|
Date and Time
|
| | |
Location
|
| | |
Record Date
|
|
| Wednesday, May 26, 2021 9:30 a.m. Pacific Time |
| | | To attend and participate in the Annual Meeting visit www.virtualshareholdermeeting.com/CWT2021 |
| | | Only stockholders at the close of business on March 30, 2021 are entitled to receive notice of and to vote at the Annual Meeting | |
| | At this time, we plan to hold the Annual Meeting entirely online. We are actively monitoring the public health and safety concerns relating to the novel coronavirus (COVID-19) and the advisories or mandates that federal, state, and local governments, and related agencies, may issue. Depending on developments relating to COVID-19, we may make alternative arrangements relating to the Annual Meeting, which could include changing the date and/or time of the meeting, or providing for the ability to attend the meeting in person as well as online if it is feasible to do so. We will announce any alternative arrangements for the meeting as promptly as practicable. Please monitor our Investor Relations website at http://ir.calwatergroup.com/ and check the website one week prior to the meeting date. As always, we encourage you to vote your shares prior to the Annual Meeting. | | |
| NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | | | | | | | |
| BOARD STRUCTURE | | | | | 6 | | |
| PROPOSAL NO. 1 – ELECTION OF DIRECTORS | | | | | 22 | | |
| STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS | | | | | 32 | | |
| COMPENSATION DISCUSSION AND ANALYSIS | | | | | 36 | | |
| | | | | 36 | | | |
| | | | | 37 | | | |
| | | | | 38 | | | |
| | | | | 40 | | | |
| | | | | 54 | | | |
| | | | | 55 | | | |
| | | | | 63 | | | |
| ORGANIZATION AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION | | | | | 63 | | |
| PROCEDURES FOR APPROVAL OF RELATED PERSON TRANSACTIONS | | | | | 63 | | |
| PROPOSAL NO. 2 – ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION | | | | | 64 | | |
| REPORT OF THE AUDIT COMMITTEE | | | | | 66 | | |
| RELATIONSHIP WITH THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | | | | 67 | | |
| | | | | 68 | | | |
| OTHER MATTERS | | | | | 68 | | |
| QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING | | | | | 70 | | |
|
Items of Business
|
| | Board’s Recommendation |
| | Where to Find Details |
| |||
| 1. | | |
Election of twelve directors
|
| |
FOR all nominees
|
| | | |
|
2.
|
| | Advisory Vote on Executive Compensation | | |
FOR
|
| |
p. 64
|
|
|
3.
|
| | Ratification of Deloitte & Touche LLP as the Group’s independent registered public accounting firm | | |
FOR
|
| |
p. 68
|
|
| |
What’s New
|
| |
| |
We continue to enhance our governance, compensation, and sustainability practices and disclosures. Among many other items, since last year California Water Service Group has:
►
Designed and implemented a robust COVID-19 response to support our customers, communities, and employees
►
Adopted four new policies: Environmental Sustainability; Diversity, Equality, and Inclusion;Political Engagement; and Human Rights
►
Published our 2020 Environmental, Social, and Governance (ESG) report with disclosures that are aligned with the Sustainability Accounting Standards Board (SASB) Water Utilities & Services Industry Standards and reference Global Reporting Initiate (GRI) standards
►
Included environmental leadership in the 2020 long-term incentive compensation program for the three-year performance period 2020 – 2022
|
| |
| | | | | | |
Director
Since |
| | | | |
Committees
|
| ||||||||||||
|
Name and Principal Occupation
|
| |
Age
|
| |
Independent
|
| |
A
|
| |
C
|
| |
F
|
| |
NG
|
| |
S
|
| |||
|
Gregory E. Aliff
Former Vice Chairman and Senior Partner of U.S. Energy & Resources, Deloitte LLP |
| |
67
|
| |
2015
|
| |
YES
|
| |
![]() |
| | | | | | | | | | |
![]() |
|
|
Terry P. Bayer
Former COO of Molina Healthcare, Inc. |
| |
70
|
| |
2014
|
| |
YES
|
| |
![]() |
| |
![]() |
| |
![]() |
| | | | | | |
|
Shelly M. Esque
Former Vice President and Global Director of Corporate Affairs of Intel Corporation |
| |
60
|
| |
2018
|
| |
YES
|
| | | | | | | | | | |
![]() |
| |
![]() |
|
|
Martin A. Kropelnicki
President & CEO of California Water Service Group |
| |
54
|
| |
2013
|
| |
—
|
| | | | | | | | | | | | | | | |
|
Thomas M. Krummel, M.D.
Emile Holman and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine |
| |
69
|
| |
2010
|
| |
YES
|
| | | | |
![]() |
| | | | |
![]() |
| | | |
|
Richard P. Magnuson
Lead Director Managing Director of Orpheum Capital |
| |
65
|
| |
1996
|
| |
YES
|
| |
![]() |
| | | | |
![]() |
| |
![]() |
| | | |
|
Yvonne A. Maldonado, M.D.
Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University |
| |
65
|
| |
New
Nominee |
| |
YES
|
| | | | | | | | | | | | | | | |
|
Scott L. Morris
Chairman of Avista Corporation |
| |
63
|
| |
2019
|
| |
YES
|
| | | | |
![]() |
| | | | | | | |
![]() |
|
|
Peter C. Nelson
Chairman of the Board of California Water Service Group |
| |
73
|
| |
1996
|
| |
—
|
| | | | | | | | | | | | | | | |
|
Carol M. Pottenger
Principal and Owner of CMP Global, LLC |
| |
65
|
| |
2017
|
| |
YES
|
| | | | | | | |
![]() |
| |
![]() |
| |
![]() |
|
|
Lester A. Snow
Director and Former President of the Klamath River Renewal Corporation |
| |
69
|
| |
2011
|
| |
YES
|
| | | | |
![]() |
| |
![]() |
| | | | |
![]() |
|
|
Patricia K. Wagner
Former Group President of U.S. Utilities for Sempra Energy |
| |
58
|
| |
2019
|
| |
YES
|
| |
![]() |
| | | | | | | |
![]() |
| | | |
| Number of meetings held during 2020 | | | | | | | | | | | |
5
|
| |
3
|
| |
2
|
| |
2
|
| |
4
|
|
| ![]() |
| |
A: Audit
|
| |
C: Organization and Compensation
|
| | | |
|
![]() |
| |
F: Finance and Capital Investment
|
| |
NG: Nominating/Corporate Governance
|
| | | |
|
![]() |
| |
S: Enterprise Risk Management, Safety and Security
|
| | | | | | |
| |
WHAT WE DO
|
| | |
WHAT WE DON’T DO
|
| |
| |
![]() We pay-for-performance with compensation in the form of annual short-term performance-based incentives, as well as award more than half of long-term equity incentive compensation in the form of restricted stock units (RSUs) subject to performance-based vesting criteria over a three-year period.
![]() We retain an independent compensation consultant who reports to the Organization and Compensation Committee.
![]() We hold an annual “say-on-pay” advisory vote.
![]() We require stock ownership with minimum holding requirements for all directors and officers to promote a long-term perspective in managing the Group and to help align the interests of our stockholders, directors, and officers.
![]() We cap individual payouts for short-term performance-based incentive and long-term equity incentive compensation plans.
![]() We have an officer compensation recovery (“clawback”) policy requiring the reimbursement of excess incentive-based compensation provided to the Group’s officers in the event of certain restatements of the Group’s financial statements.
|
| | |
![]() No excessive perquisites; the Group provides officers with only limited perquisites consisting of a company vehicle with related excess liability insurance.
![]() No tax gross-ups on perquisites or other personal benefits.
![]() No employment agreements; other than participation in the Executive Severance Plan, none of our officers are party to individual employment or severance agreements.
![]() No single-trigger change-in-control benefits; the Group’s Executive Severance Plan provides for change-in-control severance benefits upon a termination of employment following a change-in-control; the Group’s equity incentive plan does not require single-trigger vesting acceleration upon a change-in-control.
![]() No hedging and pledging of Group stock; the Group’s directors and officers are prohibited from hedging their ownership of Group stock, including trading in options, puts, calls, or other derivative instruments related to Group stock or debt, in accordance with the anti-hedging prohibition in our insider trading policy; directors and officers are also prohibited from pledging their ownership of Group stock in accordance with an anti-pledging provision in our insider trading policy.
|
| |
|
Director Independence
|
|
| |
Board Composition
|
| | ||||
| | Diversity | | | |
Our Board is comprised of members who demonstrate a diversity of thought, perspectives, skills, backgrounds and experiences, and has a goal of identifying candidates that can contribute to that diversity in a variety of ways, including ethnically and gender diverse candidates
|
| |
| | Board Skills | | | | Our Board is composed of a collective set of skills to address management challenges, especially in the areas of business strategy, financial performance, risk management, cybersecurity, technology and enterprise innovation, and executive talent and leadership, and should evolve with the organization’s business strategy | | |
| | Industry Experience | | | |
Our Board seeks and retains members with industry experience including water, utility and technology, that align with our long-term strategy; recognizes the utility industry is complex and understands the importance of having directors who have witnessed challenging business cycles and can share the wisdom of those experiences
|
| |
| | Tenure | | | |
Our Board retains members across the director tenure spectrum to promote effective oversight, and embrace innovation, a changing market and customer expectations; seeks to have a mix of long-standing members, relatively new members, and remaining members at different points along the tenure spectrum
|
| |
| | Board Size | | | |
Our Board considers the appropriate size of the board in relation to promoting active engagement, open discussion and effective challenge of management; continuously assesses the bench of successors for Board leadership positions in both expected and unexpected departure scenarios
|
| |
| |
Director Criteria
|
| | ||||
| | Personal Characteristics | | | |
►
High personal and professional ethics, integrity and honesty, good character, and sound judgment
►
Independence and absence of any actual or perceived conflicts of interest
►
The ability to be an independent thinker
|
| |
| |
Commitment to the Organization
|
| | |
►
A willingness to put in the time and energy to satisfy the requirements of Board and committee membership, including attendance and participation in Board and committee meetings of which they are a member and the annual meeting of stockholders and be available to management to provide advice and counsel
►
Possess, or be willing to develop, a broad knowledge of critical issues facing the organization
|
| |
| | Diversity | | | |
►
Diversity, including the candidate’s professional and personal experience, background, perspective, and viewpoint; as well as the candidate’s gender and ethnicity
|
| |
| | Skills and Experience | | | |
►
The value derived from each nominee’s skills, qualifications, experience, and ability to impact long-term strategic objectives
►
Solid educational background
►
Substantial tenure and experience in leadership capacities
►
Business and financial experience
►
Understanding the intricacies of a public entity
►
Experience in risk management
►
Additionally, Section 2.9 of our bylaws contains requirements that a person must meet to avoid conflicts of interest that would disqualify that person from serving as a director
|
| |
| | Identification of Director Nominees | | | |
►
Through a variety of sources, the Nominating/Corporate Governance Committee identifies new director nominees and will consider director nominees recommended by stockholders in the same manner it considers other nominees. This process is described in “Director Qualifications and Diversity” and found elsewhere in this Proxy Statement.
