DEF 14A of Nextera Energy Inc
Filed Apr 1, 2024 · FY20230001104659-24-041966
PROPOSAL 1: ELECTION AS DIRECTORS OF THE NOMINEES SPECIFIED IN THIS PROXY STATEMENT
PROPOSAL 1: ELECTION AS DIRECTORS OF THE NOMINEES SPECIFIED IN THIS PROXY STATEMENT The Board is currently composed of 13 members. Two members of the Board, Sherry S. Barrat and Kenneth B. Dunn, having reached their respective retirement ages, will retire from the Board. Upon the recommendation of the Governance & Nominating Committee, the Board has nominated the 11 other incumbent members listed below for election as directors at the 2024 annual meeting. Unless you specify otherwise, your proxy will be voted FOR the election of the listed nominees. If any nominee becomes unavailable for election, which is not currently anticipated, proxies instructing a vote for that nominee may be voted for a substitute nominee selected by the Board or, in lieu thereof, the Board may reduce the number of directors by the number of nominees unavailable for election.
PROPOSAL 1: ELECTION AS DIRECTORS OF THE NOMINEES SPECIFIED IN THIS PROXY STATEMENT
| | | | | | | Nicole S. Arnaboldi | James L. Camaren | Naren K. Gursahaney | Kirk S. Hachigian | Maria G. Henry |
PROPOSAL 1: ELECTION AS DIRECTORS OF THE NOMINEES SPECIFIED IN THIS PROXY STATEMENT
| | | | | | | | John W. Ketchum | Amy B. Lane | David L. Porges | Deborah L. “Dev” Stahlkopf | John A. Stall | Darryl L. Wilson |
PROPOSAL 1: ELECTION AS DIRECTORS OF THE NOMINEES SPECIFIED IN THIS PROXY STATEMENT
The Board believes its current size is appropriate because it facilitates substantive discussions among Board members, provides for sufficient staffing of Board committees and allows for contributions by directors having a broad range of skills, expertise, industry knowledge and diversity of opinion. Directors serve until the next annual meeting of shareholders or until their respective successors are elected and qualified.
Board refreshment and diversity
Board refreshment and diversity
Board refreshment
Board refreshment The Board and the Governance & Nominating Committee engage in a continuous process of considering the mix of skills and experience needed by the Board as a whole to discharge its responsibilities. Six of the director nominees have a tenure of less than five years. In 2023, the Governance & Nominating Committee discussed board composition, board refreshment and board recruiting at every committee meeting. The Company has a director retirement policy. Generally, no person who has attained the age of 72 years by the date of election is eligible for election as a director. However, the Board may, by unanimous action (excluding the affected director), extend a director’s eligibility for one or two additional years, in which event the director will not be eligible for subsequent election as a director if he or she would have attained the age of 73 or 74 by or prior to the date of the election.
Diversity
Diversity Diversity is among the factors that the Governance & Nominating Committee considers when identifying and evaluating potential Board nominees. NextEra Energy’s Corporate Governance Principles & Guidelines (the “Governance Guidelines”) provide that, in identifying nominees for director, the Company seeks to achieve a mix of directors representing a diversity of background and experience, including diversity with respect to age, gender, race, ethnicity and specialized experience. In the Board’s annual self-evaluation, it reviews the criteria for skills, experience and diversity reflected in the Board’s membership and also reviews the Board’s process for identification, consideration, recruitment and nomination of prospective Board members. Maria G. Henry is a nominee for election to the Board this year who currently serves on the Board and previously has not been elected by the Company’s shareholders. Ms. Henry was identified by the recruiting efforts of management and the Governance & Nominating Committee members. Ms. Henry was interviewed by each of the members of the Governance & Nominating Committee and by Mr. Ketchum. The Governance & Nominating Committee then evaluated the qualifications, background and experience of Ms. Henry using the criteria set forth in the Governance Guidelines discussed below, noting in particular that Ms. Henry would provide expertise beneficial to the Company in the areas of finance, consumer facing businesses and information management and cyber-security. Following evaluation by the Governance & Nominating Committee, Ms. Henry was interviewed by the other members of the Board and was appointed to the Board in September 2023.
Identifying and evaluating nominees for directors
Identifying and evaluating nominees for directors The Governance & Nominating Committee uses a variety of methods for identifying and evaluating nominees for director. The Governance & Nominating Committee regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. Candidates may come to the attention of the Governance & Nominating Committee through current Board members, professional search firms, shareholders or other persons. Candidates are evaluated at regular or special meetings of the Governance & Nominating Committee and may be considered at any time during the year. When considering candidates for the Board, the Governance & Nominating Committee considers all nominee recommendations, including those from shareholders, in the same manner. If any materials are provided by a shareholder in connection with the nomination of a director candidate, the materials are provided to the Governance & Nominating Committee. The Governance & Nominating Committee also reviews materials provided by professional search firms or other parties. In evaluating nominations, the Governance & Nominating Committee seeks to achieve a diverse balance of knowledge, experience and capability.
Director resignation policy
Director resignation policy Under the NextEra Energy, Inc. Amended and Restated Bylaws (the “Bylaws”), in an uncontested election, directors are elected by a majority of the votes cast. The Board has adopted a Policy on Failure of Nominee Director(s) to Receive a Majority Vote in an Uncontested Election (“Director Resignation Policy”), the effect of which is to require that, in any uncontested director election, any incumbent director who is not elected by the required vote must offer to resign and the Board will determine whether or not to accept the resignation within 90 days of the certification of the shareholder vote. The Company will report the action taken by the Board under the Director Resignation Policy in a publicly available forum or document. The Bylaws provide that, in a contested election, director nominees are elected by a plurality of the votes cast.
Director qualifications
Director qualifications The Governance Guidelines and the Governance & Nominating Committee Charter identify Board membership qualifications, including experience, skills and attributes, that are considered by the Governance & Nominating Committee in recommending non-employee nominees for Board membership. In addition to the membership qualifications identified in the Governance Guidelines, no person will be considered for Board membership who is an employee or director of a business in significant competition with the Company or of a major or potentially major customer, supplier, contractor, counselor or consultant of the Company, or an executive officer of a business where a Company employee-director serves on the board of such other business. The chart below provides a summary of the collective competencies of the current Board and explains why these are important:
Director qualifications
| DIRECTOR QUALIFICATIONS | COMPETENCIES AND RELEVANCE TO NEXTERA ENERGY | | BOARD COMPOSITION | | Individuals who have served as a public company CEO | | PUBLIC COMPANY CEO EXPERIENCE Experience serving as a CEO provides unique perspectives to help the Board independently oversee NextEra Energy’s CEO and management. Having this experience also increases the Board’s understanding and appreciation of the many facets of running a public company, including strategic planning, financial reporting, compliance and risk oversight. | | | Demonstrated expertise in managing large, relatively complex organizations, such as leadership roles of a significant company or organization | | STRATEGY EXPERTISE Our Company operates in a quickly changing industry with new developing technologies. Having experience in developing and implementing strategic plans helps enable the Board to oversee and pivot in rapidly changing environments. | | | | | OPERATIONS MANAGEMENT AND LEADERSHIP Our Company has a strong focus on cost and customer value, as well as innovation. Having experience with operations assists the Board in understanding the issues that the Company faces in achieving its industry-leading operating and maintenance (“O&M”) initiatives and reducing costs. | | | | | MERGERS & ACQUISITIONS EXPERIENCE Our Company from time to time acquires and disposes of businesses and assets. An understanding of mergers & acquisitions helps the Board evaluate any future transactions and any associated opportunities and risks. | | | Experience leading a utility, energy company or other highly regulated organization, such as CEO or other leadership position | | UTILITY/REGULATED INDUSTRY LEADERSHIP As a company in a highly regulated industry, experience in the utility industry or another regulated industry assists the Board in understanding the regulatory issues that the Company faces. | | | | | ENERGY INDUSTRY LEADERSHIP It is important that the Board understand the energy industry and the complete energy industry value chain. Energy industry leadership assists the Board in understanding all aspects of the ongoing energy transition. | | | Financial or other risk management expertise | | FINANCIAL Our Company’s business involves complex financial management, capital allocation and reporting issues. An understanding of finance and financial reporting is valuable in order to promote effective capital allocation and robust controls and oversight of accurate financial reporting. | | | | | RISK MANAGEMENT The scale, scope and complexity of our Company’s business raises a variety of interdependent risks. Experience in effectively identifying, prioritizing and managing a broad spectrum of risks can help the Board appreciate, anticipate and oversee the Company in managing the risks that face its various businesses. | |
Director qualifications
| DIRECTOR QUALIFICATIONS | COMPETENCIES AND RELEVANCE TO NEXTERA ENERGY | | BOARD COMPOSITION | | Experience serving in senior customer facing roles or in industries where customer service is strategically important | | MARKETING, SALES AND CUSTOMER SERVICE EXPERIENCE FPL services over five million customer accounts in the state of Florida. NextEra Energy Resources also has a number of customer and consumer facing businesses serving thousands of customers. Experience in marketing, sales and customer service helps the Board oversee FPL’s best-in-class customer value proposition and NextEra Energy Resources’ growing consumer facing businesses. We also have customer and consumer facing businesses at NextEra Energy Resources. | | | Experience in managing engineering and construction projects | | ENGINEERING AND CONSTRUCTION LEADERSHIP In 2023, the Company invested approximately $25 billion in energy infrastructure and NextEra Energy Resources commissioned approximately 5,025 MWs of renewable energy projects. Board experience in engineering and construction leadership assists the Board in its oversight of our large-scale capital investments and on our timely and on budget capital project execution. | | | Experience with information technology and cybersecurity | | INFORMATION TECHNOLOGY LEADERSHIP Oversight of the protection of customer information and cybersecurity is critical to providing reliable electric service at both FPL and NextEra Energy Resources. Board experience in information technology leadership assists the Board in its oversight of our cybersecurity programs. | |
Director qualifications
The Board views itself as a cohesive whole consisting of members who together serve the interests of the Company and its shareholders. The Board is comprised of directors with a mix of backgrounds, knowledge and skills that the Board considers relevant and beneficial in fulfilling its oversight role. The chart below provides a summary of each current individual director’s most relevant skills and gender:
Director qualifications
| Experience | Arnaboldi | Barrat | Camaren | Dunn | Gursahaney | Hachigian | Henry | Ketchum | Lane | Porges | Stahlkopf | Stall | Wilson | | Public Company CEO Experience | | | X | | X | X | | X | | X | | | | | Financial Industry Experience & Leadership | X | X | X | X | X | X | X | X | X | X | | | | | Strategy Expertise | X | X | X | | X | X | X | X | X | X | X | X | X | | Operations Management & Leadership | | | | | X | X | X | X | | X | | X | X | | International Experience | X | | X | | X | X | X | X | | X | X | X | X | | Utility / Regulated Industry Leadership | X | | X | | | | | X | | X | | X | | | Political / Legislative Experience | | | | | | | | X | | | X | | | | Energy Industry Leadership | | | | | | | | X | | X | | X | X | | Engineering & Construction Industry Experience | | | X | | X | | | X | | X | | X | | | Nuclear Operations Leadership | | | | | | | | X | | | | X | | | Risk Management Leadership | X | X | X | X | X | X | X | X | | X | X | X | X | | Mergers & Acquisitions Experience | X | | X | | X | X | X | X | X | X | | | X | | Information Technology / Cyber Experience | | | | | X | | X | X | | | X | | | | Investor Relations Management | | | X | | X | X | X | X | | X | | | | | Marketing / Sales / Customer Service Experience & Leadership | X | X | | | X | X | X | X | X | | | | X | | New Business Development/Development | X | X | X | | X | X | X | X | X | X | | | X | | Human Resources Development | X | X | X | X | X | X | X | X | X | X | X | X | X | | Trading/Derivatives | | | X | X | | | | X | X | | | | | | Gender | | | | | | | | | | | | | | | Female | X | X | | | | | X | | X | | X | | | | Male | | | X | X | X | X | | X | | X | | X | X |
Board gender and race/ethnic diversity
Board gender and race/ethnic diversity The Company seeks to achieve a mix of directors representing a diversity of background and experience, including diversity with respect to age, gender, race, ethnicity and specialized experience. The charts below reflect the diversity of the current Board members.
Director nominee biographies
Director nominee biographies
Director nominee biographies
| NICOLE S. ARNABOLDI | Age 65 | Independent director since 2022 | | Board Committees » Audit » Finance & Investment Public Company Boards » Manulife Financial Corporation (since 2020) | Career Highlights Ms. Arnaboldi has been a partner at Oak Hill Capital Management since 2021. She was previously the vice chairman of Credit Suisse Asset Management and a managing director of Credit Suisse Securities Corp. from 2000 to 2019. Prior to her roles at Credit Suisse, Ms. Arnaboldi served as a managing director of its predecessor, Donaldson Lufkin and Jenrette, in the firm’s venture capital group from 1985 to 1992 and then in its private equity group, where she became a managing director in 1996. | Qualifications Ms. Arnaboldi has over 35 years of leadership experience in financial services and private equity, including her service as vice chairman of Credit Suisse Asset Management and as a partner of Oak Hill Capital Management. She has a wealth of finance and business expertise, along with a proven track record as an experienced leader and strategist in investment banking and private equity for more than three decades. Ms. Arnaboldi holds a law degree from Harvard Law School, a Master of Business Administration degree from the Harvard Business School and a Bachelor of Arts degree from Harvard College. |
Director nominee biographies
| JAMES L. CAMAREN | Age 69 | Independent director since 2002 | | Board Committees » Compensation » Finance & Investment | Career Highlights Mr. Camaren is a private investor. Until May 2006, he was chairman and CEO of Utilities, Inc. which was one of the largest investor-owned water utilities in the United States until March 2002 when it was acquired by Nuon, a Dutch company, which subsequently sold Utilities, Inc. in April 2006. He joined Utilities, Inc. in 1987 and served successively as vice president of business development, executive vice president, and vice chairman, becoming chairman and CEO in 1996. | Qualifications Mr. Camaren has 19 years of leadership experience with a large, regulated investor-owned utility. During the years he served as chairman and CEO, the utility had customer growth at a rate that exceeded the industry average and acquired and integrated over 40 utilities. In addition, Mr. Camaren has experience in managing capital expenditures, environmental compliance, regulatory affairs and investor relations. |
Director nominee biographies
| NAREN K. GURSAHANEY | Age 62 | Independent director since 2014 | | Board Committees » Audit (Chair) » Executive » Governance & Nominating Public Company Boards » Stericycle, Inc. (since 2023) | Career Highlights Mr. Gursahaney is retired. He served as the president and CEO, and a member of the board of directors, of The ADT Corporation (“ADT”), a provider of security systems and services, from September 2012 until its acquisition by affiliated funds of Apollo Global Management LLC in May 2016. Prior to ADT’s separation from Tyco International Ltd. (“Tyco”) in September 2012, Mr. Gursahaney served as president of Tyco’s ADT North American Residential business segment and was the president of Tyco Security Solutions, then a provider of electronic security to residential, commercial, industrial and governmental customers and the largest operating segment of Tyco. Mr. Gursahaney joined Tyco in 2003 as senior vice president of operational excellence. He then served as president of Tyco Engineered Products and Services and president of Tyco Flow Control. Prior to joining Tyco, Mr. Gursahaney was president and CEO of GE Medical Systems Asia, where he was responsible for the company’s sales and services business in the Asia-Pacific region. During his 10-year career with GE, Mr. Gursahaney held senior leadership roles in services, marketing and information management. | Qualifications Mr. Gursahaney has extensive operations, strategic planning and leadership experience in global manufacturing and services businesses serving residential, commercial, industrial and governmental customers gained as the CEO of a public company providing security systems and service. He also has extensive global operations, information technology and service experience gained as the president and CEO of the Asia-Pacific division of a medical diagnostic and imaging manufacturer. He has an MBA from the University of Virginia and a Bachelor of Science in mechanical engineering from Pennsylvania State University. |
Director nominee biographies
