DEF 14A of Mdu Resources Group Inc
Filed Apr 3, 2025 · FY20240000067716-25-000031
SCHEDULE 14A INFORMATION
| 401(k) Plan | MDU Resources Group, Inc. 401(k) Retirement Plan, as amended and restated | FMV | Fair Market Value | | AGA | American Gas Association | FASB | Financial Accounting Standards Board | | A&R Cooperation Agreement | Amended and Restated Cooperation Agreement, dated as of March 14, 2024, by and among Keith A. Meister, Corvex Management LP, and MDU Resources Group, Inc. | Fiscal 2024 | Fiscal year ending December 31, 2024 | | | | Fiscal 2025 | Fiscal year ending December 31, 2025 | | Annual Meeting | 2025 Annual Meeting of Stockholders | Foundation | MDU Resources Foundation | | Annual Report | Annual Report on Form 10-K for Fiscal 2024 | GAAP | U.S. Generally Accepted Accounting Principles | | ASC | Accounting Standards Codification | GHG | Greenhouse Gas | | Board | Board of Directors | IR | Investor Relations | | Broadridge | Broadridge Financial Solutions, Inc. | IRC | Internal Revenue Code of 1986, as amended | | CAP | Compensation Actually Paid | IRS | Internal Revenue Service | | CD&A | Compensation Discussion and Analysis | IT | Information Technology | | CIC Severance Plan | MDU Resources Group, Inc. Change in Control Severance Plan | Knife River | Knife River Corporation (NYSE: KNF) | | Clawback Policy | Incentive Compensation Recovery Policy | LTI | The Company’s Long-Term Incentive Program | | Common Stock | The Company’s Common Stock, par value $1.00 per share | LTIP | MDU Resources Group, Inc. Long-Term Performance-Based Incentive Plan, as amended and restated | | Company | MDU Resources Group, Inc. | MPC | Management Policy Committee | | Compensation Committee | Compensation and Human Capital Committee | NEO | Named Executive Officer | | Corporate Headquarters | 1200 West Century Avenue, P.O. Box 5650, Bismarck, North Dakota 58506 | Notice | Notice of Internet Availability of Proxy Materials | | Cooperation Agreement | Amended and Restated Cooperation Agreement, by and among Keith A. Meister, Corvex Management LP, and the Company, dated as of January 24, 2023 | NYSE | New York Stock Exchange | | | | PCAOB | Public Company Accounting Oversight Board | | CyROC | Cyber Risk Oversight Committee, consisting of the CIO, CFO, and certain financial, IT, and other leaders from the Company’s business segments | Pension Plan | MDU Resources Group, Inc. Pension Plan for Non-Bargaining Unit Employees | | DCP | MDU Resources Group, Inc. Deferred Compensation Plan, dated as of November 12, 2020 | Pension Plans | Pension Plan and WBI Pension Plan | | DDCP | Deferred Compensation Plan for Directors, as amended May 15, 2008 | PEO | Principal Executive Officer | | Defined Contribution Plan | MDU Resources Group, Inc. Nonqualified Defined Contribution Plan, as amended and restated | PSA | Performance Share Award | | Deloitte | Deloitte & Touche LLP | PSU | Performance Stock Unit | | Director Compensation Policy | MDU Resources Group, Inc. Director Compensation Policy, as amended May 15, 2024 | Record Date | March 14, 2025 | | Director LTI | MDU Resources Group, Inc. Non-Employee Director Long-Term Incentive Compensation Plan, as amended May 17, 2012 | RSU | Restricted Stock Unit (time-based) | | EEI | Edison Electric Institute | SASB | Sustainability Accounting Standards Board | | EICP | MDU Resources Group, Inc. Executive Incentive Compensation Plan, as amended | Say-on-Pay | A non-binding, advisory vote to approve the compensation of our NEOs | | EPS | Earnings Per Share | SCT | Summary Compensation Table | | ERM | Enterprise Risk Management | SEC | U.S. Securities and Exchange Commission | | E&S Committee | Environmental and Sustainability Committee | SISP | MDU Resources Group, Inc. Supplemental Income Security Plan, as amended and restated | | Everus | Everus Construction Group, Inc. (NYSE: ECG) | TCFD | Task Force on Climate-related Financial Disclosures | | Exchange Act | Securities Exchange Act of 1934, as amended | TSR | Total Stockholder Return | | | | VIF | Voting Instruction Form | | | | WBI Pension Plan | Williston Basin Interstate Pipeline Company Pension Plan |
Dennis W. Johnson
Skills and Experiences We believe that our slate of director nominees possesses the appropriate mix of skills, business and board experience, and viewpoints, as presented by the percentage of our Board nominees that have each of the skills and experiences listed below: Pay-for-Performance Compensation Philosophy The centerpiece of our compensation program is our pay-for-performance philosophy that aligns compensation payouts with the achievement of our annual operating plan and long-term strategy, and consequently stockholder value. This is showcased at senior levels of the Company—particularly the CEO—for whom most compensation is tied to the achievement of metrics driving the Company’s operating and stock performance. As shown in the charts below, for 2024, 79.5% of the CEO’s annual target compensation mix, and 65.2%, on average, of the other NEOs’ annual target compensation mix, was at risk. CEO’s Annual 2024 Target Compensation Average of Other NEOs’ 2024 Target Compensation See Compensation Program Design and Structure beginning on page 45 for further information. 2024 Performance-Based Compensation Outcomes The 2024 performance-based compensation paid to our NEOs reflects our strong performance against financial, strategic, and operational goals. Notable performance-based compensation outcomes for 2024 include the following, each of which is disclosed in greater detail within the CD&A beginning on page 42. EICP Awards •The Compensation Committee has a history of setting challenging performance goals. EICP payouts are earned only when we achieve or exceed our goals, and awards are subject to negative discretion when appropriate to align management’s payouts with stockholders’ expectations. Consistent with our pay-for-performance culture, the Compensation Committee established rigorous financial, strategic, and operational performance goals for 2024. •For its financial goals, the Company achieved above target Adjusted Business Segment Earnings performance, near target Adjusted Electric and Natural Gas Distribution Segment Earnings performance, and maximum Adjusted Pipeline Segment Earnings performance; for its strategic goal, the Company achieved maximum Everus Spinoff performance; and for its operational goal, the Company completed each of the Responsible Business initiatives, in each case, as defined in the CD&A beginning on page 42. As a result, Mses. Kivisto and Jones and Mr. Vollmer earned 161.6% payouts, Mr. Senger earned a 103.1% payout, and Mr. Johnson earned a 205% payout for 2024 performance, in each case as a percentage of their target incentive. For a description of how the EICP performance metrics were calculated and the adjustments from 2024 reported financial results, as applicable, see EICP beginning on page 47. LTI Awards •The Compensation Committee made a temporary modification to its traditional LTI practices to take into account the impact of two extraordinary corporate spinoff transactions, which does not represent any change in its executive compensation philosophy, and it has since returned to granting a mix of PSA and RSU awards. In 2024, in light of the then-pending Everus spinoff, the Compensation Committee made a temporary modification to its traditional LTI practices, and granted executives, including the NEOs, RSU awards instead of the traditional mix of PSA and RSU awards (as the Compensation Committee also deemed appropriate in 2023 with the then-pending Knife River spinoff). The Compensation Committee believed this was an appropriate and balanced approach to address the Company’s executive compensation requirements during this transformational period. The Compensation Committee remains committed to fostering a pay-for-performance culture, and given the completion of the spinoffs, has returned to granting a mix of PSA and RSU awards in 2025, consistent with its executive compensation philosophy. See 2025 Compensation Program Design Changes Following Spinoffs on page 44 and Compensation Program Design and Structure beginning on page 45 for more information. •The Compensation Committee wanted to incentivize the retention of the NEOs during a period of significant transformation, and align their interests with stockholders. By granting each 2024 LTI award in the form of RSUs, which will vest in December 2026 as long as the NEO remains continuously employed with the Company, the Compensation Committee sought to align the LTI with the Company’s long-term strategy to incentivize the retention of the management team responsible for overseeing the spinoff of Everus and executing the post-spinoff strategy and transition services through the three-year vesting period ending December 2026, aligned with stockholders’ interests. •The RSU awards remain outstanding and subject to three-year cliff vesting. No vesting was accelerated nor any payment made for any outstanding RSU awards in connection with the Company’s spinoff of Everus. These awards remain subject to normal continued service-based vesting through the end of the three-year vesting period. See LTI beginning on page 51 for further information. 2025 Compensation Program Design Changes Following Spinoffs Following the recent transformational period for the Company, including the impact of two extraordinary corporate spinoff transactions, the Compensation Committee has resumed its prior practice, consistent with its executive compensation philosophy, of granting a mix of PSA and RSU awards in 2025. In addition, the comprehensive compensation approval and goal setting conducted by the Compensation Committee reflects the strategic focus of the organization. All NEOs will be subject to the same enterprise-wide financial and operational performance goals under the EICP, and financial and TSR goals under the PSAs to encourage and reward performance aligned with both the Company’s long-term strategy and stockholders’ interests. The Compensation Committee will continue to assess the executive compensation program against changing business conditions and stockholder feedback.
Dennis W. Johnson
| Compensation Program | | 2024 | 2025 | | EICP | Performance Goals | Adjusted Business Segment Earnings (weighted 80%) and Everus Spinoff (weighted 20%) for corporate executives; Adjusted Electric and Natural Gas Distribution Segment Earnings (weighted 100%), and Adjusted Pipeline Segment Earnings (weighted 100%) for business unit executives; modified by a Responsible Business modifier (5%) for all participants | 70% Adjusted Earnings from Continuing Operations, and 30% operational goals tied to the Company’s commitment to: C - Customers and Communities O - Operational Excellence R - Returns Focused E - Employee Driven | | LTI Awards | PSA/RSU Mix | RSU awards (100%) | PSA awards (70%) and RSU awards (30%) | | PSA Awards | Performance Goals | N/A | 50% Three-Year Cumulative EPS, and 50% TSR to represent the Company’s TSR percent rank over a three-year performance period relative to the Company’s 2025 custom peer group | | | Performance Period | N/A | 3 years | | RSU Awards | Vesting | Three-Year Cliff | Three-Year Cliff |
Dennis W. Johnson
| PROPOSAL | Election of Directors | | 1 | | | • | The Board recommends a vote FOR each of the nominees identified in this Proxy Statement. |
Dennis W. Johnson
There are currently seven directors on our Board. All of the nominees are current directors, except Ms. Patel. Ms. Wang will be departing when her term expires at the conclusion of the Annual Meeting. All current directors, other than Ms. Wang, are standing for election for a one-year term at the Annual Meeting. Cumulative voting is not permitted. We have refreshed our Board over the past five years, as 10 highly-qualified independent directors were added to the Board, and with Ms. Wang’s upcoming departure, 12 independent directors will have left the Board (including eight directors who became members of either the Knife River or Everus Board effective upon the applicable spinoff). We believe that the Board possesses the appropriate mix of genders, ages, ethnicities, skills, business and board experience, and viewpoints. Director Nominees Our Nominating and Governance Committee is responsible for recommending director candidates to fill current and anticipated Board vacancies. The Nominating and Governance Committee identifies and evaluates potential candidates from recommendations from the Company’s directors, management, stockholders, and other outside sources, including professional search firms. In evaluating proposed candidates, the Nominating and Governance Committee may review their résumés, obtain references, and conduct personal interviews. The Nominating and Governance Committee considers, among other factors, the Board’s current and future needs for specific skills and the candidate’s experience, leadership qualities, integrity, ability to exercise judgment, independence, and ability to make the appropriate time commitment to the Board. The Nominating and Governance Committee strives for the Board to have a rich mix of relevant skills and experiences to best oversee the Company’s strategic plan. During 2024, the Nominating and Governance Committee conducted a search for potential director candidates whose experience, skills, qualifications, and independence met the criteria it previously established, and the Nominating and Governance Committee reviewed its findings with the Board. In conducting its search, the Nominating and Governance Committee collected names of potential candidates from the Company’s directors, management, and other outside sources (excluding search firms) to identify and recruit qualified candidates. After reviewing the qualifications of the potential pool of candidates and narrowing the field to a handful of candidates, our Chair of the Board, Nominating and Governance Committee members, CEO, CFO, and Chief Legal Officer and Corporate Secretary each interviewed the candidates. Based on the Nominating and Governance Committee’s review, the candidates’ résumés, and the other directors’ and management’s interviews with the candidates, the Nominating and Governance Committee recommended, and the Board approved the nomination of, Mr. Dosch and Mses. Durkin and Patel. Mr. Dosch and Ms. Patel were both identified by an existing director, and Ms. Durkin was identified by management. Messrs. Anderson, Dosch, Jaeger, and Johnson, and Mses. Durkin, Kivisto, and Patel will be considered for election as directors to serve for one-year terms expiring at the 2026 Annual Meeting. Each nominee has been nominated by the Board for election, upon the recommendation of the Nominating and Governance Committee, and has agreed to serve. If, prior to the Annual Meeting, any nominee is unable to serve, then Jason L. Vollmer and Anthony D. Foti, both of whom have been designated as proxies for the Annual Meeting, will have full discretion to vote for another person to serve as a director in place of that nominee, or the Board may reduce its size. Director Qualifications The Nominating and Governance Committee reviewed and evaluated the skills, experience, and qualifications cataloged under the Director Nominees’ Skillset Matrix on pages 19 through 20, and demonstrated by the director nominees, in light of the Company’s long-term strategic plan. The Board, acting through the Nominating and Governance Committee, considers its members, including those directors being nominated for reelection to the Board at the Annual Meeting, to be highly qualified for service on the Board due to a variety of factors reflected in each director’s education, areas of expertise, and experience serving on other organizations’ boards. Generally, the Board seeks individuals with broad-based experience and the background, judgment, independence, and integrity to represent the stockholders in overseeing the Company’s management in their operation of the business. Within this framework, specific items relevant to the Board’s determination for each director are listed in each director’s biographical information beginning on page 15. The ages shown are as of April 3, 2025. There are no arrangements or understandings between any director or executive officer and any other person pursuant to which a director or executive officer is or was to be selected as a director or executive officer of our Company. There are no family relationships among our directors or executive officers.