|
| |
| | Retirement Age of Directors | | | |
►
We have established a mandatory retirement age for directors. A director must retire no later than the Annual Meeting that follows the date of the director’s 75th birthday. An employee director must retire as an employee no later than the Annual Meeting that follows the date of his or her 70th birthday, but may remain on the Board at the discretion of the Board of Directors.
|
| |
| | Executive Sessions of the Board | | | |
►
Under our Corporate Governance Guidelines, the non-management directors meet at least four times each year in executive session without management present, and the independent directors meet in executive session at least once a year. The Lead Independent Director, Richard P. Magnuson, chairs these sessions.
|
| |
|
Name
|
| |
Age
|
| |
California Water
Service Group Position |
| |
Current
Term Expires |
| |
Director
Since |
| |
Independent
|
| |
Occupation
|
| |
Other
Board Experience |
| |
Public
Utilities or Public Health Experience |
|
| Gregory E. Aliff | | |
67
|
| | Director | | |
2021
|
| |
2015
|
| |
Yes
|
| |
Former Vice Chairman and Senior Partner of U.S. Energy & Resources, Deloitte LLP
|
| |
Yes
|
| |
Yes
|
|
| Terry P. Bayer | | |
70
|
| | Director | | |
2021
|
| |
2014
|
| |
Yes
|
| | Former COO of Molina Healthcare, Inc. | | |
Yes
|
| |
Yes
|
|
| Shelly M. Esque | | |
60
|
| | Director | | |
2021
|
| |
2018
|
| |
Yes
|
| |
Former Vice President and Global Director of Corporate Affairs of Intel Corporation
|
| |
Yes
|
| | | |
|
Martin A. Kropelnicki
|
| |
54
|
| |
President & CEO and Director
|
| |
2021
|
| |
2013
|
| |
No
|
| |
President & CEO of California Water Service Group
|
| |
Yes
|
| |
Yes
|
|
| Thomas M. Krummel, M.D. | | |
69
|
| | Director | | |
2021
|
| |
2010
|
| |
Yes
|
| |
Emile Holman and Chair Emeritus of the Department of Surgery at Stanford University School of Medicine
|
| |
Yes
|
| |
Yes
|
|
| Richard P. Magnuson | | |
65
|
| |
Lead Director & Chair of the Board’s Executive Sessions
|
| |
2021
|
| |
1996
|
| |
Yes
|
| |
Managing Director of Orpheum Capital
|
| |
Yes
|
| | | |
| Yvonne A. Maldonado, M.D. | | |
65
|
| | Director Nominee | | |
N/A
|
| |
2021*
|
| |
Yes
|
| |
Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University
|
| |
Yes
|
| |
Yes
|
|
| Scott L. Morris | | |
63
|
| | Director | | |
2021
|
| |
2019
|
| |
Yes
|
| | Chairman of Avista Corporation | | |
Yes
|
| |
Yes
|
|
| Peter C. Nelson | | |
73
|
| |
Chairman of the Board
|
| |
2021
|
| |
1996
|
| |
No
|
| |
Chairman of the Board of California Water Service Group
|
| |
Yes
|
| |
Yes
|
|
| Carol M. Pottenger | | |
65
|
| | Director | | |
2021
|
| |
2017
|
| |
Yes
|
| | Principal and Owner of CMP Global, LLC | | |
Yes
|
| | | |
| Lester A. Snow | | |
69
|
| | Director | | |
2021
|
| |
2011
|
| |
Yes
|
| |
Director and Former President of the Klamath River Renewal Corporation
|
| |
Yes
|
| |
Yes
|
|
| Patricia K. Wagner | | |
58
|
| | Director | | |
2021
|
| |
2019
|
| |
Yes
|
| |
Former Group President of U.S. Utilities for Sempra Energy
|
| |
Yes
|
| |
Yes
|
|
| |
Board Committee
|
| | |
Role and Oversight
|
| |
| | Audit | | | | Oversees risks related to financial reporting and internal controls, cybersecurity, and third party suppliers. | | |
| |
Organization and Compensation
|
| | |
Oversees risks related to human capital management and periodic assessments of risks relating our compensation plans and programs to see that these plans and programs do not encourage management to take unreasonable risks relating to our business
|
| |
| | Finance and Capital Investment | | | | Oversees risks within the capital investment programs including infrastructure failures and credit risk | | |
| | Nominating/Corporate Governance | | | | Oversees risks related to matters of corporate governance, including director independence and Board performance, as well as risks related to environmental, social responsibility, and sustainability matters | | |
| |
Enterprise Risk Management, Safety and Security
|
| | |
Oversees management’s development and execution of the Group’s enterprise risk management, safety and security programs, including those related to physical safety and security
|
| |
| |
Board Oversight
|
| | |
Tier 1 Risk(1)
|
| | |
Lead Officer
|
| | |
Department
|
| |
| |
Full Board
|
| | |
Political Risk
|
| | |
VP, Customer Service & Chief
Citizenship Officer |
| | |
Government Affairs
|
| |
| Regulatory Risk | | | | VP, Corporate Development & Chief Regulatory Officer |
| | | Regulatory Relations | | | |||||
| Water Supply Risk | | | | VP, Customer Service & Chief Citizenship Officer |
| | | Water Resource Sustainability |
| | |||||
| Climate Change Risk | | | | VP, Customer Service & Chief Citizenship Officer |
| | |
Water Resource Sustainability
|
| | |||||
| |
Enterprise Risk
Management, Safety, and Security Committee (ESSC)(2) |
| | |
Environmental Contamination
Risk |
| | |
VP, Engineering & Chief Water
Quality & Environmental Compliance Officer |
| | |
Environmental
|
| |
| Physical Safety and Security Risk |
| | | VP, IT & Chief Risk Officer | | | | Safety | | | |||||
| Natural or Human Caused Disaster Risk |
| | | VP, IT & Chief Risk Officer, and VP, Operations |
| | | Safety | | | |||||
|
Emergency Preparedness &
Business Continuity Risk |
| | | VP, IT & Chief Risk Officer | | | | Safety & I.T. | | | |||||
| Water Quality Risk | | | | VP, Engineering & Chief Water Quality & Environmental Compliance Officer |
| | | Water Quality | | | |||||
| |
Finance Committee
|
| | |
Infrastructure Failure Risk
|
| | |
VP, Engineering & Chief Water
Quality & Environmental Compliance Officer and Chief Engineering Officer |
| | |
Engineering
|
| |
| Credit Risk | | | | VP, CFO & Treasurer and VP, Corporate Controller |
| | | Finance | | | |||||
| | Organization/Compensation Committee | | | | Talent Risk, including Diversity, Equality, and Inclusion |
| | | VP, Human Resources | | | | Human Resources | | |
| |
Audit Committee
|
| | |
Cybersecurity Risk
|
| | |
VP, IT & Chief Risk Officer
|
| | |
I.T.
|
| |
| Third-Party Supplier Risk | | | | VP, CFO & Treasurer and Chief Procurement Officer |
| | | Procurement | | |
|
Name
|
| |
Audit
|
| |
Organization and
Compensation |
| |
Finance and
Capital Investment |
| |
Nominating/
Corporate Governance |
| |
Enterprise Risk
Management, Safety, and Security |
|
|
Gregory E. Aliff
|
| |
![]() |
| | | | | | | | | | |
●
|
|
|
Terry P. Bayer
|
| |
●
|
| |
●
|
| |
![]() |
| | | | | | |
|
Shelly M. Esque
|
| | | | | | | | | | |
●
|
| |
●
|
|
|
Martin A. Kropelnicki
|
| | | | | | | | | | | | | | | |
|
Thomas M. Krummel, M.D.
|
| | | | |
![]() |
| | | | |
●
|
| | | |
|
Richard P. Magnuson
|
| |
●
|
| | | | |
●
|
| |
![]() |
| | | |
|
Scott L. Morris
|
| | | | |
●
|
| | | | | | | |
●
|
|
|
Peter C. Nelson
|
| | | | | | | | | | | | | | | |
|
Carol M. Pottenger
|
| | | | | | | |
●
|
| |
●
|
| |
![]() |
|
|
Lester A. Snow
|
| | | | |
●
|
| |
●
|
| | | | |
![]() |
|
|
Patricia K. Wagner
|
| |
●
|
| | | | | | | |
●
|
| | | |
|
Number of meetings held during 2020
|
| |
5
|
| |
3
|
| |
2
|
| |
2
|
| |
4
|
|
| |
AUDIT COMMITTEE
|
| | |
Primary Responsibilities:
|
| |
| |
Current Members:
Gregory E. Aliff, Chair
Terry P. Bayer Richard P. Magnuson Patricia K. Wagner Committee Meetings Held in 2020: 5
|
| | |
►
Represents and assists the Board in oversight of the quality and integrity of the Company’s financial statements, the Company’s compliance with legal, environmental, regulatory and reporting requirements; the qualifications, performance and independence of the Company’s Independent Registered Public Accounting Firm; the Company’s internal audit function; cybersecurity risk; and third party supplier risk
►
Responsible for the appointment, retention, compensation, and oversight of the Independent Registered Public Accounting Firm
►
Reviews with management each Form 10-K and 10-Q report required to be submitted to the SEC
►
Reviews annually the quality of internal accounting and financial controls, internal auditor reports and opinions, and any recommendations the Independent Registered Public Accounting Firm may have for improving or changing the Company’s internal controls
►
Oversees and reviews with management risks related to the Company’s financial reporting and internal controls
►
Oversees the Company’s compliance program with respect to legal and regulatory requirements, including the Company’s codes of conduct, and oversees the Company’s policies and procedures for monitoring compliance
►
Oversees the Company’s cybersecurity program, including management’s response to emerging risks and compliance with all federal and state cybersecurity standards and privacy laws
►
Oversees the Company’s program to identify, manage, and mitigate third party supplier risk and reviews with management compliance with the Supplier Code of Conduct and performance of the Supplier Diversity Program
All members of the Audit Committee are independent as defined in the New York Stock Exchange, and meet additional independence requirements for audit committee members applicable under SEC rules and the New York Stock Exchange listing standards.