| KIRK S. HACHIGIAN | Age 64 | Independent director since 2013 | | Board Committees » Compensation (Chair) » Executive » Governance & Nominating Public Company Boards » Allegion plc (since 2013) » PACCAR, Inc. (since 2008) » L3 Harris Technologies, Inc. (since December 2023) | Career Highlights Mr. Hachigian served as chairman of the board of JELD-WEN Holding, Inc., a manufacturer of windows and doors, from April 2014 until May 2018. He also served as CEO of JELD-WEN Holding, Inc. from April 2014 until November 2015. He served as chairman, president and CEO of Cooper Industries plc (“Cooper”), a publicly held electrical equipment and tool manufacturer, until Cooper’s acquisition by Eaton Corporation plc in November 2012. He was named chairman of Cooper in 2006, CEO in 2005 and president in 2004. | Qualifications Mr. Hachigian has extensive leadership, operations and strategic planning experience gained through his prior service as the chairman, CEO and president of a global, publicly held manufacturer of electrical equipment and tools. He also has international leadership and operations experience gained through his prior service as the president and CEO of the Asia-Pacific operations of a lighting products manufacturer and in key management positions in Singapore and Mexico. In addition, Mr. Hachigian has financial and risk oversight experience developed through his prior service on the audit committee of another public company and as a prior member of the board of the Houston branch of the Federal Reserve Bank of Dallas. He has an MBA in finance from the Wharton School of Business and a Bachelor of Science in engineering from the University of California (Berkeley). |
Director nominee biographies
| MARIA G. HENRY | Age: 57 | Independent director since 2023 | | Board Committees » Finance & Investment Public Company Boards » General Mills, Inc. (since 2016) » NIKE, Inc. (since May 2023) | Career Highlights Ms. Henry was chief financial officer of Kimberly-Clark Corporation from April 2015 through April 2022, and served as executive vice president and senior advisor of Kimberly-Clark Corporation from April 2022 until her retirement in September 2022. Prior to Kimberly-Clark, Ms. Henry was executive vice president and chief financial officer of the Hillshire Brands Company, formerly known as Sara Lee Corporation, from 2012 to 2014. She was the chief financial officer of Sara Lee’s North American Retail and Foodservice business from 2011 to 2012. Prior to Sara Lee, Ms. Henry held various senior leadership positions in finance and strategy in three portfolio companies of Clayton, Dubilier & Rice, most recently as executive vice president and chief financial officer of Culligan International. She also held senior finance roles in several technology companies and began her career at General Electric. | Qualifications Ms. Henry has extensive leadership experience in finance and strategy for large global public, private equity controlled, and smaller entrepreneurial companies across consumer, technology, manufacturing and distribution industries. She has had oversight responsibility for finance, treasury, investor relations, strategy, real estate and accounting. She also has experience overseeing information technology and risk, including cyber risk. Ms. Henry currently serves on the boards of directors of NIKE, Inc. and General Mills, Inc. She holds a Bachelor of Science degree in finance from the University of Maryland. |
Director nominee biographies
| JOHN W. KETCHUM | Age 53 | Director since 2022 | | Board Committees » Executive (Chair) » Nuclear Public Company Boards » NextEra Energy Partners, LP (since 2017) | Career Highlights Mr. Ketchum has been president and chief executive officer and a director of NextEra Energy since March 2022 and chairman since July 2022. He has also served as chairman of NextEra Energy’s subsidiary, Florida Power & Light Company (which has no publicly traded stock), since February 2023. Prior to his succession to the role of chief executive officer, he served as president and chief executive officer of NextEra Energy Resources, LLC (“NextEra Energy Resources”), the Company’s competitive energy supplier subsidiary and the world’s largest generator of renewable energy from the wind and sun and a world leader in battery storage. Mr. Ketchum joined NextEra Energy in 2002 and has a diverse business, finance and legal background with a broad range of experiences across key executive roles and NextEra Energy, NextEra Energy Resources and NextEra Energy Partners, LP (“NEP”). Mr. Ketchum is chief executive officer and a director of NEP, a publicly-traded growth-oriented limited partnership formed by NextEra Energy to acquire, manage and own contracted clean energy projects (in which the Company owns an underlying 52.6% interest). | Qualifications Mr. Ketchum has a diverse business, finance and legal background with a broad range of experiences gained through his key executive roles at NextEra Energy, NextEra Energy Resources and NEP. During his 21 years with NextEra Energy, Mr. Ketchum has led the execution of various strategic initiatives across the enterprise and has been instrumental in the expansion of the Company’s renewable generation fleet. While CEO of NextEra Energy Resources, Mr. Ketchum oversaw the largest three-year capital investment program in NextEra Energy Resources’ history, as well its most successful period of new renewables origination, leading to a near doubling of the size of the renewables backlog during this period. In addition, he oversaw a nearly $5 billion, three-year capital recycling program, the largest in NextEra Energy Resources’ history. Mr. Ketchum holds a Master of Laws degree in taxation and a Juris Doctor from the University of Missouri — Kansas City School of Law. Mr. Ketchum holds a Bachelor of Arts degree in economics and finance from the University of Arizona. He also completed the Emerging CFO — Strategic Financial Leadership Program at Stanford University. |
Director nominee biographies
| AMY B. LANE | Age 71 | Independent director since 2015 | | Board Committees » Executive » Finance & Investment » Governance & Nominating (Chair) Public Company Boards » FedEx Corp. (since 2022) » The TJX Companies, Inc. (since 2005) | Career Highlights Ms. Lane retired in 2002 as managing director and group leader of the global Retailing Investment Banking Group of Merrill Lynch & Co., Inc. (“Merrill Lynch”), an investment banking firm. Prior to joining Merrill Lynch in 1997, she was a managing director at Salomon Brothers, Inc. (“Salomon Brothers”), an investment banking firm, where she founded and led the retail industry investment banking unit, having joined Salomon Brothers in 1989. | Qualifications Ms. Lane has 26 years of leadership experience with financial services, capital markets, finance and accounting, capital structure, and acquisitions and divestitures in the financial services industry, as well as extensive experience in management, leadership and strategy. Ms. Lane served as a managing director and group leader of the global Retailing Investment Banking Group at Merrill Lynch from 1997 until her retirement in 2002. In that role, she led and worked on mergers and acquisitions and equity and debt transactions for a wide range of major retailers. Prior to joining Merrill Lynch, she was a managing director at Salomon Brothers, which she joined in 1989 and where she founded and led the retail industry investment banking unit. Ms. Lane has an MBA from the Wharton School of Business. |
Director nominee biographies
| DAVID L. PORGES | Age 66 | Independent director since 2020 | | Board Committees » Executive » Finance & Investment (Chair) » Governance & Nominating | Career Highlights Mr. Porges was a non-employee member of the board of directors of Equitrans Midstream Corporation (“Equitrans”) from November 2018 through December 2019 and was the chairman of the board of Equitrans from November 2018 to July 2019. He joined EQT Corporation (“EQT”) in 1998 as senior vice president and chief financial officer and served as EQT’s CEO from April 2010 to April 2011 and as CEO and chairman from April 2011 to February 2017. From February 2017 to March 2018, Mr. Porges served as EQT’s executive chairman and as chairman and interim CEO from March 2018 to November 2018. | Qualifications Mr. Porges has more than 20 years of leadership, finance, operations and mergers and acquisitions experience gained through his prior service as CEO and chairman of a publicly held energy industry company, as well as his prior service as the chief financial officer of that energy company. Mr. Porges also has experience with capital markets, finance and mergers and acquisitions gained through his prior service with an investment bank concentrating on the energy industry. Mr. Porges has an MBA from Stanford University. |
Director nominee biographies
| DEBORAH L. “DEV” STAHLKOPF | Age 54 | Independent director since 2023 | | Board Committees » Audit » Compensation | Career Highlights Ms. Stahlkopf joined Cisco Systems, Inc. (“Cisco”) in August 2021 as executive vice president and chief legal officer. Prior to joining Cisco, she held several senior roles at Microsoft Corporation (“Microsoft”) over the course of 14 years, including corporate vice president, general counsel and corporate secretary, corporate, external and legal affairs from April 2018 to July 2021, vice president and deputy general counsel from December 2015 to April 2018 and associate general counsel from December 2010 to December 2015. Prior to joining Microsoft, she practiced law in the Seattle area at Perkins Coie, specializing in employment and labor law and at Cooley Godward, LLP, focusing on corporate and technology transactions. | Qualifications Ms. Stahlkopf has extensive experience in legal strategy, including key issues including intellectual property, privacy and security, internet governance, cross-border data issues, geopolitical matters, and public policy priorities. She also has extensive experience in labor and employment law. She received her law degree from the University of Arizona, a Master of Arts degree in Philosophy from Duke University, and undergraduate degrees in English and philosophy from the University of Washington. |
Director nominee biographies
| JOHN A. STALL | Age 69 | Independent director since 2022 | | Board Committees » Audit » Nuclear (Chair) | Career Highlights Mr. Stall retired from NextEra Energy in 2010, where he served in numerous nuclear leadership roles. He served as president of NextEra Energy’s nuclear division from 2009 to 2010, as senior vice president and chief nuclear officer from 2001 to 2009, as vice president, nuclear engineering from 2000 to 2001 and vice president of NextEra Energy’s St. Lucie nuclear generating station from 1996 to 2000. He also served in leadership roles at Dominion Energy, Inc.’s North Anna nuclear generating station from 1977 until 1996. | Qualifications Mr. Stall has substantial nuclear expertise, operations and engineering experience and leadership experience. He has over 40 years of experience in nuclear generation through his career at both Dominion Energy, Inc. and NextEra Energy. He previously held a senior reactor operator license issued by the Nuclear Regulatory Commission and is a previously licensed professional engineer in the Commonwealth of Virginia. He served as the chair of an independent nuclear safety advisory committee for a publicly-traded electric utility that operates multiple nuclear generating units. He served as a member of the Institute of Nuclear Power Operations National Academy of Nuclear Training Accrediting Board from 2008 to 2019. Mr. Stall graduated from the University of Florida and holds a Bachelor of Science degree in nuclear engineering. He received his MBA from Virginia Commonwealth University. |
Director nominee biographies
| DARRYL L. WILSON | Age 60 | Independent director since 2018 | | Board Committees » Audit » Compensation Public Company Boards » Eaton Corporation plc (since 2021) » Primerica, Inc. (since February 2024) | Career Highlights Mr. Wilson was vice president, commercial of GE Power, a business of GE, from June 2017 until his retirement in December 2017. From January 2016 to June 2017, he was vice president & chief commercial officer of GE Energy Connections and, from January 2013 to January 2016, he was vice president & chief commercial officer of GE Distributed Power. From July 2008 to January 2013, he was president & CEO of GE Aeroderivative Products. Prior roles also include president & CEO of GE Consumer Products, Europe Middle-east, Africa and India, based in Budapest, Hungary and London, England. He also served as president & CEO of GE Consumer and Industrial, Asia-Pacific and India based in Shanghai, China. Additionally, Mr. Wilson spent 6 years in progressive executive leader roles with British Petroleum — North America in business operations and regional fuel and lubricant distribution management positions. | Qualifications Mr. Wilson has extensive leadership and international experience in business operations, commercial management, global manufacturing, mergers and acquisitions and services as a result of his senior leadership roles for a global manufacturer and service provider of power generation, power electronics, distribution, motors, power management, appliances and lighting products. Mr. Wilson has finance and financial markets experience as former chairman of the board of directors, Houston Branch — Dallas Federal Reserve Bank and serving on the audit and investment committees on other public and non-profit boards. Mr. Wilson received an MBA in Marketing from Indiana University and a Bachelor of Arts in business administration from Baldwin Wallace College. |
Director nominee biographies
Unless you specify otherwise in your voting instructions, your proxy will be voted FOR election of each of the nominees.
Director nominee biographies
| | The Board unanimously recommends a vote FOR the election of all nominees. |
CONSIDERATION OF DIRECTOR NOMINEES
CONSIDERATION OF DIRECTOR NOMINEES
Delivering long-term value to shareholders
Delivering long-term value to shareholders NextEra Energy has delivered superior company performance over multi-year cycles, driven in large part by an enduring executive compensation program that aligns with the Company’s strong pay for performance philosophy. Our program incentivizes our executives through the application of both annual and multi-year operational and financial performance measures, as well as through the application of a multi-year relative TSR performance measure. The structure is intended to drive consistent performance over the long-term in an industry such as ours, where large capital investment decisions for infrastructure projects which, if developed well over a generally long development cycle and subsequently operated well year-in and year-out, should provide positive, growing returns over extended periods. The structure also acknowledges the historically longer-term economic cycles inherent in the power industry and the sporadic volatility that the power industry experiences from time-to-time.
Delivering long-term value to shareholders
| NEXTERA ENERGY VS. INDICES | 1-YEAR TSR | 3-YEAR TSR | 5-YEAR TSR | 7-YEAR TSR | 10-YEAR TSR | | NextEra Energy | (25.3)% | (15.7)% | 56.4% | 140.2% | 266.6% | | S&P 500 Index | 26.3% | 33.1% | 107.2% | 141.4% | 211.5% | | S&P 500 Growth Index | 30.0% | 21.2% | 112.1% | 170.2% | 250.2% | | S&P 500 Utilities Index | (7.1)% | 11.0% | 41.0% | 64.5% | 134.8% |
Delivering long-term value to shareholders
Although none of the S&P 500 Index, the S&P 500 Growth Index or the S&P 500 Utilities Index are peer groups for the purposes of executive compensation, our Company’s performance relative to those indices demonstrates that our executive compensation program is incentivizing management to make decisions that deliver long-term value to shareholders relative to some of the highest-performing companies in the world. Our TSR over the 5-, 7- and 10-year time frame continues to compare favorably to the selected indices, while our 1- and 3-year TSR results trailed these indices, despite strong performance on ROE and EPS growth.
2023 Annual Incentive
2023 Annual Incentive Annual incentive performance is based 50% on financial metrics (Adjusted ROE and Adjusted EPS Growth) as measured against a rigorous performance grid relative to peers as shown on page 53, and 50% based on operational performance metrics primarily established based on industry benchmarks and Company performance. For 2023, NEE performed within the top tricile of both annual incentive financial metrics and performed above-target on most operational metrics. This very strong performance across our business resulted in an above-target annual incentive payout of 184%. No individual performance factors were used to modify the 2023 annual incentive award payouts for any of the NEOs in recognition of the stock price performance during 2023.
2023 Annual Incentive
| | Metric | Result | Payout Factor | | Financial | Adjusted ROE | 15.0% | 2.00 | | | Adjusted EPS Growth | 9.3% | | | Operational | Metrics for FPL and NEER that focus on safety, customer value, reliability, operational excellence, and growth | FPL: 1.78 (50% weighting) NEER: 1.57 (50% weighting) | 1.68 | | | | Total annual incentive as percent of target | 184% |
Long-Term Incentive Payout for 2021-2023 Performance-Share Award Cycle
Long-Term Incentive Payout for 2021-2023 Performance-Share Award Cycle Performance for the 2021-2023 Performance Share Awards was measured 80% against a 3-year Adjusted ROE and Adjusted EPS Growth financial matrix, with the remainder evaluated against four key operational measures. Performance is 20 percentage points higher or lower on the basis of 3-year relative TSR performance. The Company performed in the top tricile on each of the financial performance metrics and outperformed across operational metrics, resulting in a potential payout of 200%. However, the Company performed in the bottom 25th percentile on relative TSR, resulting in a downward TSR modifier of 80%. This led to an overall payout on the PSAs of 160%.
Long-Term Incentive Payout for 2021-2023 Performance-Share Award Cycle
| | Metric | Payout Factor | | Financial (80%) | 3-year Adjusted ROE and Adjusted EPS Growth | 2.00 | | Operational (20%) | Four measures focused on safety, nuclear industry performance, outage rate, and service reliability | 1.98 | | TSR Modifier (+/- 20%) | Relative 3-year TSR against top ten power companies by market capitalization | 80% | | | Total 2021-2023 Performance Share Award Payout | 160% |
Long-Term Incentive Payout for 2021-2023 Performance-Share Award Cycle
* Market capitalization is as of December 31, 2023; rankings are sourced from FactSet Research Systems Inc. This measure is not a financial measure calculated in accordance with GAAP. See Appendix A to this proxy statement for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure. Adjusted ROE is described on page 53. *** Top tricile of our peer group as measured for the purposes of our compensation programs. **** STI refers to the annual incentive plan, while PSUs refer to the performance share awards granted in 2021 for the performance period ended December 31, 2023.
