DEF 14A of Oge Energy Corp.
Filed Apr 1, 2025 · FY20240000950170-25-048615
CORPORATE GOVERNANCE
the management team (other than the CEO) a scoring by such individual's supervisor of various competencies, including the individual's management skills, business knowledge and achievement of various performance and development objectives set at the beginning of the year. These reviews were used by the CEO in making compensation recommendations to the Compensation Committee. The balance of the process for setting director and executive compensation for 2024 involved actions taken by the Compensation Committee. The Compensation Committee met in December 2023 and February 2024 to address 2024 compensation. At the December 2023 meeting, the Compensation Committee reviewed with the CEO the performance evaluations of each officer (other than the CEO). The Compensation Committee at its December 2023 meeting also reviewed and discussed with the CEO his recommendations for each member of management (other than the CEO) of 2024 salaries, target annual incentive awards (expressed as a percentage of salary) and target long-term incentive awards (also expressed as a percentage of salary). In addition, the Compensation Committee evaluated the CEO's performance at its December 2023 meeting and discussed his potential salary, target annual incentive award and target long-term compensation for 2024. Following these discussions, the Compensation Committee set 2024 salaries and, subject to potential adjustment at its meetings in February 2024, target annual incentive awards and target long-term compensation awards for each officer. The target annual incentive awards and target long-term compensation awards were expressed as percentages of salary. The Company performance goals that needed to be achieved for any payouts of such incentive awards were not set at the December 2023 meeting but, instead, were left for consideration at the scheduled meeting in February 2024. Senior management in making compensation recommendations for an executive in 2024, and the Compensation Committee in deciding the executive's compensation, used as a primary guideline the median market pay data provided by Mercer for an executive with similar responsibilities in the Company peer group. At its meeting in December 2023, the Compensation Committee also reviewed and set compensation for the directors, which is described below under "Director Compensation." Prior to the Compensation Committee's meeting in February 2024, the Company's senior management developed recommendations for the Company performance goals that needed to be met in order for any payouts of 2024 annual incentive awards or 2024 long-term performance-based compensation awards to occur. The recommended performance goals for the annual incentive awards for the executive officers were the same as for all of the other full-time company employees. At the Compensation Committee's meeting in February 2024, the Compensation Committee reviewed with senior management its recommendations and basis for Company performance goals for the annual and long-term incentive awards. Following this discussion, the Compensation Committee set the 2024 Company performance goals that had to be achieved in order for payouts of such awards to occur. The Compensation Committee also approved the form and amount of the long-term compensation awards, which consisted for officers of performance units and time-based restricted stock units. Consistent with the recommendations of senior management, those performance goals were the same for the executive officers as for all the other recipients of the performance units. In 2023, the Compensation Committee engaged Mercer as its executive compensation consultant for 2024. As part of this engagement, Mercer reviewed the Company's current director and executive officer compensation, confirmed the peer group to be used for assessment of director and executive officer compensation and assessed the competitiveness of the Company's director and executive officer compensation. Mercer also provided perspectives on market trends. During 2024, Mercer received $285,075 in fees for director and executive officer compensation advisory services to the Compensation Committee. Separately, Mercer and its affiliates received $19,570 in fees for other services, which related to routine miscellaneous services including annual compensation surveys. The decision to engage Mercer and its affiliates for these other services was reviewed and approved by the Compensation Committee. For the reasons described below, the Compensation Committee does not believe that the provision of these services affected the objectiveness of the executive compensation advice it receives from Mercer. Since the latter half of 2015, the Company has not used Mercer for any services other than the services described above. Although the Company retains Mercer and its affiliates for other services as described above, the Compensation Committee is confident that the advice it receives from Mercer is objective and not influenced by Mercer's or its affiliates' relationships with the Company because of the procedures Mercer and the Compensation Committee have in place. In particular, we have been informed by Mercer that: the executive compensation consultant receives no incentive or other compensation based on the fees charged to the Company for other services provided by Mercer or any of its affiliates; the executive compensation consultant is not responsible for selling other Mercer or affiliate services to the Company; and Mercer's professional standards prohibit the individual executive compensation consultant from considering any other relationships Mercer or any of its affiliates may have with the Company in rendering his or her advice and recommendations. In addition: • the Compensation Committee has the sole authority to retain and terminate the executive compensation consultant; • the Compensation Committee reviewed and approved all services, including the fees for such services to be provided to the Compensation Committee or the Company by the executive compensation consultant and its affiliates; • the executive compensation consultant has direct access to the Compensation Committee without management intervention; • the Compensation Committee evaluates the quality and objectivity of the services provided by the executive compensation consultant each year and determines whether to continue to retain the consultant; and • the protocols for the engagement (described below) limit how the executive compensation consultant may interact with management. While it is necessary for the executive compensation consultant to interact with management to gather information, the Compensation Committee has procedures governing if and when such consultant's advice and recommendations can be shared with management. This approach is intended to protect the Compensation Committee's ability to receive objective advice from the executive compensation consultant so that the Compensation Committee may make independent decisions about executive pay at the Company. For the reasons discussed above, and after considering certain independence-related factors, including: • whether Mercer provides other services to the Company; • fees received by Mercer from the Company; • conflict of interest policies of Mercer; • any business or personal relationships between the individual executive compensation consultant and members of the Company's Compensation Committee; • any ownership of the Company's Common Stock by the individual executive compensation consultant; and • any business or personal relationships between the individual executive compensation consultant or Mercer and an executive officer of the Company, the Compensation Committee determined that there are no conflicts of interest with respect to the consulting services provided by Mercer.