The Board has determined that each Audit Committee member has considerable knowledge in financial and auditing matters to serve on the Audit Committee. Gregory E. Aliff, Terry P. Bayer, and Patricia K. Wagner meet the New York Stock Exchange listing standards of financial sophistication and are “audit committee financial experts” under SEC rules.
|
| |
| | ORGANIZATION AND COMPENSATION COMMITTEE |
| | |
Primary Responsibilities:
|
| |
| |
Current Members:
Thomas M. Krummel, M.D., Chair
Terry A. Bayer Scott L. Morris Lester A. Snow Committee Meetings Held in 2020: 3
|
| | |
►
Oversees the Company’s officer compensation structure, policies and programs, assesses whether the Company’s compensation structure establishes appropriate incentives for officers, and assesses the results of the Company’s most recent advisory vote on executive compensation
►
Oversees the evaluation and recommendations of the compensation of the CEO to the independent directors and of the executive officers to the Board of Directors
►
Reviews the organizational structure for the Company’s senior management
►
Oversees the strategies and policies related to human capital management, including matters such as diversity and inclusion, workplace environment, culture, talent development and retention, and succession planning
►
Oversees a periodic assessment of the risk related to the Company’s compensation policies and practices applicable to offices and employees, and review the results
►
Reviews and discusses with our management the Compensation Discussion and Analysis disclosure required to be included in the proxy statement for the annual meeting of stockholders to be filed with the SEC and, based on such review and discussion, determines whether to recommend to the Board that the Compensation Discussion and Analysis disclosure be included in such filing
►
Oversees preparation of the Compensation Committee report required by SEC rules to be included in the proxy statement for the annual meeting of stockholders
All members are independent as defined in the listing standards of the New York Stock Exchange, and meet additional independence requirements for compensation committee members applicable under SEC rules and the New York Stock Exchange listing standards.
|
| |
| | FINANCE AND CAPITAL INVESTMENT COMMITTEE |
| | |
Primary Responsibilities:
|
| |
| |
Current Members:
Terry P. Bayer, Chair
Richard P. Magnuson Carol M. Pottenger Lester A. Snow Committee Meetings Held in 2020: 2
|
| | |
►
Assists the Board of Directors in fulfilling its oversight responsibilities with respect to the monitoring and oversight of our financial resources, including its capital investment management and rate recovery and resolution planning and processes
►
Assists the Board in reviewing our financial policies, strategies, and capital structure
►
Reviews and make recommendations to the Board for approval, where authority to do so has been delegated by the Board, regarding:
o
long-term financial objectives and policies
o
financing requirements and financing plans
o
the annual dividend plan
o
oversight of the annual operating budgets
o
oversight of the annual capital investment plans including periodic updates on the progress over the annual construction and capital investment programs efforts to increase stockholder value
o
reports received from the employee benefit finance committee
o
other finance matters as appropriate
In addition, the Committee will discuss with management the policies and procedures concerning the major risk exposures, including exposures to infrastructure failure risk and credit risk, and the steps management has taken and/or proposes to take to monitor, mitigate, and control such exposures within the capital investment process.
All members are independent as defined in the listing standards of the New York Stock Exchange.
|
| |
| | NOMINATING/CORPORATE GOVERNANCE COMMITTEE |
| | |
Primary Responsibilities:
|
| |
| |
Current Members:
Richard P. Magnuson, Chair
Shelly M. Esque Thomas M. Krummel, M.D. Carol M. Pottenger Patricia K. Wagner Committee Meetings Held in 2020: 2
|
| | |
►
Oversees director succession planning and actively seeks diverse individuals qualified to become Board members
►
Evaluates the composition of the board annually to assess whether the skills, experience, characteristics and other criteria established by the Board are currently represented on the Board as a whole and in individual directors, and to assess the criteria that may be needed in the future
►
Evaluate the performance of the individual directors and full Board annually
►
Oversees risks related to matters of corporate governance, including director independence and Board performance
►
Recommends to the Board the size, structure, composition, and functioning of the Board and its committees
►
Reviews the compensation of directors for service on the Board and its committees and recommends changes to the Board as appropriate
►
Reviews the Corporate Governance Guidelines annually and recommends changes to the Board
►
Oversees the Company’s Code of Business Conduct and Ethics for Directors and compliance with the code
►
Provides oversight of and reviews the Company’s strategy, policies, practices, risks, and disclosures with respect to ESG matters, and makes recommendations to management as appropriate
►
Assists management in overseeing internal and external communications with employees, investors, and other stakeholders regarding the Company’s position on or approach to ESG matters
All members are independent as defined in the listing standards of the New York Stock Exchange.
|
| |
| | ENTERPRISE RISK MANAGEMENT, SAFETY, AND SECURITY COMMITTEE |
| | |
Primary Responsibilities:
|
| |
| |
Current Members:
Lester A. Snow, Chair
Carol M. Pottenger, Vice Chair Gregory E. Aliff Shelly M. Esque Scott L. Morris Committee Meetings Held in 2020: 4
|
| | |
►
Assists the Board in the oversight of our enterprise risk management, safety, and security programs, including those related to physical safety and security
►
Discusses with management our principal risks and the effectiveness of the processes used by management to both identify and analyze major risk, as well as the effectiveness of the programs to manage and mitigate risks
►
Reviews with management our risk assessments, the steps management has taken or would consider taking to minimize such risks or exposures, safeguarding assets, and our underlying policies with respect to risk assessment, risk management, and asset protection
►
Discusses with management current and emerging applicable matters that may affect the business, operations, performance, or public image of the organization or are otherwise pertinent to us and our stakeholders
►
Reviews our Emergency Preparedness program, including emergency response and coordination with authorities
►
Reviews our physical safety and security programs to ensure preventive detection and remedial controls and processes are in place
►
Oversees our other compliance programs for enterprise risk management, safety, and security, as well as our policies and procedures for monitoring compliance
►
Makes recommendations to the Board and to our senior management with respect to any of the above matters as the Committee deems necessary or appropriate
All members are independent as defined in the listing standards of the New York Stock Exchange.
|
| |
| |
Gregory E. Aliff
|
| | | | | |
| |
![]() Independent
Age: 67 Director Since 2015 Committees:
►
Chair, Audit
►
Enterprise Risk Management, Safety and Security
Previous Board Directorships:
►
SCANA Corporation
►
Grid Alternatives
►
United States Energy Association
Current Board Directorship:
►
New Jersey Resources Corp
|
| | |
Retired
Mr. Aliff is a retired Vice Chairman and Senior Partner, US Energy and Resources, at Deloitte LLP. From 2012 to his retirement in 2015, Mr. Aliff led Deloitte’s US Sustainability Services, which focused on industrial and commercial water and energy management. From 2002 to 2012, he led Deloitte’s US Energy and Resources practice, where he oversaw all professional services to the sector. Mr. Aliff earned his Bachelor of Science in Accounting and his Master of Business Administration from Virginia Tech. He is a Certified Public Accountant and is a designated Board Leadership Fellow of the National Association of Corporate Directors (NACD). He also holds a CERT Certificate in Cybersecurity Oversight from NACD.
Mr. Aliff brings extensive accounting, auditing, and financial reporting experience to the Board, with specific expertise in both the public utility and energy and resources industries. He has in-depth experience in strategy, enterprise risk management, and regulatory affairs from his many years providing professional services to numerous major utilities. Mr. Aliff’s deep understanding of public utility markets and the breadth of experience he has gained from working with public companies make him a valuable resource to the Board.
|
| |
| |
Terry P. Bayer
|
| | | | | |
| |
![]() Independent
Age: 70 Director Since 2014 Committees:
►
Chair, Finance and Capital Investment
►
Organization & Compensation
►
Audit
Previous Board Directorship:
►
Apria Healthcare Group, Inc.
|
| | |
Retired
Ms. Bayer is the former Chief Operating Officer (COO) for Molina Healthcare, Inc., a managed care company that provides solutions to meet the healthcare needs of low-income individuals and families who participate in government programs, including Medicaid, Medicare, and Marketplace. She held that position from 2005 until her retirement in February 2018. She was previously Executive Vice President of Health Plan Operations and also held management positions at Family Health Plan (FHP), Maxicare, Matria Healthcare, and AccentCare, Inc. She holds a Juris Doctor Degree from Stanford University, a master’s degree in Public Health from the University of California, Berkeley, and a bachelor’s degree in Communication from Northwestern University.
Ms. Bayer brings senior leadership, financial, operational, and public health expertise to the Board from her service as the COO of Molina Healthcare, Inc., a public company. She has many years of experience as an operating executive with a strong focus on government program compliance, public health and administration, as well as customer service. Ms. Bayer’s significant background and experience in healthcare supports the Board’s efforts in overseeing and advising on employee health matters. Her previous experience as a director of Apria Healthcare Group, Inc. and her compliance and compensation committee memberships also allows Ms. Bayer to contribute to the Board.
|
| |
| |
Shelly M. Esque
|
| | | | | |
| |
![]() Independent
Age: 60 Director Since 2018 Committees:
►
Nominating/Corporate Governance
►
Enterprise Risk Management, Safety and Security
|
| | |
Retired
Ms. Esque, prior to her retirement in 2016, served as Vice President and Global Director of Corporate Affairs at Intel Corporation, a leader in the semiconductor industry, overseeing professionals in more than 35 countries responsible for enhancing Intel’s reputation as the world’s leading technology brand and corporate citizen. She also served as both president and chair of the Intel Foundation. In her capacity as a leader of Intel’s corporate social responsibility, community, education, foundation, and government relations worldwide, Ms. Esque represented Intel at numerous events, including the World Economic Forum, World Bank, UNESCO, and forums promoting women in the workplace.
Ms. Esque received the Greater Phoenix Chamber of Commerce 2011 ATHENA Businesswoman of the Year Award for excellence in business and leadership, exemplary community service, and support and mentorship of other women. She was also recognized by AZ Business Magazine as one of the 50 Most Influential Women in Arizona. Ms. Esque is active on many non-profit boards, including Basis Charter Schools, Take the Lead, and the Boyce Thompson Arboretum, among others. Ms. Esque’s strong understanding of corporate social responsibility, education, media relations, and government and community affairs makes her a valuable resource to the board.
|
| |
| |
Martin A. Kropelnicki
|
| | | | | |
| |
![]() Age: 54
Director Since 2013 |
| | |
President & CEO, California Water Service Group
Mr. Kropelnicki is President & CEO of the Group. Mr. Kropelnicki joined the Group as Vice President, Chief Financial Officer (CFO) and Treasurer in 2006 and was named the President and COO in 2012. He then was appointed President & CEO of the Group effective September 1, 2013. He has over 32 years of experience in finance and operations, including 15-plus years as CFO at public listed companies and has held executive positions at PowerLight Corporation, Hall Kinion & Associates, Deloitte & Touche Consulting Group, and Pacific Gas & Electric Company. He serves as a director for the Bay Area Council, and the California Foundation on the Environment & Economy, and is a member of the Silicon Valley Leadership Group. Mr. Kropelnicki is the past President of the National Association of Water Companies and currently serves on their Executive Committee. He holds a Bachelor of Arts Degree and Master of Arts Degree in Business Economics from San Jose State University. In 2016, Mr. Kropelnicki was awarded the United States Navy Memorial Fund’s Naval Heritage Award. He is the 12th recipient of this award since its inauguration.