Dennis W. Johnson
| Dennis W. Johnson Chair of the Board Independent Director Age: 76 (1) Director Since: 2001 Committees Relevant Skills | Professional Experience TMI Group Incorporated, and its two wholly-owned subsidiaries, TMI Corporation and TMI Transport Corporation (manufacturers of casework and architectural woodwork) •Chair, President, and Chief Executive Officer, since January 1982 •Various other positions, April 1974 through December 1981 Dickinson City Commission •President, July 2000 through October 2015 Other Board Service •Vice Chair, Bank of North Dakota Advisory Board of Directors (state-owned, state-run financial institution), since July 2022, and a director, since August 2017 •Director, Federal Reserve Bank of Minneapolis, January 1993 through December 1998 Reasons for Nomination Mr. Johnson has over 50 years’ experience in business management, manufacturing, and finance, including 43 years as a CEO. He also has deep institutional knowledge concerning the Company, having served as Chair of the Board since May 2019, Vice Chair from February 2018 through May 2019, and a director since February 2001. He also contributes significant knowledge of local, state, and regional issues involving North Dakota, the state of the Corporate Headquarters and a significant share of its operations, from his service on numerous industry, state, and community boards, including the North Dakota Workforce Development Council (Chair), the Theodore Roosevelt Medora Foundation, former North Dakota Gov. Schafer’s and Hoeven’s transition teams, and former North Dakota Gov. Sinner’s Education Action Commission. Further, he brings deep governance, and compensation and management resources knowledge, from his experience serving on several notable boards, providing him with relevant expertise as Chair of the Nominating and Governance Committee and a member of the Compensation Committee, respectively, and Chair of the Board. |
Dennis W. Johnson
| (1) Upon the recommendation of the Nominating and Governance Committee other than Mr. Johnson, the Board approved a limited exception to its retirement age policy for Mr. Johnson. See Director Refreshment Policy, Board Tenure, and Term Limits on page 26 for more information regarding this exception and our director retirement policy in general. |
Dennis W. Johnson
| Darrel T. Anderson Vice Chair of the Board Independent Director Age: 67 Director Since: 2023 Committees Relevant Skills | Professional Experience IDACORP, Inc. (NYSE: IDA) and Idaho Power Company (regulated electric utility company) •President and Chief Executive Officer, May 2014 through May 2020 Other Board Service •Chairman, Gemstone Holdings (parent company of Blue Cross of Idaho, a non-profit mutual insurance company), since January 2024 •Chairman, Blue Cross of Idaho, since May 2023, and a director since 2018 •Director, IDACORP, Inc. and Idaho Power Company, September 2013 through May 2022 Reasons for Nomination Mr. Anderson has over 28 years of experience in the regulated energy delivery industry within a state we serve in our service territory, having served in several leadership positions, including CEO of IDACORP, providing him with relevant expertise to serve as Vice Chair of the Board. In particular, he brings extensive public company operational, financial, and leadership experience. Further, he brings deep compensation and management resources, financial, and public company governance knowledge, from his experience serving as CEO of a public company, providing him with relevant expertise as Chair of the Compensation Committee and a member of the Audit Committee and Nominating and Governance Committee, respectively. |
Dennis W. Johnson
| Nicole A. Kivisto President and Chief Executive Officer Age: 51 Director Since: 2024 Relevant Skills | Professional Experience MDU Resources Group, Inc. (NYSE: MDU) •President and Chief Executive Officer and a director, since January 2024 •President and Chief Executive Officer, Montana-Dakota Utilities Co., Cascade Natural Gas Corporation, and Intermountain Gas Company, January 2015 through January 2024 Other Board Service •Director, AGA (trade association for natural gas industry), since 2015 •Director, EEI (trade association for electric industry), since 2015 •Director, Bravera Bank (employee and director owned bank), since February 2018 •Director, North Dakota Lignite Energy Council (trade association for coal industry) from 2015 through 2023 •Member, Board of Trustees, University of Mary from 2017 through 2023 Reasons for Nomination Ms. Kivisto brings to our Board 30 years of regulated energy delivery experience. Over the past three decades, she has held several operational, financial, and leadership positions within the Company, leading to her current role as CEO. She brings deep knowledge of our Company and its business operations, and contributes valuable insight into management’s views and perspectives, to the Board. |
Dennis W. Johnson
| Vernon A. Dosch Independent Director Age: 71 Director Since: 2024 Committees Relevant Skills | Professional Experience National Information Solutions Cooperative (NISC) (software and technology provider for the utility and broadband industries) •Chief Executive Officer and President, January 2002 through January 2020 Other Board Service •Director, JSI (consulting and broadband solutions firm), since January 2021 •Director, North Dakota Department of Commerce, Legacy Investment for Technology Loan Fund (innovation loan fund to support technology advancement), since January 2022 •Director, Starion Bank (community bank), January 2001 through January 2023 •Director, State of North Dakota, Governor’s Office / Department of Health / National Guard, COVID-19 Response, February 2020 through January 2021 Reasons for Nomination Mr. Dosch brings to our Board over 45 years’ experience in the electric utility and broadband industries, particularly concerning electric distribution, generation, and transmission, as well as the technical infrastructure necessary for electric utility and broadband billing, accounting, engineering, electronic payment processing, meter data management, and distributed energy resource management gained as CEO of NISC, providing him with relevant expertise as a member of the Audit Committee. He also brings expertise in strategic planning, financial management, business development, and culture cultivation. |
Dennis W. Johnson
| Marian M. Durkin Independent Director Age: 71 Director Since: 2024 Committees Relevant Skills | Professional Experience Avista Corporation (NYSE: AVA) (regulated electric and natural gas utility company) •Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer, August 2005 through August 2020 Other Board Service •Director, Energy Insurance Mutual (mutual insurance company serving utility companies), May 2012 through May 2022 •Director, Providence Health Care (health care system providing urgent care centers, home health, assisted living, adult day health, and skilled nursing care), May 2007 through May 2018 Reasons for Nomination Ms. Durkin brings to our Board over 15 years’ experience in the regulated electric and natural gas utility industry at a public company within our service territory, particularly extensive legal, governance, mergers and acquisitions, compliance, and risk management experience gained through her role as General Counsel and Chief Compliance Officer of Avista Corporation, as well as corporate board service, providing her with relevant expertise as a member of the Nominating and Governance Committee. She also brings substantial expertise in human resources management, executive compensation, and employee benefits, providing her with relevant expertise as a member of the Compensation Committee. |
Dennis W. Johnson
| Douglas W. Jaeger Independent Director Age: 58 Director Since: 2024 Committees Relevant Skills | Professional Experience Ulteig, Inc. (employee-owned professional engineering services firm) •President and Chief Executive Officer and a director, since May 2015 Other Board Service •Director, Great Plains Institute (non-profit organization with a mission to accelerate the transition to net-zero carbon emissions), August 2016 through April 2025 •Director, Amsoil, Inc. (manufacturer of synthetic lubricants, fuel additives, and filters), June 2023 through May 2024 •Director, Qualus Power Services / CE Power (pure-play power services firm of energy transitions, with differentiated capabilities across grid modernization, resiliency, security, and sustainability), April 2015 through July 2022 •Director, Computype Inc. (identifies and tracks critical assets with innovated programs that improve customers’ processes, performance, and control), June 2011 through May 2024 •Board of Trustees Member, North American Electric Reliability (nonprofit international regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the grid), February 2013 through August 2015 Reasons for Nomination As CEO of Ulteig, Inc., Mr. Jaeger brings to our Board significant expertise in strategic planning and organizational development. He previously held several executive positions of increasing responsibility at Xcel Energy, Inc., a publicly-traded electric and natural gas company within a state we serve in our service territory, within its transmission, operations, retail marketing and sales, and product development departments. He also contributes extensive knowledge concerning governance, mergers and acquisitions, marketing, financial management, and engineering. Further, he brings deep financial and risk management knowledge, from his experience serving as a CEO, providing him with relevant expertise as Chair of the Audit Committee. |
Dennis W. Johnson
| Priti R. Patel Independent Director Nominee Age: 57 Relevant Skills | Professional Experience Great River Energy (not-for-profit wholesale electric power cooperative) •Vice President and Chief Transmission Officer, since May 2017 Other Board Service •Chair of the Board, Great Plains Institute (non-profit organization with a mission to accelerate the transition to net-zero carbon emissions), since November 2017 •Director, Midwest Reliability Organization (regional utility reliability council), since January 2021 Reasons for Nomination Ms. Patel brings to our Board over 25 years’ experience in the electric energy industry across investor-owned utilities, a utilities regulator within the Company’s service territory, a regional transmission operator, and an electric generation and transmission cooperative, gained through senior transmission, strategy, and legal roles. She also brings expertise in transmission development, financial, government affairs, regulatory, compliance, public policy, and safety. |
Dennis W. Johnson
Director Nominees’ Skillset Matrix We believe that the director nominees possess the appropriate mix of genders, ages, ethnicities, skills, business and board experience, and viewpoints.
Dennis W. Johnson
| Board Tenure and Experience | Johnson | Anderson | Kivisto | Dosch | Durkin | Jaeger | Patel | | Board Tenure (Year Joined) | 2001 | 2023 | 2024 | 2024 | 2024 | 2024 | N/A | | Board Tenure (Years of Service) (as of April 3, 2025) | 24 | 2 | 1 | 1 | 1 | 1 | N/A | | Number of Other Current Public Company Boards | — | — | — | — | — | — | — | | Skills and Experience | | | | | | | | | Accounting and Finance experience in the preparation and review of financial statements and financial reports | ● | ● | ● | ● | | ● | | | Broad-Based Business experience in evaluating issues and making business judgments | ● | ● | ● | ● | ● | ● | ● | | Capital Markets experience overseeing company financings, investments, capital structures, and financial strategy | ● | ● | ● | | | ● | | | CEO experience of a public company or substantial private company working, communicating, and engaging with a variety of important stakeholder groups | ● | ● | ● | ● | | ● | | | Corporate Development experience assessing potential growth opportunities | | ● | ● | ● | | ● | ● | | Corporate Governance and Legal experience dealing with complex legal and public company governance issues | | ● | ● | | ● | ● | ● | | Cybersecurity experience overseeing protecting Company information | | | ● | ● | | ● | | | Human Capital Management experience in enterprise-wide management and development of talent | ● | ● | ● | ● | ● | ● | | | Regulated Energy Delivery Industry experience in our businesses and related industries, including electric and natural gas utilities and pipelines | ● | ● | ● | ● | ● | ● | ● | | Regulatory, Public Affairs, and Government experience in governmental regulations and public policy issues affecting our businesses | ● | ● | ● | | | ● | ● | | Risk Management experience in the identification, assessment, and mitigation of risks facing our company | ● | ● | ● | ● | ● | ● | | | Strategic Planning and Analysis experience overseeing long-term financial objectives and strategic priorities | ● | ● | ● | ● | ● | ● | ● | | Technology experience overseeing information technology systems and data management | | | ● | ● | | | |
Dennis W. Johnson
| Each director is individually qualified to make unique and substantial contributions. Collectively, our directors’ diverse viewpoints and independent-mindedness enhance the quality and effectiveness of Board deliberations and decision making. This blend of qualifications, attributes, and tenure results in highly-effective oversight. | | | | | | | | | Diversity | Johnson | Anderson | Kivisto | Dosch | Durkin | Jaeger | Patel | | Gender | | | | | | | | | Female | | | ● | | ● | | ● | | Male | ● | ● | | ● | | ● | | | Age (as of April 3, 2025) | | | | | | | | | Years Old | 76 | 67 | 51 | 71 | 71 | 58 | 57 | | Race/Ethnicity | | | | | | | | | Asian | | | | | | | ● | | Caucasian/White | ● | ● | ● | ● | ● | ● | |
Dennis W. Johnson
Our Board of Directors Our Board consists of individuals from a diverse range of backgrounds—in terms of gender, age, ethnicity, skills, and business and board experience—with an equally diverse range of perspectives. What our Board shares is a common desire to support and oversee management in executing our strategy. The number of directors is determined from time to time by the Board. There are currently seven directors on our Board. The Board has delegated certain duties to its committees, which assist the Board in carrying out its responsibilities. There are three standing committees of the Board. The Board has adopted charters (investor.mdu.com/governance/governance-documents) for each of the Audit Committee, Compensation Committee, and Nominating and Governance Committee. As a general principle, the Board believes that the periodic rotation of committee and committee chair assignments on a staggered basis provides opportunities to foster diverse perspectives, develops depth and breadth of knowledge within the Board, and prepares the Board for future director succession. Corporate Governance Guidelines The Corporate Governance Guidelines assist the Board in the exercise of its governance responsibilities and serves as a framework within which the Board may conduct its business, including the following duties:
Dennis W. Johnson
| •Director Responsibilities •Board Leadership and Committees •Change in Director’s Principal Employment •Stock Ownership Policy •Human Capital Management and Succession Planning Oversight •Director Independence •Director Resignation Policy •Director On-Boarding •Director Qualifications | •Board Access to Management and Outside Advisors •CEO and Board Evaluations •Board Meeting Agendas •Director Compensation •Director Continuing Education •Outside Directorships Policy •Majority Voting in the Election of Directors •Review of Related Person Transactions |
Dennis W. Johnson
The Board periodically reviews the guidelines and revises them, as appropriate. The Corporate Governance Guidelines are available at investor.mdu.com/governance/governance-documents.
Dennis W. Johnson
| The following highlight our corporate governance practices and policies: | | | ☑ | Separate Chair of the Board and CEO | | ☑ | Annual Election of All Directors | | ☑ | Proxy Access | | ☑ | Majority Voting in an Uncontested Election of Directors | | ☑ | Annual Board and Committee Assessment | | ☑ | All Director Nominees are Independent (other than CEO) | | ☑ | Executive Sessions of Independent Directors at Every Regularly-Scheduled Board Meeting | | ☑ | Standing Committees Consist Entirely of Independent Directors | | ☑ | Proactive Stockholder Engagement Program | | ☑ | One Class of Stock | | ☑ | Stock Ownership Policy for Directors and Executive Officers | | ☑ | Anti-Hedging and Anti-Pledging Policies for Directors and Executive Officers | | ☑ | Annual Say-On-Pay Vote | | ☑ | Clawback Policy | | ☑ | Maximum of Three Public Company Board Seats for Directors (including the Company’s Board) |
Dennis W. Johnson
Independence A director is not considered independent under NYSE rules if they have a material relationship with the Company that would impair their independence. In addition to the independence criteria established by the NYSE, the Board has determined that the relationships provided below are immaterial for purposes of determining whether a director is independent under the NYSE listing standards. These categorical standards are contained in the Corporate Governance Guidelines, which are available at investor.mdu.com/governance/governance-documents.
