PUBLIC SERVICE ENTERPRISE GROUP INC
For the period ended Apr 16, 2024. Filed Mar 7, 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 16, 2024 · Filed Mar 7, 2024
Contents
PROXY STATEMENT SUMMARY
This summary highlights information that is contained elsewhere in this Proxy Statement. It does not contain all the information that you should consider. We encourage you to read the entire Proxy Statement carefully before voting.
ANNUAL MEETING AGENDA AND VOTING RECOMMENDATIONS
At the Annual Meeting, you will be asked to vote on the following proposals. It is our recommendation that you vote in favor of all of the following proposals.
| Proposal · BoardRecommendation · PageReference | |||
|---|---|---|---|
| 1. | Election of Directors | FOR | 7 |
| 2. | Advisory Vote on the Approval of Executive Compensation | FOR | 38 |
| 3(a). | Approval of Amendments to our Certificate of Incorporation – to eliminate supermajority voting requirements for certain business combinations | FOR | 73 |
| 3(b). | Approval of Amendments to our Certificate of Incorporation and By-Laws – to eliminate supermajority voting requirements to remove a director without cause | FOR | 73 |
| 3(c). | Approval of Amendments to our Certificate of Incorporation – to eliminate supermajority voting requirement to make certain amendments to our By-Laws | FOR | 74 |
| 4. | Ratification of the Appointment of Deloitte as Independent Auditor for 2024 | FOR | 75 |
Ensuring that our Board has the optimal balance of skills, viewpoints, perspectives, and experiences is a top priority of the Board and the Governance, Nominating and Sustainability Committee (Governance Committee). The nominees for whom you are being asked to vote are a diverse group of highly qualified leaders with a broad range of business, industry, and academic experience, reflecting our commitment to diversity.
For additional information about the diversity, experience, skills, and qualifications of each individual nominee, please see the charts on page 3 and pages 7-9 and biographical data on pages 11-16.
The Board notes with respect and admiration the resignation of Alfred W. Zollar, effective October 24, 2023, after more than 11 years of dedicated service to PSEG. Throughout his time as a member of the Board, Mr. Zollar served PSEG faithfully and with honor. Mr. Zollar’s executive and managerial experience in business development and technology greatly contributed to PSEG’s oversight of operational excellence, customer satisfaction and cybersecurity. He leaves a lasting mark as a respected colleague and will be remembered for his dedication to PSEG’s success.
PSEG 2024 Proxy Statement 1
WHAT’S NEW?
This year we have expanded our discussion of the following sections:
| Enhanced Governance Practices - enhanced Board self-assessment process; new policy for numerical limit on outside public company Board memberships, see pages 18-19. Executive Clawback Practice - adoption of a robust practice for the recovery of executive officers’ erroneously awarded incentive compensation in the event of an accounting restatement, regardless of fault or misconduct, see page 51. 100% Carbon-Free Generation Fleet - retention of nuclear plants which produce 85% of New Jersey’s carbon-free energy; compelling growth opportunities, including the Salem nuclear plant capacity uprate; PSEG’s generation fleet is 100% carbon-free, see page 26. CPA-Zicklin Top Recognition of “Trendsetter” - 2023 CPA-Zicklin Index of Corporate Political Disclosure and Accountability, see pages 31-32. | Union Contracts and DE&I Report - successful negotiation of new agreements with all six of our unions, supporting our strategic objectives; publication of our second Diversity, Equity and Inclusion (DEI) Report, see pages 28-31. Energy Efficiency Investments - PSEG received a $280 million nine-month extension of the PSE&G Clean Energy Future-Energy Efficiency (CEF-EE) program through June 2024, and submitted its $3.1 billion CEF–EE II filing on December 1, 2023, see page 26. Gas System Modernization - PSEG completed the second phase of its Gas System Modernization Program (GSMP). Taken together with the first phase of GSMP, the program reduced methane emissions by approximately 22% compared to 2018 levels, see page 26. |
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OUR DIRECTOR NOMINEES