Mr. Kropelnicki is well positioned to lead the Group’s management team and give guidance and perspective to the Board. His experience as the former CFO of the Group provides expertise in both corporate leadership and financial management and his management experience enables him to offer valuable perspectives to our corporate planning, rate making, and budgeting along with operational and financial reporting.
|
| |
| |
Thomas M. Krummel, M.D.
|
| | | | | |
| |
![]() Independent
Age: 69 Director Since 2010 Board Committees:
►
Chair, Organization & Compensation
►
Nominating/Corporate Governance
|
| | |
Emile Homan and Chair Emeritus, Department of Surgery, Stanford University
Dr. Krummel is a leader in his field. He has been honored with the Henry J. Kaiser Family Foundation Award for Excellence in Clinical Teaching; the John Austin Collins, M.D. Memorial Award for Outstanding Teaching and Dedication to Resident Training; and the Lucile Packard Children’s Hospital Recognition of Service Excellence. He has been Chair of the Board of Directors at The Fogarty Institute for Innovation since 2014 and has served as a Director of The Morgridge Institute for Research – University of Wisconsin since 2015.
Dr. Krummel brings to the Board experience with professional training and development, as well as expertise with medical, public health, and science issues. He offers the Board unique insight on public health matters, including healthcare policy and legislation, drinking water quality, and employee health.
|
| |
| |
Richard P. Magnuson
|
| | | | | |
| |
![]() Independent
Age: 65 Director since 1996 Board Committees:
►
Chair, Nominating/Corporate Governance
►
Audit
►
Finance and Capital Investment
Previous Board
Directorships:
►
Rogue Wave Software
►
IKOS System, Inc.
►
OrCAD Sytems Corporation
|
| | |
Managing Director of Orpheum Capital
Mr. Magnuson is a venture capital investor and our Lead Independent Director. He is Managing Director of Orpheum Capital, a private investment fund. From 1984 to 1996, he was a general partner of Menlo Ventures, a venture capital firm. Mr. Magnuson holds an undergraduate degree in economics, a law degree and a master’s degree in business administration from Stanford University. In addition to his previous public company experience, Mr. Magnuson has served on the boards of several privately held companies.
With his legal and venture capital background, Mr. Magnuson brings valuable financial and business strategy expertise to the Board. His past experience on the boards of other public companies, as well as his insight on financial and operational matters, adds value to the Board. His past and current Board service also provides insight on corporate governance practices.
|
| |
| | Yvonne (Bonnie) A. Maldonado, M.D. |
| | | | | |
| |
![]() Independent
Age: 65 |
| | |
Professor of Global Health and Infectious Diseases, Departments of Pediatrics and Epidemiology and Population Health, Stanford University
Dr. Maldonado is currently a pediatric infectious diseases epidemiologist at Stanford University School of Medicine as well as the medical director of Infection Prevention and Control and an attending physician at Packard Children’s Hospital at Stanford. She is also a professor in the Departments of Pediatrics and Health Research and Policy; chief of the Division of Infectious Diseases; director of Global Child Health; and senior associate dean for faculty development and diversity at Stanford’s School of Medicine. Dr. Maldonado is currently the chair of the American Academy of Pediatrics Committee on Infectious Diseases and a member of numerous medical associations and committees.
Nationally and internationally renowned for her knowledge, research, and expertise in infectious and vaccine-preventable disease control and international health, Dr. Maldonado has led studies and investigations funded by the United States, CDC, WHO, NIH, and Gates Foundation around the world on HIV, polio, and measles. Dr. Maldonado brings a unique perspective and valuable insight to the Board.
|
| |
| |
Scott L. Morris
|
| | | | | |
| |
![]() Independent
Age: 63 Director Since 2019 Committees:
►
Organization & Compensation
►
Enterprise Risk Management, Safety and Security
Current Board Directorship:
►
McKinstry
|
| | |
Chairman, Avista Corporation
Mr. Morris has been Chairman of Avista Corporation, a publicly traded electrical and natural gas utility serving customers primarily in the Pacific Northwest, since January 2008. From January 2008 to October 1, 2019, he also served as Avista’s CEO. From January 2008 to January 2018 he served as its President. From May 2006 to December 2007, he served as its President and Chief Operating Officer. Mr. Morris joined Avista in 1981 and his experience at the company includes management positions in construction and customer service and general manager of the company’s Oregon utility business. He is a graduate of Gonzaga University and received his master’s degree from Gonzaga University in organizational leadership. He also attended the Stanford Business School Financial Management Program and the Kidder Peabody School of Financial Management. Mr. Morris serves on the board of McKinstry and on the Board of Trustees of Gonzaga University. He has served on a number of Spokane non-profit and economic development boards.
Mr. Morris brings to the Board a deep knowledge and understanding of the utility industry, having spent his entire career in the industry. As a former senior executive, he also contributes senior leadership experience and valuable perspectives on strategy, operations and business management.
|
| |
| |
Peter C. Nelson
|
| | | | | |
| |
![]() Age: 73
Director since 1996 |
| | |
Chairman, California Water Service Group
Mr. Nelson is Chairman of the Board of the Group and its subsidiaries. He is a director of the California Chamber of Commerce and a past president of the National Association of Water Companies (NAWC). Mr. Nelson has a strong record of operational and strategic leadership in the public utility business, including his 17-plus years of experience as the former President & CEO of the Group. An engineer by training with a graduate degree in business administration, he gained extensive senior executive experience at Pacific Gas & Electric Company. He has a vast understanding of the water industry from his role as the former President & CEO of the Group and from his leadership roles representing the water profession nationally at NAWC as well as in California at the State Chamber of Commerce.
|
| |
| |
Carol M. Pottenger
|
| | | | | |
| |
![]() Independent
Age: 65 Director Since 2017 Committees:
►
Vice Chair, Enterprise Risk Management, Safety and Security
►
Finance and Capital Investment
►
Nominating/Corporate Governance
|
| | |
Principal and Owner, CMP Global, LLC
As principal and owner of CMP Global LLC, Ms. Pottenger’s organization, which was founded in 2014, provides consulting services in business development, process improvement, corporate governance, strategic planning, and cyber and information systems. The first female three-star Admiral in American history to lead in a combat branch, Ms. Pottenger commanded two ships, a logistic force of 30 ships, a Japan-based strike-group of eight ships, and the Expeditionary Force of 40,000 sailors during her 36 years in the U.S. Navy before retiring in 2013. She was also the senior U.S. Flag Officer responsible for military transformation and sensitive military topics such as counterterrorism and cyber security while on assignment with NATO.
Ms. Pottenger brings unique experience to the board, ranging from operations to technology to risk management. A graduate of Purdue University in Lafayette, Indiana, she also serves on various private, defense, and non-profit boards, including the U.S. Navy Memorial Foundation in Washington, D.C. and PricewaterhouseCoopers LLP Board of Partners and Principals.
|
| |
| |
Lester A. Snow
|
| | | | | |
| |
![]() Independent
Age: 69 Director Since 2011 Committees:
►
Chair, Enterprise Risk Management, Safety and Security
►
Finance and Capital Investment
►
Organization & Compensation
|
| | |
Retired
Mr. Snow has served as Secretary of the California Natural Resources Agency, Director of the California Department of Water Resources, Regional Director of the U.S. Bureau of Reclamation, Executive Director of the CALFED Bay Delta Program, and General Manager of the San Diego County Water Authority. He served as Executive Director of the California Water Foundation, an initiative of the Resources Legacy Fund, and serves on the board of the Klamath River Renewal Corporation. He holds a Master of Science Degree in Water Resources Administration from the University of Arizona and a Bachelor of Science Degree in Earth Sciences from Pennsylvania State University.
Mr. Snow brings more than 40 years of water and natural resource management experience to the Board. His distinguished public service career enables him to assist the Board in addressing water and environmental issues as well as regulatory and public policy matters. Mr. Snow’s executive experience in the public sector provides the Board with critical insight on a variety of operational and financial matters.
|
| |
| |
Patricia K. Wagner
|
| | | | | |
| |
![]() Independent
Age: 58 Director Since 2019 Committees:
►
Audit
►
Nominating/Corporate Governance
Previous Board Directorship:
►
SoCalGas
Current Board Directorship:
►
Apogee Enterprises
|
| | |
Retired
Ms. Wagner, prior to her retirement in 2019, served as Group President, U.S. Utilities for Sempra Energy, an energy-services holding company whose subsidiaries include San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas), both California regulated utilities, as well as other companies operating in the electric and gas infrastructure business. Prior to her role as Group President, from 2017 to 2018 she served as Chairman and Chief Executive Officer of SoCalGas, one of the largest natural gas utilities in the country. She served as Executive Vice President of Sempra Energy in 2016, and as President and Chief Executive Officer of Sempra U.S. Gas & Power from 2014 to 2016. During her 24-year career in the utility sector, Ms. Wagner held a range of other leadership positions, including: Vice President of Audit Services for Sempra Energy; Vice President of Accounting and Finance for SoCalGas; Vice President of Information Technology for SoCalGas and SDG&E; and Vice President of Operational Excellence for SoCalGas and SDG&E. Ms. Wagner is currently a director of Apogee Enterprises, Inc., a public company that designs and develops commercial glass and metal products. Ms. Wagner earned her Master of Business Administration from Pepperdine University and a bachelor’s degree in chemical engineering from California State Polytechnic University, Pomona.