Dennis W. Johnson
| Immaterial Relationship | Description | | Investment Relationships with the Company | A director and any family member may own stock of the Company. | | Relationships with Other Businesses | A director is a current employee, or an immediate family member is a current executive officer, of a company with which the Company does business, provided that the aggregate amount involved in a year does not exceed the greater of $1 million or 2% of that entity’s annual consolidated gross revenue, provided that the related payments are made in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated parties, or involve the rendering of services as a public utility at rates or charges fixed in conformity with law or a governmental authority. | | Relationships with Tax Exempt Organizations | A director, or an immediate family member, serves as an officer, director, or trustee of a not-for-profit organization, and the Company’s and the Foundation’s contributions to the organization in any of the past three years do not exceed the greater of $1 million or 2% of that organization’s consolidated gross revenues. |
Dennis W. Johnson
We individually inquire of each of our directors and executive officers about any transactions in which the Company and any of these related persons or their immediate family members are participants. We also make inquiries within the Company’s records for information on any of these kinds of transactions. Once we gather the information, we then review all relationships and transactions of which we are aware in which the Company and any of our directors, director nominees, executive officers, their immediate family members, or 5% stockholders are participants to determine, based on the facts and circumstances, whether the related persons have a direct or indirect material interest. Our CFO’s office coordinates the related person transaction review process, and reports its findings to the Audit Committee. The Nominating and Governance Committee reviews any potential related person transactions involving directors and their immediate family members in making its recommendation to the Board concerning the independence of the directors. In approving, ratifying, or rejecting a related person transaction, the Audit Committee considers such information as it deems important to determine whether the transaction is on reasonable and competitive terms and is fair to the Company. There were no related person transactions in 2024 other than as set forth under Related Person Transactions beginning on page 24. The Board, upon the recommendation of the Nominating and Governance Committee, has determined that the following non-employee directors, and director nominee, are independent under the NYSE rules because they have no material relationship with the Company that would impair their independence:
Dennis W. Johnson
Dennis W. Johnson Age: 76 Director since: 2001
Chair of the Board
Chair of the Board
Douglas W. Jaeger
Douglas W. Jaeger Age: 58 Director since: 2024
Darrel T. Anderson
Darrel T. Anderson Age: 67 Director since: 2023
Vice Chair of the Board
Vice Chair of the Board
Priti R. Patel
Priti R. Patel Age: 57 Director Nominee
Vernon A. Dosch
Vernon A. Dosch Age: 71 Director since: 2024
Chenxi Wang(1)
Chenxi Wang(1) Age: 55 Director since: 2019
Marian M. Durkin
Marian M. Durkin Age: 71 Director since: 2024
Marian M. Durkin
| ALL DIRECTORS ARE INDEPENDENT, EXCEPT THE CEO |
Marian M. Durkin
(1) Ms. Wang will be departing the Board when her term expires at the conclusion of the Annual Meeting. In making its independence determination, the Board reviewed recommendations of the Nominating and Governance Committee and considered Mr. Jaeger’s and Ms. Patel’s relationships as officers of companies with which we do business. The Board determined that these relationships qualify as Relationships with Other Businesses and are, therefore, immaterial with respect to determining their independence. The Board has determined that all members of the Audit Committee, Compensation Committee, and Nominating and Governance Committee are independent as defined under the NYSE listing standards and the director independence standards adopted by the Board. Related Person Transactions The Board’s policy for the review of related person transactions is contained in the Corporate Governance Guidelines. The policy requires the Audit Committee to review any proposed transaction, arrangement, or relationship, or series thereof: •in which the Company was or will be a participant; •the amount involved exceeds $120,000; and •a related person had or will have a direct or indirect material interest. Prior to the Company entering into a related person transaction that would be required to be disclosed under the SEC rules, the Audit Committee will, after a reasonable prior review and consideration of the material facts and circumstances, make a recommendation to the Board and appropriate officers of the Company with respect to the transaction as the Audit Committee deems appropriate. The Audit Committee will prohibit any related person transaction it determines to be inconsistent with the best interests of the Company and its stockholders. Related persons are directors, director nominees, executive officers, holders of 5% or more of our voting stock, and their immediate family members. Related persons are required promptly to report to the Chief Legal Officer and Corporate Secretary all proposed or existing related persons transaction in which they are involved. The Company had no related person transaction in 2024, other than as set forth below. A&R Cooperation Agreement On January 24, 2023, the Company entered into the Cooperation Agreement with Keith A. Meister and Corvex Management LP (Mr. Meister and Corvex Management LP, together with their respective affiliates, the “Corvex Group”), pursuant to which, the Company agreed, among other things, to appoint James H. Gemmel, a partner of Corvex Management LP, to the Board, which it did in May 2023. Pursuant to the Cooperation Agreement, the Corvex Group agreed to abide by certain customary standstill restrictions, voting commitments, and other provisions. In addition, the Cooperation Agreement provided for customary director replacement procedures in the event Mr. Gemmel ceased to serve as a director or non-voting Board observer under certain circumstances as specified in the Cooperation Agreement. Furthermore, in connection with Mr. Gemmel’s appointment, the Corvex Group also entered into a customary confidentiality agreement with respect to certain Company information. In March 2024, the Company entered into the A&R Cooperation Agreement with the Corvex Group. Pursuant to the A&R Cooperation Agreement, the Company agreed to include Mr. Gemmel as a nominee for election to the Board at the 2024 Annual Meeting. The A&R Cooperation Agreement amended the terms upon which Mr. Gemmel (or his replacement) would be required to resign from the Board, such that his resignation would be effective upon the earliest of the following: (i) the second business day following such time as the Corvex Group ceased to hold a “net long position” (as defined in the A&R Cooperation Agreement) of at least 8,100,000 shares of Common Stock; (ii) the completion of the Company’s spinoff of Everus or certain similar transactions; (iii) the date of the Annual Meeting, unless the Board determined to nominate Mr. Gemmel (or his replacement pursuant to the A&R Cooperation Agreement) for election at the Annual Meeting; and (iv) the material breach by the Corvex Group or Mr. Gemmel (or his replacement pursuant to the A&R Cooperation Agreement) of the confidentiality agreement previously entered into or certain provisions of the A&R Cooperation Agreement. Pursuant to the A&R Cooperation Agreement, the parties agreed to extend the customary standstill restrictions, voting commitments, and other provisions to coincide with Mr. Gemmel’s tenure on the Board. Furthermore, the Corvex Group agreed to extend the confidentiality agreement with respect to the Company’s information. Effective as of immediately prior to the effective time of the Company’s spinoff of Everus, Mr. Gemmel resigned from the Board pursuant to the terms of the A&R Cooperation Agreement, and the A&R Cooperation Agreement terminated in accordance with its terms. Board Leadership Structure The Bylaws and Corporate Governance Guidelines require that the Chair of the Board be independent. The Board believes this structure provides balance, and is currently in the best interest of stockholders. Separating these positions allows the CEO to focus on the full-time job of running the business, while allowing the Chair of the Board to lead the Board in its fundamental role of providing advice to, and independent oversight of, management. The Board also believes that a Vice Chair of the Board is currently in the best interest of stockholders to assist the Chair of the Board, and for Board leadership succession purposes, in adherence to governance best practices. The Chair of the Board meets and confers regularly between Board meetings with the CEO. The Board believes this split structure also recognizes the time, effort, and energy the CEO is required to devote to the position in the current business environment, as well as the commitment required to serve as the Chair of the Board, particularly as the Board’s oversight responsibilities continue to grow and continue to demand more time and attention. A fundamental role of the Board is to provide oversight of management. To that end, the Board believes having an independent Chair of the Board is a means to hold the CEO accountable for managing the Company, aligned with stockholders’ interests. Furthermore, the Board has found that an independent Chair of the Board is best equipped to encourage discussions, including during executive sessions of independent directors. The Board believes that having separate positions and an independent director as Chair of the Board is the appropriate leadership structure for the Company at this time, and demonstrates the Company’s commitment to leading corporate governance practices. The Board approved a limited exception to its retirement age policy for Mr. Johnson to serve until the Company’s 2026 Annual Meeting, and is currently reviewing its leadership in light of Mr. Johnson’s future retirement from the Board. Majority Voting in the Election of Directors
Marian M. Durkin
Directors must be elected by a majority of the votes cast in uncontested elections, and a plurality of the votes cast in contested elections. A “majority of the votes cast” means that the number of votes cast “for” a director’s election must exceed the number of votes cast “against” that director’s election (with “abstentions” and “broker non-votes” not counted as votes cast either “for” or “against” that director’s election). Our Corporate Governance Guidelines provide that any incumbent director who does not receive a majority of the votes cast in an uncontested election is required to tender his or her resignation for consideration by the Nominating and Governance Committee. The Nominating and Governance Committee will make a recommendation to the Board whether to accept or reject the resignation, or take other action based upon the best interests of the Company and its stockholders. In determining its recommendation to the Board, the Nominating and Governance Committee shall consider all factors that it deems relevant. The director who tenders his or her resignation will not participate in the Nominating and Governance Committee’s or Board’s decision. Following such determination, the Company will promptly publicly disclose the Board’s decision, including, if applicable, the reasons for rejecting the tendered resignation. Proxy Access Under our proxy access bylaw, a stockholder, or a group of up to 20 stockholders, owning at least 3% of the Common Stock continuously for at least three years as of the date of the notice of nomination, may nominate and include in the Company’s proxy materials director nominees constituting up to two individuals or 20% of the Board, whichever is greater (subject to certain limitations set forth in the Bylaws), provided that the stockholder(s) and nominee(s) satisfy the requirements specified in the Bylaws. We believe these proxy access parameters reflect a well-designed and balanced approach to proxy access that mitigates the risk of abuse and protects the interests of all of our stockholders. See Deadlines and Procedures for Nominations and Stockholder Proposals for the 2026 Annual Meeting on page 82 for further information. Director Refreshment Policy, Board Tenure, and Term Limits The Company is focused on having a well-constructed and high-performing Board, and recognizes the importance of Board refreshment. To that end, the Company has a director refreshment policy that combines a retirement age (age 76) and a periodic individual assessment process with the annual election of directors. The Nominating and Governance Committee and the Board reviewed the continued service of Mr. Johnson, age 76, on the Board and have asked him to continue his service. Upon the recommendation of the Nominating and Governance Committee other than Mr. Johnson, the Board approved a limited exception to its retirement age policy for Mr. Johnson to currently serve until the Company’s 2026 Annual Meeting. The Board granted the exception because it believes that Mr. Johnson’s continued service is in the best interest of the Company and its stockholders. Given the Board’s need for strong continuing independent leadership with Mr. Goodin’s retirement as CEO and a director in 2024, along with six additional directors who, as of the Annual Meeting, will have departed the Board in the past year (including four directors who became members of the Everus Board effective upon the spinoff), the Board approved the exception for Mr. Johnson to, among other things, maintain continuity and institutional knowledge during a period of significant transformation initiatives occurring in the Company’s business, and to provide adequate time to transition a highly-capable successor to Mr. Johnson. In addition, the Board determined that an exception was warranted because Mr. Johnson has deep institutional knowledge of the Company and Board, and unique insights that remain valuable to the Board. We have refreshed our Board over the past five years, as 10 highly-qualified independent directors were added to the Board, and following the Annual Meeting, 12 independent directors will have left the Board (including eight directors who became members of either the Knife River or Everus Board effective upon the applicable spinoff). We believe that the Board possesses the appropriate mix of genders, ages, ethnicities, skills, business and board experience, and viewpoints. During 2024, Mr. Goodin retired from the Board following his retirement as CEO; Messrs. Della Rocca, Ryan, and Sparby and Ms. Rosenthal each resigned from the Board and became members of the Everus Board effective upon the spinoff; Mr. Gemmel resigned from the Board pursuant to the terms of the A&R Cooperation Agreement; and Ms. Wang will be departing the Board when her term expires at the conclusion of the Annual Meeting. Messrs. Jaeger and Dosch and Ms. Durkin were each elected to the Board in 2024. The Board has also nominated Ms. Patel for election at the Annual Meeting. The Board balances refreshment with maintaining experience. The Board also recognizes the importance of board leadership refreshment and succession planning. The Board rotates committee and committee chair assignments periodically on a staggered basis to provide opportunities to foster diverse perspectives, develop further the depth and breadth of knowledge within the Board, and prepare the Board for future director succession. The Board also considers adding a Vice Chair of the Board from time to time to assist the Chair of the Board, and for board leadership succession purposes. The Board elected Mr. Anderson as Vice Chair of the Board in February 2025. The Nominating and Governance Committee selects director nominees who think and act independently and can clearly and effectively communicate their convictions. The Board does not believe long tenure alone presumptively renders a director to not be independent. Conversely, the Board has determined that its longer-tenured director has important experience, brings diverse perspectives, and provides tangible value to the Board and the Company. The Board has also determined that his length of tenure has allowed this director to accumulate valuable knowledge and experience based upon his history with the Company and his breadth of experience in leadership roles across a range of industries outside the Company. This knowledge and experience improves the ability of the Board to provide constructive guidance and informed oversight to management. The Nominating and Governance Committee has specifically considered stockholders’ feedback that suggests lengthy Board tenure should be balanced with new perspectives. Specific to the Company, the Nominating and Governance Committee has recommended, and the Board has structured, that the Board be organized in such a way that there is an appropriate mix of directors of varying tenures, with new directors and perspectives joining the Board over time while retaining the institutional knowledge and broader business experience of a longer-tenured director. This balance enhances the Board’s oversight capabilities. The Board believes it is important to balance refreshment with the need to retain directors who have developed, over time, significant insight into the Company and its operations and who continue to make valuable contributions to the Company that benefit our stockholders. The Board does not believe that long tenure impairs a director’s ability to act independently of management. Mandatory Resignation or Retirement
Marian M. Durkin
The Board has established a policy whereby a non-employee director is required to advise the Nominating and Governance Committee Chair of any change in the non-employee director’s principal employment. If requested by the Nominating and Governance Committee Chair, after consultation with the other members of the Nominating and Governance Committee, the director is required to submit a letter of resignation to the Nominating and Governance Committee Chair, for the Nominating and Governance Committee to consider. Director On-Boarding We have an on-boarding program for new directors that is intended to educate new directors about the Company and the Board’s practices: •Convenes with the CEO, CFO, Chief Legal Officer and Corporate Secretary, Chief Human Resources, Administration, and Safety Officer, Chief Information Officer, Chief Accounting and Regulatory Affairs Officer, and other MPC members. •Reviews the Company’s operational, financial, strategic, IR, risk management, governance, and management succession plans. •Meets periodically with the Chair of the Board and the committee chairs for an immersion into the work of the committees. •Engages in enhanced discussions with the Chief Utilities Officer and President, WBI Energy, Inc. regarding the Company’s utility and pipeline businesses. •Participates in various sessions specifically tailored to the individual director, taking into consideration their board experience, committee assignments, and focus areas of our business and strategy. Director Continuing Education Director education is an ongoing process, which begins when a director joins our Board. We host quarterly Board and committee presentations to keep directors appropriately apprised of key developments concerning the following topics so they can effectively carry out their oversight responsibilities: We also encourage all directors to attend external continuing education programs to maintain their expertise and share takeaways with the other directors concerning these programs. We reimburse directors for reasonable expenses incurred in attending continuing education programs. Board Attendance The Board held 14 meetings during 2024. Each individual director attended at least 96% of the Board and committee meetings (for the committees on which the director served) during 2024, and the directors collectively attended over 99% of the aggregate Board and committee meetings, in each case for the period during which the director served. The Board holds regularly-scheduled executive sessions of independent directors in conjunction with each Board meeting. Mr. Johnson, as Chair of the Board, or Mr. Anderson, as Vice Chair of the Board in Mr. Johnson’s absence, presides at these executive sessions, as well as at Board meetings. Directors are expected to attend annual meetings. The Annual Meeting is typically scheduled on the same day as a quarterly Board meeting. In 2024, all of the directors serving at such time attended the Annual Meeting. Stock Ownership Policy The Stock Ownership Policy aligns the interests of non-employee directors and executive officers with the interests of stockholders, and promotes the Company’s sound corporate governance. The non-employee directors and executive officers are expected to achieve and maintain beneficial ownership of Common Stock having a value equal to at least the guideline indicated in the table below of the remuneration payable to them from time to time. The individual guidelines established for each participant are as follows:
Marian M. Durkin
| Participant | Guideline | | Non-Employee Director | 5X Annual Retainer Fee | | CEO | 5X Annual Base Salary Rate | | Other Section 16 Officers (including the NEOs) | 3X Annual Base Salary Rate | | Other Participants | 1.5X Annual Base Salary Rate |
Marian M. Durkin
| The following table illustrates which equity holdings count toward the Stock Ownership Policy: | ☑ What Counts | | ☒ What Does Not Count | | | | ☑ | Common Stock | ☒ | Unearned PSAs | | | ☑ | RSUs | | | | | ☑ | Shares held through the 401(k) plan | | | | | ☑ | Shares owned by a spouse or other immediate family member residing in the participant’s household | | |
Marian M. Durkin
Executives and non-employee directors are required to achieve compliance within five years of becoming subject to the policy. The Company measures compliance at the end of each year, with the compliance determination at that point in time applying for the entire ensuing year, regardless of fluctuations in the Company’s stock price. In the event any person subject to this policy fails to comply by the applicable date, they are required to hold the net shares obtained through all future vestings, after withholding for the payment of applicable taxes, until such person is in compliance; provided, however, that in the event there is a decline in the Company’s stock price that causes a participant’s holdings to fall below the applicable guideline after it was met at the previous compliance date, the participant shall not be required to purchase additional shares to meet the guideline, but the participant shall also not sell or transfer any shares of Company stock until the guideline has again been achieved (except shares sold to satisfy tax withholding obligations arising from stock vestings of prior awards). The Nominating and Governance Committee will consider a non-employee director’s failure to comply with this policy when considering that director for re-election to the Board. of directors, the CEO, and other executive officers were in compliance as of the end of 2024 (or were within the initial five-year period to achieve compliance). Retention of Outside Advisors The Board and all of its committees have authority to retain outside advisors and consultants that they consider necessary or appropriate in carrying out their respective responsibilities. The independent registered public accounting firm is retained by, and report directly to, the Audit Committee. Similarly, the consultant retained by the Compensation Committee to assist in evaluating executive compensation reports directly to that committee. Board and Committee Evaluations The Board and its committees engage in a robust Board and committee assessment process every year designed to elicit candid feedback regarding the areas in which the Board and its committees could improve, as described below:
Marian M. Durkin
| Element | Strategy | | Benchmarking and External Engagement | We benchmark our security practices against other organizations, and are active in the information security community. | | Third-Party Assessments | We engage a range of outside experts to regularly assess our organizational security programs, processes, and capabilities. | | Internal Assessments | We regularly test and improve our information systems through security risk and compliance reviews, tabletop exercises, user access campaigns, and other strategies. The CyROC provides management and the Audit Committee with periodic analyses, appraisals, recommendations, and pertinent information concerning cyber defense of the Company’s electronic information, IT, operational technology systems, and utilization of artificial intelligence, with regular updates from the Chief Information Officer. | | Training and Compliance | The Company has implemented a cybersecurity training and compliance program to facilitate initial and continuing education for employees who have contact or potential contact with the Company’s data. | | Policies, Procedures, and Practices | The Chief Information Officer, along with the Director of Cybersecurity and a designated team of cybersecurity professionals, are responsible for assessing and managing risks and developing and implementing policies, procedures, and practices based on the range of threats. There are processes around access management, data security, encryption, asset management, secure system development, security operations, and network and device security to provide safeguards, along with continual monitoring of various threat intelligence feeds. The Company has an incident response plan to identify, protect, detect, respond to, and recover from cybersecurity threats and incidents that is tested annually. The incident response plan is updated based on results of the test or as new cyber-related developments occur. The Board, MPC, and SEC financial reporting department are notified of any material cybersecurity incident through a defined escalation process, which is risk-based and specifies who is to be contacted and when at each risk level. The Audit Committee also receives periodic briefings concerning cybersecurity, information security, technology risks, and risk mitigation programs. |
Marian M. Durkin
| •Board Oversight of Long-Term Strategy •Board Assessment Process •Board Refreshment | •Executive Compensation •Environmental Stewardship •Management Succession |
Key Oversight Responsibilities
| Category | Description | | Pay Position | The pay position of our non-employee directors’ compensation program is consistent with the Company’s peer group reference points. | | Peer Groups | When establishing reference points for market comparisons of our non-employee directors’ compensation program, we consider the peer group used for our executive compensation purposes. See Benchmarking Approach beginning on page 55 for more information on our peer group. | | Pay Evaluation Perspective | When assessing the competitive position of our non-employee directors’ compensation program, the primary focus is the total targeted compensation opportunity. | | Pay Mix | Our non-employee directors’ compensation program consists of a mix of cash and equity, with an emphasis on equity. | | Differentiation | Non-employee directors receive additional compensation for leadership positions on the Board, including the Chair of the Board and committee chair roles. | | Stock Ownership | Our Stock Ownership Policy further aligns our directors with our stockholders’ interests, with compliance measured annually, as described further in Stock Ownership Policy on page 28. | | Deferral and Diversion Opportunities | Non-employee directors may elect to defer or divert all or a portion of their annual retainer fee and/or committee chair retainers in the form of phantom stock with dividend accruals or Common Stock, respectively. | | Regular Review | The Nominating and Governance Committee, and Compensation Committee, conduct annual reviews of governance practices and trends in directors’ compensation, and the amount and form of non-employee directors’ compensation, respectively. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION There are no meeting fees paid to the directors. Directors are reimbursed for all reasonable travel expenses, including spousal expenses, in connection with attendance at in-person Board and committee meetings. For all compensation periods through and including 2024, none of our current directors have previously elected to defer all or a portion of any prior annual retainer, committee chair retainer, or Chair of the Board retainer into phantom stock. Governance Director compensation is reviewed annually by the Compensation Committee. The Compensation Committee’s independent compensation consultant provided an analysis of the Company’s director compensation for 2024 based on research on market trends in director compensation, as well as a review of director compensation practices of companies in the revised compensation benchmarking peer group applicable to the Company after the spinoff of Everus. The Compensation Committee and Board reviewed the Compensation Committee’s independent compensation consultant’s report and made no changes to the annual compensation of non-employee directors, but did reduce the additional cash retainer for the Chair of the Board from $125,000 to $100,000 in November 2024 following the spinoff of Everus. 2024 Director Compensation The amounts paid to each non-employee director for 2024, including amounts deferred under the DDCP, and the stock awards granted to each non-employee director are reported below:
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | Anderson | 118,750 | 150,000 | 103 | 268,853 | | Della Rocca(3) | 27,500 | — | 17 | 27,517 | | Dosch(5) | 18,333 | 25,000 | 9 | 43,342 | | Durkin(5) | 45,833 | 62,500 | 34 | 108,367 | | Gemmel(4) | 91,667 | 125,000 | 3,686 | 220,353 | | Jaeger(5) | 76,667 | 100,000 | 60 | 176,727 | | Johnson | 230,833 | 175,000 | 5,103 | 410,936 | | Rosenthal(3) | 104,167 | — | 86 | 104,253 | | Ryan(3) | 104,167 | — | 86 | 104,253 | | Sparby(3) | 108,333 | — | 3,586 | 111,919 | | Wang(6) | 110,000 | 150,000 | 2,603 | 262,603 |
DIRECTOR COMPENSATION
(1) All stock awards are measured in accordance with FASB ASC 718. The grant date fair value is based on the closing stock price on the grant date of November 15, 2024, which was $18.34 per share. (2) Includes group life insurance premiums (i.e., $100,000 policy on each non-employee director for the benefit of the non-employee director’s beneficiaries during the time the director serves on the Board), and matching charitable donations for directors who contributed to the Company’s Good Government Fund made on behalf of the director. (3) Ms. Rosenthal and Messrs. Della Rocca, Ryan, and Sparby served as directors during 2024 through the spinoff of Everus in October 2024. The amounts reflected above are prorated for their service during 2024. Pursuant to the terms of the Employee Matters Agreement entered into in connection with the Company’s spinoff of Everus, their 2024 equity awards were granted by Everus following completion of the Company’s spinoff of Everus. (4) Mr. Gemmel resigned from the Board upon the Company’s spinoff of Everus pursuant to the terms of the A&R Cooperation Agreement. The amounts reflected are prorated for his service during 2024. (5) Messrs. Dosch and Jaeger, and Ms. Durkin, were elected to the Board in November, May, and August 2024, respectively. The amounts reflected are prorated for their service during 2024. (6) Ms. Wang will be departing the Board when her term expires at the conclusion of the Annual Meeting. Mr. Goodin, the Company’s former CEO, who retired from the Company in January 2024, continued to serve as a director until May 2024. Mr. Goodin’s director compensation for this period is reported in Summary Compensation Table beginning on page 60. Our Executive Officers Our executive officers, including their ages as of April 3, 2025, and their business experience during the past five years is as follows:
DIRECTOR COMPENSATION
| | Name | Age | Position(s) | | | Nicole A. Kivisto | 51 | Ms. Kivisto has served as President and Chief Executive Officer and a director since January 2024. Prior to that, she was President and Chief Executive Officer of Montana-Dakota Utilities Co., Cascade Natural Gas Corporation, and Intermountain Gas Company from January 2015 through January 2024. | | | Dyke A. Boese | 52 | Mr. Boese has served as Chief Information Officer since January 2025. Prior to that, he was Director of Enterprise Infrastructure and Operations from December 2020 through January 2025, and Director of Enterprise Communications and Infrastructure from April 2016 through December 2020. | | | Anthony D. Foti | 42 | Mr. Foti has served as Chief Legal Officer and Corporate Secretary since October 2024. Prior to that, he served in several roles of increasing responsibility at Foot Locker, Inc. (NYSE: FL) (global athletic footwear and apparel retailer) since October 2014, including Senior Vice President, Deputy General Counsel and Corporate Secretary since July 2023; Vice President, Deputy General Counsel and Assistant Secretary from April 2022 through June 2023; Associate General Counsel and Assistant Secretary from March 2021 through March 2022; and Associate General Counsel from October 2014 through February 2021. | | | Rob L. Johnson | 63 | Mr. Johnson has served as President, WBI Energy, Inc. since June 2023. Prior to that, he was Executive Vice President-Commercial of WBI Energy, Inc. from January 2021 through June 2023, and Vice President-Commercial of WBI Energy, Inc. from May 2014 through January 2021. | | | Anne M. Jones | 61 | Ms. Jones has served as Chief Human Resources, Administration, and Safety Officer since January 2025. Prior to that, she was Vice President and Chief Human Resources Officer from November 2021 through January 2025; and Vice President-Human Resources from January 2016 through October 2021. | | | Garret Senger | 64 | Mr. Senger has served as Chief Utilities Officer since January 2024. Prior to that, he was Executive Vice President-Regulatory Affairs, Customer Service, and Administration from June 2018 through December 2023. | | | Stephanie A. Sievert | 53 | Ms. Sievert has served as Chief Accounting and Regulatory Affairs Officer since January 2025. Prior to that, she was Vice President, Chief Accounting Officer, and Controller from September 2017 through January 2025. | | | Jason L. Vollmer | 48 | Mr. Vollmer has served as Chief Financial Officer since September 2017. Prior to that, in addition to serving as Chief Financial Officer, he also served as Vice President from September 2017 through January 2025, and Treasurer from September 2017 through October 2020 and June 2023 through January 2025. |
DIRECTOR COMPENSATION
| PROPOSAL | Advisory Vote to Approve NEO Compensation | | 2 | | | • | The Board recommends a vote FOR this proposal. |
DIRECTOR COMPENSATION
In accordance with the requirements of Section 14A of the Exchange Act and the related SEC rules, our stockholders have the opportunity to cast a Say-on-Pay vote. We currently hold our Say-on-Pay vote every year, consistent with the preference previously expressed by a majority of our stockholders at the 2023 Annual Meeting. As described in detail in the CD&A beginning on page 42, our compensation program is designed to attract, motivate, and retain talented executives responsible for leading our strategic priorities and, in turn, deliver value to our stockholders. Our executive compensation program ties compensation closely to the Company’s performance. A significant portion of the NEOs’ compensation is tied to the Company’s performance, and we believe this compensation structure closely aligns our executives’ and stockholders’ interests. The higher an executive’s position, the greater percentage of their compensation is tied to the Company’s performance. At our 2024 Annual Meeting, over 96% of shares voted on the Say-on-Pay proposal supported our executive compensation program. The Compensation Committee considered the results of the 2024 Say-on-Pay vote in reviewing the program for 2025. As part of our 2024 stockholder engagement cycle, we had individual discussions regarding executive compensation with stockholders representing over 30% of our total shares outstanding, and proxy advisory firms, and more broadly, we had some touchpoint with stockholders representing over 40% of our total shares outstanding. See Stockholder Engagement beginning on page 34 for more details on our stockholder engagement program. We took into account the views of stockholders regarding the design and effectiveness of our executive compensation program for 2025. In light of the support and feedback received during our 2024 stockholder engagement cycle, the Compensation Committee decided to retain the overall program design with certain enhancements to further align the program with the Company’s long-term strategy. See 2025 Compensation Program Design Changes Following Spinoffs on page 44 for more details. The Compensation Committee will continue to assess the executive compensation program against changing business conditions and stockholder feedback. We believe stockholders should read the CD&A beginning on page 42, and the compensation tables beginning on page 60, in determining whether to vote in favor of this proposal. Stockholders are being asked to approve the following resolution at the Annual Meeting: “RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of our NEOs, as disclosed in the Company’s Proxy Statement for the Annual Meeting pursuant to the SEC’s compensation disclosure rules, including the CD&A, the Summary Compensation Table, and the other related tables and disclosures.” As an advisory vote, this proposal is not binding on the Company, the Compensation Committee, or the Board. However, the Compensation Committee and the Board value the opinions expressed by stockholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions regarding our NEOs. Compensation Discussion and Analysis This CD&A provides information on our executive compensation program, including our compensation philosophy, which focuses on rewarding employees for their roles in executing our performance against our strategy and operating plan. While the principles underlying this philosophy extend throughout our organization, this CD&A primarily covers the compensation of our NEOs. The targets and goals disclosed in the CD&A are for the limited context of our compensation programs, and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements in other contexts. For 2024, our NEOs are the current executive officers, and former executive officers, named below:
DIRECTOR COMPENSATION
| | | | | | | Nicole A. Kivisto(1) | Jason L. Vollmer | Garret Senger | Anne M. Jones | Rob L. Johnson | | President and Chief Executive Officer | Chief Financial Officer | Chief Utilities Officer | Chief Human Resources, Administration, and Safety Officer | President, WBI Energy, Inc. | | | David L. Goodin(1) | | Jeffrey S. Thiede(2) | | | | Former President and Chief Executive Officer | | Former President and Chief Executive Officer, Everus business unit | |
DIRECTOR COMPENSATION
(1) Mr. Goodin retired as President and Chief Executive Officer effective January 2024, and Ms. Kivisto was appointed President and Chief Executive Officer effective January 2024. (2) Mr. Thiede ceased to serve as President and Chief Executive Officer of the Everus business unit effective upon the completion of the Company’s spinoff of Everus in October 2024. The Completion of a Journey … and We’re Just Getting Started In 2024, we completed our journey to transform the Company into a pure-play regulated energy delivery business. The journey started in August 2022 with the announcement to spinoff the Company’s construction materials and contracting business, Knife River, which was completed in May 2023. We continued on the journey in November 2023 with the announcement to spinoff the Company’s construction services business, Everus, which was completed in October 2024. In each of these spinoffs, the Company’s stockholders received one share each of Knife River and Everus common stock for every four shares of the Company’s Common Stock owned as of the applicable record date. After these two spinoffs were completed, the combined market capitalization of the companies grew from $5.9 billion in May 2023 to $12.9 billion in December 2024—creating $7 billion of incremental value for holders of the Company’s Common Stock in May 2023 who continued to hold shares of all three companies through December 2024.