KEY SHAREHOLDER ENGAGEMENT HIGHLIGHTS
| WHAT WE HEARD | OUR RESPONSE | | Shareholders wanted disclosure of the annual incentive plan metrics | » Disclosure of the metric definitions and the rationale behind the metric selection has been expanded. The individual weightings for each metric are now disclosed, which offers a more comprehensive understanding of the calculations behind the final payouts. | | Shareholders were proponents of higher annual performance metric hurdles for our NEE and NEP performance-based restricted stock awards | » The Compensation Committee increased the annual NEE performance-based stock award hurdle of adjusted earnings from $2.5B in 2023 to $3.0B for 2024 and the annual NEP performance-based stock award hurdle of adjusted EBITDA was increased from $400MM in 2023 to $900MM for 2024. We remain committed to evaluating the performance hurdles on an annual basis. | | Shareholders commented that unvested equity should not count in stock ownership guidelines | » Our Governance & Nominating committee recommended that the full Board modernize the stock ownership guidelines to exclude unvested equity from counting towards the stock ownership guidelines. This update was approved in late 2023 and the plan details are available at www.investor.nexteraenergy.com/corporate-governance. | | Shareholders prefer more robust anti-pledging policies | » Our Governance & Nominating committee recommended that the full Board modernize NEE’s Securities Trading Policy to implement a more robust anti-pledging policy that is consistent with best practices. This update was approved in late 2023 and the plan details are available within the Securities Trading Policy at www.investor.nexteraenergy.com/corporate-governance. | | Shareholders expressed an interest in disclosure that incorporates the feedback we received during shareholder engagement meetings | » Beginning with this proxy statement, we are including this additional disclosure table which includes feedback related to our governance and executive compensation programs received during shareholder engagement meetings. We plan to include this information in future years as well. |
KEY SHAREHOLDER ENGAGEMENT HIGHLIGHTS
| WHAT WE HEARD | OUR RESPONSE | | | | | Some shareholders indicated they preferred performance-based stock awards to have a minimum three-year cliff vesting period | » Both the NEE and NEP performance-based stock awards have one-year performance hurdles that must be achieved annually for the award to vest. We use one-year performance measurements for these long-term equity awards to emphasize the importance of the immediate responsibilities of our executives in attaining one-year goals that can act as a steppingstone towards long-term financial success. Per the NextEra Energy Stock Retention policy, once vested, all Section 16 officers are required to hold the stock for two additional years. Measuring performance annually but requiring executives to hold their awards for two years after vesting strikes a balance between immediate performance and sustainable value creation. It encourages behaviors that contribute to short-term goals and yet encourages a mindset geared towards the long-term success and sustainability of NextEra Energy. The table below illustrates the timeline of vesting versus when shares are available: | | | | | | | Vesting Period | Post-Vest Holding Period | Shares Available (after grant) | | | First (1/3) | 1 year | 2 years | 3 years | | | Second (1/3) | 2 years | 2 years | 4 years | | | Third (1/3) | 3 years | 2 years | 5 years | | A few shareholders commented that similar metrics exist in the short- and long-term incentive plans | » While a financial matrix of adjusted ROE and adjusted EPS is utilized in both the short-term incentive and long-term incentive plans, the plans measure adjusted ROE and adjusted EPS over different time periods (1-year vs 3-year) and assign different weightings to the financial matrix. These metrics were selected due to their importance in aligning each program with shareholder interests. Since annual growth of adjusted EPS and consistently strong adjusted ROE are essential to supporting long-term financial growth, the Compensation Committee believes including these metrics in both plans supports the Company’s delivery of its long-term financial goals for our shareholders and our customers. | | | | | We heard shareholders wanted compensation to reflect the shareholder experience in 2023 | » For 2024, we kept all target compensation, including base salaries, flat for all of the NEOs, notwithstanding record results on adjusted earnings and adjusted EPS. | | | | | Shareholders generally disfavor single trigger change in control provisions | » Beginning in 2021, our executive change in control agreements were modernized with double trigger change in control (CIC) provisions. We committed to not provide single trigger CIC provisions to any newly hired or promoted executive officer, and only legacy agreements for certain current NEOs contain such provisions which provide vesting in connection with a CIC. | | | |
Our commitment to best practices
| WHAT WE DO | WHAT WE DO NOT DO | | Tie pay to performance; 92% of the CEO’s actual direct 2023 compensation was performance-based Use industry benchmarks when setting operational goals and when reviewing actual performance and generally target top-decile performance as compared to our industry on operational measures Take steps to mitigate undue risk related to compensation, including using a clawback policy, stock ownership and retention requirements and multiple performance metrics; the Compensation Committee conducts an annual comprehensive risk assessment of incentive compensation plans in an effort to confirm that none of the Company’s compensation programs creates risks that are reasonably likely to have a material adverse impact on the Company Have robust stock ownership guidelines which all NEOs exceed Require executive officers to hold both NEE and NEP performance-based restricted stock for two years after vesting Have a minimum full vesting period for stock options and performance-based restricted stock, generally three years Use an independent compensation consultant Engage in shareholder outreach and regularly assess the executive compensation program against shareholder input, emerging trends and other factors Require NEOs to enter into Rule 10b5-1 plans with minimum waiting periods to transact trades in company securities | No CEO employment agreement No tax gross-ups of NEO perquisites No excise tax gross-up provisions in change in control agreements entered into since 2009 No repricing of underwater stock options No share recycling under equity compensation plans No hedging or pledging of company securities by NEOs or directors permitted under securities trading policy No counting of unvested equity toward meeting stock ownership guidelines No guaranteed annual or multi-year bonuses |
How the Company’s annual incentive plan and long-term incentives contribute to sustainability
How the Company’s annual incentive plan and long-term incentives contribute to sustainability In addition to those metrics in our annual incentive plan and our performance shares that emphasize our commitment to sustainability, our executive compensation program also includes goals tied to customer value, employee safety and compliance with environmental regulations, a variety of which have been included as compensation metrics since 2001. Compensation metrics tied to improved sustainability include:
How the Company’s annual incentive plan and long-term incentives contribute to sustainability
| | CUSTOMER VALUE PROPOSITION | | OPERATIONAL PERFORMANCE | | SAFETY | | To emphasize the delivery of a sustainable, outstanding customer value proposition, compensation metrics include: » O&M costs per retail MWh, » capital expenditures, » service reliability, and » customer satisfaction scores. These metrics are intended to drive the sustainable delivery of: » low bills, » high reliability, » clean energy solutions, and » outstanding customer service. | | Intended to support continued efficient and reliable delivery of clean energy to our customers. These metrics include: » availability metrics across the generation fleets, and » reliability metrics for the transmission and distribution grid. | | Safety is a Company priority because people are our most important asset, and safety is a leading indicator of our operational performance. » The number of OSHA recordable incidents is included to emphasize the Company’s focus on a zero-injury workplace and incentivize senior executive leadership on safety issues. | | | | | | | | ENVIRONMENTAL EVENTS | | | | | | To support our commitment to the environment, metrics include: » achieving zero significant environmental violations across all of our businesses. | |
How the Company’s annual incentive plan and long-term incentives contribute to sustainability
II.
Compensation elements designed to align with our strategy
| | | ELEMENT | HOW IT IS PAID | DESCRIPTION | | | ◀ FIXED ▶ | Short- Term | BASE SALARY | Cash | Fixed amount reflects the responsibilities and day-to-day contributions of the NEOs. | | | ◀ “AT-RISK” REWARDS ▶ | | ANNUAL INCENTIVE AWARDS | Cash | Financial metrics » The financial measures are the Company’s one-year adjusted EPS growth and adjusted ROE compared to the ten-year average of the companies in the S&P 500 Utilities Index. | Reward participants for achievement of a set of key financial and operational performance measures, the majority of which are based on industry benchmarks and for which payouts depend on Company performance relative to those benchmarks. | | | | | | Operational metrics » The operational measures are focused on operational performance relative to industry performance. | | | | Long- Term | EQUITY COMPENSATION | Performance share awards | Granted for three-year performance periods to drive intermediate and long-term results. Payouts of performance share awards are based on two distinct measurements: 1. three-year adjusted EPS growth and adjusted ROE relative to the ten-year average of the companies in the S&P 500 Utilities Index, and 2. the average of annual performance on core operational performance measures relative to industry peers for each of three consecutive years. These award payouts are modified by ± 20% based on our three-year TSR relative to the top ten power companies by market cap (a subset of the S&P 500 Utilities Index). | | | | | | Performance-based restricted stock awards | Vest ratably over three years only if the Company achieves a specified annual adjusted earnings goal each year. | | | | | | Performance-based restricted NEP common units | Vest ratably over three years only if NEP achieves a specified annual adjusted EBITDA goal each year. | | | | | | Nonqualified stock option awards | Granted subject to a three-year ratable vesting period, having a ten-year term and delivering value to executives only if the Company’s stock price at exercise exceeds the stock price on the grant date of the award. | |
TOTAL DIRECT COMPENSATION — TARGET PAY MIX
TOTAL DIRECT COMPENSATION — TARGET PAY MIX Our Incentive Plans Utilize Rigorous Targets The Compensation Committee endeavors to set rigorous targets for our annual and long-term incentive plans in the context of company expectations for the year, relevant industry benchmarks, stage of our development cycles, and other relevant factors. Given year-over-year variability in our operating environment, certain targets may be set higher, at, or lower than prior year performance, and comparing such metrics year-over-year does not reflect the full scope of factors that may influence performance and ultimate difficulty in achieving these targets. The Compensation committee follows a thorough process to set targets including industry benchmarks and internal historical Company performance.
Compensation resources
| The Compensation Committee believes it is critical to the Company’s long-term performance to offer its executive officers compensation opportunities broadly commensurate with their competitive alternatives. |
Compensation resources
The Company obtained market comparison information for all NEOs from publicly-available peer group information and market survey data. The Company’s peer group is composed of a set of companies from the energy services industry and a set of companies from the general industry. These companies were selected by the Compensation Committee with input from executive officers (including the CEO) and the Compensation Consultant. The Compensation Committee believes the use of companies from both the energy services industry and the general industry was appropriate because the Company’s executive officers come from both within and outside the Company’s industry. The Compensation Committee believes their opportunities for alternative employment are not limited to other energy or utility companies. For 2023, the Compensation Committee conducted a review of the then-existing 2022 peer group based on the following criteria:
SELECTION CRITERIA
Based on its review, the Compensation Committee approved for 2023 the same peer group that was approved for 2022, since all energy services industry and general industry companies continued to meet the selection criteria. The Compensation Committee believes the peer group is appropriately aligned with industries in which the Company competes for talent and the Company’s business in terms of market capitalization and scope. The 2023 comparator groups are as follows:
SELECTION CRITERIA
Although the Compensation Committee did not target specific total compensation levels relative to industry peers (a so-called “percentile” approach), it generally reviewed peer company data at the 50th percentile for the general industry companies and the 75th percentile for the energy services industry companies. The Compensation Committee believes these levels were appropriate because: » the Company’s 2022 market capitalization and assets were above the 90th percentile of its general industry peer companies and its energy services industry peer companies; the Company’s 2022 market capitalization was more than two times that of the 2nd largest energy services industry peer company’s market capitalization; the Company’s practice is to make a relatively high portion of each NEO’s compensation performance-based as compared to its peers; and » the Company’s operations are more complex, more diverse and of a greater size than those of substantially all of its energy services industry peer companies.
2023 base salary
2023 base salary Salary increases were based on market considerations, the nature and responsibilities of each NEO’s respective position, expertise and performance, the competitiveness of each NEO’s current pay in relation to their corresponding peer group and the recommendations of the CEO. For 2023, the CEO received a 5% base salary increase related to progression in his role and position relative to peer group. Other NEOs received increases ranging from 7% to 15%. Mr. Crews’ base salary increase was related to consideration of market and competitive data for similarly positioned roles and Mrs. Kujawa’s increase was related to the increasing complexity and scope of her non-traditional utility role, which has wind facilities in 23 US states and four Canadian providences, solar facilities in 31 US states, battery storage in 17 US states and two nuclear plants in two states. Base salary adjustments are typically effective as of January 1 each year.
2023 annual performance-based compensation
2023 annual performance-based compensation Annual Incentive Plan goals are established to incentivize superior performance relative to industry peers. A majority of these goals are based on industry benchmarks and payouts under the Annual Incentive Plan are generally based on Company performance in the relevant period. Prior to 2023, the Compensation Committee established financial and operational performance goals under the Annual Incentive Plan in the following categories:
2023 annual performance-based compensation
| TYPE OF 2023 PERFORMANCE GOALS | HOW WE ESTABLISHED AND USED THE 2023 PERFORMANCE GOALS | | FINANCIAL | » Based on enduring standards indicative of sustained performance — adjusted EPS growth and adjusted ROE — as compared to the financial performance over the ten-year period ended on December 31, 2023 of the companies included in the S&P 500 Utilities Index. » Higher ratings indicate corporate financial performance superior to industry median and lower ratings indicate corporate financial performance which lags industry median. | | OPERATIONAL | » Goals and payout scales are established in advance of the year using available industry benchmarks insofar as possible. » If an industry benchmark is not available, the applicable goal generally is set at a level representing an improvement or a stretch as compared to prior performance. » As a general principle, the Compensation Committee seeks to set operational performance goals at levels that represent excellent performance, superior to the results of typical companies in our industry, and require significant effort on the part of the executive team to achieve. » Performance on certain compliance-related goals is scored as either “met” or “not met,” while performance against other goals is judged on a sliding scale in comparison to top-decile, top-quartile, median and sub-median performance as compared to the industry. |
2023 annual performance-based compensation
2023 financial performance matrix The financial performance matrix approved by the Compensation Committee for 2023, which is illustrated below, compares the Company’s 2023 adjusted EPS growth and adjusted ROE to the average of the actual annual adjusted EPS growth and adjusted ROE of the companies included in the S&P 500 Utilities Index during the ten-year period from January 1, 2014 to December 31, 2023 (estimated for 2023 using actual results for the first three quarters and analysts’ estimates for the fourth quarter).* The Compensation Committee believes these financial metrics are “enduring standards,” because they: » are objective, » require the Company to demonstrate improvement, » are aligned with how shareholder value is created, and » encourage management to include stretch goals as part of the annual budget-setting process. The financial performance matrix is designed to provide relatively greater rewards if the Company outperforms others in its industry on the indexed measures and relatively lower rewards if it does not.
2023 annual performance-based compensation
| | ADJUSTED EARNINGS PER SHARE GROWTH | | The Compensation Committee selected adjusted EPS growth because it provides a more meaningful representation of the Company’s fundamental earning power than net income calculated in accordance with GAAP and therefore better aligns the NEOs’ motivations with the Company’s strategy and with shareholders’ long-term interests. In addition, the Compensation Committee believes the use of adjusted EPS growth for this purpose is consistent with the way in which the Company communicates its earnings to analysts and investors. | |
2023 annual performance-based compensation
| | ADJUSTED ROE | | Adjusted ROE is a long-term value creation metric that aligns the interest of management with those of our shareholders by measuring and rewarding profitability relative to shareholders’ investment. The Compensation Committee selected adjusted ROE because it is a gauge of our profitability and how efficiently we generate profits. | |
2023 annual performance-based compensation
The numbers in the following matrix set forth the range of possible ratings for corporate financial performance. A rating of “1” indicates overall corporate financial performance at the industry median, while higher ratings indicate corporate financial performance superior to the industry median, and lower ratings indicate corporate financial performance which lags the industry median. It is important to recognize the adjusted ROE and adjusted EPS growth amounts set forth in the illustration below reflect actual industry performance on these measures for the ten-year period ended December 31, 2023, and the Company’s executive compensation is based, with respect to adjusted ROE and adjusted EPS growth, on the performance delivered by the Company relative to industry performance. * Adjusted EPS growth and adjusted ROE which is used, among other reasons, to provide industry comparability, are not financial measurements calculated in accordance with GAAP and their definitions may differ among companies. Adjusted EPS growth, as defined by NextEra Energy for purposes of the annual Incentive Plan, is equal to the Company’s adjusted earnings dividend by weighted average diluted shares outstanding. Adjusted earnings, as defined by NextEra Energy for purposes of the Annual Incentive Plan, is the Company’s consolidated net income, as reported in the audited annual financial statements as determined in accordance with GAAP, excluding the effects of: (i) changes in the mark-to-market value of non-qualifying hedges; (ii) other than temporary impairments on investments; (iii) extraordinary items; (iv) non-recurring charges or gains (e.g., restructuring charges and material litigation losses); (v) discontinued operations; (vi) regulatory and/or legislative changes and/or changes in accounting principles; (vii) labor union disruptions; and (viii) acts of God such as hurricanes. Adjusted ROE, as defined by NextEra Energy, is equal to the Company’s adjusted earnings divided by average common shareholders’ equity, adjusted to provide industry comparability, expressed as a percentage. 2023 operational goals Operational goals and payout scales are primarily established based on industry benchmarks and Company performance. As noted previously, management’s ability to deliver performance superior to our industry will generally result in above-target compensation, while performance that is inferior to our industry will generally result in below-target compensation. In that context, FPL’s typical performance goals based on industry benchmarks are generally better than the top-quartile performers in its industry and NextEra Energy Resources’ performance goals based on earnings growth and profitability are well above utility industry norms (in both cases based on internal reviews of publicly-available information and information provided by consultants and industry associations). The following tables set forth the 2023 operational performance goals and the actual performance achieved against those goals.