Ms. Wagner has immense working knowledge and familiarity with the California regulatory environment and has worked with the California Public Utilities Commission. Her deep understanding of regulatory affairs and experience working for an investor-owned utility make her a valuable asset to the Group. She also brings valuable accounting and finance, senior leadership and operational experience to the Board.
|
| |
|
2020 Director Compensation Program
|
| ||||||
| Board Retainers: | | | | | | | |
|
Annual Base Retainer – All Directors
|
| | | $ | 65,500 | | |
|
Chairman of the Board Retainer
|
| | | $ | 60,000 | | |
|
Lead Director Retainer
|
| | | $ | 22,000 | | |
| Committee Chair Retainers: | | | | | | | |
|
Audit Committee Chair Retainer
|
| | | $ | 18,000 | | |
|
Organization and Compensation Committee Chair Retainer
|
| | | $ | 13,500 | | |
|
Nominating/Corporate Governance Committee Chair Retainer
|
| | | $ | 12,500 | | |
|
Finance and Risk Management Committee Chair Retainer
|
| | | $ | 10,000 | | |
|
Enterprise Risk Management, Safety and Security Committee Chair Retainer
|
| | | $ | 11,000 | | |
|
Enterprise Risk Management, Safety and Security Committee Vice Chair Retainer
|
| | | $ | 5,500 | | |
| Board/Committee Meeting Attendance Fees: | | | | | | | |
|
Chairman of the Board – Board Attendance Fee
|
| | | $ | 4,600 | | |
|
All other Directors – Board Attendance Fee
|
| | | $ | 2,300 | | |
|
Chairman of the Board – Committee Attendance Fee
|
| | | $ | 1,800 | | |
|
All other Directors – Committee Attendance Fees
|
| | | $ | 1,800 | | |
| Equity: | | | | | | | |
|
Annual RSA Equity Grants(1)
|
| | | $ | 87,500 | | |
|
Name (a)
|
| |
Fees
Earned or Paid in Cash($) (b) |
| |
Stock Awards
($)(2)(3) (c) |
| |
Total($)
(h) |
| |||||||||
|
Peter C. Nelson(1)
Chairman |
| | | $ | 200,300 | | | | | $ | 83,798 | | | | | $ | 284,098 | | |
|
Richard P. Magnuson
Lead Director |
| | | | 142,800 | | | | | | 83,798 | | | | | | 226,598 | | |
| Gregory E. Aliff | | | | | 131,700 | | | | | | 83,798 | | | | | | 215,498 | | |
| Terry P. Bayer | | | | | 120,100 | | | | | | 83,798 | | | | | | 203,898 | | |
| Shelly M. Esque | | | | | 99,300 | | | | | | 83,798 | | | | | | 183,098 | | |
| Thomas M. Krummel, M.D. | | | | | 116,400 | | | | | | 83,798 | | | | | | 200,198 | | |
| Scott L. Morris | | | | | 101,100 | | | | | | 83,798 | | | | | | 184,898 | | |
| Carol M. Pottenger | | | | | 108,400 | | | | | | 83,798 | | | | | | 192,198 | | |
| Lester A. Snow | | | | | 122,900 | | | | | | 83,798 | | | | | | 206,698 | | |
| Patricia K. Wagner | | | | | 101,100 | | | | | | 83,798 | | | | | | 184,898 | | |
|
Name
|
| |
Common Stock
Beneficially Owned(*) |
| |||
|
Gregory E. Aliff
Director |
| | | | 13,339 | | |
|
Terry P. Bayer
Director |
| | | | 16,246 | | |
|
Shannon C. Dean
Executive Officer |
| | | | 15,443 | | |
|
Shelly M. Esque
Director |
| | | | 6,156 | | |
|
David B. Healey
Executive Officer |
| | | | 16,371 | | |
|
Martin A. Kropelnicki
Director and Executive Officer |
| | | | 100,649 | | |
|
Thomas M. Krummel, M.D.
Director |
| | | | 28,984 | | |
|
Robert J. Kuta
Executive Officer |
| | | | 13,472 | | |
|
Michael B. Luu
Executive Officer |
| | | | 16,959 | | |
|
Richard P. Magnuson
Director |
| | | | 58,090 | | |
|
Michael S. Mares, Jr.
Executive Officer |
| | | | 3,936 | | |
|
Lynne P. McGhee
Executive Officer |
| | | | 26,288 | | |
|
Greg A. Milleman
Executive Officer for California Subsidiary |
| | | | 3,420 | | |
|
Scott L. Morris
Director |
| | | | 3,598 | | |
|
Michelle R. Mortensen
Executive Officer |
| | | | 8,622 | | |
|
Peter C. Nelson
Director and Retired Executive Officer |
| | | | 17,990 | | |
|
Elissa Y. Ouyang
Executive Officer |
| | | | 6,162 | | |
|
Todd K. Peters
Executive Officer for California Subsidiary |
| | | | 2,497 | | |
|
Carol M. Pottenger
Director |
| | | | 7,569 | | |
|
Gerald A. Simon
Executive Officer |
| | | | 7,566 | | |
|
Thomas F. Smegal III
Executive Officer |
| | | | 43,836 | | |
|
Lester A. Snow
Director |
| | | | 19,924 | | |
|
Paul G. Townsley
Executive Officer |
| | | | 26,226 | | |
|
Ronald D. Webb
Executive Officer |
| | | | 20,277 | | |
|
Patricia K. Wagner
Director |
| | | | 3,595 | | |
|
All directors and executives as a group
|
| | | | 487,215 | | |
|
Class
|
| |
Beneficial Owner
|
| | Number of Shares of Common Stock |
| | Percent of Class |
| ||||||
| Common | | |
BlackRock, Inc.(1)
55 East 52nd Street
New York, NY 10055
|
| | | | 8,253,577 | | | | | | 16.6% | | |
| Common | | |
The Vanguard Group, Inc.(2)
100 Vanguard Blvd.
Malvern, PA 19355
|
| | | | 5,731,833 | | | | | | 11.50% | | |
| Common | | |
State Street Corporation(3)
One Lincoln Street
Boston, MA 02111
|
| | | | 3,770,555 | | | | | | 7.57% | | |
|
Name
|
| |
Title
|
|
| Martin A. Kropelnicki | | | President & CEO | |
| Thomas F. Smegal III | | | Vice President, Chief Financial Officer | |
| Paul G. Townsley | | | Vice President, Corporate Development and Chief Regulatory Officer | |
| Robert J. Kuta | | | Vice President, Engineering and Chief Water Quality and Environmental Compliance Officer | |
| Lynne P. McGhee | | | Vice President, General Counsel | |
|
Table of Contents
|
| |
Page
|
| |||
| This Compensation Discussion and Analysis is organized as follows: | | | | | | | |
| | | | | 36 | | | |
| | | | | 37 | | | |
| | | | | 38 | | | |
| | | | | 40 | | | |
| | | | | 54 | | | |
| | | | | 55 | | |
| |
►
Pay-for-performance by aligning officer compensation to pre-established, quantifiable performance goals
►
Use performance metrics that are understandable and are tied to key performance indicators; all of our officers have the ability to make an impact
►
Provide competitive pay to attract and retain highly-qualified officers
►
Align management interests with the long-term interests of our customers and stockholders
►
Establish performance goals that are aligned with our organizational strategy
►
Maintain a one-team approach, meaning all eligible officers and department heads share the same performance targets and compensation plan
|
| |
|
Name
|
| |
2019
Base Salary |
| |
2020
Base Salary |
| |
Percent
Increase |
| |
2021
Base Salary |
| |
Percent
Decrease |
| |||||||||||||||
| Martin A. Kropelnicki | | | | $ | 987,000 | | | | | $ | 1,021,545 | | | | | | 3.5 | | | | | $ | 900,000 | | | | | | (12.0) | | |
| Thomas F. Smegal III | | | | | 457,500 | | | | | | 475,800 | | | | | | 4.0 | | | | | | 428,220 | | | | | | (10.0) | | |
| Paul G. Townsley | | | | | 405,000 | | | | | | 419,500 | | | | | | 3.6 | | | | | | 377,550 | | | | | | (10.0) | | |
| Robert J. Kuta | | | | | 347,500 | | | | | | 360,000 | | | | | | 3.6 | | | | | | 324,000 | | | | | | (10.0) | | |
| Lynne P. McGhee | | | | | 319,500 | | | | | | 345,500 | | | | | | 8.1 | | | | | | 310,950 | | | | | | (10.0) | | |
| |
WHAT WE DO
|
| | |
WHAT WE DON’T DO
|
| |
| |
![]() We pay for performance with compensation in the form of annual short-term performance-based incentives, as well as award a substantial portion of long-term equity incentive compensation in the form of restricted stock units (RSUs) subject to performance-based vesting criteria over a three-year period.
![]() We retain an independent compensation consultant who reports to the Organization and Compensation Committee.
![]() We hold an annual “say-on-pay” advisory vote.
![]() We require stock ownership with minimum holding requirements for all directors and officers to promote a long-term perspective in managing the Group and to help align the interests of our stockholders, directors, and officers.
![]() We cap individual payouts for short-term performance-based incentive and long-term equity incentive compensation plans.
![]() We have an officer compensation recovery (“clawback”) policy requiring the reimbursement of excess incentive-based compensation provided to the Group’s officers in the event of certain restatements of the Group’s financial statements.
|
| | |
![]() No excessive perquisites; the Group provides officers with only limited perquisites consisting of a company vehicle with related excess liability insurance.
![]() No tax gross-ups on perquisites or other personal benefits.
![]() No employment agreements; other than participation in the Executive Severance Plan, none of our officers are party to individual employment or severance agreements.
![]() No single-trigger change-in-control benefits; the Group’s Executive Severance Plan provides for change-in-control severance benefits upon a termination of employment following a change-in-control; the Group’s equity incentive plan does not require single-trigger vesting acceleration upon a change-in-control.