DIRECTOR COMPENSATION
| Table of Contents | | | 42 | The Completion of a Journey … and We’re Just Getting Started | | 43 | 2024 Performance-Based Compensation Outcomes | | 43 | EICP Awards | | 43 | LTI Awards | | 44 | 2025 Compensation Program Design Changes Following Spinoffs | | 44 | Leadership Appointments | | 44 | CEO Appointment | | 44 | Other NEO Appointment | | 45 | Say-on-Pay Stockholder Vote | | 45 | Compensation Program Design and Structure | | 45 | Pay-for-Performance Compensation Philosophy | | 46 | Compensation Mix | | 55 | Procedures for Determining Compensation | | 55 | Setting Compensation, Establishing Goals, and Evaluating Performance | | 55 | Benchmarking Approach | | 56 | Use of Independent Compensation Consultant | | 56 | Management Involvement in Developing the Compensation Program | | 57 | Additional Information | | 57 | Key Compensation Governance Policies | | 57 | Clawback Policy | | 57 | Stock Ownership Policy | | 58 | Policy Prohibiting Hedging or Pledging of the Company’s Stock | | 58 | Insider Trading Policy | | 58 | Equity Award Timing Procedures | | 58 | Impact of Tax and Accounting Treatment |
DIRECTOR COMPENSATION
2024 Performance-Based Compensation Outcomes The 2024 performance-based compensation paid to our NEOs reflects our strong performance against financial, strategic, and operational goals. Notable performance-based compensation outcomes for 2024 include the following, each of which is disclosed in greater detail within this CD&A: EICP Awards •The Compensation Committee has a history of setting challenging performance goals. EICP payouts are earned only when we achieve or exceed our goals, and awards are subject to negative discretion when appropriate to align management’s payouts with stockholders’ expectations. Consistent with our pay-for-performance culture, the Compensation Committee established rigorous financial, strategic, and operational performance goals for 2024. •For its financial goals, the Company achieved above target Adjusted Business Segment Earnings performance, near target Adjusted Electric and Natural Gas Distribution Segment Earnings performance, and maximum Adjusted Pipeline Segment Earnings performance; for its strategic goal, the Company achieved maximum Everus Spinoff performance; and for its operational goal, the Company completed each of the Responsible Business initiatives. As a result, Mses. Kivisto and Jones and Mr. Vollmer earned 161.6% payouts, Mr. Senger earned a 103.1% payout, and Mr. Johnson earned a 205% payout for 2024 performance, in each case as a percentage of their target incentive. For a description of how the EICP performance metrics were calculated and the adjustments from 2024 reported financial results, as applicable, see EICP beginning on page 47. LTI Awards •The Compensation Committee made a temporary modification to its traditional LTI practices to take into account the impact of two extraordinary corporate spinoff transactions, which does not represent any change in its executive compensation philosophy, and it has since returned to granting a mix of PSA and RSU awards. In 2024, in light of the then-pending Everus spinoff, the Compensation Committee made a temporary modification to its traditional LTI practices, and granted executives, including the NEOs, RSU awards instead of the traditional mix of PSA and RSU awards (as the Compensation Committee also deemed appropriate in 2023 with the then-pending Knife River spinoff). The Compensation Committee believed this was an appropriate and balanced approach to address the Company’s executive compensation requirements during this transformational period. The Compensation Committee remains committed to fostering a pay-for-performance culture, and given the completion of the spinoffs, has returned to granting a mix of PSA and RSU awards in 2025, consistent with its executive compensation philosophy. See 2025 Compensation Program Design Changes Following Spinoffs on page 44 and Compensation Program Design and Structure beginning on page 45 for more information. •The Compensation Committee wanted to incentivize the retention of the NEOs during a period of significant transformation, and align their interests with stockholders. By granting each 2024 LTI award in the form of RSUs, which will vest in December 2026 as long as the NEO remains continuously employed with the Company, the Compensation Committee sought to align the LTI with the Company’s long-term strategy to incentivize the retention of the management team responsible for overseeing the spinoff of Everus and executing the post-spinoff strategy and transition services through the three-year vesting period ending December 2026, aligned with stockholders’ interests. •The RSU awards remain outstanding and subject to three-year cliff vesting. No vesting was accelerated nor any payment made for any outstanding RSU awards in connection with the Company’s spinoff of Everus. These awards remain subject to normal continued service-based vesting through the end of the three-year vesting period. See LTI beginning on page 51 for further information. 2025 Compensation Program Design Changes Following Spinoffs Following the recent transformational period for the Company, including the impact of two extraordinary corporate spinoff transactions, the Compensation Committee has returned to its prior practice before the recent spinoffs of granting a mix of PSA and RSU awards in 2025. This does not represent any change in executive compensation philosophy. In addition, the comprehensive compensation approval and goal setting conducted by the Compensation Committee reflects the strategic focus of the organization. All NEOs will be subject to the same enterprise-wide financial and operational performance goals under the EICP, and financial and TSR goals under the PSAs to encourage and reward performance aligned with the Company’s long-term strategy, aligned with stockholders’ interests. The Compensation Committee will continue to assess the executive compensation program against changing business conditions and stockholder feedback.
DIRECTOR COMPENSATION
| Compensation Program | | 2024 | 2025 | | EICP | Performance Goals | Adjusted Business Segment Earnings (weighted 80%) and Everus Spinoff (weighted 20%) for corporate executives; Adjusted Electric and Natural Gas Distribution Segment Earnings (weighted 100%), and Adjusted Pipeline Segment Earnings (weighted 100%) for business unit executives; modified by a Responsible Business modifier (5%) for all participants | 70% Adjusted Earnings from Continuing Operations, and 30% operational goals tied to the Company’s commitment to: C - Customers and Communities O - Operational Excellence R - Returns Focused E - Employee Driven | | LTI Awards | PSA/RSU Mix | RSU awards (100%) | PSA awards (70%) and RSU awards (30%) | | PSA Awards | Performance Goals | N/A | 50% Three-Year Cumulative EPS, and 50% TSR to represent the Company’s TSR percent rank over a three-year performance period relative to the Company’s 2025 custom peer group | | | Performance Period | N/A | 3 years | | RSU Awards | Vesting | Three-Year Cliff | Three-Year Cliff |
DIRECTOR COMPENSATION
Leadership Appointments CEO Appointment As part of a planned succession process, in January 2024, Ms. Kivisto succeeded Mr. Goodin, who retired, as President and Chief Executive Officer. In connection with Ms. Kivisto’s promotion, the Compensation Committee and the full Board approved a compensation package that reflects the competition for talented CEOs, particularly in regulated energy delivery companies. Her annual base salary was set at $900,000. Ms. Kivisto was eligible to receive a target EICP award and LTI award of 100% and 289% of base salary, respectively. In designing Ms. Kivisto’s compensation package, the Compensation Committee and the full Board sought to deliver market competitive compensation commensurate with Ms. Kivisto’s capabilities and experience and provide a powerful incentive to develop and execute on the Company’s transformation goals. Other NEO Appointment Further to the Company’s planned succession process, in January 2024, Mr. Senger succeeded Ms. Kivisto in many of her prior responsibilities as Chief Utilities Officer. In connection with Mr. Senger’s promotion, the Compensation Committee and the full Board approved a compensation package that reflects the competition for talented senior executives, particularly in regulated energy delivery companies. His annual base salary was set at $480,000. Mr. Senger was eligible to receive a target EICP award and LTI award of 60% and 100% of base salary, respectively. In designing Mr. Senger’s compensation package, the Compensation Committee and the full Board sought to deliver market competitive compensation commensurate with Mr. Senger’s capabilities and experience and provide a powerful incentive to develop and execute on the Company’s transformation goals. Say-on-Pay Stockholder Vote At our 2024 Annual Meeting, over 96% of shares voted on the Say-on-Pay proposal supported our executive compensation program. The Compensation Committee considered the results of the 2024 Say-on-Pay vote, and our stockholders’ strong support of our executive compensation program in reviewing the program for 2025. Additionally, we had discussions with stockholders representing over 30% of our total shares outstanding, and proxy advisory firms, regarding executive compensation as part of our 2024 stockholder engagement cycle (and, more broadly, we had some touchpoint with stockholders representing over 40% of our total shares outstanding), and we took into account stockholders’ views regarding the design and effectiveness of our executive compensation program. See Stockholder Engagement beginning on page 34 for more details on our stockholder engagement program. In light of the support and feedback received during our 2024 stockholder engagement cycle, the Compensation Committee decided to retain the overall program design with certain enhancements to further align the program with the Company’s long-term strategy. See 2025 Compensation Program Design Changes Following Spinoffs on page 44 for a discussion of the 2025 compensation program design changes. The Compensation Committee will continue to assess the executive compensation program against changing business conditions and stockholder feedback. Our Say-on-Pay vote is currently held every year, consistent with the preference expressed by a majority of our stockholders. Compensation Program Design and Structure Pay-for-Performance Compensation Philosophy The centerpiece of our compensation program is our pay-for-performance philosophy that aligns compensation payouts with the achievement of our annual operating plan and long-term strategy, and consequently stockholder value. This is showcased at senior levels of the Company—particularly the CEO—for whom most compensation is tied to the achievement of metrics driving the Company’s operating and stock performance, as described below:
DIRECTOR COMPENSATION
| Factor | Description | | At Risk Compensation | A significant portion of the NEOs’ annual target compensation mix is at risk. | | Challenging Goals | We have a pay-for-performance culture, and the Compensation Committee sets rigorous financial goals. | | Formulaic | The financial goals under our EICP payouts are formulaically determined based on performance. | | Peer Benchmarked | We utilize an objective set of criteria to determine peer companies and evaluate CEO and NEO pay against market data, while considering individual contributions and experience. | | Linked to Long-Term Strategy | Compensation objectives are directly linked to the Company’s strategy to provide that executives are focused on elements that drive our business success and create stockholder value. | | No Excessive Risk Taking | Our compensation programs do not encourage or reward excessive or imprudent risk taking. | | Responsive to Say-on-Pay Vote | The Compensation Committee considered the results of the 2024 Say-on-Pay vote, and our stockholders’ feedback in reviewing our executive compensation program for 2025. See Stockholder Engagement beginning on page 34. In light of the support and feedback received during our 2024 stockholder engagement cycle, the Compensation Committee decided to retain the overall program design with certain enhancements to further align the program with the Company’s long-term strategy. See 2025 Compensation Program Design Changes Following Spinoffs on page 44. |
DIRECTOR COMPENSATION
Compensation Mix The Compensation Committee seeks to align the compensation program with both our business strategy and our stockholders’ interests. Our executive compensation program includes both a mix of annual and long-term, as well as cash and equity, compensation. As shown in the charts below, for 2024, 79.5% of the CEO’s annual target compensation mix, and 65.2%, on average, of the other NEOs’ annual target compensation mix, was at risk. CEO’s Annual 2024 Target Compensation Average of Other NEOs’ 2024 Target Compensation The Compensation Committee allocates a higher percentage of target compensation to LTI awards than EICP awards for NEOs because they are positioned to have a greater influence on the Company’s long-term performance. Furthermore, these LTI awards, combined with the Stock Ownership Policy, promotes increased ownership of our stock by the NEOs. As a result, the Compensation Committee believes the NEOs, as stockholders, are motivated to deliver long-term value to all stockholders. The key components of our executive compensation program seek to drive financial, strategic, and operational results, and align the NEOs’ interests with those of our stockholders. The components of our 2024 executive compensation program included:
DIRECTOR COMPENSATION
| Annual | Base Salary | Supports the objective of attracting and retaining talented executives with annual fixed compensation. | | | | Provides executives with market-competitive fixed compensation appropriate to their position, experience, and responsibilities. | | | EICP | Links annual cash compensation to attainment of short-term performance goals based on the achievement of a mix of financial, strategic, and operational goals. | | Long-Term | LTI Awards | Links to the Company’s stock price and provides an incentive to work towards the achievement of long-term stock performance. | | | | Links compensation to the attainment of a service requirement, supporting executive retention. | | | | Aligns executives and stockholders’ interests with value that fluctuates based on stock price performance. | | Other | Retirement Benefits | Provides post-retirement security with Pension Plans, 401(k), SISP, Excess SISP, Deferred EICP, Defined Contribution Plan, DCP, and CIC Severance Plan, as applicable, which align with the objectives of attracting and retaining talented executives. |
DIRECTOR COMPENSATION
Base Salary In evaluating whether a base salary rate increase is appropriate, all employees, including the NEOs, are measured based on individual performance, market and peer data, responsibilities, experience, tenure in position, internal equity, and, for the NEOs, a compensation study prepared by the Compensation Committee’s independent compensation consultant. As part of its annual review of compensation, the Compensation Committee approved an annual base salary rate increase, effective January 1, 2024, for both Ms. Kivisto and Mr. Senger to reflect their promotions, including each of their expanded responsibilities, and for each of Ms. Jones and Messrs. Vollmer, Johnson, and Thiede based on each NEO’s performance and a position-oriented analysis of market salaries. The annual base salary rate for Mr. Goodin was not increased during 2024 due to his announced retirement.