CORPORATE GOVERNANCE
Environmental, Social and Governance. Our wholly-owned electric company, Oklahoma Gas and Electric Company ("OG&E"), serves approximately 907,000 customers in a service territory spanning 30,000 square miles in Oklahoma and western Arkansas. OG&E's commitment is to provide energy-related services in a balanced and environmentally responsible manner which includes providing safe, reliable and reasonably priced power while protecting the environment. We provide detailed information regarding our sustainability initiatives in multiple venues including our Corporate Stewardship Report on our company website, our responses to the environmental reporting climate questionnaire conducted by CDP and our filings with the SEC. In addition, we were among the initial steering committee members of, and annually update and publish on our website an ESG disclosure report in accordance with, the Edison Electric Institute's ("EEI") ESG and sustainability-related reporting. The EEI has developed a reporting framework to enable utility companies to provide current or interested investors and other stakeholders with key ESG and sustainability information on a comparable basis. The EEI reporting framework includes a quantitative section with data on recent greenhouse gas emissions, as well as a 2005 baseline for comparison. We have also completed and publicly disclosed on the "Stewardship Center" of our website (i) a report using the Sustainability Accounting Standards Board standards and (ii) our climate-related analysis and report pursuant to the elements of the Task Force on Climate-related Financial Disclosures. Additional information about our ESG performance can be found on our website at www.oge.com under "Stewardship Center." Information on our website, including the reports and documents mentioned in this paragraph, is not incorporated by reference into this proxy statement. Since 1902, we have been deeply engaged in the communities we serve, supporting the growth and well-being of our economies, customers, and our employees. As one of the largest employers in our service territory, we are committed to attracting, retaining and developing a high quality, diverse workforce and providing a safe, inclusive and productive work environment. We have a broad pipeline of diverse candidates for our workforce prepared to serve our communities due to, among other things, our partnerships with universities and technical colleges as well as U.S. military recruiters. We directly contribute to our communities in a number of ways, including providing grants through the OGE Energy Corp. Foundation, Company and employee contributions to the United Way and various other partnerships and sponsorships. Another way that the Company assists in our communities is by the volunteer hours donated by our employees, as they are offered 16 hours of paid volunteer leave every year. We have employees whose full-time responsibility is to engage in the community and listen and work directly with governments, chambers of commerce, businesses and schools to support growth and enact meaningful change. At the Company, safety is more than a priority; it is a value and is paramount in the work we perform. Our safety principles are core to who we are and what we do. These principles are communicated, demonstrated and embraced at all levels of the company and supported by our core belief to "Live Safely." Since the inception of our safety principle that all incidents and injuries are preventable and embracing our incident and injury free vision, we have seen a sustained decline in our injury rate. We have reduced our five-year averages for OSHA reportable injuries by 67 percent and our Days Away, Restricted, Transfer Rate (“DART”) by 76 percent since our 2011 baseline. We track our safety performance and benchmark ourselves to a peer utility group, and in 2024, our safety performance ranked first in such peer group. We continue to analyze trends and engage in discussions with our employees, creating a dialogue to enhance safety performance and work toward our incident and injury-free workplace. Our focus on safety has contributed to the last nine years being the safest in our history.