![]() No hedging and pledging of Group stock; the Group’s directors and officers are prohibited from hedging their ownership of Group stock, including trading in options, puts, calls, or other derivative instruments related to Group stock or debt, in accordance with the anti-hedging prohibition in our insider trading policy; directors and officers are also prohibited from pledging their ownership of Group stock in accordance with an anti-pledging provision in our insider trading policy.
|
| |
| Allete, Inc. | | | NorthWestern Corp. | |
| American States Water Company | | | Otter Tail Corporation | |
| Aqua America, Inc. | | | Ormat Technologies | |
| Avista Corporation | | | PNM Resources | |
| Black Hills Corp. | | | Portland General Electric | |
| Chesapeake Utilities Corp. | | | San Jose Water Company | |
| MGE Energy | | | South Jersey Industries, Inc. | |
| Northwest Natural Gas Company | | | Unitil Corporation | |
| |
Financial Goals
|
| | |
Achievements
|
| |
| | Financial Results Including Capital Investment and Return on Equity | | | |
►
Achieved net income of $96.8 million and diluted earnings per share of $1.97 (each determined in accordance with GAAP)
►
Achieved the majority of its operational goals while keeping controllable costs within budget
►
Invested $298.7 million of capital in accordance with our infrastructure improvement program
►
Increased the Group’s 2021 annual dividend by seven cents, or 8.2%, which represents our 54th consecutive annual dividend increase
►
Raised net proceeds of $81.8 million through an at-the-market equity program, better matching the Company’s capital needs with funding
►
Maintained the Group’s strong credit rating of A+ stable and AA− for first mortgage bonds and “exceptional” liquidity rating from Standard & Poor’s (one of the only North American utilities to do so)
►
Achieved consolidated Group earnings per share in 2020 representing a return on equity (determined in accordance with GAAP) of 11.38% as reported in item 7 of the Group’s Form 10-K for the year ended December 31, 2020 as filed with the SEC
►
On December 4, 2020, the California Public Utilities Commission (CPUC) approved the Group’s largest subsidiary, California Water Service Company’s (Cal Water), October 14, 2020 proposed decision for its 2018 General Rate Case (GRC) application. The decision authorizes total revenue of up to $696.5 million and to:
•
Continue its decoupling balancing accounts through 2022
•
Invest $828 million in new capital through 2021
•
Recover $148 million of water system infrastructure upgrades to via the CPUC’s advice letter procedure once the project is completed
|
| |
| | Water Quality and Customer Service Accomplishments |
| | |
►
Met all state and all federal primary and secondary water quality standards in all water systems Group owns during the pandemic
►
Completed two treatment facilities to remove per- and polyfluoroalkyl substances (PFAS)
►
Met or exceeded all customer service standards as set by the CPUC
|
| |
| |
Financial Goals
|
| | |
Achievements
|
| |
| | Safety Achievement | | | |
►
Activated our Emergency Operations Center to enable communication and coordination on instituting new COVID-19 protocols across operations and offices in four U.S. states, including 22 California districts
►
Developed and delivered multiple levels of employee training and guidance for COVID-19 protocols and safety measures
►
During Public Safety Power Shutoffs (PSPS), Cal Water customers maintained water service through the activation of the company’s Emergency Response Centers and deployment of operational, engineering, water quality, and other experts and resources statewide, including portable generators, booster pumps, and emergency trailers
►
Virtually conducted twelve community Emergency Operation Center joint exercises with local police, fire, and city authorities
►
Launched the Power 4 America (P4A) program, a partnership with the Utility Workers of America, to improve safety awareness and protect our employees
►
Implemented a “Drive to Zero” initiative to eliminate preventable accidents and developed a hands-on course for driving heavy equipment
|
| |
| |
Corporate Goals
|
| | |
Achievement
|
| |
| |
Group Operations:
Achieve planned operating results as defined in the 2020 Corporate Goals and Objectives
|
| | |
►
Operated within the approved 2020 budget
►
Continued enhancement of the Group’s safety organization and programs making safety a top priority
►
Developed and deployed a program that met the requirements of the California Consumer Privacy Act (CCPA), Telephone Consumer Protection Act (TCPA), and Senate Bill 998
►
Achieved the highest compliance control status for the Defense Federal Acquisition Regulations Supplement (DFARS) audit and engaged a qualified, third-party company to perform an annual network penetration test for the corporate and SCADA networks
►
Completed a materiality assessment to determine and prioritized the highest priority ESG topics for Group and its stakeholders and produced Group’s first ESG report
►
Completed the purchase of Rainier View Water Company to acquire its water system assets and provide water utility service to its 18,000-plus service connections
|
| |
| |
Stockholder Value:
Achieve budgeted earnings per share of $1.63, earn authorized return on equity on invested capital of 9.20%, and company-funded capital expenditures of $275 million
|
| | |
►
Earnings per share of $1.97, representing a return on equity (as determined in accordance with GAAP) of 11.38% as reported in item 7 of the Group’s Form 10-K for the year ended December 31, 2020 as filed with the SEC
►
The Group’s 2020 achieved capital expenditures was $298.7 million, inclusive of company-funded capital expenditures of $294 million, as reported in item 7 of the Group’s Form 10-K for the year ended December 31, 2020 as filed with the SEC (excluding developer funded expenditures of $18.9 million and including an increase in accounts payable accrual of $14.2 million for capital project spend)
|
| |
| |
Regulatory Goal:
Conclude the 2018 Cal Water GRC
|
| | |
►
The California Public Utilities Commission (CPUC) issued a decision in our 2018 Infrastructure Investment Filing (GRC) authorizing Cal Water to invest $828 million in new capital through 2021 and to keep its decoupling balancing accounts through 2022
►
The CPUC approved Cal Water’s request for an additional $700 million of authorization for debt and equity financing to fund its capital improvement program which is expected to fund these improvements through 2025
►
The Hawaii Public Utilities Commission (HPUC) approved Hawaii Water Service Company’s (Hawaii Water) application for the purchase of the Membership Interests of Kalaeloa Water Company, LLC. Hawaii Water took control of the water system on November 2, 2020
|
| |
| |
Customer Service and Water Quality:
Complete key strategic projects in the areas of customer service and water quality including:
►
Meet or exceed all customer service standards as set by the PUC
►
Meet or exceed all water quality standards in every state, every day, with no primary or secondary water quality violations in 2020
►
Meet or exceed all wastewater discharge standards in every system, every day, in 2020
|
| | |
►
Met requirements of America’s Water Infrastructure Act (AWIA) of 2018, including submittal deadlines for risk and resilience assessments for priority 1 and 2 systems and emergency response plans for priority 1 systems
►
Exceeded nine CPUC standards which encompass key measurements for telephone responsiveness, service responsiveness, billing accuracy, and general levels of customer complaints (the nine CPUC customer service standards are found in the CPUC’s General Order 103-A)
►
Met all state and federal primary and secondary water quality standards in all water systems operated by Group during the pandemic
►
Maintained an excellent environmental standards record throughout 2020
|
| |
| |
Corporate Goals
|
| | |
Achievement
|
| |
| |
Employee Retention and Development:
Implement key strategic projects in the area of employee retention and development
|
| | |
►
Implemented Workday human capital and payroll management application
►
Implemented a preventable vehicle accident reduction program including the rollout of our hand-on heavy equipment driving course
►
Recognized with a Silver Stevie Award in the category of Most Valuable Employer for COVID-19 response by the Stevie Awards for Great Employers
►
Named a “Top 100 Workplace” in the San Francisco Bay Area for the ninth consecutive year by the Bay Area News Group
►
Named a “Top Workplace” by Top Workplaces, LLC for the first time
►
Received recertification as a Great Place to Work® by the Great Place to Work® Institute for the fifth consecutive year
|
| |
|
Performance Level*
|
| |
Primary Water
Standards Violations (all states) |
| |
Secondary Water
Standards Violations (California only) |
| |
Procedural
Violations (California only) |
| |
Goal
Achieved |
| |||
| Maximum | | |
0
|
| |
0
|
| |
0
|
| | | | 200% | | |
| Target | | |
0
|
| |
2 or fewer
|
| |
Up to 4
|
| | | | 100% | | |
| Threshold | | |
1 or fewer
|
| |
4 or fewer
|
| |
Up to 8
|
| | | | 50% | | |
|
Performance Level*
|
| |
Criteria
|
| |
Goal
Achieved |
| |||
| Maximum | | |
99.1% of maximum annual metric
|
| | | | 200% | | |
| Target | | |
92.1.% of maximum annual metric
|
| | | | 100% | | |
| Threshold | | |
90.0% of maximum annual metric
|
| | | | 50% | | |
|
Performance Level*
|
| |
2020
(In Millions) |
| |
Goal
Achieved |
| ||||||
| Maximum | | | | $ | 325 | | | | | | 200% | | |
| Target | | | | $ | 275 | | | | | | 100% | | |
| Threshold | | | | $ | 245 | | | | | | 25% | | |
|
Performance Level*
|
| |
EPS Variance
from Budget |
| |
Goal
Achieved |
| |||
| Maximum | | |
Over 10%
|
| | | | 200% | | |
| Target | | |
−2.5% to 2.5%
|
| | | | 100% | | |
| Threshold | | |
−7.6% to −10%
|
| | | | 25% | | |
|
Performance Level*
|
| |
Community EOC Training Performance Target
|
| |
Goal
Achieved |
| |||
| Maximum | | | Conduct 12 community EOC trainings | | | | | 200% | | |
| Target | | | Conduct 10 community EOC trainings | | | | | 100% | | |
| Threshold | | | Conduct eight community EOC trainings | | | | | 25% | | |
|
Performance Level*
|
| |
Training Rate Measure Performance Target
|
| |
Goal
Achieved |
| |||
| Maximum | | | 100% of applicable employees | | | | | 200% | | |