2023 annual performance-based compensation
| FPL | | | | | | | | INDICATOR | GOAL | ACTUAL | INDICATOR WEIGHT | TOTAL SECTION WEIGHT | | Customer Value | O&M costs (plan-adjusted)(1) | $1,325 million(1) | $1,323 million(1) exceeded top decile | 35% | | | | Capital expenditures (plan-adjusted)(1) | $8,837 million(1) | $9,528 million(1) | 15% | | | Reliability | Fossil generation availability(2) | top decile performance | exceeded top decile performance | 6% | | | | Nuclear industry composite performance index(3) | aggressive goal | beat goal and approximated top decile performance | 6% | | | | Service reliability — service unavailability (minutes) | better than top decile (49.0 minutes) | exceeded top decile performance (46.7 minutes) | 7% | | | | Service reliability — average frequency of customer interruptions | 0.62 interruptions per customer per year (average) | 0.55 — exceeded top decile performance | 7% | | | | Service reliability — average number of momentary interruptions per customer | 4.2 momentary interruptions per customer per year | 3.3 — best ever performance and exceeded top decile performance | 4% | | | Operational | Employee safety — OSHA recordables(4) per 200,000 hours | 0.33 — top decile | 0.28 — exceeded top decile performance | 8% | | | | Significant environmental violations | 0 | 0 | 2% | | | | Customer satisfaction — residential value surveys | aggressive goal | missed goal | 4% | | | | Customer satisfaction — business value surveys | aggressive goal | missed goal | 4% | | | | Performance under FERC and NERC reliability standards(5) | no significant violations | did not meet goal | 2% | |
2023 annual performance-based compensation
(1) Certain of the financial performance indicators used in the Annual Incentive Plan are calculated in a manner consistent with NextEra Energy’s planning and budgeting process and how management reviews its performance relative to that plan, and are not, or do not relate directly to, financial measures calculated in accordance with GAAP. For information about the Company’s results of operations for 2023, as presented in accordance with GAAP, investors should review the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and should not rely on any adjusted amounts or non-GAAP financial measures set forth above. The following explains how the plan-adjusted amounts are calculated from NextEra Energy’s audited consolidated financial statements: (a) FPL O&M costs (plan-adjusted) is a measure that includes most but not all O&M expenses and includes certain expenses that are not classified as O&M expenses under GAAP but are reported for state regulatory purposes as O&M expenses; (b) FPL capital expenditures (plan-adjusted) are presented on an accrual basis, and exclude nuclear fuel payments and certain costs that are not classified as capital expenditures under GAAP in the consolidated statements of cash flows but that are reported for state regulatory purposes as capital expenditures; and (c) NextEra Energy Resources’ earnings (plan-adjusted) exclude: (i) the mark-to-market effect of non-qualifying hedges; (ii) other than temporary impairments on investments; extraordinary items;
2023 annual performance-based compensation
| NEXTERA ENERGY RESOURCES | | | | | | | | INDICATOR | GOAL | ACTUAL | INDICATOR WEIGHT | TOTAL SECTION WEIGHT | | FINANCIAL | Earnings (plan-adjusted)(1) | $2,763 million(1) | $2,757 million(1) | 25% | | | | ROE | 14.9% | 14.7% | 10% | | | | Meet budgeted cost goals | $2,690 million | $2,747 million | 7% | | | | NEP cash available for distribution | $815 million | missed goal | 10% | | | OPERATIONAL | Employee safety — OSHA recordables(4) per 200,000 hours | 0.33 — top decile | 0.18 — beat goal and exceeded top decile performance | 3% | | | | Significant environmental violations | 0 | 0 | 2% | | | | Nuclear industry composite performance index(3) | aggressive goal | beat goal and exceeded top decile performance | 5% | | | | Equivalent forced outage rate(6) | aggressive goal | beat goal and exceeded top decile performance | 8% | | | GROWTH | Execute approved North American new and repowered wind projects on schedule and on budget | 1,700 MW | beat goal | 10% | | | | Execute approved North American solar and storage projects on schedule and on budget | 3,800 MW | beat goal | 5% | | | | New development or acquisition opportunities within NextEra Energy Resources that receive approval | aggressive goal | beat goal | 10% | | | | Pre-tax income contribution from all asset optimization, marketing and trading activities, full requirements and retail | aggressive goal | beat goal | 5% | |
2023 annual performance-based compensation
(iv) non-recurring charges or gains (e.g., restructuring charges and material litigation losses); (v) discontinued operations; (vi) regulatory and/or legislative changes and/or changes in accounting principles; (vii) labor union disruptions; and (viii) acts of God such as hurricanes. (2) “Fossil generation availability” measures the amount of time during a given period that a power generating unit is available to produce power. (3) The “nuclear industry composite performance index” referenced is the Institute of Nuclear Power Operations, or INPO, index. INPO promotes the highest levels of safety and reliability in the operation of commercial nuclear power plants by establishing performance objectives, criteria and guidelines for the nuclear power industry and conducting regular detailed evaluations of all nuclear power plants in North America. The INPO index is an 18-month rolling average of a nuclear plant’s, and a company’s nuclear fleet’s, performance against operating performance measures. (4) “OSHA” is the United States Occupational Safety and Health Administration. An OSHA recordable injury is an occupational injury or illness that requires medical treatment more than simple first aid and must be reported under OSHA regulations. (5) “FERC” is the Federal Energy Regulatory Commission and “NERC” is the North American Electric Reliability Corporation. The determination of a violation is based on the year in which the penalty is paid, rather than the year in which the violation occurred. Settlement occurred in 2023. No violations in 2023. EFOR is the “equivalent forced outage rate” and is computed as the hours of unit failure (unplanned outage hours and equivalent unplanned de-rated hours) given as a percentage of the total hours of the availability of an electricity generating unit.
2023 annual performance-based compensation
| | Operational Performance Metrics | Description/Rationale | FPL Metric | NEER Metric | | Customer Value | Operations & maintenance costs (plan-adjusted) | Operations and maintenance costs play a crucial role in ensuring the efficient, reliable, and safe operation of our infrastructure while minimizing costs, ensuring customer satisfaction, and meeting regulatory requirements. Our best-in-class operations and maintenance costs ensure lower bills for our customers. | x | - | | | Capital expenditures (plan-adjusted) | By making strategic capital expenditures, we can deliver sustainable, reliable, efficient service while reducing long-term costs, staying competitive, and meeting regulatory requirements | x | - | | Reliability/ Operational | Fossil generation availability(2) | High availability rates evidence efficient operations, good management, and effective maintenance practices. We set our goal as exceeding the top decile of performance within the 2022 NERC survey; we do not disclose the specific goal as we are unable to share the underlying data as it was acquired through a purchased survey subject to confidentiality and proprietary restrictions. | x | - | | | Nuclear industry composite performance index(3) | The “nuclear industry composite performance index” referenced is the Institute of Nuclear Power Operations, or INPO, index. INPO promotes the highest levels of safety and reliability in the operation of commercial nuclear power plants by establishing performance objectives, criteria and guidelines for the nuclear power industry and conducting regular detailed evaluations of all nuclear power plants in North America. The INPO index is an 18-month rolling average of a nuclear plant’s, and a company’s nuclear fleet’s, performance against operating performance measures. We do not disclose the specific goal as we are unable to share the underlying data as it was acquired through purchased survey subject to confidentiality and proprietary restrictions. | x | x | | | Service reliability — service unavailability (minutes) | The amount of downtime where power or other utility service was not provided due to outages or interruptions. We strive to minimize the number of minutes of service unavailability, as high availability rates are critical for customer satisfaction, operational efficiency and regulatory compliance. Our aggressive goal was set as exceeding the top decile performance level, as established by the 2022 Edison Electric Institute (EEI) survey results. | x | - | | | Service reliability — average frequency of customer interruptions | Represents how often, on average, a customer experiences an interruption in service during the year. By including this metric, we incentivize management to understand and track the causes of these interruptions, as well as develop strategies to minimize their occurrence, thus improving overall service reliability and customer satisfaction. Our aggressive goal was set as exceeding the top decile performance level, as established by the 2022 Edison Electric Institute (EEI) survey results. | x | - | | | Service reliability — average number of momentary interruptions per customer | The average number of momentary interruptions (brief outages of a few seconds to a few minutes) per customer is another measure of service reliability. | x | - |
2023 annual performance-based compensation
| | Operational Performance Metrics | Description/Rationale | FPL Metric | NEER Metric | | Reliability/ Operational | Employee safety — OSHA recordables per 200,000 hours(4) | OSHA recordables per 200,000 hours is a standardized safety evaluation metric where a lower rate indicates fewer recordable incidents in the workplace, and as a result, a safer work environment. Safety is a leading indicator of our overall operational processes, and this metric is a key performance indicator of our safety practices. Good safety practices can contribute to better operational efficiency and resource utilization. Our aggressive goal was set as exceeding the top decile performance level, as established by the 2022 Edison Electric Institute (EEI) survey results. | x | x | | | Significant environmental violations | We focus on eliminating significant environmental violations by setting the annual goal at zero such incidents — this demonstrates our commitment to sustainability, minimizing risks and preventing potential fines. | x | x | | | Customer satisfaction — residential value surveys | Including these metrics in executive compensation allows for a clear assessment of individual and overall organizational performance in meeting customer needs and expectations. Residential customer satisfaction is important to us, as reliable and affordable electricity is paramount for the overall well-being of our residential customers. | x | - | | | Customer satisfaction — business value surveys | Including business customer satisfaction as a metric in our compensation program encourages a culture of continuous improvement and innovation, which is important for us to support and contribute to the success and competitiveness of Florida’s business community. | x | - | | | Performance under FERC and NERC reliability standards(5) | We devote significant attention to consistently meeting these regulations which ensure grid reliability and well-functioning power markets. | x | - | | | Equivalent forced outage rate (EFOR)(6) | EFOR is an important metric for the Company as it helps in evaluating the reliability and availability of power generation assets. | - | x | | Financial | Earnings (plan-adjusted, in MM)(1) | Strong earnings are essential for NEER as they reflect financial performance, contribute to investor confidence, support dividend payments, provide resources for growth and investment and facilitate debt servicing. Strong and sustainable earnings are critical for the success and long-term growth of the Company. | - | x | | | Return on equity | ROE measures our ability to generate profits from shareholders’ equity, making it a good measure of how efficiently management is using equity to generate profits and grow the company. High and sustainable ROE indicates effective long-term strategic planning and execution. | - | x | | | Meet budgeted cost goals (MM) | Meeting cost goals is essential as it drives profitability, enhances competitiveness, improves ROI, strengthens the customer value proposition, mitigates financial risks, drives operational efficiency, and supports sustainability efforts. It is a critical aspect of NEER’s overall business strategy and long-term success in the renewable energy sector. | - | x | | | NEP CAFD | Cash Available for Distribution, or CAFD, represents the amount of cash available for distribution to unitholders after deducting operating expenses, debt service, maintenance capital expenditures, and other expenses related to the operation and maintenance of renewable energy assets. This metric provides insight into the financial performance and cash flow generation of renewable energy projects or portfolios. | - | x |
2023 annual performance-based compensation
| | Operational Performance Metrics | Description/Rationale | FPL Metric | NEER Metric | | Growth | Execute approved North American new and repowered wind projects on schedule and on budget | Executing on the construction and fulfillment of previously approved wind projects supports growth, including EPS growth. | - | x | | | Execute approved North American solar and storage projects on schedule and on budget | Executing on the construction and fulfillment of previously approved solar projects supports growth, including EPS growth. | - | x | | | New development or acquisition opportunities within NEER that receive approval | Growth of project backlogs gives visibility to future growth projects through focused capital investment for new, on-strategy growth opportunities. | - | x | | | PMI Growth: Pre-tax income contribution from all asset optimization, proprietary trading, origination, gas marketing and trading, full requirements net of G&A and Gexa | NextEra Energy Marketing is responsible for electricity and fuel management for all of NextEra Energy Resources' generation fleet, which includes the largest renewable energy portfolio in North America. As our portfolio of generation assets grows, optimizing our existing generation fleet will become a larger opportunity set, which enables us to lead the decarbonization of the U.S. economy. | - | x |
2023 annual performance-based compensation
After the end of 2023, the Executive Compensation Review Board (“review board”), whose members were Messrs. Ketchum, Crews and Pimentel, Mrs. Kujawa, Mrs. Daggs and Ms. Caplan, assessed: (1) whether the operational performance goals had been achieved, exceeded or missed and, to the extent exceeded or missed, by what margin such goals had been exceeded or missed (as set forth in the tables above); (2) the degree of difficulty of achieving each goal; and (3) the Company’s performance with respect to each goal as compared to the pre-established payout scale based on top-decile, top-quartile, median and sub-median performance on the same measure (industry-based, where benchmark data was available) and arrived at an aggregate determination for the Company’s 2023 performance as compared to the goals. This assessment determined the Company had achieved superior performance in 2023. The determination of the review board was then presented to the Compensation Committee, which had ultimate authority to accept or modify all or any part of the determination. For 2023, the Compensation Committee reviewed and discussed the review board’s recommendations and the conclusions on which they were based and determined to accept those recommendations. 2023 annual incentive awards for the NEOs Each NEO’s 2023 annual incentive payout was determined based on a rating (“NextEra Energy performance rating”) derived by combining the Company’s financial performance as measured by the financial performance matrix (weighted 50%) and the Company’s operational performance as compared to the operational performance goals (weighted 50%). The NextEra Energy performance rating for 2023 was 1.84.
2023 annual performance-based compensation
| | | | | FINANCIAL PERFORMANCE (50%) | OPERATIONAL PERFORMANCE (50%) | OVERALL PERFORMANCE RATING | | 2023 Adjusted EPS Growth: 9.3% | | | | 2023 Adjusted ROE: 15.0% | | | | 2.00 | 1.68 | 1.84 |
2023 annual performance-based compensation
The NextEra Energy performance rating may be adjusted for each NEO by the Compensation Committee based on individual performance under circumstances in which the Compensation Committee determines that the formulaic calculation of the performance rating without adjustment would otherwise result in the payment of an inappropriate incentive. The Compensation Committee generally uses this aspect of the executive compensation program on a conservative basis, as it believes the formula for calculating the NextEra Energy performance rating ordinarily should result in appropriate incentive payments. The individual performance adjustment, when used, historically has most often ranged between ±10%. No individual performance factors were used to modify the 2023 annual incentive award payouts for any of the NEOs. The following illustrates the determination of the 2023 annual incentive for each NEO: In years where the Company’s performance is above the performance of its peers on industry benchmarks, the Company expects annual incentive awards will be paid to the NEOs above target. This was the case in 2023, and the NEOs’ annual incentive awards were as follows:
2023 annual performance-based compensation
| NAMED EXECUTIVE OFFICER | 2023 Annual Incentive Target (as a % of Base Salary | 2023 TARGET ANNUAL INCENTIVE ($) | 2023 ANNUAL INCENTIVE AWARD ($) | | John W. Ketchum | 160% | 2,520,000 | 4,636,800 | | Terrell Kirk Crews II | 70% | 511,200 | 940,600 | | Rebecca J. Kujawa | 100% | 1,100,000 | 2,024,000 | | Armando Pimentel, Jr.(1) | 100% | 1,000,000 | 1,840,000 | | Charles E. Sieving | 70% | 892,000 | 1,641,300 |
2023 annual performance-based compensation
(1) Mr. Pimentel was rehired on January 25, 2023. His 2023 annual incentive was not prorated as part of the overall compensation package as an inducement for him to accept the position.
2023 long-term performance-based equity compensation
2023 long-term performance-based equity compensation EQUITY COMPENSATION MIX
2023 long-term performance-based equity compensation
| WHAT WE GRANTED | WHY WE GRANTED IT | | Performance shares | » Directly focus NEOs on the multi-year sustained achievement of challenging TSR, financial and operational goals, because the number of shares ultimately earned depends upon the Company’s and the NEO’s performance over a three-year performance period | | Performance-based restricted stock | » Includes a performance goal » Affected by all stock price changes, so value to NEOs affected by both increases and decreases in the Company’s stock price » Require two-year post-vest hold | | Performance-based restricted NEP common units | » Includes a performance goal » Affected by all common unit price changes, so value to NEOs affected by both increases and decreases in NEP’s common unit price » Require two-year post-vest hold | | Stock options | » Reward the NEOs only if the Company’s stock price increases and remains above the stock price on the date of grant |
2023 long-term performance-based equity compensation
In determining the appropriate mix of equity compensation components, the Compensation Committee primarily considers the following factors:
2023 long-term performance-based equity compensation
| | | | | | » the mix of these components at competitor and peer companies and emerging market trends | » the retention value of each element and other values important to the Company, including, for example, the tax and accounting consequences of each type of award | » the advice of the Compensation Consultant | » the perceived value to the NEO of each element |
2023 long-term performance-based equity compensation
The Compensation Committee continued its practice of granting NEOs equity-based compensation, the majority of which is composed of performance share awards. This practice aligns with feedback from our shareholders, who have indicated during our shareholder outreach they favor the longer-term features of performance shares. The target award level for each equity-based element was expressed as a percentage of each NEO’s target total direct compensation opportunity. The target dollar value for each component was converted to a number of shares of equivalent value (estimated present value for stock options and performance shares). 2023 MIX OF EQUITY COMPENSATION AWARDS FOR THE NEOS In 2023, the Compensation Committee granted the following mix of equity-based compensation to the NEOs:
2023 long-term performance-based equity compensation
| | MIX OF EQUITY COMPENSATION AWARDS(1) | | | | | NAMED EXECUTIVE OFFICER | PERFORMANCE SHARES | OPTIONS | PERFORMANCE-BASED RESTRICTED STOCK | PERFORMANCE-BASED RESTRICTED NEP COMMON UNITS | | John W. Ketchum | 65% | 25% | 3% | 7% | | Terrell Kirk Crews II | 60% | 20% | 13% | 7% | | Rebecca J. Kujawa | 60% | 20% | 13% | 7% | | Armando Pimentel, Jr. | 60% | 20% | 20% | — | | Charles E. Sieving | 60% | 20% | 13% | 7% |
2023 long-term performance-based equity compensation
(1) Calculation of percentage mix based on the target value of each grant as a percentage of each NEO’s total equity-based compensation. PERFORMANCE SHARE AWARDS GRANTED IN 2023 FOR THE PERFORMANCE PERIOD ENDING DECEMBER 31, 2025 The performance share awards granted in 2023 have a performance period beginning January 1, 2023 and ending December 31, 2025. The Compensation Committee continued to use the performance measures adopted in 2018 to ensure alignment in award design with TSR plan design trends and enable strong pay for performance alignment. The 2023 performance share awards have 3-year adjusted ROE and adjusted EPS growth and operational measures as performance measures. Consistent with prior years, the awards also have an individual performance factor ranging from ±20%, to enable the Compensation Committee to adjust payouts based on their assessment of the NEO’s individual performance. The goals used for the performance share awards are different both in terms of the objectives and time-frames from the goals used under the Company’s Annual Incentive Plan. The measures and their relative weights are set forth below:
2023 long-term performance-based equity compensation
| PERFORMANCE MEASURE | | WEIGHT | TARGET | | | Financial measures: | | | | 3-year TSR relative to top ten power companies by market capitalization, which is a subset of the S&P 500 Utilities Index | | ±20% modifier to award payout | Midpoint of the TSR at the 75th and 25th percentiles | | 3-year adjusted ROE and adjusted EPS growth determined using the financial matrix below: | | | ROE: 8.6% | | | | | EPS: 4.0% | | | Operational measures: 5% each | Target Performance | | | 3-year average employee safety — OSHA recordables/200,000 hours | | | 0.97 | | Nuclear industry composite performance index (combined for FPL and NextEra Energy Resources nuclear facilities) | | | 93.8 | | 3-year average equivalent forced outage rate (fossil and renewable generation) | | | 6.5% | | FPL 3-year average service reliability — service unavailability (minutes) | | | 114.0 |
2023 long-term performance-based equity compensation
During the performance period, performance shares are not issued. The NEO may not sell or transfer the NEO’s contingent right to receive performance shares and dividends are not paid. PAYOUT OF PERFORMANCE SHARE AWARDS GRANTED IN 2021 FOR THE PERFORMANCE PERIOD ENDED DECEMBER 31, 2023 Each NEO, other than Mr. Pimentel who was not employed at the time of the 2021 grant, was granted a target number of performance shares in 2021 for a three-year performance period beginning January 1, 2021 and ending on December 31, 2023. The Compensation Committee views the payout of this grant after the end of the performance period as part of each NEO’s 2021 compensation, while the performance shares granted in 2023 for the performance period ending on December 31, 2025 are considered to be part of each NEO’s 2023 compensation, even though the shares will not be issued, if at all, until February 2026. In February 2024, payouts were made under the 2021-2023 performance share grants. The 2021-2023 performance grants were based on a financial performance matrix of adjusted EPS growth and adjusted ROE (weighted 80%), operational measures (weighted 20%), and TSR relative to the top ten power companies by market capitalization (+/- 20% modifier). The awards also have an individual performance factor ranging from ±20%, to enable the Compensation Committee to adjust payouts based on their assessment of the NEO’s individual performance. For the performance period from January 1, 2021 through the end of 2023, NextEra Energy’s relative TSR was -13.25% and ranked eighth among the top ten power companies by market capitalization, resulting in a relative TSR modifier of -20%. The TSR calculation requires a 20-trading day average to determine the beginning average and ending average price for the common stock of NextEra Energy and each member of the peer group.