CORPORATE GOVERNANCE
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | | Frank A. Bozich | $115,000 | $160,000 | — | — | — | — | $275,000 | | Peter D. Clarke | $135,000 | $160,000 | — | — | — | — | $295,000 | | Cathy R. Gates | $120,000 | $160,000 | — | — | — | — | $280,000 | | David L. Hauser | $135,000 | $160,000 | — | — | — | — | $295,000 | | Luther C. Kissam, IV | $115,000 | $160,000 | — | — | — | — | $275,000 | | Judy R. McReynolds | $145,000 | $160,000 | — | — | — | — | $305,000 | | David E. Rainbolt | $120,000 | $160,000 | — | — | — | — | $280,000 | | J. Michael Sanner | $140,000 | $160,000 | — | — | — | — | $300,000 | | Sheila G. Talton | $115,000 | $160,000 | — | — | — | — | $275,000 |
CORPORATE GOVERNANCE
Amounts in this column represent the dollar value of the annual retainer that was deposited in the director's account under the Company's Deferred Compensation Plan in December 2024. At December 31, 2024, the number of common stock units in the Company Common Stock Fund for each of the directors was as follows: Mr. Bozich, 24,080 common stock units; Mr. Clarke, 28,646 common stock units; Ms. Gates, 8,315 common stock units; Mr. Hauser, 46,599 common stock units; Mr. Kissam, 18,017 common stock units; Ms. McReynolds, 57,576 common stock units; Mr. Rainbolt, 35,858 common stock units; Mr. Sanner, 52,133 common stock units; and Ms. Talton, 43,294 common stock units.
CORPORATE GOVERNANCE
| PROPOSAL NO. 1 - | | ELECTION OF DIRECTORS |
CORPORATE GOVERNANCE
The Board of Directors of the Company currently consists of 10 members. The term of each director will expire at this year's Annual Meeting of Shareholders. The following persons are the nominees of the Board to be elected for a one-year term at the Annual Meeting of Shareholders to be held on May 15, 2025: Mr. Frank A. Bozich, Mr. Peter D. Clarke, Ms. Cathy R. Gates, Mr. David L. Hauser, Mr. Luther C. Kissam, Ms. Judy R. McReynolds, Mr. David E. Rainbolt, Mr. J. Michael Sanner, Ms. Sheila G. Talton and Mr. Sean Trauschke. The term of each nominee will continue until their successors are elected and qualified. Each of these nominees is currently a director of the Company and OG&E. Proxies solicited by the Board of Directors will be voted "FOR" the election of each of the 10 nominees as director, unless a different vote is specified. The Board of Directors does not know of any nominee who will be unable to serve, but if any of them should be unable to serve, the proxy holder may vote for a substitute nominee. All nominees own less than 0.3 percent of any class of voting securities of the Company. The following contains certain information concerning the nominees for director.
CORPORATE GOVERNANCE
| Frank A. Bozich President and CEO, Trinseo PLC Age: 64 Director Since: 2016 Committees: Compensation Nominating, Corporate Governance and Stewardship | Professional Experience: Mr. Bozich is President and CEO at Trinseo PLC, a global materials company and manufacturer of plastic resins and latex binders. He has served as President and CEO of Trinseo since March 2019. Mr. Bozich has been a member of Trinseo's board of directors since June 2019. Prior to joining Trinseo, from 2013 to 2019, Mr. Bozich was the Chief Executive Officer of the SI Group, Inc., a global developer and manufacturer of phenolic resins and chemicals. Mr. Bozich also previously held several executive management positions at BASF Corporation, a multi-national chemicals and manufacturing corporation, including President of BASF's Catalysts Division from 2010 to 2013, Group Vice President of Precious and Base Metal Service and Group Vice President of the Integration Management Office. Mr. Bozich previously served as a director of SI Group, Inc. and other private or non-profit organizations. | | | Qualifications: The Board concluded that Mr. Bozich should continue serving as a director of the Company based on his executive leadership as the chief executive officer of a publicly-traded company, his customer perspective in leading and developing manufacturing businesses that rely heavily on energy services and products such as those delivered by the Company, his ESG experience in leading companies subject to extensive environmental regulations, and his risk oversight experience developed over many years of leadership at publicly-traded and large private companies. |
CORPORATE GOVERNANCE
| Peter D. Clarke Retired Partner, Jones Day Age: 74 Director Since: 2018 Committees: Audit Nominating, Corporate Governance and Stewardship, Chair Executive | Professional Experience: Mr. Clarke is a retired energy lawyer with the Jones Day law firm. Mr. Clarke served as a partner of Jones Day from 2001 through 2016 and served as Co-Chair of the energy practice at Jones Day. Prior to his retirement from the firm at the end of 2017, he was employed by Jones Day as Of-Counsel for the period of January 1, 2017 through December 31, 2017. Mr. Clarke worked as legal counsel representing the public utility and energy industries for more than 40 years. His energy practice focused on corporate finance, disclosure obligations under the federal securities laws, corporate governance and mergers and acquisitions. Mr. Clarke has also participated in a variety of community, charitable and professional organizations. | | | Qualifications: The Board concluded that Mr. Clarke should continue serving as a director of the Company based on his utility/regulatory knowledge of the utility industry generally and of the Company specifically, his corporate governance/legal experience relating to the energy and public utility industries, and his financial acumen/literacy related to corporate finance. |
CORPORATE GOVERNANCE