| Target | | | 85% of applicable employees | | | | | 100% | | |
| Threshold | | | 70% of applicable employees | | | | | 25% | | |
|
Performance Level*
|
| |
TCIR Measure Performance Target
|
| |
Numeric
Equivalent |
| |
Goal
Achieved |
| ||||||
| Maximum | | | 25% improvement over 2019 achieved results | | | | | 2.78 | | | | | | 200% | | |
| Target | | | 5% improvement over 2019 results | | | | | 3.52 | | | | | | 100% | | |
| Threshold | | | 90% of 2019 achieved results | | | | | 4.07 | | | | | | 25% | | |
|
Performance Level*
|
| |
Preventable Vehicle Accident Measure
Performance Target |
| |
Numeric
Equivalent |
| |
Goal
Achieved |
| ||||||
| Maximum | | | 20% improvement over 2019 achieved results | | | | | 34 | | | | | | 200% | | |
| Target | | | Maintain 2019 achieved results | | | | | 42 | | | | | | 100% | | |
| Threshold | | | 85% of 2019 achieved results | | | | | 48 | | | | | | 25% | | |
|
Performance Level*
|
| |
Unannounced Site Safety Audits and Immediate
Onsite Review Measure Performance Target |
| |
Goal
Achieved |
| |||
| Maximum | | | 144 audits | | | | | 200% | | |
| Target | | | 72 audits | | | | | 100% | | |
| Threshold | | | 18 audits | | | | | 25% | | |
|
Performance Metric
|
| |
Minimum Threshold
Performance |
| |
Target Performance
|
| |
Maximum
Performance |
| |
Achieved Results
|
|
| Water Quality | | | Up to one primary (all states), up to four secondary (California only), up to eight procedural violations (California only) | | | No primary (all states), up to two secondary (California only), up to four procedural violations (California only) | | | No primary (all states), no secondary (California only), no procedural violations (California only) | | | 200% – No primary, no secondary, or procedural violations | |
| Customer Service | | | 90.0% of the maximum annual metric | | | 92.1% of the maximum annual metric | | | 99.1% of the maximum annual metric | | | 175% – Achieved 98.7% of the maximum annual metric | |
| Utility Plant | | | $245 million in company-funded capital expenditures | | | $275 million in company-funded capital expenditures | | | $325 million in company-funded capital expenditures | | | 150% – $298.7 million in capital expenditures, of which $294 million was company-funded | |
| Earnings per Share (EPS) | | | Negative 10% EPS variance from budget | | | +/- 2.5% EPS variance from budget | | | Positive10% EPS variance from budget | | | 200% – Positive 21% EPS variance from budget | |
| Safety | | |
►
Conduct eight community EOC trainings,
►
70% of applicable employees trained
►
90% of 2019 achieved TCIR results
►
85% of 2019 preventable vehicle accident achieved results
►
18 unannounced site safety audits and immediate onsite reviews
|
| |
►
Conduct 10 community EOC trainings,
►
85% of applicable employees trained
►
5% improvement over 2019 achieved TCIR results,
►
Maintain 2019 preventable vehicle accident achieved results,
►
72 unannounced site safety audits and immediate onsite reviews
|
| |
►
Conduct 12 community EOC trainings
►
100% of applicable employees trained
►
25% improvement over 2019 achieved TCIR results
►
20% improvement over 2019 preventable vehicle accident achieved results
►
144 unannounced site safety audits and immediate onsite reviews
|
| |
►
150%
►
Conducted eight community EOC trainings
►
96% of applicable employees trained
►
11% improvement over 2019 TCIR results,
►
19% improvement over 2019 preventable vehicle accident achieved results
►
188 unannounced site safety audits and immediate onsite reviews
|
|
|
Name
|
| |
2020
Short-Term Incentive Award ($)(1) |
| |||
| Martin A. Kropelnicki | | | | $ | 1,787,704 | | |
| Thomas F. Smegal | | | | | 249,795 | | |
| Paul G. Townsley | | | | | 220,238 | | |
| Robert J. Kuta | | | | | 189,000 | | |
| Lynne P. McGhee | | | | | 181,388 | | |
|
Performance Level*
|
| |
Annual Return on Common Stockholders’ Equity
|
| |
Goal
Achieved |
| |||
| Maximum | | |
Target plus 50 basis points
|
| | | | 200% | | |
| Target | | |
California authorized ROE
|
| | | | 100% | | |
| Threshold | | |
Target minus 200 basis points
|
| | | | 20% | | |
|
Performance Level*
|
| |
Accumulation of Stockholder Value Over the Performance Period
|
| |
Goal
Achieved |
| |||
| Maximum | | |
$450 million
|
| | | | 200% | | |
| Target | | |
$350 million
|
| | | | 100% | | |
| Threshold | | |
$275 million
|
| | | | 25% | | |
|
Performance Level*
|
| |
Performance Target
|
| |
Goal
Achieved |
| |||
| Maximum | | | Annual framework-compliant reporting of material ESG data, completion of water supply risk assessment from climate change and signing agreements or beginning construction on with three water supply diversification projects by 2022 |
| | | | 200% | | |
| Target | | | Annual framework-compliant reporting of material ESG data, completion of water supply risk assessment from climate change | | | | | 100% | | |
| Threshold | | | Annual framework-compliant reporting of material ESG data | | | | | 50% | | |
|
Performance Metric
|
| |
Annual Threshold
Performance |
| |
Annual Target
Performance |
| |
Annual Maximum
Performance |
|
| Water Quality | | | Up to one primary, up to four secondary, up to eight procedural violations | | | No primary, up to two secondary, up to four procedural violations | | | No primary, no secondary, no procedural violations | |
| Customer Service | | | 92.5% of maximum annual metric | | | 95.5% of maximum annual metric | | | 99.5% of maximum annual metric | |
| Utility Plant | | | $195 million in 2018, $240 million in 2019, $245 in million in 2020 | | | $210 million in 2018, $255 million in 2019, $275 million in 2020 | | | $230 million in 2018, $275 million in 2019, $325 million in 2020 | |
| Return on Equity | | | 7.20% in 2018, 2019 and 2020 | | | CPUC authorized ROE: 9.20% in 2018, 2019, and 2020 | | | 9.70% in 2018, 2019, and 2020 | |
| Safety | | | 10% improvement in TCIR, in preventable accidents measures over 2017 results, and 65% applicable employees trained | | | 25% improvement in TCIR, in preventable accidents measures over 2017 results, and 80% of applicable employees trained | | | 40% improvement in TCIR, in preventable accidents measures over 2017 results, and 100% of applicable employees trained | |
|
Name
|
| |
2018 Performance
Stock Earned ($)(1) |
| |||
| Martin A. Kropelnicki | | | | $ | 579,065 | | |
| Thomas F. Smegal | | | | | 151,095 | | |
| Paul G. Townsley | | | | | 151,095 | | |
| Robert J. Kuta | | | | | 151,095 | | |
| Lynne P. McGhee | | | | | 151,095 | | |
| |
Title
|
| | |
Equity
|
| |
| | President & CEO | | | | 3X annual base salary | | |
| | Group Vice Presidents | | | | 1.5X annual base salary | | |
| | Other Officers | | | | 1X annual base salary | | |
| | Non-Employee Directors | | | | 5X annual base retainer | | |
|
Name and
Principal Position (a) |
| |
Year
(b) |
| |
Salary
($) (c) |
| |
Stock
Awards ($)(1) (e) |
| |
Non-equity
Incentive Plan Compensation ($)(2) |
| |
Change in
Pension Value and Non-qualified Deferred Compensation Earnings ($)(3)(4) (h) |
| |
All Other
Compensation ($)(5) (i) |
| |
Total
($) (j) |
| |
Total
Excluding Change in Pension Value and Non-qualified Deferred Compensation Earnings(6) |
| ||||||||||||||||||||||||
|
Martin A. Kropelnicki
President & CEO |
| | | | 2020 | | | | | $ | 1,059,246 | | | | | $ | 880,653 | | | | | $ | 1,787,704 | | | | | $ | 0 | | | | | $ | 49,253 | | | | | $ | 3,776,856 | | | | | $ | 3,776,856 | | |
| | | 2019 | | | | | | 985,775 | | | | | | 590,006 | | | | | | 1,347,255 | | | | | | 10,339,051 | | | | | | 43,358 | | | | | | 13,305,445 | | | | | | 2,966,394 | | | |||
| | | 2018 | | | | | | 946,716 | | | | | | 551,478 | | | | | | 1,245,400 | | | | | | 3,114,609 | | | | | | 45,120 | | | | | | 5,913,608 | | | | | | 2,798,999 | | | |||
|
Thomas F. Smegal III
Vice President, Chief Financial Officer |
| | | | 2020 | | | | | $ | 493,256 | | | | | $ | 153,202 | | | | | $ | 249,795 | | | | | $ | 0 | | | | | $ | 40,218 | | | | | $ | 936,471 | | | | | $ | 936,471 | | |
| | | 2019 | | | | | | 456,860 | | | | | | 153,946 | | | | | | 187,346 | | | | | | 2,103,003 | | | | | | 50,445 | | | | | | 2,951,600 | | | | | | 848,597 | | | |||
| | | 2018 | | | | | | 428,053 | | | | | | 143,884 | | | | | | 143,650 | | | | | | 56,669 | | | | | | 48,519 | | | | | | 844,410 | | | | | | 787,741 | | | |||
|
Paul G. Townsley
Vice President, Rates & Regulatory Matters |
| | | | 2020 | | | | | $ | 434,981 | | | | | $ | 153,202 | | | | | $ | 220,238 | | | | | $ | 295,871 | | | | | $ | 37,096 | | | | | $ | 1,141,388 | | | | | $ | 845,517 | | |
| | | 2019 | | | | | | 404,425 | | | | | | 153,946 | | | | | | 165,848 | | | | | | 974,213 | | | | | | 37,997 | | | | | | 1,736,429 | | | | | | 762,216 | | | |||
| | | 2018 | | | | | | 386,163 | | | | | | 143,884 | | | | | | 127,075 | | | | | | 368,199 | | | | | | 38,495 | | | | | | 1,068,052 | | | | | | 699,853 | | | |||
|
Robert J. Kuta
Vice President, Engineering |
| | | | 2020 | | | | | $ | 373,276 | | | | | $ | 153,202 | | | | | $ | 189,000 | | | | | $ | 53,125 | | | | | $ | 41,425 | | | | | $ | 810,028 | | | | | $ | 756,903 | | |
| | | 2019 | | | | | | 346,934 | | | | | | 153,946 | | | | | | 142,301 | | | | | | 774,941 | | | | | | 46,208 | | | | | | 1,464,331 | | | | | | 689,390 | | | |||
| | | 2018 | | | | | | 324,856 | | | | | | 143,884 | | | | | | 108,550 | | | | | | 290,457 | | | | | | 46,237 | | | | | | 923,537 | | | | | | 633,080 | | | |||
|
Lynne P. McGhee
Vice President, General Counsel |
| | | | 2020 | | | | | $ | 357,598 | | | | | $ | 153,202 | | | | | $ | 181,388 | | | | | $ | 0 | | | | | $ | 26,126 | | | | | $ | 718,314 | | | | | $ | 718,314 | | |
| | | 2019 | | | | | | 319,036 | | | | | | 153,946 | | | | | | 130,835 | | | | | | 1,510,569 | | | | | | 28,625 | | | | | | 2,143,011 | | | | | | 632,442 | | | |||
| | | 2018 | | | | | | 306,967 | | | | | | 143,884 | | | | | | 98,800 | | | | | | 206,348 | | | | | | 30,547 | | | | | | 792,721 | | | | | | 586,373 | | |
| | | |
RSA Grant Date
Fair Value |
| |
RSU Grant Date
Fair Value at Target Achievement |
| |
RSU Grant Date
Fair Value at Maximum Achievement |
| |||||||||
| Mr. Kropelnicki | | | | $ | 352,261 | | | | | $ | 528,392 | | | | | $ | 1,056,784 | | |
| Mr. Smegal | | | | $ | 71,820 | | | | | $ | 81,382 | | | | | $ | 162,764 | | |
| Mr. Townsley | | | | $ | 71,820 | | | | | $ | 81,382 | | | | | $ | 162,764 | | |
| Mr. Kuta | | | | $ | 71,820 | | | | | $ | 81,382 | | | | | $ | 162,764 | | |