DIRECTOR COMPENSATION
| Name | 2023 Base Salary Rate ($) | 2024 Base Salary Rate ($) | Base Salary Rate Increase (%) | | Kivisto | 550,000 | 900,000 | 63.6 | | Vollmer | 565,000 | 587,500 | 4.0 | | Senger | 336,000 | 480,000 | 42.9 | | Jones | 405,000 | 421,000 | 4.0 | | Johnson | 375,000 | 386,250 | 3.0 | | Thiede(1) | 550,000 | 575,000 | 4.5 |
DIRECTOR COMPENSATION
(1) Mr. Thiede ceased to serve as President and Chief Executive Officer of the Everus business unit effective upon the completion of the Company’s spinoff of Everus in October 2024. EICP
DIRECTOR COMPENSATION
| We have a history of setting challenging performance goals. EICP payouts are earned only when we achieve or exceed our goals, and awards are subject to negative discretion when appropriate to align management’s payouts with stockholders’ expectations regarding financial performance. |
DIRECTOR COMPENSATION
Consistent with our pay-for-performance culture, the Compensation Committee established rigorous financial, strategic, and operational performance goals for 2024. The performance metrics the Compensation Committee established for each of the NEOs are illustrated below:
DIRECTOR COMPENSATION
| Name | Performance Metrics | | | | | Financial | Strategic | Operational | | Kivisto, Vollmer, and Jones | Adjusted Business Segment Earnings (weighted 80%) | Everus Spinoff (weighted 20%) | Responsible Business (5% modifier) | | Senger | Adjusted Electric and Natural Gas Distribution Segment Earnings (weighted 100%) | N/A | | | Johnson | Adjusted Pipeline Segment Earnings (weighted 100%) | | |
DIRECTOR COMPENSATION
Mr. Thiede ceased to serve as President and Chief Executive Officer of the Everus business unit effective upon the completion of the Company’s spinoff of Everus in October 2024, and as a result his 2024 EICP payout, if any, will be or was paid by Everus, as determined by Everus’ compensation committee. Mr. Goodin retired before the Compensation Committee established the goals for the 2024 performance period; he was, therefore, ineligible to receive an EICP award. The Compensation Committee’s intent was to motivate the business segment executives, Messrs. Senger and Johnson, to focus primarily on the success and performance of their businesses during a year of change, while motivating the corporate executives, Mses. Kivisto and Jones and Mr. Vollmer, to assist in the success and performance of all lines of business and successfully complete the transformation of the businesses based on the Company’s strategic initiatives. All executives were motivated to drive certain key operational initiatives as well. While positioning the Company for the future, we also remained focused on near-term execution, and the team delivered strong performance against each goal. Financial Performance Consistent with our pay-for-performance culture, the Compensation Committee established rigorous financial performance goals for the NEOs in 2024. The performance metrics the Compensation Committee established for each of the NEOs as illustrated below:
DIRECTOR COMPENSATION
| Performance Metric (presented in millions) | Threshold $) | Target ($) | | Maximum ($) | Actual Payout as a Percentage of Target (%) | | | | | 315.6 | | | | Adjusted Business Segment Earnings | | | | | 145.8 | | | 251.0 | 295.3 | | 339.6 | | | | | 122.6 | | | | | Adjusted Electric and Natural Gas Distribution Segment Earnings | | | | | 98.1 | | | 110.8 | 123.1 | | 135.4 | | | | | | | 68.3 | | | Adjusted Pipeline Segment Earnings | | | | | 200.0 | | | 45.4 | 53.4 | | 61.4 | |
DIRECTOR COMPENSATION
The Compensation Committee established the 2024 Adjusted Business Segment Earnings target of $295.3 million based upon the business plan and budget approved by the Board. Mses. Kivisto and Jones and Mr. Vollmer earned EICP payouts of 145.8% of their respective target awards based on strong performance against the goal. Messrs. Senger and Johnson are business unit executives, so their payouts were based on an Adjusted Electric and Natural Gas Distribution Segment Earnings target of $123.1 million, and an Adjusted Pipeline Segment Earnings target of $53.4 million, in each case based upon the business plan and budget approved by the Board. Messrs. Senger and Johnson earned EICP payouts of 98.1% and 200.0% of their respective target awards based on strong performance against each of their respective goals. The EICP payouts provide for the exclusion of certain items from such performance targets that the Compensation Committee considers to be unusual or non-recurring. These items, if they occur, are excluded when calculating the EICP payouts, however, such unusual or non-recurring items may not be material for purposes of the non-GAAP measures presented in the Annual Report, which is available at investor.mdu.com/financials/annual-reports/. Please note the following reconciliations:
DIRECTOR COMPENSATION
| Reconciliation of Adjusted Business Segment Earnings to Net Income (presented in thousands) | 2024 Financial Results ($) | Adjustments ($) | 2024 Adjusted Financial Results for EICP Purposes ($) | | Adjusted Electric and Natural Gas Distribution Segment Earnings | 121,730 | 886(1) | 122,616 | | Adjusted Pipeline Segment Earnings | 68,042 | 217(2) | 68,259 | | Adjusted Construction Services Segment Earnings | 122,031 | 2,699(3) | 124,730 | | Adjusted Business Segment Earnings(1)(2)(3) | 311,803 | 3,802 | 315,605 | | Other | (30,695) | | | | Net Income | 281,108 | | |
DIRECTOR COMPENSATION
(1) Reflects differences in corporate overhead allocations due to the Company’s spinoff of Everus. (2) Reflects differences in corporate overhead allocations due to the Company’s spinoff of Everus ($207,000), and transaction costs incurred in connection with certain acquisitions ($10,000). (3) Reflects transaction and stand-up costs due to the Company’s spinoff of Everus. Strategic Performance With the goal of maximizing long-term value for stockholders, the Company completed the spinoff of Knife River, its construction materials and contracting business, in 2023, and the Board set the strategic performance goal of additionally spinning-off Everus, the Company’s construction services business, in 2024, in each case into a separate publicly-traded company, to create additional stockholder value.
DIRECTOR COMPENSATION
| Performance Metric | Threshold | Target | Maximum | Actual Payout as a Percentage of Target (%) | | | | | Spinoff Completed | | | Everus Spinoff | | | | 200 | | | Spinoff Underway | Filing of Final Form 10 | Spinoff Completed | |
DIRECTOR COMPENSATION
The Company achieved its goal to spinoff Everus in October 2024 into a separate publicly-traded company, creating significant value for stockholders. The NEOs achieved maximum performance for this performance metric. Operational Performance With the goals of better serving customers and driving future performance, the Compensation Committee established an operational performance goal of advancing certain responsible business initiatives in 2024. The Responsible Business modifier is a separate performance measure, independent of the achievement of the financial and strategic performance metrics, and is based on the Compensation Committee’s assessment of management’s progress regarding the following initiatives:
DIRECTOR COMPENSATION
| Performance Metric | Initiative | | Environmental Our Value of Excellence We are committed to reducing our carbon footprint over time. | •Evaluate and plan implementation of GHG emissions management software in an effort to reduce our carbon footprint over time. | | Social Our Value of Stewardship We have a long history of supporting the communities we serve. | •Augment MDU Resources Foundation reporting in the Sustainability Report to sharpen focus of giving by sector in support of the Company’s mission. •Establish leading methods to track vendor spend consistent with certain Dunn & Bradstreet certification data. | | Governance Our Value of Respect We are committed to maintaining a respectful workplace. | •Enhance and document compliance trainings and outreach to employees to support the Company’s culture and advance its compliance programs. |
DIRECTOR COMPENSATION
The Responsible Business modifier applies equally to all NEOs and adds or deducts to their EICP payout based on performance. The Compensation Committee determined that the Company completed each of the Responsible Business initiatives in 2024. The Company leveraged the responsible business results to implement change across the organization and better serve its customers and drive future performance. Based on the Compensation Committee’s assessment of management’s progress toward the completion of the foregoing initiatives, the NEOs achieved target performance, resulting in each NEO receiving an additional 5% of their target incentive as a payout. To learn more about our responsible business practices, see our Sustainability Report, which is presented consistent with SASB, TCFD, EEI, and AGA reporting standards and is available at mdu.com/sustainability/. EICP payments are based upon the Company’s results, without individual performance adjustments. All EICP financial goals and calculations are based on the results of the performance for 2024. The Compensation Committee did not exercise discretion in the amounts payable to the NEOs or any other employees under the EICP. EICP awards are calculated based on a percentage of the executive’s base salary rate during the year. For 2024, the maximum payout under this plan was 200% of target (excluding the Responsible Business modifier). Achievement of the financial performance goals is calculated using linear interpolation to match the results of performance measures achieved between the payout levels:
DIRECTOR COMPENSATION
| Adjusted Business Segment Earnings and Adjusted Pipeline Segment Earnings | | | Adjusted Electric and Natural Gas Distribution Segment Earnings | | | | Percentage of Target Results Achieved (%) | Level | Payout (%) | Percentage of Target Results Achieved (%) | Level | Payout (%) | | 85 | Threshold | 25 | 90 | Threshold | 50 | | 100 | Target | 100 | 100 | Target | 100 | | 115 | Maximum | 200 | 110 | Maximum | 200 |
DIRECTOR COMPENSATION
The NEOs’ target EICP payouts are shown below:
DIRECTOR COMPENSATION
| Name | Target as a Percentage of Base Salary Rate (%) | 2024 Target Payout ($) | | Kivisto(1) | 100 | 900,000 | | Vollmer | 75 | 440,625 | | Senger(1) | 60 | 288,000 | | Jones | 50 | 210,500 | | Johnson | 50 | 193,125 | | (1) Each of Ms. Kivisto and Mr. Senger’s target EICP awards were increased in January 2024 from 75% to 100%, and 45% to 60%, respectively, to reflect their promotions and expanded responsibilities, respectively, and the competition for top talent in the then-current environment. | | |
DIRECTOR COMPENSATION
Based on the corresponding achievement of the 2024 performance goals, the Compensation Committee approved the following payouts, including a Responsible Business modifier award of 5.0%, to each of the NEOs:
DIRECTOR COMPENSATION
| Name | Results of Financial Performance Measure (%) | Results of Strategic Performance Measure (%) | Results of Responsible Business Modifier (%) | Actual 2024 Payout as a Percentage of Target (%) | Actual 2024 Payout $) | | Kivisto | 116.6 | 40.0 | 5.0 | 161.6 | 1,454,400 | | Vollmer | 116.6 | 40.0 | 5.0 | 161.6 | 712,050 | | Senger | 98.1 | N/A | 5.0 | 103.1 | 296,928 | | Jones | 116.6 | 40.0 | 5.0 | 161.6 | 340,168 | | Johnson | 200.0 | N/A | 5.0 | 205.0 | 395,906 |
DIRECTOR COMPENSATION
Prior to the Compensation Committee certifying that the EICP goals were achieved, the Company’s Internal Auditing department, as a benefit to the Compensation Committee, reviewed the EICP calculations to ensure that the payouts were calculated in accordance with the plan. LTI 2024 RSU Awards In 2024, in light of the then-pending Everus spinoff, the Compensation Committee made a temporary modification to its traditional LTI practices, and granted executives, including the NEOs, RSU awards instead of the traditional mix of PSA and RSU awards (as the Compensation Committee also deemed appropriate in 2023 with the then-pending Knife River spinoff). In making this temporary modification, the Compensation Committee took into account the impact of these extraordinary corporate spinoff transactions and the strategic work that would be necessary by management to achieve the Company’s long-term goal of becoming a pure-play regulated energy delivery business. Although the Compensation Committee has historically utilized PSAs, in 2024, it determined that it was inappropriate to establish three-year performance goals because such goals would unlikely remain relevant for the three-year performance period, as a result of the significant transformation. In addition, the Compensation Committee also believed that granting PSAs in 2024 would potentially create a pay-for-performance misalignment due to anticipated changes in financial metrics and the peer group, resulting from the then-pending spinoff. The Compensation Committee believed the grant of RSUs with a three-year vesting period was an appropriate and balanced approach to address the Company’s executive compensation requirements during this transformational period. The Compensation Committee remains committed to fostering a pay-for-performance culture, and given the completion of the spinoffs, has returned to granting a mix of PSA and RSU awards in 2025, consistent with its executive compensation philosophy. See 2025 Compensation Program Design Changes Following Spinoffs on page 44 and Compensation Program Design and Structure beginning on page 45 for more information. By granting each 2024 LTI award in the form of RSUs, which will vest in December 2026 as long as the NEO remains continuously employed with the Company, the Compensation Committee sought to align the LTI with the Company’s long-term strategy to incentivize the retention of the management team responsible for overseeing the spinoff of Everus and executing the post-spinoff strategy and transition services through the three-year vesting period ending December 2026, aligned with stockholders’ interests. No vesting was accelerated nor any payment made for any outstanding RSU awards in connection with the Company’s spinoff of Everus. These awards remain subject to normal continued service-based vesting through the end of the three-year vesting period. The number of shares granted was calculated based on $19.39 per share, representing the average closing price of a share of Common Stock from January 1 through January 22, 2024. Following the Company’s spinoff of Everus, the awards were converted using the concentration (employer) method, as approved by the Compensation Committee, which adjusted the number of outstanding shares for participants remaining with the Company by the ratio of the pre-spin MDU closing stock price on October 31, 2024 of $28.85 compared to the post-spin MDU closing stock price on November 1, 2024 of $15.10. The number of RSUs granted in 2024 are shown below:
DIRECTOR COMPENSATION
| Name | LTI as a Percentage of Base Salary (%) | LTI Target ($)(1) | RSU Award (#) | Grant Date Value ($)(1) | RSU Award Following Everus Spinoff (#) | | Kivisto | 289 | 2,600,000 | 134,089 | 2,795,756 | 256,189 | | Vollmer | 186 | 1,094,750 | 56,459 | 1,177,170 | 107,870 | | Senger | 100 | 480,000 | 24,755 | 516,142 | 47,296 | | Jones | 91 | 382,800 | 19,742 | 411,621 | 37,718 | | Johnson | 80 | 309,000 | 15,936 | 332,266 | 30,447 | | Thiede(2) | 186 | 1,071,500 | 55,260 | 1,152,171 | N/A |
DIRECTOR COMPENSATION
(1) The grant date fair value is calculated in accordance with FASB ASC 718 by multiplying the number of RSUs granted by the closing stock price on the date of the grant, which was $20.85 on February 15, 2024. The grant date fair value plus the incremental increase in value due to the Everus spinoff is reported in column (e) of the Summary Compensation Table beginning on page 60. (2) Mr. Thiede ceased to serve as President and Chief Executive Officer of the Everus business unit effective upon the completion of the Company’s spinoff of Everus in October 2024, and as a result, his outstanding RSU awards were converted into Everus awards using the concentration (employer) method of conversion as of such date. Mr. Goodin retired before the Compensation Committee established the goals for the 2024 performance period; he was, therefore, ineligible to receive an LTI award. Benefits The Company provides post-employment benefits to certain employees, including the NEOs, because it believes it is important to provide benefits that approximate the benefits paid by other employers to executives in similar positions. The Compensation Committee periodically reviews the benefits in an effort to maintain a market-based benefits package. The NEOs participated in the following plans during 2024.