| Cathy R. Gates Retired Partner, Ernst & Young LLP Age: 66 Director Since: 2023 Committees: Compensation Audit | Professional Experience: Ms. Gates was an assurance partner for Ernst & Young LLP, based in their Tulsa office, through her retirement in 2017. She served as a managing partner for eight years with oversight responsibility for more than 100 professionals, working with public and privately-held clients throughout the Southwest region in retail/consumer products, transportation, manufacturing and contract drilling industries. In addition to her professional career, Ms. Gates is active with several nonprofit organizations including the Tulsa Area United Way and University of Arkansas Walton College of Business. She also serves on the board of directors of Somnigroup International Inc. (formerly Tempur Sealy International, Inc.) and sits on the audit committee. | | | Qualifications: The Board concluded that Ms. Gates should continue serving as a director of the Company based on her extensive knowledge across a number of industries developed during her tenure providing assurance services to public and private companies, her financial acumen/expertise gained in public accounting and from serving on an audit committee of another public company, her knowledge of the service territory served by the Company, and her risk oversight experience gained in public accounting. |
CORPORATE GOVERNANCE
| David L. Hauser Former Chairman and CEO, FairPoint Communications, Inc. Age: 73 Director Since: 2015 Committees: Compensation, Chair Nominating, Corporate Governance and Stewardship Executive | Professional Experience: Mr. Hauser is the former Chairman and Chief Executive Officer of FairPoint Communications, Inc., a provider of communication services located in Charlotte, N.C. He served in the role from July 2009 to August 2010 and thereafter served as a consultant until March 2011. From 1998-2009, Mr. Hauser held leadership positions with Duke Energy Corporation, including group executive and chief financial officer and vice president and treasurer. Mr. Hauser also currently serves as chairman of the board of EnPro Inc. He is a former member of the board of trustees of the University of North Carolina at Charlotte and of Furman University and a retired member of the North Carolina Association of Certified Public Accountants. | | | Qualifications: The Board concluded that Mr. Hauser should continue serving as a director of the Company based on his extensive utility/regulatory experience and due to his executive leadership experience in serving as the chief executive officer of a publicly-traded company, his financial leadership in utility and regulated businesses, his financial acumen/expertise resulting from his prior performance as chair of the audit committee of another public company, and his risk oversight experience developed over many years of leadership positions with publicly-traded companies. |
CORPORATE GOVERNANCE
| Luther (Luke) C. Kissam, IV Former Chairman, President and CEO, Albemarle Corporation Age: 60 Director Since: 2020 Committees: Compensation Nominating, Corporate Governance and Stewardship | Professional Experience: Mr. Kissam is currently a Senior Advisor with Bernhard Capital Partners, a service and infrastructure focused private equity management firm. He is the former Chairman, President and Chief Executive Officer of Albemarle Corporation, a global specialty chemicals company with leading positions in lithium, bromine and refining catalysts. He served as Chief Executive Officer from 2011 to 2020 and held various leadership positions at Albemarle beginning in 2003, including President and Executive Vice President of Manufacturing, Law and HS&E. Prior to joining Albemarle, Mr. Kissam served as Vice President, General Counsel and Secretary of Merisant Company, having previously served as Associate General Counsel of Monsanto Company. Mr. Kissam currently serves on the board of directors of Advanced Drainage Systems, Inc. and DuPont de Nemours, Inc. and previously served on the board of directors of Albemarle Corporation from 2015 until May 2021. | | | Qualifications: The Board concluded that Mr. Kissam should continue serving as a director of the Company based on his executive leadership experience from previously serving as chairman and chief executive officer of a large, multi-national, publicly-held company, his customer perspective in leading businesses that rely heavily on energy services and products such as those delivered by the Company, his expertise relating to new technologies applicable to utilities, his corporate governance/legal experience at publicly-traded companies, and his risk oversight experience developed in his leadership positions with publicly-traded companies. |
CORPORATE GOVERNANCE
| Judy R. McReynolds Chairman, President and CEO, ArcBest Corporation Age: 62 Director Since: 2011 Lead Director Committees: Compensation Executive | Professional Experience: Ms. McReynolds is Chairman and Chief Executive Officer of ArcBest Corporation, headquartered in Fort Smith, Ark., and responsible for managing the multibillion-dollar integrated logistics solutions company, which includes the brands ArcBest, ABF Freight®, Panther Premium Logistics® and U-Pack®. With over 30 years of logistics and transportation industry experience, including over 28 years at ArcBest, Ms. McReynolds has served as Chairman of the Board of Directors of ArcBest Corporation since April 2016 and has been a member of ArcBest Corporation's Board of Directors since she was named President and Chief Executive Officer in January 2010. Ms. McReynolds served as President of ArcBest from January 2010 to July 2024. Ms. McReynolds