| Ms. McGhee | | | | $ | 71,820 | | | | | $ | 81,382 | | | | | $ | 162,764 | | |
| | | | | | | | | |
Estimated Payouts Under
Non-Equity Incentive Plan Awards ($)(1) |
| |
Estimated Payouts Under
Equity Incentive Plan Awards(2) |
| |
All
Other Stock Awards: Number of Shares of Stock or Units (#) (i) |
| |
Grant
Date Fair Value of Stock and Options Awards ($) (l) |
| ||||||||||||||||||||||||||||||||||||
| Name (a) |
| |
Grant Date
(b) |
| |
Threshold
($) |
| |
Target
($) |
| |
Maximum
($) |
| |
Threshold
(#) |
| |
Target
(#) |
| |
Maximum
(#) |
| |||||||||||||||||||||||||||||||||
| Martin A. Kropelnicki(3) | | | | | 3/3/2020 | | | | | $ | 0 | | | | | $ | 1,021,545 | | | | | $ | 2,043,090 | | | | | | 0 | | | | | | 10,278 | | | | | | 20,556 | | | | | | 6,852 | | | | | $ | 880,653 | | |
| Thomas F. Smegal III(3) | | | | | 3/3/2020 | | | | | | 0 | | | | | | 137,340 | | | | | | 274,680 | | | | | | 0 | | | | | | 1,583 | | | | | | 3,166 | | | | | | 1,397 | | | | | | 153,202 | | |
| Paul G. Townsley(3) | | | | | 3/3/2020 | | | | | | 0 | | | | | | 125,850 | | | | | | 251,700 | | | | | | 0 | | | | | | 1,583 | | | | | | 3,166 | | | | | | 1,397 | | | | | | 153,202 | | |
| Robert J. Kuta(3) | | | | | 3/3/2020 | | | | | | 0 | | | | | | 108,000 | | | | | | 216,000 | | | | | | 0 | | | | | | 1,583 | | | | | | 3,166 | | | | | | 1,397 | | | | | | 153,202 | | |
| Lynne P. McGhee(3) | | | | | 3/3/2020 | | | | | | 0 | | | | | | 103,660 | | | | | | 207,300 | | | | | | 0 | | | | | | 1,583 | | | | | | 3,166 | | | | | | 1,397 | | | | | | 153,202 | | |
| | | |
Stock Awards
|
| |
Equity Incentive Plan Awards
|
| ||||||||||||||||||
| Name (a) |
| |
Number of
Shares or Units of Stock That Have Not Vested (#) (g) |
| |
Market
Value of Shares or Units of Stock That Have Not Vested ($)(1) (h) |
| |
Number of
Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Market
Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) |
| ||||||||||||
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Martin A. Kropelnicki
|
| | | | 625(2) | | | | | | 33,769 | | | | | | 7,489(2) | | | | | | 404,631 | | |
| | | 2,328(3) | | | | | | 125,782 | | | | | | 5,584(3) | | | | | | 301,704 | | | |||
| | | 6,852(4) | | | | | | 370,214 | | | | | | 10,278(4) | | | | | | 555,320 | | | |||
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Thomas F. Smegal III
|
| | | | 163(2) | | | | | | 8,807 | | | | | | 1,954(2) | | | | | | 105,575 | | |
| | | 6083) | | | | | | 32,850 | | | | | | 1,457(3) | | | | | | 78,722 | | | |||
| | | 1,397(4) | | | | | | 75,480 | | | | | | 1,583(4) | | | | | | 85,529 | | | |||
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Paul G. Townsley
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| | | | 163(2) | | | | | | 8,807 | | | | | | 1,954(2) | | | | | | 105,575 | | |
| | | 608(3) | | | | | | 32,850 | | | | | | 1,457(3) | | | | | | 78,722 | | | |||
| | | 1,397(4) | | | | | | 75,480 | | | | | | 1,583(4) | | | | | | 85,529 | | | |||
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Robert J. Kuta
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| | | | 163(2) | | | | | | 8,807 | | | | | | 1,954(2) | | | | | | 105,575 | | |
| | | 608(3) | | | | | | 32,850 | | | | | | 1,457(3) | | | | | | 78,722 | | | |||
| | | 1,397(4) | | | | | | 75,480 | | | | | | 1,583(4) | | | | | | 85,529 | | | |||
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Lynne P. McGhee
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| | | | 168(2) | | | | | | 8,807 | | | | | | 1,954(2) | | | | | | 105,575 | | |
| | | 608(3) | | | | | | 32,850 | | | | | | 1,457(3) | | | | | | 78,722 | | | |||
| | | 1,397(4) | | | | | | 75,480 | | | | | | 1,583(4) | | | | | | 85,529 | | |
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Option Awards
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Stock Awards
|
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| Name (a) |
| |
Number of
Shares Acquired on Exercise (#) (b) |
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Value
Realized on Exercise ($) (c) |
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Number of
Shares Acquired on Vesting (#) (d) |
| |
Value
Realized on Vesting ($) (e) |
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| Martin A. Kropelnicki | | | | | — | | | | | | — | | | | | | 18,171 | | | | | | 886,593 | | |
| Thomas F. Smegal III | | | | | — | | | | | | — | | | | | | 4,741 | | | | | | 231,321 | | |
| Paul G. Townsley | | | | | — | | | | | | — | | | | | | 4,741 | | | | | | 231,321 | | |
| Robert J. Kuta | | | | | — | | | | | | — | | | | | | 4,741 | | | | | | 231,321 | | |
| Lynne P. McGhee | | | | | — | | | | | | — | | | | | | 4,741 | | | | | | 231,321 | | |
| Name (a) |
| |
Plan
Name (b) |
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Number of
Years Credited Service (#)(1) (c) |
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Present
Value of Accumulated Benefit ($)(2) (d) |
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Martin A. Kropelnicki
President & CEO |
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California Water Service Pension Plan
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| | | | 14.80 | | | | | $ | 1,346,028 | | |
|
Supplemental Executive Retirement Plan
|
| | | | 14.80 | | | | | | 20,795,585 | | | |||
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Thomas F. Smegal III(3)
Vice President, Chief Financial Officer and Treasurer |
| |
California Water Service Pension Plan
|
| | | | 23.67 | | | | | | 1,806,299 | | |
|
Supplemental Executive Retirement Plan
|
| | | | 15.00 | | | | | | 4,096,393 | | | |||
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Paul G. Townsley
Vice President, Rates and Regulatory Matters |
| |
California Water Service Pension Plan
|
| | | | 7.83 | | | | | | 676,659 | | |
|
Supplemental Executive Retirement Plan
|
| | | | 7.83 | | | | | | 2,717,982 | | | |||
|
Robert J. Kuta
Vice President, Engineering |
| |
California Water Service Pension Plan
|
| | | | 5.71 | | | | | | 574,886 | | |
|
Supplemental Executive Retirement Plan
|
| | | | 5.71 | | | | | | 1,254,387 | | | |||
|
Lynne P. McGhee(3)
Vice President, General Counsel |
| |
California Water Service Pension Plan
|
| | | | 17.56 | | | | | | 1,545,382 | | |
|
Supplemental Executive Retirement Plan
|
| | | | 15.00 | | | | | | 3,044,372 | | |
| Name (a) |
| |
Executive
Contributions in Last FY ($)(1) (b) |
| |
Aggregate
Earnings in Last FY ($)(1) (d) |
| |
Aggregate
Withdrawals/ Distributions ($) (e) |
| |
Aggregate
Balance at Last FY ($)(2) (f) |
| ||||||||||||
| Martin A. Kropelnicki | | | | $ | 238,770 | | | | | $ | 402,009 | | | | | $ | — | | | | | $ | 2,449,046 | | |
| Thomas F. Smegal III | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Paul G. Townsley | | | | | 40,152 | | | | | | 42,411 | | | | | | — | | | | | | 391,628 | | |
| Robert J. Kuta | | | | | — | | | | | | 1,539 | | | | | | — | | | | | | 14,698 | | |
| Lynne P. McGhee | | | | | — | | | | | | 3,880 | | | | | | — | | | | | | 30,528 | | |
|
Name
|
| |
Change-in-Control
and Termination of Employment Severance Amount ($) |
| |
Termination of
Employment without a Change-in-Control Severance Amount ($) |
| ||||||
| Martin A. Kropelnicki | | | | $ | 3,064,635 | | | | | $ | 157,161 | | |
| Thomas F. Smegal III | | | | | 1,427,400 | | | | | | 73,200 | | |
| Paul G. Townsley | | | | | 1,258,500 | | | | | | 64,538 | | |
| Robert J. Kuta | | | | | 1,080,000 | | | | | | 48,462 | | |
| Lynne P. McGhee | | | | | 1,036,500 | | | | | | 53,154 | | |
|
Measurement
|
| |
Under SEC Rules
|
| |
Excluding Change in
Present Value of Pension Benefits |
| ||||||
| CEO Compensation | | | | $ | 3,777,821 | | | | | $ | 3,777,821 | | |
| Median Employee Compensation | | | | $ | 114,592 | | | | | $ | 105,634 | | |
| Ratio | | | | | 1:33 | | | | | | 1:36 | | |
|
Category of Services
|
| |
2019
|
| |
2020
|
| ||||||
| Audit Fees(1) | | | | $ | 1,601,200 | | | | | $ | 1,845,126 | | |
| Audit-Related Fees(2) | | | | | 411,610 | | | | | | 121,835 | | |
| Tax Fees | | | | | 0 | | | | | | 0 | | |
| All Other Fees(3) | | | | | 60,050 | | | | | | 0 | | |
| Total | | | | $ | 2,072,860 | | | | | $ | 1,966,961 | | |
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You may vote online.
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You may vote by telephone.
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You may vote by mail.
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You do this by following the “Vote by Internet” instructions on the proxy card. If you vote online, you do not have to mail in your proxy card.
Even if you plan to attend the Annual Meeting online, we recommend that you vote your shares prior to the meeting so that your vote will be counted if you later decide not to attend.
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You do this by following the “Vote by Phone” instructions on the proxy card. If you vote by telephone, you do not have to mail in your proxy card. You must have a touch-tone phone to vote by telephone.
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You do this by signing the proxy card and mailing it in the enclosed, prepaid, and addressed envelope. If you mark your voting instructions on the proxy card, your shares will be voted as you instruct.
If you return a signed card but do not provide voting instructions, your shares will be voted:
►
For each of the twelve named director nominees;
►
For the advisory vote to approve executive compensation; and
►
For the ratification of the selection of Deloitte & Touche LLP as the Group’s independent registered public accounting firm for 2021.
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Proposal
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Vote Required
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| Proposal No. 1 – Election of twelve directors | | | Majority of Votes Cast | | | ||
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Proposal No. 2 – Advisory vote to approve executive compensation
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Majority of Shares Present in Person or Represented by Proxy and Entitled to Vote
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Proposal No. 3 – Ratify the selection of Deloitte & Touche LLP as the Group’s independent registered public accounting firm for 2021
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| | Majority of Shares Present in Person or Represented by Proxy and Entitled to Vote | | |