| Name | Age | DirectorSince | Primary Occupation | Independent | CommitteeMemberships* |
|---|---|---|---|---|---|
| Ralph A. LaRossa | 60 | 2022 | Chair of the Board, President and Chief Executive Officer (CEO) of PSEG | E (Chair) | |
| Susan Tomasky Lead Director | 71 | 2012 | Retired President of AEP Transmission of American Electric Power Corporation | ● | E, G, O |
| Willie A. Deese | 68 | 2016 | Retired Executive Vice President (EVP) of Merck & Co. Inc. | ● | A, E, G (Chair), O |
| Jamie M. Gentoso | 47 | 2022 | President of Holcim Building Envelope of Global Head of Solutions & Products Business Unit, Holcim | ● | F, IO |
| Barry H. Ostrowsky | 73 | 2018 | Retired President and CEO of RWJBarnabas Health, Inc. | ● | A (Chair), E, F, O |
| Ricardo G. Pérez | 64 | 2024 | Retired President and Chief Operating Officer (COO) of Westinghouse Electric Company | ● | G, IO |
| Valerie A. Smith | 68 | 2022 | President of Swarthmore College | ● | G, O |
| Scott G. Stephenson | 66 | 2020 | Retired Chairman of the Board, President and CEO of Verisk Analytics, Inc. | ● | A, F (Chair), IO |
| Laura A. Sugg | 63 | 2019 | Retired President of Australasia Division of ConocoPhillips Corporation | ● | A, G, IO (Chair) |
| John P. Surma | 69 | 2019 | Retired Chairman of the Board and CEO of United States Steel Corporation | ● | G, IO, O (Chair) |
| Kenneth Y. Tanji | 58 | 2023 | EVP and Chief Financial Officer (CFO), Prudential Financial, Inc. | ● | A, F |
*A=Audit; G=Governance, Nominating and Sustainability; E=Executive; F=Finance; IO=Industrial Operations; O=Organization and Compensation
*Committee Chair and member positions are indicated as of the date of this Proxy Statement. If elected, the nominees’ positions will change as follows:
Ms. Tomasky, as our independent Lead Director and principal liaison on Board-wide issues between the Chair of the Board and the independent Directors, will no longer have the official designation of member of the Governance, Nominating and Sustainability and Organization and Compensation Committees.
Ms. Sugg will also serve as a member of the Finance Committee and will not serve as a member of the Governance, Nominating and Sustainability Committee.
We anticipate that all Committee Chair terms (with the exception of the Executive Committee Chair) will expire in April 2026 to align each of them with the independent Lead Director’s four-year term.
2 PSEG 2024 Proxy Statement
GOVERNANCE HIGHLIGHTS FOR DIRECTOR NOMINEES
Governance Best Practices
| • Numerical limit on outside public company Board memberships • Enhanced Board assessment process • Executive compensation clawback practices • Majority voting for directors with a director resignation policy • Stockholders’ right to call special meetings (25% of shares cast) • Strong independent Lead Director with clear duties | • Annual review and disclosure of political contributions • Board oversight of sustainability, climate change, cybersecurity, and human capital management (including DEI) • Diverse Board • Robust stock ownership requirements for directors and executives • Succession planning for CEO and key executives • No poison pill • Proxy access |
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PSEG 2024 Proxy Statement 3
2023 PERFORMANCE SNAPSHOT
The charts below compare the relative contributions to earnings of PSE&G, PSEG Power LLC (PSEG Power or Power) & Other over the past five years and show our earnings growth in those years. Our financial highlights are presented below.
We are a public utility holding company that is predominantly a regulated electric and gas utility and a nuclear generation business. Our business plan focuses on achieving growth by allocating capital primarily toward regulated investments in an effort to continue to improve the sustainability and predictability of our business, while focusing on modernizing our energy infrastructure, improving reliability and resilience, increasing energy efficiency and delivering cleaner energy to meet customer expectations and be well aligned with public policy objectives. You can find a more comprehensive discussion of our 2023 business and financial performance in our 2023 Annual Report on Form 10-K. See Appendix A for a complete list of items excluded from Net Income in the determination ofnon-GAAP Operating Earnings.
Financial Highlights
| Dollars in Millions, except per share amounts | 2023 | 2022 |
|---|---|---|
| Operating Revenues | 11,237 | 9,800 |
| Net Income | 2,563 | 1,031 |
| Operating Earnings (non-GAAP) | 1,742 | 1,739 |
| Total Assets | 50,741 | 48,718 |
| Earnings Per Share (EPS) – Diluted | ||
| Net Income | 5.13 | 2.06 |
| Operating Earnings (non-GAAP) | 3.48 | 3.47 |
| Dividends Paid per Share | 2.28 | 2.16 |
| Market Price per Share – Year-end | 61.15 | 61.27 |
4 PSEG 2024 Proxy Statement
EXECUTIVE COMPENSATION HIGHLIGHTS
| 93.2% Approval in 2023 | SAY ON PAY Stockholders continued to show strong support for our executive compensation programs, with 93.2% of the votes cast for the approval of the “say on pay” proposal at our 2023 Annual Meeting. |
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Our executive compensation program is benchmarked against our peers and helps us recruit and retain top talent. It closely links pay to performance in order to align our leadership team’s interests with stockholders’ interests.
Our independent compensation consultant, Compensation Advisory Partners LLC (CAP), provides executive compensation services to the Board.
| Key Components | Type | Rationale |
|---|---|---|
| Base salary | Fixed | Experience, skills, scope of role, performance, and competitive market. |
| Annual cash incentive award under our Management Incentive Compensation Plan (MICP) | Variable performance-based | Emphasis on Operating Earnings Per Share (EPS) (non-GAAP) as the corporate financial objective and business unit financial performance, as well as additional operational and strategic metrics. Payment opportunity from zero to 200% of target percentage of salary. |
| Equity-based incentive awards under our Long-Term Incentive Plan (LTIP), consisting of performance share units (PSUs) and restricted stock units (RSUs) | Variable performance-based | PSUs (70% for the Named Executive Officers (NEOs)) are measured over a three-year period based upon: (i) Total Shareholder Return (TSR) vs. peers; (ii) EPS growth; and (iii) environmental, social, and governance (ESG) priorities with the opportunity to earn between zero and 200% of target. PSUs cliff vest at the end of the three-year period, unless retirement eligible, when PSUs vest 1/36 per month. RSUs (30% for the NEOs) cliff vest at the end of three years, unless retirement eligible, when RSUs vest 1/12 per month over one year. All of our NEOs are retirement eligible. Starting with the 2024 grants, RSUs will have 3-year graded vesting (1/3 per year) starting from the grant date, unless retirement eligible when RSUs will vest 1/12 per month over one year. |
| Retirement and post-employment benefits | Assist in attracting and retaining our executives and provide a competitive benefits package to our employees. |
PSEG 2024 Proxy Statement 5
Executive Pay Mix
For 2023, the target annual and long-term incentive pay for our CEO and other NEOs as a group was 88% and 74%, respectively, of target Total Direct Compensation.
2023 TARGET COMPENSATION SUMMARY
| Executive · Base Salary ($) · AnnualIncentive · Target TotalCash ($) · Long-Term Incentive($) · Target TotalCompensation($) | ||||||
|---|---|---|---|---|---|---|
| PSUs · RSUs | ||||||
| Ralph A. LaRossa | 1,293,800 | 130% | 2,975,740 | 5,600,056 | 2,400,041 | 10,975,837 |
| Daniel J. Cregg(1) | 780,500 | 80% | 1,404,900 | 1,365,038 | 585,057 | 3,354,995 |
| Tamara L. Linde | 709,000 | 80% | 1,276,200 | 1,050,019 | 450,015 | 2,776,234 |
| Kim C. Hanemann | 671,600 | 75% | 1,175,300 | 980,068 | 420,047 | 2,575,415 |
| Charles V. McFeaters(2) | 650,000 | 75% | 1,137,500 | 700,039 | 300,049 | 2,137,588 |
| (1) | Mr. Cregg also received a retention RSU grant in the amount of $2 million in April 2023. This retention grant will vest on January 1, 2025. |
| (2) | Mr. McFeaters was promoted on May 20, 2023, from Senior Vice President (SVP) of Nuclear Operations at PSEG Nuclear to President and Chief Nuclear Officer (CNO) of PSEG Nuclear. The salary and target annual incentive noted above represent Mr. McFeaters’ year-end 2023 salary and target bonus post his promotion to President and CNO. Mr. McFeaters’ salary and annual incentive prior to the promotion while in the position of SVP of Nuclear Operations was $444,500 and 60%, respectively. For the pro-rated actual salary for Mr. McFeaters, please see the Summary Compensation Table on page 53. |
6 PSEG 2024 Proxy Statement
Overview of Board Nominees –Diversity of Skills, Qualifications and Experience
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