DIRECTOR COMPENSATION
| Name | Pension Plans | 401(k) Plan | SISP | Excess SISP | Deferred EICP | Defined Contribution Plan | DCP | CIC Severance Plan | | Kivisto | ● | ● | ● | | ● | | | ● | | Vollmer | ● | ● | | | | ● | ● | ● | | Senger | ● | ● | ● | | | | | ● | | Jones | ● | ● | | | | ● | ● | ● | | Johnson | ● | ● | | | | ● | ● | ● | | Goodin | ● | ● | ● | ● | ● | | | | | Thiede(1) | | ● | | | | ● | ● | |
DIRECTOR COMPENSATION
(1) Mr. Thiede ceased to serve as President and Chief Executive Officer of the Everus business unit effective upon the completion of the Company’s spinoff of Everus in October 2024, and as a result, his 401(k) and DCP plan balances transferred to the respective Everus plans as of such date. The Company retained Mr. Thiede’s benefit obligation associated with the Defined Contribution Plan. Pension Plans The Company maintains the Pension Plans for participants, including certain NEOs, who met the eligibility requirements prior to the plans being frozen to new employees after December 2006, and as of December 2009 was amended to also freeze benefit accruals. The benefits under the Pension Plans are based on 1.1% of the participant’s 60 highest consecutive months’ average earnings in the last 120 months (up to the integration level of $3,115, which was the integration level when the plan was frozen in 2009). Benefits are paid as straight life annuities for single participants, and as actuarially-reduced annuities with a survivor benefit for married participants, unless otherwise elected. 401(k) Plan The majority of employees who are at least 18 years of age, including the NEOs, are eligible to participate in the 401(k) Plan, and defer their base salary up to the IRS limit, which was $23,000 in 2024. Participants, including the NEOs, receive a company match up to 3%, depending on their elected deferral rate. In addition, participants who are either non-bargaining unit employees hired after 2006 or employees who were not previously participants in the Pension Plans, receive an additional company contribution of 5% of plan eligible compensation, including Mr. Thiede, and participants who are either non-bargaining unit employees hired prior to 2006 and participants in the Pension Plans, receive an additional company contribution based on the participant’s age as of December 31, 2009 when benefit accruals under the Pension Plans were frozen, including Messrs. Senger, Johnson, and Goodin and Ms. Jones (each 11.5%), Ms. Kivisto (9%), and Mr. Vollmer (7%). These amounts may be reduced to comply with IRS limits. SISP The Company maintains a SISP for certain executives, including certain NEOs, who met the eligibility requirements prior to the plan being frozen to new participants and benefit levels for existing participants, effective February 11, 2016. The SISP is a nonqualified defined benefit retirement plan. SISP benefits are determined by reference to levels defined within the plan. The SISP was intended to augment the retirement income provided under the Pension Plans and is payable to the participant or their beneficiary for a period of 15 years. The SISP benefits are subject to a vesting schedule in which participants are 100% vested after ten years of participation in the plan. Participants can elect to receive the SISP as monthly retirement benefits only, monthly death benefits paid to a beneficiary only, or a combination of retirement and death benefits, whereby each benefit is reduced proportionately. Regardless of the election, if the participant dies before the SISP retirement benefit commences, only the SISP death benefit is provided. SISP benefits are forfeited if the participant’s employment is terminated for cause. The amounts in the Pension Benefits in 2024 on page 64 represent the present value of the vested SISP benefits as of December 31, 2024, using the monthly retirement benefit shown in the table and a discount rate of 5.26%. In the event of death, Messrs. Goodin and Senger and Ms. Kivisto’s beneficiaries would receive monthly death benefit payments for 15 years.
DIRECTOR COMPENSATION
| Name | Monthly SISP Retirement Payment ($) | Monthly SISP Death Payment ($) | | Kivisto | 6,572 | 13,144 | | Senger | 5,840 | 11,680 | | Goodin | 23,040 | 46,080 |
DIRECTOR COMPENSATION
Excess SISP The Company maintains an Excess SISP for certain SISP participants, including certain NEOs, whose Pension Plan benefits exceed IRC limitations on retirement benefits through the Pension Plan. Excess SISP benefits are equal to the difference between the monthly Pension Plan benefit that would have been payable to the participant under the Pension Plan absent the limitations under the IRC and the actual benefits payable to the participant under the Pension Plan. Participants are only eligible for the Excess SISP benefits if the participant is fully vested under the Pension Plan, their employment terminates prior to age 65, and benefits under the Pension Plan are reduced due to limitations under the IRC on plan compensation. In November 2009, the SISP was amended to limit the participants eligible for early retirement and the Excess SISP. Mr. Goodin is the only NEO eligible for the Excess SISP benefit, which is $812 per month. Mr. Goodin began receiving his Excess SISP benefits six months after his retirement, which will continue until the month prior to his 65th birthday or until his death, if prior to age 65. Excess SISP benefits are forfeited if the participant’s employment is terminated for cause. Deferred EICP The Company maintains a Deferred EICP for certain executives, including certain NEOs, who met the eligibility requirements prior to the deferred compensation provision of the EICP being frozen to new contributions, effective in January 2021. Prior to 2021, executives participating in the EICP could elect to defer up to 100% of their payouts. These deferrals accrue interest per annum at a rate of the average of the Treasury High Quality Market Corporate Bond Yield Curve for the last business day of each month for the prior twelve-month period from October to September. The interest rate in effect for 2024 was 5.3%. Deferred amounts are paid based on the participant’s election either as a lump sum or monthly installments not to exceed 120 months following termination of employment or beginning in the fifth year following the year the award was earned. In the event of a participant’s death, all amounts deferred are payable to the participant’s estate or beneficiary in a lump sum. In the event of a change in control, all amounts deferred would immediately become payable. Defined Contribution Plan The Company maintains a Defined Contribution Plan for certain executives, including certain NEOs, who met the eligibility requirements prior to the plan being frozen for new participants effective in January 2021. Prior to 2021, the Defined Contribution Plan provided Company contributions to a select group of employees approved by the Compensation Committee. Participants may select from a group of investment options, and their account balance represents an unsecured promise of the Company based on a hypothetical investment experience per the participant’s elections. Participants may elect to receive their benefit either in a lump sum or in annual installments up to 10 years upon separation from service with the Company. Plan benefits become fully vested if the participant dies while actively employed. Benefits are forfeited if the participant’s employment is terminated for cause. The Defined Contribution Plan was frozen to new participants and contributions effective January 1, 2021. DCP The Company maintains a DCP for certain executives, including certain NEOs, whereby the participant has the opportunity to defer up to 80% of base salary and 100% of EICP payout. The Company also provides discretionary credits to select individuals recommended by the CEO and approved by the Compensation Committee. Participants are 100% vested in their contributions of salary and/or EICP payouts, but vesting of discretionary employer credits occurs ratably over three years. Participants can establish one or more retirement or in-service accounts, which capture the hypothetical investment experience based on a suite of investment options similar to the Defined Contribution Plan. Participants may elect to receive their vested contributions and investment earnings either in a lump sum or in annual installments up to 10 years for retirement accounts and five years for in-service accounts upon a qualifying distribution event. Plan benefits become fully vested if the participant dies, becomes disabled while actively employed, or attains age 65 with completing ten years of service. In the event of termination within one year of a change in control, plan benefits become fully vested and payable in a lump sum. Benefits are forfeited if the participant’s employment is terminated for cause. Participants receive a company contribution based on a percentage of the participant’s base salary, including Messrs. Vollmer (15%), Johnson (10%), and Thiede (17%), and Ms. Jones (10%). CIC Severance Plan We believe it is important to protect the interests of our management team in the event of a “change in control.” As a result, the Board adopted the CIC Severance Plan in 2024. It is our belief that the interests of our stockholders will be best served if the interests of our management are aligned with our stockholders, and that providing “change in control” benefits should mitigate any potential reluctance of management to pursue potential “change in control” transactions that may be in the best interests of our stockholders. The Company maintains a CIC Severance Plan for certain executives, including the NEOs, in the event of a “qualifying termination” following a “change in control,” to provide for (a) a cash lump sum equal to the participant’s prorated annual base salary and EICP payout, any accrued and unused vacation pay, and previously incurred but unreimbursed business expenses, (b) a cash lump sum equal to the participant’s prorated EICP payout, a multiple of annual base salary and target EICP payout (determined by the participant’s tier level, i.e., 3x and 2x for Ms. Kivisto and the remaining NEOs, respectively (the “Multiple”)), (c) retiree medical, if applicable, and (d) outplacement services. Additionally, the LTIP provides that, upon a change in control, each outstanding award shall vest in full (provided that the treatment of any performance goals applicable to the award will be determined in accordance with the terms of the applicable award agreement), except that such vesting shall not apply to the extent that a replacement award is provided to the participant. See Potential Payments Upon Termination or Change in Control beginning on page 65 for definitions of “qualifying termination” and “change in control,” and additional information for specific benefits under the CIC Severance Plan for the NEOs. For avoidance of doubt, unless otherwise determined by the Board, the sale of a subsidiary, operating entity, or business unit of the Company shall not constitute a “change in control” for purposes of the CIC Severance Plan. No Perquisites NEOs do not receive perquisites that materially differ from those available to employees in general. No Employment Agreements None of the NEOs has an employment agreement. All of the NEOs are employed at-will. Procedures for Determining Compensation Setting Compensation, Establishing Goals, and Evaluating Performance As reflected in the following timeline, while in the midst of significant strategic and structural change to our business, the Compensation Committee continued in 2024 to focus its compensation decisions on aligning the NEOs’ interests with those of our stockholders and the performance of the Company.