previously served in various leadership roles at ArcBest since 2000 including senior vice president, chief financial officer, treasurer and controller. Ms. McReynolds serves on the board of First Bank Corp. (Fort Smith, Ark.) and First National Bank of Fort Smith, as well as various other local community and educational boards. Ms. McReynolds also serves as a member of the Wall Street Journal CEO Council and serves on various transportation industry boards and committees. | | | Qualifications: The Board concluded that Ms. McReynolds should continue serving as a director of the Company based on her executive leadership experience as chairman, president, chief executive officer and director of ArcBest Corporation, a publicly-held freight transportation and logistics services company, her financial acumen/expertise resulting from prior service as chief financial officer of a publicly-traded company, her knowledge of the service territory and communities served by the Company, and her risk oversight experience developed over many years of leadership positions with a publicly-traded company. |
CORPORATE GOVERNANCE
| David E. Rainbolt Executive Chairman, BancFirst Corporation Age: 69 Director Since: 2019 Committees: Audit Nominating, Corporate Governance and Stewardship | Professional Experience: Mr. Rainbolt is Executive Chairman of BancFirst Corporation, a financial holding company which provides retail and commercial banking services through its principal wholly-owned subsidiary banks, BancFirst headquartered in Oklahoma City, Pegasus Bank in Dallas, Texas and Worthington Bank in Fort Worth, Texas. He has served as the Executive Chairman of BancFirst Corporation since May 2017 and previously served as President and Chief Executive Officer from January 1992 to May 2017. In addition to serving as a director of BancFirst Corporation, Mr. Rainbolt currently serves as a director of a number of community, charitable, professional and governmental boards, including Dean A. McGee Eye Institute (Chair), Trustee of the Presbyterian Health Foundation and Oklahoma Medical Research Foundation. | | | Qualifications: The Board concluded that Mr. Rainbolt should continue serving as a director of the Company based on his executive leadership experience in previously serving as president and chief executive officer of a bank, his extensive knowledge of the communities in the service territory due to his involvement and active service in numerous civic and charitable matters affecting many of the communities served by the Company, his financial acumen/literacy from his experience in the banking industry, and his risk oversight experience developed over many years of leadership positions in the regulated banking industry. |
CORPORATE GOVERNANCE
| J. Michael Sanner Retired Partner, Ernst & Young LLP Age: 72 Director Since: 2017 Committees: Audit, Chair Nominating, Corporate Governance and Stewardship Executive | Professional Experience: Mr. Sanner is a retired audit partner of the Ernst & Young LLP accounting firm. Mr. Sanner joined the accounting firm of Arthur Andersen LLP following college and has over 37 years of experience providing assurance services to both public and private companies primarily in the energy sector. Prior to his retirement in June 2013, Mr. Sanner served as Assurance Partner at Ernst & Young LLP. Mr. Sanner currently serves on the board of Bank7, a publicly-traded company. In addition, Mr. Sanner served as a member of the Oklahoma Accountancy Board (2010-2020) and has been involved in numerous civic, professional and charitable organizations. | | | Qualifications: The Board concluded that Mr. Sanner should continue serving as a director of the Company based on his utility/regulatory knowledge developed during his tenure providing accounting services to companies primarily in the energy sector, his financial acumen/expertise gained in public accounting, his knowledge of the service territory served by the Company, and his risk oversight experience gained in public accounting of regulated entities. |
CORPORATE GOVERNANCE
| Sheila G. Talton President and CEO, Gray Matter Analytics Age: 72 Director Since: 2013 Committees: Compensation Nominating, Corporate Governance and Stewardship | Professional Experience: Ms. Talton currently serves as President and CEO of Gray Matter Analytics, a healthcare analytics solutions company that works with payors and providers. Prior to founding Gray Matter Analytics in 2013, she served as President and Chief Executive Officer of SGT Ltd., a strategy and technology consulting business, from 2011 to 2013 and as Vice President of Cisco Systems, Inc., from 2008 to 2011. Ms. Talton currently serves on the boards of Deere & Company and Sysco Corporation. From 2012 until 2019, Ms. Talton served on the board of Wintrust Financial Corporation. She has been a Congressional appointee on the U.S. White House Women's Business Council. She also has been recognized as one of the "Top 10 Women in Technology" by Enterprising Women, as "Entrepreneur of the Year" by the National Federation of Black Women Business Owners and as a 2021 Notable Black Leader & Executive by Crain's Chicago Business. She serves on the boards of several nonprofit organizations including Chicago's Northwestern Memorial Foundation, the Chicago Shakespeare Theater and the Chicago Urban League. | | | Qualifications: The Board concluded that Ms. Talton should continue to serve as a director of the Company based on her executive leadership experience and her subject matter expertise in information technology and data analytics gained while leading Gray Matter Analytics and in executive positions held in global technology companies and consulting firms. Ms. Talton also brings knowledge and perspectives on cybersecurity and oversight of corporate stewardship, including social and human capital management implications and opportunities. |