2023 long-term performance-based equity compensation
| | Relative TSR Percentile Ranking for 3-Year Performance Period | TSR Results for Three Year Performance Period | Modifier Result | | NextEra Energy | | -13.25% | 0.80 | | Top Ten Power Companies by Market Capitalization (a subset of the S&P 500 Utilities Index) | 75th Percentile | 27.37% | 120% | | | Midpoint | 13.99% | Interpolated | | | 25th Percentile | -13.25% | 80% |
2023 long-term performance-based equity compensation
Based on our performance during the performance period, the 2021 performance share award received an overall rating of 1.60, determined as shown below, other than for Mr. Crews.
2023 long-term performance-based equity compensation
| PERFORMANCE MEASURE(1) | WEIGHT | RESULT | PAYOUT AS A % OF TARGET | | Adjusted EPS growth and adjusted ROE | 80% | 2.00 | 200% | | Operational measures | 20% | 1.98 | 198% | | Overall rating | | 2.00 | 200% | | Relative TSR modifier | ±20% | 0.80 | 80% | | Overall rating (after applying relative TSR modifier and individual performance factors)(1) | | 1.60 | 160% |
2023 long-term performance-based equity compensation
(1) Each NEO’s individual performance factor ranges from ±20% and can only modify the overall rating prior to applying the TSR modifier. After applying each NEO’s individual performance factor, which had no impact on the overall rating, the NEOs, except for Mr. Crews, received an overall rating of 1.60. Applying the overall rating results to the target performance shares resulted in the following performance share award payouts for each of the NEOs:
2023 long-term performance-based equity compensation
| NAMED EXECUTIVE OFFICER | TARGET PERFORMANCE SHARES FOR PERFORMANCE PERIOD 1/1/21-12/31/23 | PAYOUT FACTOR | PERFORMANCE SHARES EARNED | | John W. Ketchum | 37,433 | 1.60 | 59,892 | | Terrell Kirk Crews II(1) | 1,150 | 1.91 | 2,196 | | Rebecca J. Kujawa | 22,920 | 1.60 | 36,672 | | Armando Pimentel, Jr.(2) | — | — | — | | Charles E. Sieving | 16,478 | 1.60 | 26,364 |
2023 long-term performance-based equity compensation
(1) Mr. Crews’ 2021 performance share award payout was determined by multiplying his target number of shares by his three-year average performance rating determined under the Annual Incentive Plan for each of 2021, 2022 and 2023; this is because he was not a senior officer at the time of the 2021 grant and therefore not included in the awards that included TSR as a metric. (2) Mr. Pimentel did not receive a 2021 performance share award as he was not employed by the Company at that time. PERFORMANCE-BASED RESTRICTED STOCK GRANTED IN 2023 The performance objective for performance-based restricted stock is adjusted earnings of $2.5 billion. The shares of performance-based restricted stock granted in 2023 will not vest unless and until the Compensation Committee certifies that NextEra Energy’s adjusted earnings for each of 2023, 2024 and 2025, respectively, equal or exceed $2.5 billion. Because the Compensation Committee intends for the grant date present value of performance-based restricted stock awards to equal the fair market value of an equivalent number of shares of the Company’s common stock absent the performance and vesting conditions, dividends are paid on performance-based restricted stock awards as dividends are paid on the common stock. However, any dividends paid on performance-based restricted stock awards that do not vest must be repaid within 30 days following forfeiture of the award. To ensure alignment between our senior executives and our shareholders, grants of performance-based restricted stock require a two-year post-vest hold. PERFORMANCE-BASED RESTRICTED NEP COMMON UNITS GRANTED IN 2023 In February 2023, NEOs who are also officers of NEP were granted NEP performance-based restricted common units (“NEP Awards”). The Compensation Committee believes the proposed NEP Awards further align the incentive compensation of these NEOs to activities that promote the growth of long-term value for our shareholders. After considering this and other factors, the Board of Directors of NEP (the “NEP Board”) in February 2023 approved grants of NEP Awards to those Company NEOs who also are officers of NEP, as well as to other officers and employees of the Company or its affiliates who are responsible for significant NEP activities. The NEP Awards received by the NEOs did not increase the NEOs’ overall incentive compensation opportunity, but instead replaced on a dollar-for-dollar basis approximately 7% of the aggregate grant date value of the portion of their long-term performance-based awards in 2023 that otherwise would have been issued in the form of performance-based restricted stock of the Company. The performance objective for the NEP Awards is adjusted EBITDA of $400 million. Adjusted EBITDA is NEP’s consolidated net income, as reported in its audited financial statements as determined in accordance with GAAP, plus interest expense, income tax expense, depreciation and amortization less certain non-cash, non-recurring items. Therefore, the NEP Awards granted in 2023 will not vest unless and until the NEP Board certifies that NEP’s adjusted EBITDA for 2023, 2024 and 2025, respectively, equals or exceeds $400 million (this was increased to $900 million for awards granted in 2024). The NEP Awards were made pursuant to the NextEra Energy Partners, LP 2014 Long Term Incentive Plan (“NEP 2014 LTIP”). NEP will be reimbursed by the Company for the grant date fair value of all NEP Awards granted to employees and officers of the Company or its affiliates. To ensure alignment between our senior executives and our shareholders, grants of performance-based restricted units require a two-year post-vest hold. NONQUALIFIED STOCK OPTION AWARDS IN 2023 The Compensation Committee grants nonqualified stock options, rather than incentive stock options, primarily because the tax treatment of nonqualified stock options is more favorable to the Company than the treatment of incentive stock options. The stock options vest and become exercisable in three substantially equal annual installments. The 2021 LTIP prohibits repricing of awarded options without shareholder approval. EQUITY GRANT PRACTICES Equity awards are granted by the Compensation Committee to the NEOs each year in mid-February, which is a date that is normally set two years in advance. The Compensation Committee believes granting equity in this way is appropriate because the Company typically releases year-end earnings in late January, so all relevant information should be available to the market on the grant date. Equity awards may also be made to new executive officers upon hire or promotion, generally coincident with the date of hire or promotion or the Compensation Committee meeting next following the date of hire or promotion. The Compensation Committee does not seek to time equity grants to take advantage of information, either positive or negative, about the Company which has not been publicly disseminated. The exercise price of options granted is equal to the closing market price of NextEra Energy’s common stock on the effective date of grant.
Clawback provisions
Clawback provisions The Company has an incentive compensation recoupment, or “clawback,” policy which provides for recoupment of Incentive Compensation from current and former executive officers in the event of a Triggering Event (the “Clawback Policy”). Capitalized terms used but not defined herein shall have the same respective meanings given to them in the Clawback Policy. “Incentive Compensation” means any compensation, including but not limited to annual cash incentives under the Executive Annual Incentive Plan (or any successors thereto), and long-term equity incentives under the Amended and Restated 2011 Long Term Incentive Plan and the 2021 Long Term Incentive Plan, that was granted, earned or vested based in whole or in part upon the attainment of one or more Financial Reporting Measures; provided however, for the avoidance of doubt, “Incentive Compensation” does not include any long-term incentives under the NextEra Energy Partners, LP 2014 Long Term Incentive Plan or under any other incentive plan of NextEra Energy Partners, LP in effect from time to time. “Triggering Event” means a decision by the Audit Committee of the Board that an accounting restatement Company’s previously published financial statements is required due to material non-compliance by the Company with any financial reporting requirement under the federal securities laws, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period or, if earlier, the date such a decision should have been made. If a Triggering Event occurs, the Company shall (to the extent permitted by applicable law) promptly recoup any Incentive Compensation received during the Recoupment Period by any individual who served as an Executive Officer at any time during the performance period applicable to such Incentive Compensation that was in excess of that which such Executive Officer would have received after giving effect, as applicable, to the accounting restatement associated with the Triggering Event. The incentive compensation to be recouped will be in an amount and form determined in the judgment of the Board following recommendation by the Compensation Committee (which recommendation shall not be binding), in accordance with the applicable listing standards or policies of the national stock exchange upon which the Company’s shares are listed. The Company shall not be permitted to insure or indemnify any Executive Officer against (i) the loss of any Incentive Compensation that is recouped in accordance with the Clawback Policy, or (ii) any claims relating to the Company’s enforcement of its rights under the Clawback Policy.
Severance Plan
Severance Plan The NextEra Energy, Inc. Executive Severance Benefit Plan (the “Severance Plan”) provides for the payment of severance benefits to the NEOs and to certain other senior executives if their employment with the Company is involuntarily terminated in specified circumstances. The purpose of the Severance Plan is to retain the covered senior executives and encourage dedication to their duties by ensuring the equitable treatment of those who may experience an involuntary termination, as defined in the Severance Plan. The Severance Plan provides severance benefits following involuntary termination in exchange for entry by the executive into a release of claims against the Company and an agreement to adhere to certain non-competition and related covenants protective of the Company and its affiliates. Following a covered involuntary termination and the execution of the release and other agreement, the executive would receive a cash payment equal to two times the executive’s annual base salary plus two times the executive’s target annual incentive compensation for the year of termination, payable in two equal annual installments. In addition, the executive’s outstanding equity and equity-based awards would vest pro rata, and become payable at the end of any applicable performance periods, subject to the attainment by the Company of the specified performance objectives. The executive also would receive certain ancillary benefits, including outplacement assistance or payment in an amount equal to the value of the outplacement assistance. Amounts payable under the Severance Plan are subject to a cap specified in the Severance Plan. The Company may amend or terminate the Severance Plan, in full or in part, at any time, but if an amendment or termination would affect the rights of an executive, the executive must agree in writing to the amendment or termination. The Severance Plan does not provide for the payment of severance benefits upon terminations governed by the terms of the executive retention employment agreement (“Retention Agreement”) described below.
Change in control
Change in control Each of the NEOs is a party to a Retention Agreement with the Company. The Compensation Committee has concluded the Retention Agreements are desirable in order to align NEO and shareholder interests under some unusual conditions, as well as useful and, in some cases, necessary to attract and retain senior executive talent. In connection with a change in control of the Company, it can be important to secure the dedicated attention of executive officers whose personal positions are at risk and who have other opportunities readily available to them. By establishing compensation and benefits payable under various merger and acquisition scenarios, change in control agreements enable the NEOs to set aside personal financial and career objectives and focus on maximizing shareholder value. These agreements also help the officer to maintain an objective and neutral perspective in analyzing opportunities that may arise. Furthermore, they ensure continuity of the leadership team at a time when business continuity is of paramount concern. Without the Retention Agreements, the Company would have a greater risk of losing key executives in times of uncertainty. Retention Agreements entered into since 2009 do not include excise tax gross-ups. Retention Agreements entered into since 2021 require double-trigger equity vesting upon a change of control; i.e., there must be both a change of control and qualifying termination for accelerated vesting to occur. The material terms of the Retention Agreements are described under Potential Payments Upon Termination or Change in Control beginning on page 80.
Retirement programs
Retirement programs EMPLOYEE PENSION PLAN AND 401(K) PLAN NextEra Energy maintains two retirement plans which qualify for favorable tax treatment under the Internal Revenue Code (“Code”): a non-contributory defined benefit pension plan and a defined contribution 401(k) plan. These plans are available to substantially all NextEra Energy employees. Each of the NEOs participates in both plans. The pension plan is more fully described following Table 5: Pension Benefits. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (“SERP”) Current tax laws place various limits on the benefits payable under tax-qualified retirement plans, such as NextEra Energy’s defined benefit pension plan and 401(k) plan, including a limit on the amount of annual compensation that can be taken into account when applying the plans’ benefit formulas. Therefore, the retirement incomes provided to the NEOs by the qualified plans generally constitute a smaller percentage of final pay than is typically the case for other Company employees. In order to make up for this and maintain the market-competitiveness of NextEra Energy’s executive retirement benefits, NextEra Energy maintains an unfunded, nonqualified SERP for its executive officers, including the NEOs. For the NEOs, compensation included under the SERP is annual base salary plus the actual annual cash incentive award, as opposed to the compensation included under the qualified plans, which is annual base salary only. NextEra Energy believes it is appropriate to include annual cash incentive awards for purposes of determining retirement plan benefits (both defined benefit pension and 401(k)) for the NEOs in order to ensure the NEOs can replace in retirement a proportion of total compensation similar to that replaced by other employees participating in the Company’s defined benefit pension and 401(k) plans, bearing in mind that base salary alone constitutes a relatively smaller percentage of a NEO’s total compensation. For additional information about the defined benefit plan benefit formulas under the SERP, see Table 5: Pension Benefits and accompanying descriptions. DEFERRED COMPENSATION PLAN NextEra Energy sponsors a nonqualified, unfunded Deferred Compensation Plan, which allows eligible highly compensated employees, including the NEOs, voluntarily and at their own risk, to elect to defer certain forms of compensation prior to the compensation being earned and vested. NextEra Energy makes this opportunity available to its highly compensated employees as a financial planning tool and an additional method to save for retirement. Deferrals by executive officers generally result in the Company deferring its obligation to make cash payments or issue shares of its common stock to those executive officers. The Compensation Committee does not view the Deferred Compensation Plan as providing executives with additional compensation. Participants in the Deferred Compensation Plan are general creditors of the Company and the deferral of the payment obligation provides a financial advantage to the Company. For additional information about the Deferred Compensation Plan, see Table 6: Nonqualified Deferred Compensation and accompanying descriptions.
TABLE 1A: 2023 SUMMARY COMPENSATION TABLE
| (A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | (I) | (J) | | NAME AND PRINCIPAL POSITION (1) | YEAR | SALARY (3) ($) | BONUS ($) | STOCK AWARDS (4)(5)(6) ($) | OPTION AWARDS (4) ($) | NON-EQUITY INCENTIVE PLAN COMPENSATION (7) ($) | CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS (8)(9) ($) | ALL OTHER COMPENSATION (8)(10) ($) | TOTAL ($) | | John W. Ketchum(2), Chairman, President and CEO of NextEra Energy and Chairman of FPL | 2023 | 1,575,000 | 0 | 10,568,909 | 2,599,993 | 4,636,800 | 811,026 | 399,396 | 20,591,124 | | | 2022 | 1,483,333 | 0 | 8,436,431 | 2,187,500 | 4,500,000 | 475,209 | 331,856 | 17,414,329 | | | 2021 | 1,400,000 | 0 | 10,517,014 | 983,999 | 1,960,000 | 421,019 | 225,121 | 15,507,153 | | Terrell Kirk Crews II, Executive Vice President, Finance and Chief Financial Officer of NextEra Energy and FPL | 2023 | 730,300 | 0 | 2,048,115 | 391,691 | 940,600 | 204,299 | 103,552 | 4,418,556 | | | 2022 | 630,400 | 0 | 1,317,395 | 264,094 | 889,000 | 103,644 | 91,662 | 3,296,195 | | Rebecca J. Kujawa, President and Chief Executive Officer of NextEra Energy Resources | 2023 | 1,100,000 | 0 | 7,111,077 | 1,359,993 | 2,024,000 | 407,530 | 173,876 | 12,176,476 | | | 2022 | 979,167 | 0 | 5,487,265 | 1,099,995 | 2,000,000 | 288,824 | 146,585 | 10,001,836 | | | 2021 | 875,000 | 0 | 8,378,012 | 602,492 | 1,225,000 | 250,351 | 113,323 | 11,444,178 | | Armando Pimentel, Jr., President and Chief Executive Officer of FPL | 2023 | 896,154 | 0 | 6,274,511 | 1,199,997 | 1,840,000 | 117,429 | 235,316 | 10,563,407 | | Charles E. Sieving, Executive Vice President, Chief Legal, Environmental and Federal Regulatory Affairs Officer of NextEra Energy and Executive Vice President of FPL | 2023 | 1,274,300 | 0 | 2,665,736 | 509,894 | 1,641,300 | 423,332 | 207,615 | 6,772,178 | | | 2022 | 1,190,900 | 0 | 2,376,928 | 476,495 | 1,429,080 | 380,269 | 174,889 | 6,028,560 | | | 2021 | 1,082,600 | 0 | 7,428,609 | 433,198 | 1,299,100 | 357,356 | 161,282 | 10,762,145 |
Table 2: 2023 grants of plan-based awards
Table 2: 2023 grants of plan-based awards The following table provides information about the cash and equity incentive compensation awarded to the NEOs in 2023. It is important to keep in mind the following when reviewing the table: » Columns (C), (D) and (E) below set forth the range of possible payouts established under the Annual Incentive Plan for 2023 and are not amounts actually paid to the NEOs. The actual amounts paid with respect to 2023 under the Annual Incentive Plan, which is a Non-Equity Incentive Plan, as that term is used in the heading for columns (C), (D) and (E) of this table, are set forth in Table 1a: 2023 Summary Compensation Table in column (G), entitled “Non-Equity Incentive Plan Compensation.” » The number of shares listed under “Estimated Future Payouts Under Equity Incentive Plan Awards” (columns (G) and (H)) represent 2023 grants of performance shares, performance-based restricted stock and performance-based restricted NEP common units, the material terms of which are described below this table. » The number of shares listed under “All Other Option Awards: Number of Securities Underlying Options” (column (J)) and the exercise price set forth under “Exercise or Base Price of Option Awards” (column (K)) represent the number and exercise price of 2023 grants of non-qualified stock options, the material terms of which are described below this table. In the column headed “Grant Date Fair Value of Stock and Option Awards” (column (L)), the top number is the grant date fair value of the performance share award, the next number is the grant date fair value of the performance-based restricted stock award, the third number is the grant date fair value of the stock options granted and the fourth number is the grant date fair value of NEP performance-based restricted common units, as applicable.