DIRECTOR COMPENSATION
| May | June | July | August | | September | October | November | December | | •The Compensation Committee Chair, and the Compensation Committee, each meet with management, and privately with their independent compensation consultant, from May through December to review performance against the established performance goals, discuss developments and emerging trends, review recommendations concerning the executive compensation design, components, and equity awards for each executive, and review specific management resources issues. The Compensation Committee also meets privately with its independent compensation consultant to review the CEO’s compensation. | | | | | •At its May meeting, the Compensation Committee reviews the compensation paid to non-employee directors and makes recommendations to the Board regarding the directors’ compensation program. | | | | | •At its August meeting, the Compensation Committee has preliminary discussions with management and the Compensation Committee’s independent compensation consultant regarding the compensation program design for the following year, including reviewing compensation trends and a competitive analysis of each executive’s compensation relative to market. The Compensation Committee provides feedback and direction regarding the program design for the next year. | | | | | •At its November meeting, final recommendations are presented, and the Compensation Committee approves executives’ base salaries and EICP and LTIP targets for each executive. The Compensation Committee also reviews performance evaluations and preliminary EICP and LTIP goal updates. The Compensation Committee meets privately with its independent compensation consultant to review and approve the CEO’s compensation. | | | | | January | February | March | April | | •The Compensation Committee reviews any feedback from stockholder engagement meetings regarding the compensation program. | | | | | •At its February meeting, the Compensation Committee establishes the EICP and, when applicable, the PSA goals, and certifies performance in connection with prior year EICP and PSA awards, as applicable. | | | |
DIRECTOR COMPENSATION
Benchmarking Approach We have established guidelines for compensation, including cash and equity, for each NEO. These guidelines are reviewed annually and are based upon compensation for comparable positions in a peer group. We also use the peer group data to assess the competitiveness of total direct compensation awarded to our senior executives. The Compensation Committee endeavors to refresh the peer group annually. In 2023, in an effort to more closely align the peer group with the Company following the spinoff of Knife River, the Compensation Committee reviewed the criteria (companies having revenues of approximately 0.4 to 2.4 times the Company’s revenue, and select companies within the utilities, midstream, and industrials (construction services focused) sectors) and updated the compensation peer group used for the evaluation of 2024 executive compensation to remove companies in the construction materials industry and add additional companies in the utility and construction services industries:
DIRECTOR COMPENSATION
| Deleted Companies |
DIRECTOR COMPENSATION
•Granite Construction Incorporated •Martin Marietta Materials Inc. •MasTec, Inc. •Summit Materials, Inc. •Quanta Services, Inc. •Vulcan Materials Company
DIRECTOR COMPENSATION
| Added Companies |
DIRECTOR COMPENSATION
•APi Group Corporation •Avista Corporation •Comfort Systems USA, Inc. •New Jersey Resources Corporation •OGE Energy Corp. •Primoris Services Corporation
DIRECTOR COMPENSATION
| 2024 Compensation Benchmarking Peer Group |
DIRECTOR COMPENSATION
•Alliant Energy Corporation •Ameren Corporation •APi Group Corporation •Atmos Energy Corporation •Avista Corporation •Black Hills Corporation •CMS Energy Corporation •Comfort Systems USA, Inc. •Dycom Industries, Inc. •EMCOR Group, Inc. •Evergy, Inc. •KBR, Inc. •MYR Group Inc. •New Jersey Resources Corporation •NiSource Inc. •OGE Energy Corp. •Pinnacle West Capital Corporation •Portland General Electric Company •Primoris Services Corporation •Southwest Gas Holdings, Inc. •WEC Energy Group, Inc. One goal of the Compensation Committee is to provide competitive total compensation opportunities for the NEOs that vary with Company performance. The Compensation Committee uses the peer group benchmark information as a reference point in evaluating executive compensation, assessing the competitiveness of total direct compensation awarded to our senior executives, and designing compensation plans and benefits. It does not, however, attempt to match the compensation of each executive position in the Company precisely with that of an equivalent position in the peer group. In general, the Compensation Committee looks to position an executive’s total compensation near the median of comparable positions at peer companies, consistent with the Company’s revenue in relation to peer companies. The Compensation Committee also considers other factors, including performance, responsibility, experience, tenure, internal equity, and market positioning, when determining compensation. The Compensation Committee then uses this peer group, along with other market survey information, to evaluate and make executive compensation decisions. In 2024, in an effort to more closely align the peer group with the Company following the spinoff of Everus, the Compensation Committee reviewed the criteria and updated the compensation peer group used for the evaluation of 2025 executive compensation to remove companies in the construction services industry and companies that were too large to be comparable following the spinoff, and add additional companies in the utility and pipeline industries. Use of Independent Compensation Consultant The Compensation Committee has retained a nationally-recognized compensation consultant that is independent and performs no work for management as its advisor. The independent compensation consultant reports directly to the Compensation Committee, meets with the Compensation Committee privately without management present, and regularly communicates privately with the Committee Chair. The Compensation Committee has assessed the compensation consultant’s independence based on standards promulgated by the SEC and concluded that no conflict of interest exists that would prevent it from serving as an independent compensation consultant to the Compensation Committee. Each year, the independent compensation consultant reviews a report on risk in relation to the Company’s compensation policies and practices, reviews the CEO’s compensation, and advises on compensation issues impacted by the Company’s strategic initiatives. In addition, each year the independent compensation consultant reviews and makes recommendations regarding the compensation program for non-employee directors, and the Compensation Committee considers the independent compensation consultant’s report on the program. Management Involvement in Developing the Compensation Program Management is involved in various aspects of developing the executive compensation program. Our Chief Human Resources, Administration, and Safety Officer works with our CEO to develop compensation recommendations for all executive officers and other key employees, other than the CEO, and then they review these proposals with the Committee Chair, and may make changes to the recommendations based upon his input before the recommendations are presented to the Compensation Committee for review. The Chair of the Board also advises the Compensation Committee Chair in fulfilling his designated role and responsibilities. Our Chief Legal Officer and Corporate Secretary also attends meetings of the Compensation Committee and participates in some of these discussions and preparations. Key Compensation Governance Policies
DIRECTOR COMPENSATION
| ☑ What We Do | | | ☑ | At Risk Compensation. The Compensation Committee ties the EICP to rigorous financial and strategic performance measures intended to reward the NEOs for the accomplishment of these goals. Typically, the Compensation Committee awards a combination of PSAs and RSUs. But, in 2024, due to the spinoff of Everus, LTI awards consisted solely of RSUs, which may be earned based on continued service of the NEO at the end of the three-year period to incentivize the retention of the management team responsible for overseeing the Everus spinoff and executing the post-spinoff strategy and transition services, aligned with stockholders’ interests. All LTI is paid as Common Stock, which encourages stock ownership by the NEOs. | | ☑ | Independent Compensation Consultant. The Compensation Committee retains an independent compensation consultant to evaluate executive compensation plans and practices. | | ☑ | Stockholder Engagement Program. The Company conducts proactive stockholder and proxy advisory firm engagement outreach to solicit feedback. | | ☑ | Competitive Compensation. Executive compensation reflects performance, experience, internal equity, competitive market, and the Company’s performance. | | ☑ | Balanced Mix of Pay Components. The target compensation mix represents a balance of annual cash and long-term equity-based compensation. | | ☑ | Mix of Financial and Strategic Goals. Use of a mixture of financial and strategic goals to measure performance prevents overemphasis on a single metric. | | ☑ | Annual Say-on-Pay Vote. Our Say-on-Pay vote is currently held every year, consistent with the preference expressed by a majority of our stockholders. | | ☑ | Mitigates Undue Risk in Compensation Programs. Risks related to our compensation programs are regularly analyzed through an annual compensation risk assessment. | | ☑ | Stock Ownership Policy. The Company imposes and monitors a meaningful Stock Ownership Policy. | | ☑ | Clawback Policy. The Clawback Policy provides for the recovery of certain incentive-based compensation in the event of an accounting restatement. |
DIRECTOR COMPENSATION
| ☒ What We Do Not Do | | | ☒ | No In-Flight Performance Metric or Performance Target Changes. No performance metric or performance target changes to in-flight performance cycles. | | ☒ | No Severance Benefits. Executives do not receive employment agreements that provide for severance (other than the CIC Severance Plan). | | ☒ | No Employment Agreements. None of the executives has an employment agreement. All of the executives are employed at-will. | | ☒ | No Stock Options. The Company does not issue stock options. | | ☒ | No Perquisites. Executives do not receive perquisites that materially differ from those available to employees in general. | | ☒ | No Hedging Stock. Executives are not allowed to hedge Company securities. | | ☒ | No Pledging Stock. Executives are not allowed to pledge Company securities in margin accounts or as collateral for loans. | | ☒ | No Tax Gross-Ups. Executives do not generally receive tax gross-ups on their compensation. |
DIRECTOR COMPENSATION
Clawback Policy The Company adopted the Clawback Policy concerning the recoupment of incentive compensation in compliance with SEC rules and the NYSE listing standards. The policy applies to all current and former executive officers, within the meaning of the Exchange Act, who receive incentive-based compensation on or after October 2, 2023. Under the policy, in the event that the financial results upon which incentive-based compensation was predicated become the subject of a financial restatement that is required because of material non-compliance with financial reporting requirements (including any accounting restatement required to correct an error in previously-issued financial statements that is material to the previously-issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period), the Compensation Committee will clawback any erroneously-awarded incentive-based compensation, so that the ultimate payout gives retroactive effect to the financial results, as restated. The recovery of such compensation applies regardless of whether an executive officer engaged in misconduct or otherwise caused or contributed to the required restatement. Stock Ownership Policy We have a meaningful Stock Ownership Policy for our non-employee directors and executive officers. At the end of 2024, all of the NEOs met or exceeded their applicable requirements (or were within the initial five-year period to achieve compliance). For additional information, see Stock Ownership Policy on page 28. Policy Prohibiting Hedging or Pledging of the Company’s Stock The Director Compensation Policy and Executive Compensation Policy prohibit directors and executives (who participate in the EICP and/or LTIP) from hedging their ownership of Common Stock. Under these policies, directors and executives are prohibited from engaging in transactions that allow them to own stock technically, but without the full benefits and risks of such ownership, including, but not limited to, zero-cost collars, equity swaps, straddles, prepaid variable forward contracts, security futures contracts, exchange funds, and forward sale contracts. These policies also prohibit directors and executives from holding Common Stock in a margin account, with certain exceptions, or pledging Common Stock as collateral for a loan. Common Stock may be held in a margin brokerage account only if the stock is explicitly excluded from any margin, pledge, or security provisions of the customer agreement. In addition, no director or executive may engage in these types of transactions while in possession of material nonpublic information concerning the Company. For additional information regarding the Company’s policy prohibiting hedging or pledging of the Company’s stock, see Insider Trading Policy available at investor.mdu.com/governance/governance-documents. Insider Trading Policy The Board has adopted the Insider Trading Policy, which governs the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers, employees, and other covered persons, and the Company itself, which is reasonably designed to promote compliance with insider trading laws, rules, and regulations, and NYSE listing standards. A copy of the Insider Trading Policy is available at investor.mdu.com/governance/governance-documents. Equity Award Timing Procedures While we do not currently grant stock options or similar option-like instruments, such as stock appreciation rights, we are providing information regarding our procedures related to the grant of equity awards close in time to the release of material non-public information. While the Compensation Committee has historically granted nearly all LTI awards at its meeting each February, the Company does not have a formal policy or obligation that requires us to award equity or equity-based compensation on specific dates. The Compensation Committee and Board, however, have adopted a practice with respect to the grant of equity awards that generally prohibits the grant of equity awards during closed quarterly trading windows (as determined in accordance with the Insider Trading Policy). Neither our Board nor our Compensation Committee takes material non-public information into account when determining the timing of equity awards, nor do we time the disclosure of material non-public information for the purpose of impacting the value of executive compensation. We generally issue equity awards to our executive officers on a limited and infrequent basis, and not in accordance with any fixed schedule. Impact of Tax and Accounting Treatment The Compensation Committee may consider the impact of tax or accounting treatment in determining compensation. The Compensation Committee did not make any adjustments to the 2024 compensation program to address the impact of tax or accounting treatment. The Compensation Committee may also consider the accounting and cash flow implications of various forms of executive compensation. We expense salaries and EICP payouts as earned. For our equity awards, we record the accounting expense in accordance with FASB ASC 718, which is generally over the vesting period. Compensation Committee Report The Compensation Committee has reviewed and discussed the CD&A with management and, based on that review and discussion, has recommended to the Board that the CD&A be included in this Proxy Statement. Members of the Compensation Committee
Dennis W. Johnson
| (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($)(6) | | Nicole A. Kivisto | 2024 | 966,137 | 3,162,624 | 1,454,400 | — | 45,744 | 5,628,905 | | President and Chief | 2023 | 550,000 | 980,883 | 845,625 | 58,798 | 43,974 | 2,479,280 | | Executive Officer | 2022 | 530,000 | 860,649 | 266,723 | 1,294 | 78,795 | 1,737,461 | | Jason L. Vollmer | 2024 | 602,317 | 1,415,617 | 712,050 | — | 126,969 | 2,856,953 | | Chief Financial Officer | 2023 | 565,000 | 1,007,320 | 760,631 | 1,966 | 122,874 | 2,457,791 | | | 2022 | 530,000 | 860,649 | 225,383 | — | 150,957 | 1,766,989 | | Garret Senger | 2024 | 480,000 | 591,717 | 296,928 | — | 46,864 | 1,415,509 | | Chief Utilities Officer | | | | | | | | | Anne M. Jones | 2024 | 443,256 | 494,883 | 340,168 | — | 90,527 | 1,368,834 | | Chief Human Resources, | 2023 | 405,000 | 339,977 | 363,488 | 34,811 | 106,666 | 1,249,942 | | Administration, and Safety Officer | 2022 | 385,000 | 312,594 | 109,148 | — | 81,271 | 888,013 | | Rob L. Johnson | 2024 | 386,250 | 396,901 | 395,906 | — | 87,584 | 1,266,641 | | President, WBI Energy, Inc. | 2023 | 347,917 | 293,584 | 337,731 | — | 74,239 | 1,053,471 | | David L. Goodin(7) | 2024 | 262,903 | 339,417 | — | — | 151,347 | 753,667 | | Former President and Chief | 2023 | 1,085,000 | 3,359,339 | 2,434,469 | 173,094 | 48,691 | 7,100,593 | | Executive Officer | 2022 | 1,044,000 | 3,247,775 | 739,935 | 33,340 | 192,238 | 5,257,288 | | Jeffrey S. Thiede(8) | 2024 | 479,167 | 1,152,171 | — | — | 134,855 | 1,766,193 | | Former President and Chief | 2023 | 550,000 | 980,883 | 605,138 | — | 131,524 | 2,267,545 | | Executive Officer, Everus business unit | 2022 | 530,000 | 860,649 | 613,343 | — | 166,470 | 2,170,462 |
Dennis W. Johnson
| Name | 401(k) Plan Match ($) | DCP Company Contribution ($) | Life Insurance Premium ($) | Matching Charitable Contributions ($) | Director Compensation ($)(a) | Total ($) | | Kivisto | 41,400 | — | 744 | 3,600 | — | 45,744 | | Vollmer | 34,500 | 88,125 | 744 | 3,600 | — | 126,969 | | Senger | 46,000 | — | 714 | 150 | — | 46,864 | | Jones | 46,000 | 42,100 | 627 | 1,800 | — | 90,527 | | Johnson | 46,000 | 38,625 | 559 | 2,400 | — | 87,584 | | Goodin | 42,920 | — | 60 | — | 108,367 | 151,347 | | Thiede | 27,600 | 100,000 | 655 | 6,600 | — | 134,855 | | (a) Represents compensation, including cash fees and the grant date fair value of equity and life insurance premiums, earned by Mr. Goodin while he served as a non-employee director from January 2024 through May 2024. | | | | | | |
Dennis W. Johnson
| Termination Event | Severance ($)(1) | LTI ($)(2) | Nonqualified Deferred Compensation ($)(3) | Disability Insurance ($)(4) | Total ($) | | Kivisto | | | | | | | Death | — | 2,650,916 | 167,826 | — | 2,818,742 | | Disability | — | 2,650,916 | — | 454,664 | 3,105,580 | | CIC (with Termination) | 6,364,500 | 6,326,775 | 167,826 | — | 12,859,101 | | CIC (w/o Termination) | — | 1,625,991 | 167,826 | — | 1,793,817 | | Vollmer | | | | | | | Death | — | 1,773,309 | 740,125 | — | 2,513,434 | | Disability | — | 1,773,309 | 498,427 | 660,506 | 2,932,242 | | CIC (with Termination) | 2,543,375 | 3,649,639 | 498,427 | — | 6,691,441 | | CIC (w/o Termination) | — | 1,670,344 | — | — | 1,670,344 | | Senger | | | | | | | Voluntary or w/o Cause | — | 253,174 | — | — | 253,174 | | Death | — | 542,444 | — | — | 542,444 | | Disability | — | 542,444 | — | 79,262 | 621,706 | | CIC (with Termination) | 1,897,498 | 1,247,599 | — | — | 3,145,097 | | CIC (w/o Termination) | — | 379,770 | — | — | 379,770 | | Jones | | | | | | | Voluntary or w/o Cause | — | 375,605 | — | — | 375,605 | | Death | — | 606,287 | 563,477 | — | 1,169,764 | | Disability | — | 606,287 | 259,153 | 113,692 | 979,132 | | CIC (with Termination) | 1,549,885 | 1,255,501 | 259,153 | — | 3,064,539 | | CIC (w/o Termination) | — | 563,417 | — | — | 563,417 | | Johnson | | | | | | | Voluntary or w/o Cause | — | 317,036 | — | — | 317,036 | | Death | — | 503,259 | 524,388 | — | 1,027,647 | | Disability | — | 503,259 | 195,680 | 138,582 | 837,521 | | CIC (with Termination) | 1,426,290 | 1,054,006 | 195,680 | — | 2,675,976 | | CIC (w/o Termination) | — | 495,337 | — | — | 495,337 | | Goodin | | | | | | | Estimated Payments(5) | — | 2,009,607 | — | — | 2,009,607 |