CORPORATE GOVERNANCE
| Sean Trauschke Chairman, President and CEO, OGE Energy Corp. Age: 58 Director Since: 2015 | Professional Experience: Mr. Trauschke currently serves as Chairman, President and Chief Executive Officer of the Company and OG&E. Mr. Trauschke has been Chief Executive Officer of the Company since June 2015. He has been President of OG&E since July 2013 and President of OGE Energy since August 2014 and was named as Chairman of the Board in December 2015. From 2009 until 2013, he held the position of Vice President and Chief Financial Officer of the Company and OG&E. Mr. Trauschke also serves on the boards of the Greater Oklahoma City Chamber, United Way of Central Oklahoma and other local community organizations. | | | Qualifications: The Board concluded that Mr. Trauschke should continue serving on the Board based on his executive leadership experience, his utility/regulatory experience, his extensive knowledge of the Company’s business and service territory, his financial acumen/literacy, his risk oversight experience and his ESG experience, all due in large part to his leadership roles at the Company, including having served as Chairman, President and CEO and formerly serving as Chief Financial Officer. |
CORPORATE GOVERNANCE
The affirmative vote of the holders of a majority of the shares of the Company's Common Stock present online at the virtual meeting or represented by proxy and entitled to vote on the election of directors at the Annual Meeting of Shareholders will be required for the election of each of the 10 nominees as director. Broker non-votes will be treated as shares not entitled to be voted and will have no effect on the outcome of the proposal. Any incumbent director who is not reelected in an election in which majority voting applies is required to tender his or her resignation promptly to the Board. The Nominating, Corporate Governance and Stewardship Committee will then consider the tendered resignation and recommend to the Board whether to accept or reject the resignation offer, or whether other action should be taken. The Board will act on the recommendation within 100 days following certification of the shareholders' vote and will promptly disclose its decision regarding whether to accept the director's resignation offer. The director who tenders his or her resignation will not participate in the recommendation of the Nominating, Corporate Governance and Stewardship Committee or the decision of the Board with respect to his or her resignation. If a director's resignation is not accepted by the Board, the director will continue to serve until the next annual meeting and until his or her successor is duly elected. If a director's resignation is accepted by the Board, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of the bylaws. The Board of Directors recommends a vote "FOR" the election of each of the 10 nominees as director. Proxies solicited by the Board of Directors will be voted "FOR" the election of each of the 10 nominees as director, unless a different vote is specified.
CORPORATE GOVERNANCE
| PROPOSAL NO. 2 - | | RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S PRINCIPAL INDEPENDENT ACCOUNTANTS FOR 2025 |
CORPORATE GOVERNANCE
The Audit Committee has selected Ernst & Young LLP as principal independent accountants to audit the accounts of the Company for the fiscal year ending December 31, 2025. Ernst & Young LLP was originally selected by the Board, upon the recommendation of the Audit Committee, as principal independent accountants for the Company effective May 16, 2002. While the Audit Committee is responsible for the appointment, retention, termination and oversight of the Company's principal independent accountants, the Audit Committee and the Board are requesting, as a matter of policy, that shareholders ratify the appointment of Ernst & Young LLP as the Company's principal independent accountants. The Audit Committee is not required to take any action as a result of the outcome of the vote on this proposal. However, if the shareholders do not ratify this appointment, the Audit Committee may investigate the reasons for the shareholders' rejection and may consider whether to retain Ernst & Young LLP or to appoint another principal independent accountant. Furthermore, even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of different principal independent accountants at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders. Representatives of Ernst & Young LLP will be present at the Annual Meeting of Shareholders and will have an opportunity to make a statement if they so desire. Such representatives will be available to respond to appropriate questions from the shareholders at the Annual Meeting of Shareholders. The affirmative vote of the holders of a majority of the shares of the Company's Common Stock present online at the virtual meeting or represented by proxy and entitled to vote at the Annual Meeting of Shareholders will be required for the ratification of the appointment of Ernst & Young LLP as the Company's principal independent accountants for 2025. Abstentions from voting in this matter are treated as votes against. The Board of Directors recommends a vote "FOR" the ratification of the appointment of the Company's principal independent accountants. Proxies solicited by the Board of Directors will be voted "FOR" the ratification of the appointment of the Company's principal independent accountants, unless a different vote is specified.
