing standards issued in accordance with the Dodd Frank Act of 2010 that provides for the recovery of incentive-based compensation from executive officers in the event of an accounting restatement due to material noncompliance with any financial reporting requirement, regardless of the executive officer’s culpability. In addition, we maintain a broader recoupment policy that applies in certain other situations, including to all employees with respect to any compensation, including time-based long-term incentive awards, if the employee is found to have engaged in wrongdoing in connection with corporate criminal misconduct. | | |
| | | | Anti-Hedging and Anti-Pledging Policy. As part of our Insider Trading Policy, we have a policy prohibiting all of our employees and directors from hedging the risk of stock ownership by purchasing, selling, or writing options on CenterPoint Energy securities or engaging in transactions in other third-party derivative securities with respect to CenterPoint Energy securities. Additionally, our Insider Trading Policy prohibits our employees and directors from pledging CenterPoint Energy securities as collateral for a loan. | | |
| | | | 100% Independent Human Capital and Compensation Committee. The Human Capital and Compensation Committee consists entirely of independent directors. | | |
| | | | Independent Compensation Consultant. The Human Capital and Compensation Committee retains an independent consultant to provide advice on executive compensation matters. | | |
Design of Executive Compensation Program
Key Compensation Components and Purpose
We strive to provide compensation that is competitive, both in total and in individual components, with the companies we view as our peers and likely competitors for executive talent.
We also motivate our executives to achieve individual and business performance objectives by varying their compensation in accordance with our overall success. Actual compensation in a given year will vary based on our performance, and to a lesser extent, on qualitative appraisals of individual performance. We expect our named executive officers to have a higher percentage of their total compensation at risk to align each of our named executive officers with the short-term and long-term performance objectives of CenterPoint Energy and with the interests of our shareholders and other stakeholders.
| | CenterPoint Energy, Inc. 2025 Proxy Statement | | | 39 | |
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The key components of our 2024 compensation programs and their purpose in advancing our strategic objectives are outlined below.
| | | | | | | ELEMENT | | | | FORM OF AWARD | | | | PERIOD | | | | PURPOSE | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Fixed | | | | Base Salary | | | | Cash | | | | One year | | | | ✓ Fixed, competitive level of compensation based on scope and complexity of role, individual experience, and performance to attract and retain top talent | | |
| | | At Risk | | | | Short-Term Incentive | | | | Cash | | | | One year | | | | ✓ Rewards delivery of near-term objectives aligned with the Company’s long-term business strategy ✓ Considers individual performance and contributions to Company performance ✓ Short-term incentive funding for our named executive officers is based on achieving a non-GAAP Adjusted EPS goal ✓ Potential payout also subject to discretion of Human Capital and Compensation Committee, including downward modification for alignment with achievement of Company non-financial metrics applicable to non-executive short-term incentive awards (including safety, operational excellence, and customer satisfaction metrics) ✓ Potential payout subject to diversity and inclusion negative-only modifier | | |
| | Long-Term Incentives | | | | Performance ShareUnits (PSUs)75% | | | | Three-year cliff vesting, subject to cumulative Adjusted EPS performance | | | | ✓ Rewards creation of long-term value through cumulative Adjusted EPS ✓ Aligns with shareholder interests ✓ PSUs based on cumulative Adjusted EPS represent 35% of total award value | | | |||||
| | Three-year cliff vesting, subject to relative stock performance | | | | ✓ Incentivizes Company outperformance relative to peer companies ✓ Aligns with shareholder interests ✓ TSR target and maximum performance based on a percentile achievement based on position relative to peer group ✓ Price-to-earnings (P/E) modifier provides for a minimum payout level if the P/E ratio ranks in the top quartile of our peer group ✓ PSUs based on TSR represent 35% of total award value | | | |||||||||||||
| | Three-year cliff vesting, subject to carbon emissions reduction goals | | | | ✓ Aligns with the Company’s long-term net zero and greenhouse gas emissions reduction goals ✓ PSUs based on carbon emissions reduction goals account for 5% of the total award | | | |||||||||||||
| | Restricted StockUnits (RSUs)25% | | | | Three-year graded vesting, subject to continued employment and positive operating income | | | | ✓ Promotes retention, facilitates stock ownership, and supports succession planning ✓ Aligns with long-term shareholder interests ✓ RSUs represent 25% of total award value and will vest only if CenterPoint Energy achieves positive operating income for the last full calendar year preceding the applicable vesting date | | | |||||||||
| | 40 | | | CenterPoint Energy, Inc. 2025 Proxy Statement | |
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Pay For Performance
The guiding principle of our compensation philosophy is that the interests of executives and shareholders should be aligned and that pay should be based on performance. Our program provides upside and downside potential, depending on actual results, as compared to predetermined measures of success.
A significant portion of our named executive officers’ total direct compensation, which includes base salary in addition to the short-term and long-term incentive components, as applicable, is conditioned upon achieving results that are key to our long-term success for the benefit of our stakeholders and increasing shareholder value.
The following graphics reflect the components of the target total direct compensation opportunities provided to our named executive officers.
TARGET COMPENSATION MIX AS OF DECEMBER 31, 2024
(consisting of base salary, short-term incentives and long-term incentives)
The graphic represents the average size of each component as a percentage of each named executive officer’s total target direct compensation opportunities (other than the Chief Executive Officer’s and Ms. Wilson’s) as of December 31, 2024, approved by the Human Capital and Compensation Committee in 2024.
| | CenterPoint Energy, Inc. 2025 Proxy Statement | | | 41 | |
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.