TABLE 2: 2023 GRANTS OF PLAN-BASED AWARDS
TABLE 2: 2023 GRANTS OF PLAN-BASED AWARDS
TABLE 2: 2023 GRANTS OF PLAN-BASED AWARDS
| (A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | (I) | (J) | (K) | (L) | | NAME | GRANT DATE | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | | | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS (#) | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS(3) (#) | EXERCISE OR BASE PRICE OF OPTION AWARDS ($/SH) | Grant Date Fair Value of Stock and Option Awards(4) ($) | | | | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | | | | | | John W. Ketchum | — | 0 | 2,520,000 | 5,040,000 | — | — | — | — | — | — | — | | | 2/16/2023 | | | | 0 | 96,654 | 193,308 | | | | 9,528,925 | | | 2/16/2023 | | | | 0 | 4,122 | 4,122 | | | | 311,994 | | | 2/16/2023 | | | | | | | | 172,757 | 75.69 | 2,599,993 | | | 2/22/2023 | | | | 0 | 10,546 | 10,546 | | | | 727,990 | | Terrell Kirk Crews II | — | 0 | 511,200 | 1,022,400 | — | — | — | — | — | — | — | | | 2/16/2023 | | | | 0 | 16,802 | 33,604 | | | | 1,656,476 | | | 2/16/2023 | | | | 0 | 3,363 | 3,363 | | | | 254,545 | | | 2/16/2023 | | | | | | | | 26,026 | 75.69 | 391,691 | | | 2/22/2023 | | | | 0 | 1,986 | 1,986 | | | | 137,094 | | Rebecca J. Kujawa | — | 0 | 1,100,000 | 2,200,000 | — | — | — | — | — | — | — | | | 2/16/2023 | | | | 0 | 58,335 | 116,670 | | | | 5,751,131 | | | 2/16/2023 | | | | 0 | 11,679 | 11,679 | | | | 883,984 | | | 2/16/2023 | | | | | | | | 90,365 | 75.69 | 1,359,993 | | | 2/22/2023 | | | | 0 | 6,895 | 6,895 | | | | 475,962 | | Armando Pimentel, Jr. | — | 0 | 1,000,000 | 2,000,000 | — | — | — | — | — | — | — | | | 2/16/2023 | | | | 0 | 51,472 | 102,944 | | | | 5,074,522 | | | 2/16/2023 | | | | 0 | 15,854 | 15,854 | | | | 1,199,989 | | | 2/16/2023 | | | | | | | | 79,734 | 75.69 | 1,199,997 | | Charles E. Sieving | — | 0 | 892,000 | 1,784,000 | — | — | — | — | — | — | — | | | 2/16/2023 | | | | 0 | 21,868 | 43,736 | | | | 2,155,922 | | | 2/16/2023 | | | | 0 | 4,378 | 4,378 | | | | 331,371 | | | 2/16/2023 | | | | | | | | 33,880 | 75.69 | 509,894 | | | 2/22/2023 | | | | | 2,585 | 2,585 | | | | 178,443 |
TABLE 2: 2023 GRANTS OF PLAN-BASED AWARDS
(1) Non-Equity Incentive Plan awards are paid under the Annual Incentive Plan, the material terms of which are described in Compensation Discussion & Analysis. For 2023, amounts payable were paid in cash in February 2024. See column (G) of Table 1a: 2023 Summary Compensation Table for actual amounts paid with respect to 2023 under the Annual Incentive Plan. No discretionary bonuses were paid to NEOs in 2023. (2) In 2023, each NEO was granted awards of performance shares and performance-based restricted stock under the 2021 LTIP and, for Mrs. Kujawa and Messrs. Ketchum, Crews and Sieving, performance-based restricted NEP common units under the NEP 2014 LTIP. Performance shares were granted in 2023 for a three-year performance period ending December 31, 2025. The number of shares which will ultimately be paid to each NEO at the end of the performance period will be determined by multiplying the NEO’s target number of performance shares by a percentage determined by the Compensation Committee based on the Company’s performance over the three-year performance period (as more fully described in Compensation Discussion & Analysis), which may not exceed 200% of the target award. See footnotes (4) through (10) to Table 3: 2023 Outstanding Equity Awards at Fiscal Year End for further information about the vesting of performance-based restricted stock and performance-based restricted NEP common units. (3) Non-qualified stock options were granted under the 2021 LTIP in 2023. The stock options generally vest and become exercisable at the rate of one-third per year beginning approximately one year from date of grant and are fully exercisable after three years. See footnote (1) to Table 3: 2023 Outstanding Equity Awards at Fiscal Year End for further information about the vesting of stock options. All stock options were granted at an exercise price of 100% of the closing price of NextEra Energy common stock on the date of grant. The amounts shown are the value of the equity-based compensation grants as of the 2023 grant date under applicable accounting rules.
Additional disclosure related to 2023 summary compensation table and 2023 grants of plan-based awards table
Additional disclosure related to 2023 summary compensation table and 2023 grants of plan-based awards table MATERIAL TERMS OF PERFORMANCE SHARES GRANTED TO NEOS IN 2023 » three-year performance period; » paid in shares of NextEra Energy common stock, based primarily on Company performance for the three-year performance period as compared to specified financial and operational objectives with a ±20% relative TSR modifier based on performance of the top ten power companies by market capitalization at the end of a three-year period, capped at 200% of target; » dividends are not paid or accrued during the performance period; » may vest in full or in part upon the occurrence of certain events, such as a change in control, death, disability or some retirements; » forfeited if employment terminates prior to the end of the performance period in all other instances (subject to the terms of Retention Agreements and the Severance Plan); and » award agreement includes non-solicitation and non-competition provisions. MATERIAL TERMS OF PERFORMANCE-BASED RESTRICTED STOCK GRANTED TO NEOS IN 2023 » if corporate performance objective of adjusted earnings of $2.5 billion is met as of the end of the preceding year, performance-based restricted stock vests one-third per year for three years for each year the corporate performance objective is met, beginning approximately one year from date of grant; » if corporate performance objective of adjusted earnings of $2.5 billion is not met in any year, performance-based restricted stock scheduled to vest in that year is forfeited; » dividends are paid on performance-based restricted stock as and when declared by the Company, but are subject to repayment by the NEO if awards are forfeited prior to vesting; » NEOs have the right to vote their shares of performance-based restricted stock; » may vest in full or in part prior to or on normal vesting date and, in some circumstances, without regard to satisfaction of performance objective, upon the occurrence of certain events, such as a change in control, death, disability or some retirements; » forfeited if employment terminates prior to vesting in all other instances (subject to terms of Retention Agreements and the Severance Plan); and » award agreement includes non-solicitation and non-competition provisions. MATERIAL TERMS OF PERFORMANCE-BASED RESTRICTED NEP COMMON UNITS GRANTED TO NEOS IN 2023 » if the NEP performance objective of adjusted EBITDA of $400 million is met as of the end of the preceding year, performance-based restricted NEP common units vest one-third per year for three years for each year the NEP performance objective is met, beginning approximately one year from date of grant; » if the NEP performance objective of adjusted EBITDA of $400 million is not met in any year, performance-based restricted NEP common units scheduled to vest in that year are forfeited; » distributions are paid on performance-based restricted NEP common units as and when declared by NEP, but are subject to repayment by the NEO if awards are forfeited prior to vesting; » NEOs have the right to vote their performance-based restricted NEP common units; » may vest in full or in part prior to or on normal vesting date and, in some circumstances, without regard to satisfaction of performance objective, upon the occurrence of certain events, such as a change in control, death, disability or some retirements; » forfeited if employment terminates prior to vesting in all other instances (subject to terms of Retention Agreements and the Severance Plan); and MATERIAL TERMS OF STOCK OPTIONS GRANTED TO NEOS IN 2023 » vest and become exercisable one-third per year for three years, beginning approximately one year from date of grant; » exercise price equal to closing price of NextEra Energy common stock on date of grant (February 16, 2023); » generally expire ten years from date of grant; » may vest in full or in part prior to normal vesting date upon the occurrence of some events, such as a change in control, death, disability or some retirements; » forfeited if employment terminated prior to vesting in all other instances (subject to terms of Retention Agreements and the Severance Plan); and » award agreement includes non-solicitation and non-competition provisions. DETERMINATION OF AMOUNT PAYABLE UNDER ANNUAL INCENTIVE PLAN TO NEOS See Compensation Discussion & Analysis for a description of the criteria used to determine the amount payable to each NEO under the Annual Incentive Plan (Non-Equity Incentive Plan Compensation).
Table 3: 2023 outstanding equity awards at fiscal year end
Table 3: 2023 outstanding equity awards at fiscal year end The following table provides information about equity incentive awards granted to the NEOs in 2023 and in prior years. It is important to keep in mind the following when reviewing the table: » The number of shares listed in column (I), “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested,” includes both performance shares, at maximum payout level (in accordance with applicable SEC rules), prior to the expiration of the performance period, and performance-based restricted stock, performance-based restricted stock units and performance-based restricted NEP common units prior to the satisfaction of the performance and time criteria required for vesting. As required by SEC rules, the amounts listed in column (J), “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested,” represent the value of performance-based restricted stock, performance-based restricted stock units and performance-based restricted NEP common units and performance share awards at maximum payout levels. These amounts were not realized by the NEOs during 2023, and the value of awards which vest at a later date is likely to be different from the amount listed, based on, among other factors, the performance of the Company and the price of the Company’s common stock.
TABLE 3: 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
TABLE 3: 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
TABLE 3: 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
| (A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | (I) | (J) | | NAME | OPTION AWARDS | | | | | STOCK AWARDS | | | | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE(1) (#) | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE(1)(2) (#) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF SECURITIES UNDERLYING UNEXERCISED UNEARNED OPTIONS (#) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED(3) ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED(4) (#) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED(3) ($) | | John W. Ketchum | 75,068 | 0 | 0 | 27.92 | 2/12/2026 | | | | | | | 98,140 | 0 | 0 | 31.72 | 2/17/2027 | | | | | | | 90,768 | 0 | 0 | 38.61 | 2/15/2028 | | | | | | | 106,440 | 0 | 0 | 45.65 | 2/14/2029 | | | | | | | 89,972 | 0 | 0 | 68.87 | 2/13/2030 | | | | | | | 66,397 | 33,198(2) | 0 | 83.95 | 2/11/2031 | | | | | | | 69,710 | 139,420(3) | 0 | 75.38 | 2/17/2032 | | | | | | | 0 | 172,757(4) | 0 | 75.69 | 2/16/2033 | | | | | | | | | | | | — | — | 356,016(5) | 21,624,412(5) | | | | | | | | — | — | 8,983(6) | 545,627(6) | | | | | | | | — | — | 63,660(7) | 3,866,683(7) | | | | | | | | — | — | 17,720(8) | 538,865(8) | | Terrell Kirk Crews II | 5,612 | 0 | 0 | 31.72 | 2/17/2027 | | | | | | | 4,720 | 0 | 0 | 38.61 | 2/15/2028 | | | | | | | 9,340 | 0 | 0 | 45.65 | 2/14/2029 | | | | | | | 7,748 | 0 | 0 | 68.87 | 2/13/2030 | | | | | | | 4,082 | 2,041(2) | 0 | 83.95 | 2/11/2031 | | | | | | | 8,416 | 16,832(3) | 0 | 75.38 | 2/17/2032 | | | | | | | 0 | 26,026(0) | 0 | 75.69 | 2/16/2033 | | | | | | | | | | | | — | — | 56,270(5) | 3,417,840(5) | | | | | | | | — | — | 5,397(6) | 327,814(6) | | | | | | | | — | — | 2,940(8) | 89,405(8) | | Rebecca J. Kujawa | 56,120 | 0 | 0 | 45.65 | 2/14/2029 | | | | | | | 51,396 | 0 | 0 | 68.87 | 2/13/2030 | | | | | | | 40,654 | 20,327 | 0 | 83.95 | 2/11/2031 | | | | | | | 35,054 | 70,108 | 0 | 75.38 | 2/17/2032 | | | | | | | 0 | 90,365 | 0 | 75.69 | 2/17/2033 | | | | | | | | | | | | — | — | 211,076(5) | 12,820,756(5) | | | | | | | | — | — | 19,558(6) | 1,187,953(6) | | | | | | | | — | — | 63,660(7) | 3,866,683(7) | | | | | | | | — | — | 11,381(8) | 346,096(8) | | Armando Pimentel, Jr. | | | | | | | | | | | | 99,412 | 0 | 0 | 25.91 | 2/13/2025 | | | | | | | 145,140 | 0 | 0 | 27.92 | 2/12/2026 | | | | | | | 157,464 | 0 | 0 | 31.72 | 2/17/2027 | | | | | | | 129,460 | 0 | 0 | 38.61 | 2/15/2028 | | | | | | | 20,840 | 0 | 0 | 45.65 | 2/14/2029 | | | | | | | 0 | 79,734 | 0 | 75.69 | 2/16/2033 | | | | | | | | | | | | — | — | 102,944(5) | 6,252,819(5) | | | | | | | | — | — | 15,854(6) | 962,972(6) |
TABLE 3: 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
| (A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | (I) | (J) | | NAME | OPTION AWARDS | | | | | STOCK AWARDS | | | | | | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE(1) (#) | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE(1)(2) (#) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF SECURITIES UNDERLYING UNEXERCISED UNEARNED OPTIONS (#) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED(3) ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED(4) (#) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED(3) ($) | | Charles E. Sieving | 67,588 | 0 | 0 | 38.61 | 2/15/2028 | | | | | | | 67,100 | 0 | 0 | 45.65 | 2/14/2029 | | | | | | | 51,044 | 0 | 0 | 68.87 | 2/13/2030 | | | | | | | 29,231 | 14,615 | 0 | 83.95 | 2/11/2031 | | | | | | | 15,184 | 30,370 | 0 | 75.38 | 2/17/2032 | | | | | | | 0 | 33,880 | 0 | 75.69 | 2/16/2033 | | | | | | | | | | | | — | — | 84,630(5) | 5,140,426(5) | | | | | | | | — | — | 8,234(6) | 500,133(6) | | | | | | | | — | — | 63,660(7) | 3,866,683(7) | | | | | | | | — | — | 4,780(8) | 145,360(8) |
TABLE 3: 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
(1) All stock options are non-qualified. All options listed as exercisable at December 31, 2023 were fully vested at that date. (2) Stock options vest one third per year on the anniversary of the grant date until they become fully vested on the third anniversary of the grant date. (3) Market value of the performance shares, performance-based restricted stock and performance-based restricted stock units is based on the closing price of NextEra Energy common stock on December 31, 2023 of $60.74. Market value of the unvested performance-based restricted NEP common units is based on the closing price of NEP common units on December 31, 2023 of $30.41. (4) Performance shares generally vest on the last day of the applicable performance period, with payouts determined by the Compensation Committee at its first regular meeting after the end of the year. Because the end of the performance period for the performance shares granted to each of the NEOs in 2020 was December 31, 2023, these performance shares are not included in Table 3: 2023 Outstanding Equity Awards at Fiscal Year End and are included in Table 4: 2023 Option Exercises and Stock Vested under columns (D) and (E), “Stock Awards — Number of Shares Acquired on Vesting” and “Stock Awards — Value Realized on Vesting,” and discussed in footnote (1) to that table. (5) The amount shown represents performance shares of NextEra Energy stock counted at the maximum payout of 200%. For Mr. Ketchum, the original number of shares granted was 81,354 and 96,654, which vest on 12/31/2024 and 12/31/2025, respectively. For Mr. Crews, the original number of shares granted was 11,333 and 16,802, which vest on 12/31/2024 and 12/31/2025, respectively. For Mrs. Kujawa, the original number of shares granted was 47,203 and 58,335, which vest on 12/31/2024 and 12/31/2025, respectively. For Mr. Pimentel, the original number of shares granted was 51,472, which vest on 12/31/2025. For Mr. Sieving, the original number of shares granted was 20,447 and 21,868, which vest on 12/31/2024 and 12/31/2025, respectively. (6) The amount shown represents performance-based restricted stock of NextEra Energy. For Mr. Ketchum, the number of shares vesting is as follows: 5,074 on 2/15/2024, 2,535 on 2/15/2025 and 1,374 on 2/15/2026. For Mr. Crews, the number of shares vesting is as follows: 2,396 on 2/15/2024, 1,880 on 2/15/2025 and 1,121 on 2/15/2026. For Mrs. Kujawa, the number of shares vesting is as follows: 8,610 on 2/15/2024, 7,055 on 2/15/2025 and 3,893 on 2/15/2026. For Mr. Pimentel, the number of shares vesting is as follows: 5,284 on 2/15/2024, 5,285 on 2/15/2025 and 5,285 on 2/15/2026. For Mr. Sieving, the number of shares vesting is as follows: 3,946 on 2/15/2024, 2,828 on 2/15/2025 and 1,460 on 2/15/2026. (7) The amount shown represents shares of performance-based restricted NextEra Energy stock units (including shares added to the award upon the reinvestment of dividend equivalents), granted 2/11/2021 pursuant to a one-time executive transition award. For Messrs. Ketchum and Sieving, and Mrs. Kujawa, the number of shares vesting is 31,829 on 2/15/2026 and 31,830 on 2/15/2031. The amount shown represents performance-based restricted NEP common units. For Mr. Ketchum, the number of units vesting is as follows: 7,819 on 2/15/2024, 6,385 on 2/15/2025, and 3,516 on 2/15/2026. For Mr. Crews, the number of units vesting is as follows: 1,183 on 2/15/2024, 1,095 on 2/15/2025, and 662 on 2/15/2026. For Mrs. Kujawa, the number of units vesting is as follows: 4,980 on 2/15/2024, 4,102 on 2/15/2025, and 2,299 on 2/15/2026. For Mr. Sieving, the number of units vesting is as follows: 2,274 on 2/15/2024, 1,644 on 2/15/2025, and 862 on 2/15/2026.
Table 4: 2023 option exercises and stock vested
Table 4: 2023 option exercises and stock vested The following table provides information about the NEOs’ stock awards which vested in 2023. It is important to keep in mind the following when reviewing the table: » The “Number of Shares Acquired on Vesting” (column (D)) represents performance shares granted in 2021 for the performance period which ended in 2023, as well as performance-based restricted stock vesting in 2023 from grants made in prior years. The Compensation Committee looks at the value of these grants as of the date of grant, rather than as of the date of vesting, when making compensation determinations. » The “Value Realized on Vesting” (column (E)) represents the aggregate payout value of the vested performance shares and vested performance-based restricted stock.
TABLE 4: 2023 OPTION EXERCISES AND STOCK VESTED
TABLE 4: 2023 OPTION EXERCISES AND STOCK VESTED
TABLE 4: 2023 OPTION EXERCISES AND STOCK VESTED
| (A) | (B) | (C) | (D) | (E) | | NAME | OPTION AWARDS | | STOCK AWARDS | | | | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($) | NUMBER OF SHARES ACQUIRED ON VESTING(1) (#) | VALUE REALIZED ON VESTING(1) ($) | | John W. Ketchum | 0 | 0 | 71,120 | 4,243,092 | | Terrell Kirk Crews II | 0 | 0 | 4,669 | 308,777 | | Rebecca J. Kujawa | 0 | 0 | 45,913 | 2,777,166 | | Armando Pimentel, Jr. | 91,160 | 3,664,860 | 0 | 0 | | Charles E. Sieving | 0 | 0 | 32,094 | 1,929,571 |
TABLE 4: 2023 OPTION EXERCISES AND STOCK VESTED
(1) Includes:
TABLE 4: 2023 OPTION EXERCISES AND STOCK VESTED
| NAME | NUMBER OF PERFORMANCE- BASED RESTRICTED NEE STOCK # | VALUE $ | NUMBER OF PERFORMANCE- BASED RESTRICTED NEP COMMON UNITS # | VALUE $ | NUMBER OF PERFORMANCE SHARES (#) | VALUE ($) | | John W. Ketchum | 5,707 | 431,963 | 5,521 | 381,115 | 59,892 | 3,430,015 | | Terrell Kirk Crews II | 1,847 | 139,799 | 626 | 43,213 | 2,196 | 125,765 | | Rebecca J. Kujawa | 5,864 | 443,846 | 3,377 | 233,114 | 36,672 | 2,100,205 | | Armando Pimentel, Jr. | 0 | 0 | 0 | 0 | 0 | 0 | | Charles E. Sieving | 3,628 | 274,603 | 2,102 | 145,101 | 26,364 | 1,509,866 |
Table 5: Pension benefits
Table 5: Pension benefits The table and description below provide information about the NEOs’ pension benefits. It is important to keep in mind the “Present Value of Accumulated Benefit” (column (D)) listed for the SERP includes the present value of such benefits in the defined benefit portion of the SERP only, and disclosure of information related to the defined contribution portion of the SERP can be found in the next table, Table 6: Nonqualified Deferred Compensation.
Table 5: Pension benefits
| (A) | (B) | (C) | (D) | (E) | | NAME | PLAN NAME | NUMBER OF YEARS CREDITED SERVICE (#) | PRESENT VALUE OF ACCUMULATED BENEFIT ($) | PAYMENTS DURING LAST FISCAL YEAR($) | | John W. Ketchum(1) | NextEra Energy, Inc. Employee Pension Plan | 21 | 423,153 | 0 | | | SERP(3) | 21 | 2,806,573 | 0 | | Terrell Kirk Crews II(1) | NextEra Energy, Inc. Employee Pension Plan | 8 | 120,308 | 0 | | | SERP(3) | 8 | 388,350 | 0 | | Rebecca J. Kujawa(1) | NextEra Energy, Inc. Employee Pension Plan | 17 | 306,601 | 0 | | | SERP(3) | 17 | 1,158,243 | 0 |
Table 5: Pension benefits
| (A) | (B) | (C) | (D) | (E) | | NAME | PLAN NAME | NUMBER OF YEARS CREDITED SERVICE (#) | PRESENT VALUE OF ACCUMULATED BENEFIT ($) | PAYMENTS DURING LAST FISCAL YEAR($) | | Armando Pimentel, Jr.(1) | NextEra Energy, Inc. Employee Pension Plan | 6 | 251,917 | 0 | | | SERP(2)(3) | 6 | 89,354 | 0 | | Charles E. Sieving(1) | NextEra Energy, Inc. Employee Pension Plan | 15 | 286,836 | 0 | | | SERP(3) | 15 | 2,979,004 | 0 |
Table 5: Pension benefits
(1) For Mrs. Kujawa and Messrs. Ketchum, Crews, Pimentel and Sieving, the amounts shown are their respective accrued pension benefits as of December 31, 2023, which are equal to their respective cash balance account values in the tax qualified employee pension plan and in the SERP at December 31, 2023. Mrs. Kujawa and Messrs. Ketchum, Crews, Pimentel and Sieving are fully vested in both plans. Each NEO is entitled to his or her fully vested accrued account balances upon termination of employment. (2) Mr. Pimentel’s years of credited service include the years of prior service prior to rejoining the Company; he did not receive a SERP enhancement. (3) NextEra Energy’s nonqualified SERP provides both defined benefit and defined contribution benefits. See Additional Disclosure Related to Pension Benefits Table, below. The defined benefit portion of the SERP is shown in this table, while amounts attributable to the defined contribution portion of the SERP are included in Table 1a: 2023 Summary Compensation Table under column (I), “All Other Compensation” (amounts for which are detailed in Table 1b: 2023 Supplemental All Other Compensation), and also are reported in Table 6: Nonqualified Deferred Compensation under columns (C), (D) and (F).
Additional disclosure related to pension benefits table
Additional disclosure related to pension benefits table NextEra Energy maintains two non-contributory defined benefit retirement plans: a tax-qualified employee pension plan and a non-qualified SERP. EMPLOYEE PENSION PLAN NextEra Energy’s tax-qualified employee pension plan is a cash balance plan in which credits to each active, full-time employee’s account are determined as a percentage of his or her monthly covered earnings, with “basic crediting” of 4.5% until the fifth anniversary of employment and 6% thereafter. Covered earnings for each NEO are limited to base salary and do not include annual incentive compensation, long-term incentive compensation or any other compensation included in Table 1a: 2023 Summary Compensation Table. Each employee’s cash balance account is also credited quarterly with interest at an annual rate equal to the average rates of interest paid on one-year Treasury Constant Maturities for the month of August of the preceding calendar year. The interest crediting rate is subject to a 3% minimum for account balances earned after 2014 and a 4% minimum for account balances earned prior to 2015 and to a 14% maximum. For 2023, the interest crediting rate was 4% for account balances earned prior to 2015 and 3.28% for account balances earned after 2014. Benefits under the cash balance formula are not reduced for employer contributions to Social Security or other offset amounts. Under the tax-qualified employee pension plan, benefits are cliff-vested after three full years of service and employees may become fully vested if they are participants in the qualified plan at a time when the Company decides to transfer a portion of pension plan assets to fund retiree medical benefits. All NEOs are fully vested. All vested participants are eligible for lump sum payment of benefits following termination of employment, and certain annuity forms of payment also are available to all employees, including the NEOs. SERP For the reasons described in Compensation Discussion & Analysis, NextEra Energy maintains an unfunded SERP for its executive officers, including the NEOs. The SERP’s defined benefit formula for NEOs provides two times the normal cash balance crediting rate of the tax-qualified employee pension plan (“double basic credits”). Also for the SERP, the double basic credits are applied to base salary plus bonus paid during the year (versus base salary only). The normal cash balance crediting rate is 4.5% of base salary prior to five years of service and 6% of base salary thereafter. Double the basic crediting rate is therefore 9% and 12% of base salary plus bonus paid during the year for the SERP. Benefits for all NEOs are calculated in this manner. SERP benefits are cliff-vested after five full years of service and all NEOs were fully vested as of December 31, 2023. All vested participants are eligible for lump sum payment of benefits following termination of employment (subject to timing restrictions imposed by section 409A of the Code) or may elect certain annuity forms of payment.
Table 6: Nonqualified deferred compensation
Table 6: Nonqualified deferred compensation The table and description below provide information about the NEOs’ nonqualified deferred compensation. It is important to keep in mind the following when reviewing the table: » The amounts shown under the heading “Aggregate Earnings in Last FY” (column (D)) represent earnings in the Deferred Compensation Plan, in the defined contribution portion of the SERP. » The amounts shown under the heading “Aggregate Balance at Last FYE” (column (F)) represent balances in the Deferred Compensation Plan and in the defined contribution portion of the SERP.
TABLE 6: NONQUALIFIED DEFERRED COMPENSATION
TABLE 6: NONQUALIFIED DEFERRED COMPENSATION
TABLE 6: NONQUALIFIED DEFERRED COMPENSATION
| (A) | (B) | (C) | (D) | (E) | (F) | | NAME | EXECUTIVE CONTRIBUTIONS IN LAST FY(1) ($) | REGISTRANT CONTRIBUTIONS IN LAST FY(2) ($) | AGGREGATE EARNINGS IN LAST FY(3) ($) | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS ($) | AGGREGATE BALANCE AT LAST FYE(4) ($) | | John W. Ketchum | 0 | 272,750 | (424,387) | 0 | 1,406,833 | | Terrell Kirk Crews II | 0 | 61,068 | (79,993) | 0 | 270,164 | | Rebecca J. Kujawa | 0 | 131,392 | (116,513) | 0 | 415,540 | | Armando Pimentel, Jr. | 0 | 26,892 | (3,235) | 0 | 23,657 | | Charles E. Sieving | 0 | 112,583 | (608,110) | 0 | 2,025,614 |
TABLE 6: NONQUALIFIED DEFERRED COMPENSATION
(1) The Deferred Compensation Plan permits deferral (up to 100%) of salary, annual incentive and performance shares. (2) The SERP includes a defined contribution component which provides a match on NEOs’ base and annual incentive earnings above the IRS limit, which was $330,000 for 2023. The 4.75% match is the same as the match opportunity provided to participants in the Company’s 401(k) plan. As with the 401(k) plan, crediting of matching contributions under the defined contribution component of the SERP is in the form of phantom NextEra Energy common stock. All amounts shown in this column also are included in Table 1a: 2023 Summary Compensation Table in column (I), “All Other Compensation” (amounts for which are detailed in Table 1b: 2023 Supplemental All Other Compensation). (3) Earnings include the sum of each participant’s annual earnings (which includes, among other things, stock price appreciation on stock-based deferred compensation) in the Deferred Compensation Plan and in the defined contribution portion of the SERP. Earnings include Deferred Compensation Plan earnings of $15,676 for Mr. Sieving. Mrs. Kujawa and Messrs. Ketchum, Crews and Pimentel have not deferred any compensation under this plan. Earnings for the defined contribution component of the SERP were as follows: Mr. Ketchum ($424,387), Mr. Crews ($79,993), Mrs. Kujawa ($116,513), Mr. Pimentel ($3,235) and Mr. Sieving ($623,786). None of these amounts are included in Table 1a: 2023 Summary Compensation Table since no above-market interest was credited in 2023. (4) Deferred Compensation Plan accounts include fully vested and earned compensation plus earnings. The Company views deferred compensation as a vehicle for retirement planning rather than as a means of providing additional compensation. Mr. Sieving had a Deferred Compensation Plan balance of $106,681. Mrs. Kujawa and Messrs. Ketchum, Crews and Pimentel have not deferred any cash compensation or performance shares and therefore have no balances in the Deferred Compensation Plan. Balances for the defined contribution component of the SERP were as follows: Mr. Ketchum $1,406,833 (of which $635,418 was previously reported as compensation in prior Summary Compensation Tables for years prior to 2023), Mr. Crews $270,164 (of which $37,230 was previously reported as compensation in prior Summary Compensation Tables for years prior to 2023), Mr. Pimentel $23,657, Mrs. Kujawa $415,540 (of which $244,302 was previously reported as compensation in prior Summary Compensation Tables for the years prior to 2023), Mr. Sieving $2,025,614 (of which $378,456 was previously reported in prior Summary Compensation Tables for years prior to 2023).
Additional disclosure related to nonqualified deferred compensation table
Additional disclosure related to nonqualified deferred compensation table Cash deferral elections under the Deferred Compensation Plan must be made prior to the period in which the cash is earned and can range, in whole percentages, from 1% to 100% of a participant’s base salary and/or annual incentive award. Equity deferral elections must be made by December 31 of the year preceding the beginning of the applicable performance period, and participants electing to defer performance shares may defer all or a portion of the payout amount. Deferred Compensation Plan earnings are not guaranteed by the Company. The Company’s contributions to the SERP for each NEO also are considered deferred compensation. The contributions and earnings in Table 6: Nonqualified Deferred Compensation include those from the nonqualified defined contribution portion of the SERP. Distributions are in the form of lump sum payments, which may be subject to a six-month delay following termination of employment in compliance with Code Section 409A. Earnings in 2023 from previous deferrals of cash compensation came from phantom investments in the investment vehicles, which mirror the funds available to participants in the Company’s 401(k) plan and include mutual funds, index funds and similar investment alternatives offered to participants under the Company’s 401(k) plan. The Company does not provide a guaranteed rate of return on these funds.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL For the reasons discussed in Compensation Discussion & Analysis, NextEra Energy has entered into the Retention Agreements, which commit the Company to make payments to NEOs under special circumstances. Generally, these are changes in corporate control of the Company and termination of the NEO’s employment. In accordance with SEC instructions, these quantitative disclosures assume a change in control took place on December 31, 2023. In fact, no change in control of the Company occurred on that date and no NEO’s employment terminated on that date. If such an event were to occur in the future, actual payments would likely be different from those presented here based on various factors, including the NextEra Energy common stock price at such time. Consistent with SEC instructions, the amounts shown in the tables that follow exclude obligations due from the Company to the NEO following a triggering event for: (1) any earned but unpaid base salary, annual incentive compensation and long-term incentive compensation through the date of termination; (2) vested benefits under the Company’s employee pension and 401(k) plans and all other benefit plans in accordance with their terms and conditions; (3) accrued vacation pay; (4) reimbursement of reasonable business expenses incurred prior to the date of termination; and (5) any other compensation or benefits to which the NEO may be entitled under and in accordance with the Company’s generally applicable non-discriminatory plans or employee benefit programs, including the retiree medical plan. Furthermore, all payments shown in the tables exclude the obligations of the Company to the NEO for vested benefits under the SERP and the Deferred Compensation Plan. See Table 5: Pension Benefits and Table 6: Nonqualified Deferred Compensation for the values of accumulated SERP and Deferred Compensation Plan benefits at December 31, 2023.
Potential payments under retention agreements
Potential payments under retention agreements Each NEO is a party to a Retention Agreement with the Company. These agreements generally provide for certain protections and benefits to the NEO in the event of a change in control of the Company in exchange for the NEO’s continued full-time commitment to the interests of the Company during a transition period of three years following a change in control. The NEOs also undertake confidentiality commitments requiring them to hold in a fiduciary capacity all secret or confidential information relating to the Company and, under most circumstances, not to divulge any such information either during or after the period of employment. Each Retention Agreement provides for a mutual commitment to the NEO’s continued employment for a period of three years following a change in control of the Company. If a change in control occurs, absent a termination of employment, the NEOs, other than Mr. Crews and Mr. Pimentel, generally will receive an accelerated payout or vesting of previously granted equity-based awards the NEO would otherwise have received in the normal course of business had the change in control not occurred and had the NEO’s employment continued over the remaining vesting periods. Mr. Crews and Mr. Pimentel will receive an accelerated payout or vesting of previously granted equity-based awards following a change in control and termination of employment. Tables 7a and 7b and the accompanying discussion of the Retention Agreements set forth the details of the estimated payments that would have been made to the NEOs (on December 31, 2023 and December 31, 2024, respectively) had a change in control actually occurred at the close of business on December 31, 2023, assuming each of the NEOs continued in employment throughout 2023.
Potential payments under the Severance Plan
Potential payments under the Severance Plan The Severance Plan provides for the payment of severance benefits to the NEOs and to certain other senior executives if their employment is involuntarily terminated other than for Cause, defined below (and other than in a termination governed by the terms of the Retention Agreements). See Compensation Discussion & Analysis for a discussion of the purpose of the Severance Plan. The Severance Plan provides severance benefits following involuntary termination other than for Cause in exchange for entry into a release of claims against the Company and an agreement (the “Non-Competition Agreement”) to adhere to certain non-competition and related covenants protective of the Company. Following a covered involuntary termination and the execution of the release and the Non-Competition Agreement, the NEO would receive a cash payment equal to two times his or her annual base salary plus two times his or her target annual incentive compensation for the year of termination, payable in two equal annual installments. In addition, the NEO’s outstanding equity and equity-based awards would vest pro rata and become payable at the end of any applicable performance periods, subject to the attainment by the Company of the specified performance objectives. The NEO also would receive certain ancillary benefits, including outplacement assistance or payment in an amount equal to the value of the outplacement assistance. Amounts payable under the Severance Plan are subject to a cap equal to six times the average of the NEO’s last three years’ base salary plus annual incentive. If the employment of Mrs. Kujawa or Messrs. Ketchum, Crews, Pimentel or Sieving, or any of them, had been involuntarily terminated on December 31, 2023 in circumstances triggering the Company’s obligations under the Severance Plan, the Company estimates the amounts shown in Table 9 below would have become payable.
Potential payments under Equity Award Agreements
Potential payments under Equity Award Agreements The award agreements for each long term equity incentive award outstanding during 2023 (except the executive transition awards for Mrs. Kujawa and Messrs. Ketchum and Sieving, the terms of which are described below) contain provisions which govern treatment of the award in the event of the NEO’s termination of employment due to death, disability, retirement at or after age 55 (“normal retirement”), or retirement after age 50 meeting terms and conditions set by, and acceptable to, the Compensation Committee (an “approved early retirement”). Under the terms of the equity award agreements (other than the executive transition awards), each outstanding unvested equity award vests on a pro rata basis for service through the date of death or disability or normal retirement (for performance share, stock option, performance-based restricted stock and performance-based restricted NEP common unit awards based on days of service completed during the vesting period). The pro rata portion of each stock option, performance-based restricted stock and performance-based restricted NEP common unit award is vested upon death or disability. In the case of normal retirement, stock option awards vest upon retirement and performance-based restricted stock and NEP common units generally vest upon their normal vesting date following satisfaction of applicable performance criteria. The pro rata portion of each performance share award is paid after the end of the performance period, subject to satisfaction of applicable performance criteria. See Table 3: 2023 Outstanding Equity Awards at Fiscal Year End for information for each NEO as of December 31, 2023 about outstanding unvested equity awards which would vest as determined in the manner set forth above upon death, disability or normal retirement. If an NEO was eligible for, and retired in accordance with, an approved early retirement, all outstanding and unvested equity awards (except the executive transition awards, as described below) would vest in full, and would be paid out either on the vesting schedule set forth in each award agreement or upon retirement, generally subject to satisfaction of applicable performance criteria. The value of the prorated outstanding long-term incentive awards at December 31, 2023 for each of the NEOs would have been approximately: Mr. Ketchum, $5,979,880; Mr. Crews, $1,063,205; Mrs. Kujawa, $4,076,820; Mr. Pimentel, $1,552,630; and Mr. Sieving, $1,701,730. As of December 31, 2023, each of Messrs. Ketchum, Pimentel and Sieving were of an age which would have made them eligible for consideration by the Compensation Committee for an approved early retirement. If the Compensation Committee had approved an early retirement for any of Messrs. Ketchum, Pimentel or Sieving on that date (which the Compensation Committee did not do), the value on December 31, 2023 of the outstanding long-term incentive awards that would have continued to vest on their original terms (performance shares and performance-based restricted stock and NEP common units as applicable) or vested (options) would have been approximately: Mr. Ketchum, $11,896,699; Mr. Pimentel, $4,089,381; and Mr. Sieving, $3,215,706. The award agreements governing the executive transition awards of Mrs. Kujawa and Messrs. Ketchum and Sieving provide for partial accelerated vesting of the stock and accrued dividends upon death or disability, according to a schedule contained in the award agreement. The award agreement does not provide for accelerated vesting upon retirement. If Mrs. Kujawa or Messrs. Ketchum or Sieving had terminated employment on December 31, 2023 due to death or disability, 40% of their total executive transition award granted in 2021 would have vested. The value of the unvested shares vesting solely due to death or disability would have been approximately $1,546,623. All equity award agreements (including the agreements governing the executive transition awards) include non-solicitation and non-competition provisions (effective during employment and for a two-year period after termination), as well as non-disparagement provisions. The terms of these protective covenants survive the termination of the award agreement and termination of employment.
Pay Versus Performance (PVP)
Pay Versus Performance (PVP) Provided below is the Company’s “Pay Versus Performance” disclosure as required pursuant to Item 402(v) of Regulation S-K. As required by Item 402(v), we have included: » A tabular list of the most important measures our Compensation Committee used in 2023 to link pay calculated in accordance with Item 402(v) (referred to as “Compensation Actually Paid”, or CAP) to Company performance; » A table that compares the total compensation of our Named Executive Officers as presented in the Summary Compensation Table (“SCT”) for each year to CAP and specified performance measures; and » A discussion of: — the relationship between our cumulative TSR and the TSR of the S&P 500 Utilities Index (“Peer Group TSR”); — the relationship between CAP and our TSR; —
Tabular list of most important measures to determine 2023 compensation actually paid
Tabular list of most important measures to determine 2023 compensation actually paid The list below represents the financial performance measures that the Company considers to have been the most important in linking CAP to our PEO and non-PEO NEOs for 2023 to Company performance. The measures are not ranked. Descriptions of these measures, and the manner in which these measures determine the amounts of incentive compensation paid to our NEOs, is described in our Compensation Discussion & Analysis within the sections titled “2023 Annual Performance-Based Incentive Compensation” and “2023 Long-Term Performance-Based Equity Compensation.” »
Pay Versus Performance table
Pay Versus Performance table
Pay Versus Performance table
| Year(1) | Summary Compensation Table Total for First PEO ($) | Summary Compensation Table Total for Second PEO ($) | Compensation Actually Paid to First PEO(2) ($) | Compensation Actually Paid to Second PEO(2) ($) | Average Summary Compensation Table Total for non-PEO NEOs ($) | Average Compensation Actually Paid to non-PEO NEOs(2) ($) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($MMs)(4) | Adjusted EPS(5) ($) | | | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return(3) ($) | | | | (a) | (b) | (b) | (c) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | 20,591,124 | N/A | 7,211,720 | N/A | 8,470,154 | 3,917,791 | 109.62 | 107.78 | 6,282 | 3.17 | | 2022 | 40,406,018 | 17,414,329 | 34,410,149 | 18,918,020 | 7,394,893 | 7,426,310 | 146.74 | 118.17 | 3,246 | 2.90 | | 2021 | 25,335,936 | N/A | 55,348,220 | N/A | 13,316,860 | 19,729,777 | 160.51 | 118.24 | 2,827 | 2.55 | | 2020 | 23,720,707 | N/A | 63,079,713 | N/A | 6,454,940 | 12,715,279 | 130.08 | 100.49 | 2,369 | 2.31 |
Pay Versus Performance table
During 2023, our PEO was Mr. Ketchum. During 2022, our PEOs were Mr. Robo (first PEO) and Mr. Ketchum (second PEO). During 2021 and 2020, our PEO was Mr. Robo. During 2023, our non-PEO NEOs consisted of Mr. Crews, Mrs. Kujawa, Mr. Pimentel and Mr. Sieving. During 2022, our non-PEO NEOs consisted of Mr. Crews, Mrs. Kujawa, Mr. Silagy, Mr. Sieving and Ms. Caplan. During 2021 and 2020, our non-PEO NEOs consisted of Messrs. Ketchum, Silagy and Sieving and Mrs. Kujawa. (2) The following table sets forth the adjustments made during each year represented in the PVP Table to arrive at “compensation actually paid” during each year:
PEO and average non-PEO NEOs summary compensation table total to compensation actually paid reconciliation
PEO and average non-PEO NEOs summary compensation table total to compensation actually paid reconciliation
PEO and average non-PEO NEOs summary compensation table total to compensation actually paid reconciliation
| Year | Executive(s) | Summary Compensation Table Total ($) | Deduct Option and Stock Awards Granted in Fiscal Year ($) | Add Fair Value at Fiscal Year-End of Unvested Option and Stock Awards Granted in Fiscal Year ($) | Add Change in FAIR Value of Unvested Option and Stock Awards Granted in Prior Fiscal Year ($) | Add Change in FAIR Value of Option and Stock Awards Vested in Fiscal Year ($) | Deduct Fair Value of Option and Stock Awards Forfeited in Fiscal Year ($) | Deduct Change in Pension Value and Nonqualified Deferred Compensation Earnings Column of the SCT ($) | Add Pension Service Cost ($) | Add Dividends Paid on Unvested Shares in Fiscal Year ($) | Compensation Actually Paid ($)(i) | | 2023 | PEO | 20,591,124 | (13,168,902) | 9,993,852 | (7,479,727) | (2,338,619) | — | (811,026) | 352,471 | 72,547 | 7,211,720 | | | Other NEOs | 8,470,154 | (5,804,360) | 4,172,741 | (2,166,093) | (625,020) | — | (288,148) | 120,554 | 37,962 | 3,917,791 | | 2022 | First PEO | 40,406,018 | (13,094,677) | 18,259,934 | (1,507,964) | (9,326,246) | — | (1,000,479) | 597,194 | 76,368 | 34,410,149 | | | Second PEO | 17,414,329 | (10,623,931) | 15,168,274 | (1,053,175) | (1,857,707) | — | (475,209) | 292,699 | 52,740 | 18,918,020 | | | Other NEOs | 7,394,893 | (4,332,201) | 6,010,715 | (554,750) | (1,002,574) | — | (305,362) | 185,918 | 29,670 | 7,426,310 | | 2021 | First PEO | 25,335,936 | (17,391,104) | 23,190,233 | 14,918,520 | 9,630,919 | — | (1,023,668) | 598,193 | 89,191 | 55,348,220 | | | Other NEOs | 13,316,860 | (9,961,104) | 12,160,788 | 2,529,143 | 1,788,740 | — | (375,214) | 238,766 | 31,799 | 19,729,777 | | 2020 | First PEO | 23,720,707 | (16,101,809) | 22,483,170 | 20,062,587 | 13,222,028 | — | (951,970) | 554,570 | 90,431 | 63,079,713 | | | Other NEOs | 6,454,940 | (3,495,669) | 4,783,802 | 3,164,051 | 1,901,154 | — | (316,805) | 193,518 | 30,289 | 12,715,279 |
Director Compensation
Director Compensation
2023 COMPENSATION OF NON-EMPLOYEE DIRECTORS
2023 COMPENSATION OF NON-EMPLOYEE DIRECTORS
2023 COMPENSATION OF NON-EMPLOYEE DIRECTORS
| (A) | (B) | (C) | (D) | (E) | (F) | (G) | (H) | | NAME(1)(2) | FEES EARNED OR PAID IN CASH(3) ($) | STOCK AWARDS(4)(5) ($) | OPTION AWARDS ($) | NON-EQUITY INCENTIVE PLAN COMPENSATION ($) | CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS ($) | ALL OTHER COMPENSATION(6) ($) | TOTAL ($) | | Nicole S. Arnaboldi | 145,000 | 185,441 | 0 | 0 | 0 | 0 | 330,441 | | Sherry S. Barrat | 185,000 | 185,441 | 0 | 0 | 0 | 0 | 370,441 | | James L. Camaren | 145,000 | 185,441 | 0 | 0 | 0 | 0 | 330,441 | | Kenneth B. Dunn | 145,000 | 185,441 | 0 | 0 | 0 | 10,000 | 340,441 | | Naren K. Gursahaney | 170,000 | 185,441 | 0 | 0 | 0 | 0 | 355,441 | | Kirk S. Hachigian | 165,000 | 185,441 | 0 | 0 | 0 | 0 | 350,441 | | Maria G. Henry | 36,250 | 52,470 | 0 | 0 | 0 | 0 | 88,720 | | Amy B. Lane | 165,000 | 185,441 | 0 | 0 | 0 | 0 | 350,441 | | David L. Porges | 155,000 | 185,441 | 0 | 0 | 0 | 0 | 340,441 | | Rudy E. Schupp | 82,500 | 185,441 | 0 | 0 | 0 | 0 | 267,941 | | John L. Skolds | 85,000 | 185,441 | 0 | 0 | 0 | 0 | 270,441 | | Dev Stahlkopf | 72,500 | 116,405 | 0 | 0 | 0 | 0 | 188,905 | | John A. Stall | 157,500 | 185,441 | 0 | 0 | 0 | 0 | 342,941 | | Darryl L. Wilson | 145,000 | 185,441 | 0 | 0 | 0 | 10,000 | 340,441 |
2023 COMPENSATION OF NON-EMPLOYEE DIRECTORS
(1) Ms. Henry was appointed to the Board on September 25, 2023 and Ms. Stahlkopf on May 18, 2023. (2) Messrs. Schupp and Skolds did not stand for reelection at the 2023 Annual Meeting of Shareholders on May 18, 2023. (3) Ms. Arnaboldi elected to defer 100% of her annual cash retainer. (4) Ms. Arnaboldi and Mr. Gursahaney elected to defer 100% of their equity retainer and Ms. Lane elected to defer 75% of her equity retainer. (5) Non-employee directors of NextEra Energy received shares of NextEra Energy common stock in an amount determined by dividing $185,000 by the closing price of the common stock on the date of grant, rounded up to the nearest ten shares. On February 16, 2023, each non-employee director then in office received 2,450 shares of stock valued at $75.69 per share. Ms. Henry received a prorated grant on October 12, 2023 of 990 shares valued at $53.00 per share and Ms. Stahlkopf received a prorated grant on May 18, 2023 of 1,550 shares valued at $75.10 per share. Dividends are paid on the shares in cash. Dividends on deferred shares are credited to the participant’s account under the Deferred Compensation Plan. The amounts in this column represent the aggregate grant date fair value of equity-based compensation awards granted during 2023 to each non-employee director valued in accordance with applicable SEC and accounting rules. For the February 2023 equity compensation award, the grant date fair value was $185,441 per director. (6) In accordance with applicable SEC rules, perquisites and personal benefits with an aggregate value of less than $10,000 are omitted. Includes matching contributions to educational institutions on behalf of Messrs. Dunn and Wilson made under the NextEra Energy Foundation’s matching gift program, which is available to all employees and directors.
Additional information about director compensation
Additional information about director compensation NextEra Energy directors who are salaried employees of NextEra Energy or any of its subsidiaries do not receive any additional compensation for serving as a director or committee member. Mr. Ketchum is the only such director currently serving on the Board. Director compensation was not increased from 2023 levels. Effective January 1, 2024, non-employee directors of NextEra Energy received an annual cash retainer of $145,000 plus a number of shares of NextEra Energy common stock determined by dividing $185,000 by the closing price of NextEra Energy common stock on the grant date, rounded up to the nearest ten shares. The grant date for the annual retainers paid for 2023 was February 15, 2024, at which time the non-employee directors of NextEra Energy were each granted 3,240 shares of NextEra Energy common stock. These shares are generally not transferable until the director meets the Company’s stock ownership guidelines. When joining the Board, newly-elected non-employee directors are awarded a grant of NextEra Energy common stock approximately equal to the annual common stock retainer awarded to existing non-employee directors, prorated
Director Compensation
Director Compensation based on the new director’s date of election to the Board. These shares are not transferable until the director meets the Company’s stock ownership guidelines.
Director Compensation
| ANNUAL NON-EMPLOYEE DIRECTOR COMPENSATION (EFFECTIVE 1/1/2024) | ADDITIONAL CASH RETAINERS ($) | | | | Lead Director | 40,000 | | | Committee Chairs: | | | | » Audit | 25,000 | | | » Nuclear | 25,000 | | | » Other committees | 20,000 |
Director Compensation
Non-employee Board committee chairpersons receive an additional annual retainer of $25,000 for chairing the Audit Committee or the Nuclear Committee and $20,000 for chairing the other committees. The Lead Director receives an annual retainer of $40,000, except that a Lead Director who also serves as a Chair of any Board committee is only entitled to receive a single annual retainer in an amount equal to the Lead Director annual retainer. Beginning in 2023, non-employee directors no longer receive a fee for each Board and committee meeting attended. Directors may defer all or a portion of their cash compensation and all or a portion of their equity compensation in the Deferred Compensation Plan and may participate in the Company’s matching gift program, which matches gifts to educational institutions up to a maximum of $10,000 per donor per year. Board members may travel on Company aircraft while on Company business and in limited circumstances for non-business reasons if the Company would incur little, if any, incremental cost, space is available and the aircraft is in use for another authorized purpose. Board members may be accompanied by their immediate family members if space is available. Travel expenses to attend Board or committee meetings or while on Board business are reimbursed.