CORPORATE GOVERNANCE
| PROPOSAL NO. 3 - | | ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION |
CORPORATE GOVERNANCE
In accordance with Section 14A of the Securities Exchange Act of 1934, the Company is providing shareholders with an advisory (non-binding) vote on compensation programs, that is sometimes referred to as "say on pay," for our CEO and the other four officers named in the Summary Compensation Table on page 41 (who we refer to as "Named Executive Officers"). Accordingly, you may vote on the following resolution at the 2025 Annual Meeting of Shareholders: "RESOLVED, that the compensation paid to the Company's Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion is hereby APPROVED." This vote is non-binding. The Board and the Compensation Committee, which is comprised of independent directors, intend to consider the outcome of the vote when making future executive compensation decisions and, in particular, to consider any significant negative voting results to the extent they can determine the cause or causes for such votes. The Board has determined that, consistent with its recommendation for an advisory vote on the frequency of the shareholder votes on executive compensation at this year’s Annual Meeting of Shareholders, OGE Energy will hold future advisory votes on executive compensation every year. As discussed in the Compensation Discussion and Analysis, our 2024 executive compensation program is premised on providing competitive and responsible levels of compensation that has a significant component that is performance-based so as to align the interests of our executive officers with those of our shareholders. Payouts of annual incentive awards and a significant portion of the long-term incentive awards require the achievement of specific goals established by the Compensation Committee that are designed to benefit our shareholders and the Company, both in the long and short term. Specifically, awards under the Annual Incentive Plan provide officers an opportunity to earn an annual cash incentive, with the amount of the incentive payout being dependent on the level of achievement of specified Company performance-based goals established for the year. These Company performance goals typically are tied to earnings and measures of operating performance. The annual incentive performance goals for the executive officers were the same as for all the other full-time employees. For 2024, the long-term awards under the Stock Incentive Plan consist of two components. One component, accounting for 35 percent of the long-term incentive award, consists of restricted stock units that will vest on December 31, 2026, assuming continued employment through that date. The other component, consisting of performance units, accounts for the remaining 65 percent of the awards. The performance units are equity-based, with the amount ultimately paid to an officer being dependent on the level of achievement, usually over a three-year period, of specific Company performance goals that in 2024 were tied directly to total shareholder return compared to a broad utility peer group. The terms of this equity-based award have not permitted any adjustments to calculating total shareholder return for unusual one-time events. By having a significant portion of our executives' compensation dependent on the level of achievement of various performance goals, our 2024 executive compensation program is designed to reward executives with a highly-competitive level of compensation during years of excellent Company performance and, conversely, in years of below average performance, for their compensation to be below competitive levels. The Company believes that it sets challenging performance targets as illustrated by the incentive compensation actually paid to our Named Executive Officers. Over the last five years, Named Executive Officers have averaged an Annual Incentive Plan payout of approximately 102 percent of their target awards and a payout of long-term incentive awards of approximately 90 percent. We believe the Company's executive compensation program strikes the appropriate balance between utilizing responsible pay practices and effectively incentivizing our executives to create value for our shareholders. This balance is evidenced by the following: Our executive compensation was approved by more than 90 percent of our shareholders who voted at last year's Annual Meeting of Shareholders. For 2024, consistent with prior years, total direct compensation (i.e., salary plus targeted annual incentive compensation and targeted long-term incentive compensation) for our Named Executive Officers was targeted at the median amount for a comparable group of executives in the Company Peer Group (which peer group is listed on page 30). To reinforce our pay-for-performance culture, targets for individual Named Executive Officers may also reflect the individual’s performance in prior years and experience in the position. The Committee believes this approach, combined with the opportunity to earn above-target incentive compensation if they deliver above-target performance are consistent with the objectives of our compensation policies. The Committee believes that this approach enables us to attract and retain skilled and talented executives to guide and lead our business. A significant part of executive compensation is considered at risk. For 2024, a Named Executive Officer's base salary comprised 16 percent to 43 percent of their targeted total direct compensation. For 2024, an officer's at-risk compensation included the ability to earn from 0 percent to 200 percent of an award under the Annual Incentive Plan and the Stock Incentive Plan, based on the level of achievement of the applicable performance goals set by the Compensation Committee. The at-risk awards under the Stock Incentive Plan also included grants of time-based restricted stock units that will vest after a three-year period, assuming continued employment with the Company. The mix of performance-based and time-based long-term incentive awards is similar to most companies in the Company Peer Group. The performance-based target awards under the Annual Incentive Plan and under the Stock Incentive Plan represented approximately 44 percent to 61 percent of a Named Executive Officer's targeted total direct compensation in 2024. Shareholders are encouraged to read the Compensation Discussion and Analysis, the accompanying compensation tables and the related narrative disclosure for more information about the Company's executive compensation program. The affirmative vote of the holders of a majority of the shares of the Company's Common Stock present online at the virtual meeting or represented by proxy and entitled to vote on the matter at the Annual Meeting of Shareholders will be required for the approval, on an advisory basis, of the Named Executive Officer compensation. Abstentions from voting in this matter are treated as votes against. Broker non-votes will be treated as shares not entitled to be voted and will have no effect on the outcome of the proposal. The Board of Directors recommends a vote "FOR" the approval of the Named Executive Officer compensation as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables and the related narrative disclosure. Proxies solicited by the Board of Directors will be voted "FOR" the approval of the Named Executive Officer compensation, unless a different vote is specified.
CORPORATE GOVERNANCE
| PROPOSAL NO. 4 - | | AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION TO ELIMINATE SUPERMAJORITY VOTING PROVISIONS |
Audit Committee
| | Minimum | Target | Maximum | Actual Performance | % Payout | | OG&E Earnings Target | $2.14/share | $2.22/share | $2.30/share | $2.33 | 200% | | O&M Target | $425 million | $412 million | $399 million | $423 million | 58% | | Safety Target (Recordable Incident Rate) | (A) | (A) | (A) | (A) | 80% | | Customer/Operations Target (B) | | | | | | | SAIDI (33%) | 142 minutes | 128 minutes | 112 minutes | (C) | 166% | | Escalent Surveys | | | | | | | Cogent Syndicated Residential Score (17%) | 50th percentile | 66.67th percentile | 100th percentile | Did not meet | 0% | | Cogent Syndicated Business Score (17%) | 50th percentile | 66.67th percentile | 100th percentile | Did not meet | 0% | | Equivalent Forced Outage Rate (33%) | (D) | (D) | (D) | (D) | 124% | | Environmental Target | (E) | (E) | (E) | (E) | 175% |
Audit Committee
| | Minimum | Target | Maximum | Actual Performance | % Payout | | Total Shareholder Return | 25th percentile of peer group | 50th percentile of peer group | 90th percentile of peer group | Above 70th percentile of peer group | 157.43% |
Audit Committee
| SUMMARY COMPENSATION TABLE |
Audit Committee
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3) | All Other Compensation ($)(4) | Total ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | S. Trauschke | 2024 | $1,204,632 | $— | $5,099,875 | $— | $1,715,866 | $1,935,557 | $173,019 | $10,128,949 | | Chairman, President and Chief | 2023 | $1,158,290 | $— | $4,533,361 | $— | $1,485,597 | $1,103,668 | $154,250 | $8,435,166 | | Executive Officer of | 2022 | $1,103,128 | $— | $4,340,655 | $— | $1,205,189 | $496,397 | $158,220 | $7,303,589 | | the Company | | | | | | | | | | | C. Walworth (5) | 2024 | $348,691 | $— | $332,173 | $— | $203,184 | $52,218 | $31,057 | $967,323 | | Chief Financial Officer and Treasurer | | | | | | | | | | | of the Company | | | | | | | | | | | B. Buckler (5) | 2024 | $341,413 | $— | $862,455 | $— | $— | $— | $65,172 | $1,269,040 | | Former Chief Financial Officer | 2023 | $489,715 | $100,000 | $798,635 | $— | $399,699 | $— | $83,308 | $1,871,357 | | of the Company | 2022 | $466,398 | $50,000 | $764,655 | $— | $324,259 | $— | $71,692 | $1,677,004 | | W. Sultemeier | 2024 | $517,400 | $— | $766,669 | $— | $435,488 | $— | $90,579 | $1,810,136 | | General Counsel, Corporate | 2023 | $497,494 | $— | $703,121 | $— | $377,045 | $— | $82,603 | $1,660,263 | | Secretary and Chief Compliance | 2022 | $473,803 | $— | $673,200 | $— | $305,878 | $— | $72,947 | $1,525,828 | | Officer of the Company | | | | | | | | | | | D. Jones | 2024 | $454,563 | $— | $721,679 | $— | $412,030 | $1,512 | $35,635 | $1,625,419 | | Vice President, Utility | 2023 | $437,070 | $— | $665,258 | $— | $356,731 | $1,122 | $34,909 | $1,495,090 | | Operations of OG&E | 2022 | $404,706 | $— | $575,039 | $— | $281,368 | $— | $32,465 | $1,293,578 | | D. Parker | 2024 | $367,557 | $— | $389,020 | $— | $214,177 | $46,703 | $33,708 | $1,051,165 | | Vice President, Technology, Data | | | | | | | | | | | and Security of OG&E | | | | | | | | | |
Audit Committee
| Grants of Plan-Based Awards Table for 2024 |
Audit Committee
| Outstanding Equity Awards at 2024 Fiscal Year-End Table |
Audit Committee
| 2024 Option Exercises and Stock Vested Table |
Audit Committee
| 2024 Pension Benefits Table |
Audit Committee
| 2024 Nonqualified Deferred Compensation Table |
Audit Committee
| Pay Versus Performance |
Compensation Committee
| POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL |