DEF 14A of American States Water Co, Apr 5, 2024

DEF 14A of American States Water Co

Filed Apr 5, 2024 · FY20230001140361-24-018222

Open on EDGAR

  1. What are the functions of the compensation committee?

    | ⯀ | selects a compensation consultant to assist the committee in evaluating the amount or form of executive and director compensation; |

  2. What are the functions of the compensation committee?

    | ⯀ | reviews and makes recommendations to the board regarding the compensation of directors; |

  3. What procedures do we use for reviewing and approving transactions between us and our directors and executive officers?

    What procedures do we use for reviewing and approving transactions between us and our directors and executive officers? We have adopted a code of conduct and guidelines on significant governance issues, which include policies and procedures regarding relationships between us and our directors and executive officers. Information about how to obtain a copy of the code of conduct and guidelines on significant governance issues is set forth in this proxy statement under the heading, “Obtaining Additional Information from Us.” Under the company’s guidelines on significant governance issues, directors are expected to make business opportunities relating to the company’s business available to the company before pursuing the opportunity for the director’s own or another’s account. Neither the board nor the audit and finance committee has approved any other guidelines that would permit a director or executive officer to engage in any transactions or actions that would create a conflict of interest. All conflict of interest transactions must be approved by disinterested members of the board and the audit and finance committee in accordance with California law and the rules of the New York Stock Exchange. Our code of conduct prohibits any director or executive officer from engaging in any transactions or other actions which create a conflict of interest, except under guidelines approved by the board or the audit and finance committee. A conflict of interest arises if a director or executive officer takes an action or has interests that may make it difficult for the director or executive officer to act objectively or effectively and include:

  4. What procedures do we use for reviewing and approving transactions between us and our directors and executive officers?

    | ⯀ | causing the company or any of its subsidiaries to employ or retain a family member as an employee or consultant; |

  5. What procedures do we use for reviewing and approving transactions between us and our directors and executive officers?

    | ⯀ | causing the company or any of its subsidiaries to do business with any businesses in which the director, executive officer or any family member stands to gain personally; |

  6. What procedures do we use for reviewing and approving transactions between us and our directors and executive officers?

    | American States Water Company | 22 | 2024 Proxy Statement |

  7. What procedures do we use for reviewing and approving transactions between us and our directors and executive officers?

    | ⯀ | making investments which may impair the ability of the director or executive to make decisions on behalf of the company; |

  8. What procedures do we use for reviewing and approving transactions between us and our directors and executive officers?

    | ⯀ | taking advantage of business opportunities relating to the company’s business or that are discovered through the use of corporate property, information or position for personal gain, without first offering the opportunity to the company; or |

  9. What procedures do we use for reviewing and approving transactions between us and our directors and executive officers?

    | ⯀ | competing with the company. |

  10. What procedures do we use for reviewing and approving transactions between us and our directors and executive officers?

    Our guidelines on significant governance issues also require each director to disclose to the board any financial or personal interest in any transaction that comes before the board for approval. Each director and executive officer is also required to disclose annually any relationships with the company and to declare that all such relationships during the prior year have been disclosed. Our board did not consider any transactions in which any member of the board or executive officer had an interest in 2023 or any related party transactions subject to disclosure under Auditing Standard No. 2410. We do not provide loans, loan guarantees or otherwise extend credit, directly or indirectly, to any of our executive officers or directors.

  11. How much stock do directors and executive officers own?

    How much stock do directors and executive officers own? We are providing you information in the table below regarding the number of our common shares beneficially owned by our directors, nominees and executive officers as of March 28, 2024, including common shares which each director and executive officer has a right to acquire on or prior to May 27, 2024.

  12. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS We provide information on the following pages about each of our directors and nominee, including his or her age, years of service as a director of the company, educational background, business experience, service on other boards and community service activities. The process used by the board in nominating directors is a subjective one and is based on the recommendations of the nominating and governance committee, the background, qualifications and age of each of the other members of the board, considered as a group, and the evaluation of the performance of each director based on previous service on the board, board committees and as liaisons between management and the board or a committee or otherwise working on matters specified by the board. The ages of the directors reported on the following pages are as of March 28, 2024.

  13. What is the experience of each nominee for election as a director?

    What is the experience of each nominee for election as a director? Our board of directors has nominated three persons as class I directors for a three-year term expiring at the end of our annual meeting of shareholders in 2027 or until their successors are duly elected and qualified.

  14. What is the experience of each nominee for election as a director?

    | American States Water Company | 31 | 2024 Proxy Statement |

  15. What is the experience of each nominee for election as a director?

    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR ALL” OF THE NOMINEES LISTED BELOW.

  16. What is the experience of each nominee for election as a director?

    | Independent Director One Public Company Board Age: 68 Director Since: 2021 Committee(s): Audit and Finance, and Nominating and Governance Key Skills: Leadership, Accounting/Finance, Public Utility Regulation, Industry Experience | Mr. Steven D. Davis | | | Background Mr. Davis has over 37 years’ experience in the public utility industry. He most recently served as Corporate Group President, Utilities, of Sempra from January 2017 until March 2018. As Corporate Group President he was responsible for the operations of San Diego Gas & Electric Company (SDG&E), Southern California Gas Company (SoCal Gas) and electric utilities in Chile and Peru. Prior to serving as Corporate Group President, he served as Executive Vice President, External Affairs and Corporate Strategy of Sempra from September 2015 until December 2016. He was President and Chief Operating Officer of SDG&E from 2014 until September 2015 and has also served in various other executive positions at Sempra, SDG&E and SoCal Gas, including serving as Senior Vice President, Chief Financial Officer and External Relations at SDG&E and SoCal Gas, and in other executive positions with responsibilities in the areas of investor and community relations, customer service and distribution operations. Mr. Davis has served as a director and as a member of the audit committee of Williams Industrial Services Group, Inc. from June 2019 until September 2023. He previously served as a director of SoCal Gas from November 2015 until March 2018 and as a director of SDG&E from 2011 until March 2018. Mr. Davis has served on a number of non-profit boards of directors, including the U.S. Chamber of Commerce and Edison Electric Institute from 2015-2018 and the California Chamber of Commerce from 2012-2016. He also served on the Board of Trustees of the Campanile Foundation from 2008-2014. Mr. Davis graduated from San Diego State University with a Bachelor of Science degree, Business Administration (Accounting). |

  17. What is the experience of each nominee for election as a director?

    | American States Water Company | 32 | 2024 Proxy Statement |

  18. What is the experience of each nominee for election as a director?

    | Chairman of the Board of Directors Independent Director Age: 71 Director Since: 1998 Committee(s): Non-voting ex-officio member of all committees Key Skills: Leadership, Finance, Strategic Planning, Corporate Governance | Ms. Anne M. Holloway | | | Background Ms. Holloway was a partner at Navigant Consulting, Inc., a provider of financial and strategic consulting services to Fortune 500 companies, governments and governmental agencies from 1999 to 2000. She served as President of Resolution Credit Services Corp., a subsidiary of Xerox Financial Services, from 1992 to 1999 where she was responsible for, among other things, the successful resolution of financial guarantees on troubled tax- exempt bonds, the restructuring of debt and negotiation with the Resolution Trust Corporation. She also served as Chief Operating Officer of International Insurance Company, another company in the Resolution Group, where she was responsible for operations, human resources and technology. Prior to joining the Resolution Group, Ms. Holloway held various management positions with Shawmut National Corporation, a financial services company. She has also acted as a business consultant to Sacred Heart Schools since January 2021 and business consultant to WelbeHealth, a public benefit company that provides senior care services, from June 2011 until March 2023. Ms. Holloway currently serves on the board and the finance and audit committee of the Michael J. Fox Foundation for Parkinson’s Research. She also serves on the board and compensation committee of WelbeHealth. She served as the chair of the Board of Trustees of Sacred Heart Schools in Atherton, California from 2008 to 2012. After she completed her chair role, she continued to support the school on the site management and development committees until 2013. Until 2018, she had served as co-chair for the nominating and governance committee for City Year San Jose/Silicon Valley, a national organization that works with AmeriCorps volunteers to reduce dropout rates and improve high school proficiency locally in San Jose, California. She holds a BA degree from Newton College of the Sacred Heart and an MBA from Boston University. She has completed the Harvard Business School Executive Management program. In December 2018, she completed the Distinguished Careers Institute at Stanford University. |

  19. What is the experience of each nominee for election as a director?

    | American States Water Company | 33 | 2024 Proxy Statement |

  20. What is the experience of each nominee for election as a director?

    | Independent Director Age: 60 Not a Previous Director Key Skills: Leadership, Industry Experience, Strategic Planning | Ms. Caroline A. Winn | | | Background Ms. Winn has over 35 years’ experience in the public utility industry. She has been the Chief Executive Officer of San Diego Gas & Electric (SDG&E), a subsidiary of Sempra, since August 2020. As CEO, she is responsible for managing an organization of 4,700 employees and over $2 billion of annual capital investments. She served as Chief Operating Officer of SDG&E from January 1, 2017 to July 2020. In prior executive roles at SDG&E, she has led multiple strategic initiatives, including architecting SDG&E’s wildfire mitigation program, orchestrating the transformation of its customer service organization, taking control of supply chain and streamlining procurement and logistics activities, and launched multi-million-dollar revenue streams. She spent the early years of her tenure at SDG&E and Sempra in technically complex engineering and construction roles. Ms. Winn sits on the board of directors of SDG&E. She also has served as the chair of the Western Energy Institute beginning in 2020, a member of the board of directors and audit committee of the Kayne Anderson closed end energy fund (KYN) beginning in 2020 and a member of the management council of the San Diego Regional Chamber of Commerce beginning in 2022. She is active in a number of charitable organizations, including serving as the vice chair of the Monarch School, a school dedicated to homeless students and services for families in need, beginning in 2019, a member of the directors’ council of the Scripps Institute of Oceanography beginning in 2019 and a board and audit committee member of St. Vincent DePaul Father Joe’s Villages, a non-profit organization serving the homeless in San Diego, beginning in 2021. She is also leading/chairing the American Heart Association’s Go Red for Women campaign in 2024. Ms. Winn holds a bachelor’s degree in electrical engineering from California State University Sacramento and is a licensed professional engineer in California. |

  21. What is the experience of each nominee for election as a director?

    | American States Water Company | 34 | 2024 Proxy Statement |

  22. What is the experience of our other directors?

    What is the experience of our other directors? Our Board has three class II directors with terms expiring at the end of the annual meeting in 2025.

  23. What is the experience of our other directors?

    | Independent Director Age: 73 Director Since: 2007 Committee(s): Nominating and Governance (Chair), Compensation Key Skills: Leadership, Public Relations, Government, Corporate Governance | Dr. Diana M. Bontá | | | Background Dr. Bontá served as President and Chief Executive Officer of The Bontá Group for the last ten years until her retirement in March 2024. The Bontá Group provided consulting services in the healthcare area. Previously, Dr. Bontá served as the President and Chief Executive Officer of The California Wellness Foundation, a private independent foundation with a mission to improve the health of people in California. She has also served as the Vice President of Public Affairs of the Kaiser Foundation Health Plan and Hospitals, Southern California Region, where she was responsible for setting the Region’s public policy agenda and providing leadership and oversight of public affairs programs and support for Kaiser Permanente’s external communications and reputation management. Dr. Bontá also served as the first Latina director of the California Department of Health Services. Prior to serving as director of the California Department of Health Services, Dr. Bontá served as director of the Department of Health and Human Services of the City of Long Beach, California. She has been a trustee of the Annie E. Casey Foundation since 2008 and a Governance Committee chair since 2009. She is also a board member of the New Hope Medical Foundation, and has been a member of the board of directors and of the foundation board of trustees at Children’s Hospital of Los Angeles since 2019. Previously, Dr. Bontá was a board member at the Archstone Foundation from 2009-2021 and had served as the chair of its board of directors and audit committee. She has served as a commissioner of the City of Los Angeles Board of Fire Commissioners as an appointee of Mayor Antonio Villaraigosa, and as a director/trustee of the Charles R. Drew University of Medicine and Science. She served as a director/trustee on the Department of Health and Human Services Minority Health Committee, as an appointee of both California Governors Gray Davis and Arnold Schwarzenegger to the Board of Trustees of the Health Professions Education Foundation. She holds doctorate and master’s degrees in public health from the University of California, Los Angeles (UCLA). She held an appointment as an adjunct professor at UCLA’s School of Public Health from 1999 to 2023 and is a registered nurse. |

  24. What is the experience of our other directors?

    | American States Water Company | 35 | 2024 Proxy Statement |

  25. What is the experience of our other directors?

    | Independent Director Age: 59 Director Since: 2019 Committee(s): ASUS (Chair) and Compensation Key Skills: Leadership, Engineering, Government Contracting, Strategic Planning | Ms. Mary Ann Hopkins | | | Background Ms. Hopkins has over 33 years of progressive experience in engineering and management with an emphasis on infrastructure, water, environmental, defense, security and intelligence markets, including serving the U.S. government. She has served in several leadership positions at Arcadis NV, a global design, engineering and consulting company based in the Netherlands, from 2016 until June 2023. At the time of her retirement in 2023, she served as the Chief Growth Officer and a member of the Arcadis Executive Leadership Team and was responsible globally for Strategy, Sales and Business Development and Marketing and Communications. From 2012 until 2016, she was a Group President of Parsons Corporation, an international engineering, construction, technical and management services firm whose customers include the U.S. government. As Group President, she was responsible for worldwide operations of the Federal Unit of Parsons serving the primary markets of infrastructure, environmental, defense, security and intelligence. Prior to her promotion to Group President, she served in various other executive and management capacities at Parsons since 1989. She has been a member of the board of directors and the audit, risk and compliance committee and the finance committee at Blumont, Inc. since 2016. Blumont provides global engineering and management support services primarily for the US Government, UK Government and the United Nations in more than 20 countries and includes delivering humanitarian assistance, building infrastructure and creating economic opportunities. She has a BS and a master’s degree in civil engineering from Syracuse University and attended the Advanced Management Program at Duke University. |

  26. What is the experience of our other directors?

    | American States Water Company | 36 | 2024 Proxy Statement |

  27. What is the experience of our other directors?

    | President and Chief Executive Officer Age: 66 Director Since: 2009 Committee(s): ASUS Key Skills: Leadership, Industry Experience, Accounting/Finance, Strategic Planning | Mr. Robert J. Sprowls | | | Background Mr. Sprowls is the sole management member of the board of directors and has served as President and Chief Executive Officer of the company since 2009 and Chief Financial Officer (CFO) for more than four years prior to that. He also has served as President and Chief Executive Officer of subsidiaries Golden State Water Company and American States Utility Services, Inc. and its subsidiaries since 2009. Mr. Sprowls has more than 35 years of experience in business strategy, operations management, corporate finance and business problem-solving for regulated utilities, utility holding companies and highly competitive, non-regulated utility affiliates. Prior to joining American States Water Company, Mr. Sprowls spent 21 years at CILCORP Inc., or CILCORP, a public utility holding company whose largest subsidiary, Central Illinois Light Company, served approximately 250,000 electric and gas utility customers. During his tenure with CILCORP, Mr. Sprowls held positions as President, Business Unit Leader – Energy Delivery, CFO and Treasurer of Central Illinois Light Company, CFO of a non-regulated subsidiary of CILCORP, QST Enterprises Inc., and Vice President and Treasurer of CILCORP. Mr. Sprowls left CILCORP and Central Illinois Light Company following the sale of the company to Ameren Corporation in 2003. He is currently a member of the board of directors of the National Association of Water Companies, a non-profit organization representing private water companies, and has previously served as its President and a member of its Executive Committee. He has served on the board of directors of CILCORP Inc. and Central Illinois Light Company. He has been a member of the Southern California Leadership Council, past chairman and a member of the board of directors of the Illinois Energy Association, a past chairman and a member of the board of directors of Goodwill Industries of Central Illinois and a committee chairman for the Heart of Illinois United Way Campaign. He holds a BA degree in economics and business administration from Knox College in Illinois and a master’s degree in business administration with a concentration in accounting and finance from Bradley University, also in Illinois. He is a Certified Public Accountant (inactive) and a Certified Management Accountant. |

  28. What is the experience of our other directors?

    | American States Water Company | 37 | 2024 Proxy Statement |

  29. What is the experience of our other directors?

    Our Board has three class III directors with terms expiring at the end of the annual meeting in 2026.

  30. What is the experience of our other directors?

    | Independent Director Age: 64 Director Since: 2023 Committee(s): Audit and Finance, ASUS Key Skills: Accounting, Public Utility Regulation, Industry Knowledge, Leadership Environmental, Social And Governance Matters | Mr. Thomas A. Eichelberger | | | Background Mr. Eichelberger had a career in public accounting for over 37 years, retiring in May 2022 as an Audit Partner at Deloitte & Touche LLP in the power and utilities industry group. He served complex companies as the lead client service partner with a primary focus on serving large utility holding companies with rate-regulated subsidiaries in the electric, gas, and water industries. He also served as the lead partner on non-regulated utility affiliates with significant investments in wind and solar projects. Prior to 2002 when he began his career at Deloitte, he was at Arthur Andersen LLP. He is a Certified Public Accountant in Florida and Georgia, a member of the American Institute of Certified Public Accountants, Georgia Society of Certified Public Accountants, and the Florida Institute of Public Accountants. He is a former member of the Board of Directors of the Ashford Dunwoody YMCA and a former member of the Board of Directors of Food for Thought Outreach. He was also active in the Volunteer Income Tax Assistance Program for many years. He received a Bachelor of Science from the University of Notre Dame and a Master of Science in Management from Georgia Institute of Technology with a concentration in accounting. |

  31. What is the experience of our other directors?

    | American States Water Company | 38 | 2024 Proxy Statement |

  32. What is the experience of our other directors?

    | Independent Director Age: 64 Director Since: 2023 Committee(s): Compensation, Nominating and Governance Key Skills: Leadership, Government Contracting, Audit and Finance, Information Technology | Mr. Roger M. Ervin | | | Background Mr. Ervin joined American States Water with over 35 years of experience leading public and private sector organizations including serving in various director roles. He retired after serving as President and Chief Executive Officer of Blumont, Inc. from 2014 to 2020. Blumont provides global engineering and management support services for the US Government, UK Government and the United Nations in more than 20 countries. Prior to serving at Blumont, he was a member of the leadership team at LMI Consulting, a 50+ year old US government contractor that provides operational and infrastructure support to the US Department of Defense, Department of State and US intelligence agencies. Mr. Ervin served as the Secretary of Revenue for the State of Wisconsin from 2007-2011, during which time he led the restructuring of agency operations, a rewrite of the state’s tax code and positioned the agency for the digital age. He has had additional government experience, including serving in US Department of State, US Department of Commerce and The African Development Bank. He has been providing consulting services relating to overseas businesses to Roche Diagnostics since 2022. He also currently serves as an Adjunct Professor at the Robert M. LaFollette School of Public Policy at the University of Wisconsin-Madison. He served previously as an Adjunct Professor at the University of Wisconsin School of Business instructing students on the principles of Strategic Management. Since 2020, he has been a director and member of the audit committee of Ascendium Education Group, a non-profit and for-profit student loan corporation and has served on the audit and finance committees of several other not for profits since 1995. He has a Bachelor of Science degree from Tulane University and an MBA from the University of Wisconsin-Madison. |

  33. What is the experience of our other directors?

    | American States Water Company | 39 | 2024 Proxy Statement |

  34. What is the experience of our other directors?

    | Independent Director Age: 69 Director Since: 2020 Committee(s): Compensation (Chair), Nominating and Governance, ASUS Key Skills: Legal, Industry Knowledge, Corporate Governance, Acquisitions | Mr. C. James Levin | | | Background Mr. Levin has been a corporate lawyer in Los Angeles, California for over 35 years. In June 2019, he retired from Winston & Strawn LLP where he had practiced as a corporate partner and then of counsel since joining the firm in 2010. Prior to joining that firm, Mr. Levin was a corporate partner at O’Melveny & Myers LLP, having joined the firm in 1981 as an associate. Mr. Levin specialized in corporate law, including securities, corporate governance, and mergers and acquisitions. He served as the chair or co-chair of the mergers and acquisitions group of O’Melveny & Myers LLP for a number of years. He provided legal advice as outside counsel on various corporate matters to American States Water Company and its subsidiaries for a number of years prior to joining the board. Mr. Levin currently serves on the Board of Trustees of the Descanso Gardens Foundation, a non-profit corporation dedicated to the support and operation of this public garden in Southern California. Through December 2023, he also served as the Foundation’s chair of the finance committee. Mr. Levin has a BA degree from DePauw University, an MBA from Kellogg Graduate School of Management at Northwestern University and a JD from the Northwestern Pritzker School of Law. |

  35. What is the experience of our other directors?

    | American States Water Company | 40 | 2024 Proxy Statement |

  36. What is the experience of our other directors?

    Mr. Fielder will be retiring from the board after the 2024 annual meeting. He will continue to serve as a Class I director of the board until his successor is duly elected to the board at the 2024 annual meeting.

  37. What is the experience of our other directors?

    | Independent Director Age: 78 Director Since: 2013 Committee(s): Audit and Finance (Chair), ASUS Key Skills: Leadership, Public Utility Regulation, Industry Experience, Information Technology | Mr. John R. Fielder | | | Background Mr. Fielder has over 40 years of experience in the public utility industry. Prior to his retirement, he was President of Southern California Edison Company from October 2005 until his retirement on December 31, 2010. As President, he was responsible for operations support, customer service, information technology, environmental affairs, state regulatory and public affairs and employee relations. Prior to his position as President, Mr. Fielder held various leadership positions at Southern California Edison Company, including Senior Vice President of Regulatory Affairs for 14 years and Vice President of Information Services. He has served on a number of not-for-profit boards during his career. He currently serves as the chairman of the Long Beach Memorial Medical Center/Hospital governing board, and previously served on the hospital’s foundation board and investment committee. Since 2006, he has also served as a member of the board of the Rancho Los Cerritos Foundation, which supports a historic property and museum in Long Beach, California, and has served on the finance committee of the Foundation since 2012. He also served a two-year term as chair of the board of the Long Beach Aquarium of the Pacific in 2011 and 2012 and a term as the chair of the audit committee of the Aquarium in 2013 and 2014. In addition, he has served on the board development committee of Long Beach BLAST, a program to connect college students with youth facing adversity. He has also served on various industry association boards during his career. He has a BA degree from the University of California, Santa Barbara, an MBA from the University of California, Los Angeles, and a law degree from Pepperdine School of Law. |

  38. What is the experience of our other directors?

    ***

  39. What is the experience of our other directors?

    | American States Water Company | 41 | 2024 Proxy Statement |

  40. DIRECTOR(1) COMPENSATION FOR 2023

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | Anne M. Holloway | $225,000 | $40,000 | $97 | $265,097 | | Sarah J. Anderson(4) | 14,144 | — | 382 | 14,526 | | Dr. Diana M. Bontá | 146,500 | 40,000 | 97 | 186,597 | | Steven D. Davis | 142,536 | 40,000 | 97 | 182,633 | | Thomas A. Eichelberger(4) | 124,106 | 40,000 | 2,539 | 166,645 | | Roger M. Ervin(4) | 83,786 | 40,000 | 57 | 123,843 | | John R. Fielder | 154,500 | 40,000 | 471 | 194,971 | | Mary Ann Hopkins | 148,000 | 40,000 | 97 | 188,097 | | C. James Levin | 157,500 | 40,000 | 97 | 197,597 | | Janice F. Wilkins(4) | 57,758 | — | 498 | 58,256 |

  41. Compensation Discussion and Analysis

    We also provide information comparing our performance to our peer group. You can find information about the composition of our peer group in this section under the heading “Compensation Committee Process.” The compensation committee made its decisions regarding compensation of our named executive officers in 2023 based, in part, on this peer group information. We have compared our financial performance during the past three and five years to members of our peer group. Financial Highlights The company’s consolidated diluted earnings in 2023 of $3.36 per share (GAAP measure) were favorably impacted by the receipt of final CPUC decisions in the water general rate case and cost of capital proceedings, as well as investment gains resulting from current market conditions. As a result, recorded earnings for 2023 included the impact of (i) retroactive new rates related to the full year of 2022 of $19.7 million, or $0.38 per share, as a result of receiving a final decision on the water general rate case in June 2023, (ii) the final cost of capital decision that resulted in the reversal during 2023 of revenues subject to refund of $6.4 million, or $0.13 per share, due to a change in estimate from what had been recorded during 2022, and (iii) gains totaling $5.0 million, or $0.10 per share, on investments held to fund one of the company’s retirement plans due to financial market conditions. Excluding these items, the company’s adjusted diluted earnings for 2023 were $2.75 per share (non-GAAP measure). For the 10-year period ended December 31, 2023, the company achieved a compound annual growth rate (CAGR) of 7.6% in its recorded consolidated diluted earnings per share or a CAGR of 5.6% if 2023 is adjusted as noted above. It also achieved an 8.1% CAGR in dividends during the 10-year period. Over the past five years, the company also achieved a:

  42. Compensation Discussion and Analysis

    2023 Pay Mix The principal elements of our compensation program include a base salary, annual cash incentives (a portion of which is based on achieving financial, operational and customer service objectives during the year), and annual equity grants (a portion of which is based on achieving financial and operational performance objectives during a three-year performance period). We refer to the combination of these elements of compensation as total direct compensation. The compensation committee set the target percentages presented in the charts below for each component of total direct compensation in 2023 based on 26 pay periods, assuming that each named executive officer would earn the aggregate target during the year in annual cash incentives and at the target level following the end of the three-year performance period for the performance stock awards. As these charts show, approximately 74% and 41% of target total direct compensation (salary, bonus and equity) is variable (or at-risk) for our CEO and other named executive officers (NEOs), respectively.

  43. Compensation Discussion and Analysis

    In determining the target percentages for each component of total direct compensation, the compensation committee considered the practices of our 2023 peer group, how well the company’s pay levels are aligned with performance compared to the company’s 2023 peer group, the views and practices of the CPUC in setting rates, the practices of the two water utilities regulated by the CPUC that are members of our 2023 peer group, the preference of proxy advisory firms for significant portions of total direct compensation to consist of variable pay based on the satisfaction of objective performance targets and the prior year’s performance of the executive officer. The compensation committee also believes that it is generally important for more of the compensation of the chief executive officer to be dependent on performance than that of the other executive officers. The mix of total direct compensation awarded in 2023 which will be received by a named executive officer (which does not include the actuarial calculation of the change in pension value or other compensation shown in the Summary Compensation Table) may be different from the target mix depending upon a variety of factors, the value of some of which cannot yet be determined. The factors affecting actual total direct compensation awarded in 2023 that have not yet been determined include:

  44. Compensation Discussion and Analysis

    | ⯀ | the company’s financial and operational performance for the three-year performance period with respect to the performance measures set forth in the executive’s applicable performance stock award agreement for this period; |

  45. Compensation Discussion and Analysis

    | ⯀ | the value of the company’s common shares upon the vesting of time-vested restricted stock units awarded to the executive in 2023 and the value of dividend equivalent rights on dividends paid on these restricted stock units (no restricted stock units awarded to an executive in 2023 vested in 2023); and |

  46. Compensation Discussion and Analysis

    Alignment of CEO Pay with Performance During the review of our overall executive compensation program in January 2023 and January 2024, our consultant (Pearl Meyer) reviewed the relationship between realizable total direct compensation of our CEO and our performance for the three, three-year periods ended December 31, 2021, December 31, 2022 and December 31, 2023. These reviews were conducted to assist the compensation committee in understanding the degree of alignment between realizable total direct compensation delivered to the CEO during these three-year periods and our performance relative to our peer group. For purposes of this review, company performance is defined as total shareholder return (including reinvested dividends) over the respective three-year period. For the three-year period ended December 31, 2022, total direct peer group realizable compensation is defined as the sum of:

  47. Compensation Discussion and Analysis

    | ⯀ | Actual short-term cash incentives (bonuses) earned over the three-year period ended December 31, 2022; |

  48. Compensation Discussion and Analysis

    | ⯀ | Cumulative “in-the-money” value as of December 31, 2022 of any stock options granted over the prior three-year period; |

  49. Compensation Discussion and Analysis

    | ⯀ | Cumulative value as of December 31, 2022 of any restricted shares or restricted stock units granted over the prior three-year period and payouts of performance shares made for completed performance periods; and |

  50. Compensation Discussion and Analysis

    | ⯀ | The value as of December 31, 2022 of any performance shares at target for any incomplete performance periods. |

  51. Compensation Discussion and Analysis

    As a second comparison, we also reviewed our CEO’s pay for performance using realizable pay from January 1, 2021 to December 31, 2023 compared to total shareholder return (including reinvested dividends) over the same period. Peer company pay is based on 2021 and 2022 actual pay with an estimate of 2023 pay equal to 2022 since 2023 pay information for most of our peers was not available at the time of this analysis. For all performance periods, the company’s performance has been equal to or greater than its relative CEO pay rank for the peer group. We believe that this indicates an efficient compensation plan design relative to performance achieved.

  52. Compensation Discussion and Analysis

    (1) The 2020-2022 and 2021-2023 performance periods are compared to the current peer group. The 2019-2021 performance period is compared to our 2022 peer group comprised of ALLETE, Inc., Avista Corporation, California Water Service Group, Chesapeake Utilities Corporation, Essential Utilities, Inc., MGE Energy, Inc., Northwest Natural Holding Company, Northwestern Corporation, Otter Tail Corporation, SJW Group and South Jersey Industries, Inc.

  53. Compensation Discussion and Analysis

    Compensation Committee Process The compensation committee annually reviews our executive compensation program in order to assess whether it continues to meet the objectives of the program. The compensation committee typically engages a compensation consultant to assist the committee. The compensation committee engaged Pearl Meyer in August 2011 as a compensation consultant to the committee. After consideration of the merits of engaging a new compensation consultant compared to the benefits of retaining Pearl Meyer and an independence assessment of Pearl Meyer, the committee decided to extend the engagement of Pearl Meyer for 2023. In conducting its independence assessment, the compensation committee concluded that no conflicts of interest existed between the company and Pearl Meyer (or any individuals working on the company’s account on behalf of Pearl Meyer). We provide additional information regarding this assessment under the heading “Compensation Committee - Is our compensation consultant independent?” The compensation committee considers compensation information from a selected group of companies by first reviewing the performance of our executive compensation program in the prior year and then determining executive compensation for the current year. As part of the process of selecting a peer group, Pearl Meyer identifies and selects a peer group of companies with input from management. The final peer group in each year is then approved by the compensation committee. Our current peer group is presented below:

  54. Compensation Discussion and Analysis

    Owing to the limited number of similarly sized water utilities (with annual revenues between $100 million and $2.2 billion), a group of companies was selected as our current peer group based on similarity in industry (water, gas and electric utilities) and size. IDACORP, Inc. was added to our current peer group and South Jersey Industries, Inc. was excluded from our current peer group due to South Jersey Industries, Inc. going private in February 2023. The peer group of companies used in determining executive compensation in 2023 included South Jersey Industries, Inc., but did not include IDACORP, Inc. The peer group of companies used in 2022 included South Jersey Industries, Inc. and Unitil Corporation, but did not include Avista Corporation or IDACORP, Inc. Avista Corporation was added to the peer group used in 2022 and Unitil Corporation was excluded from that peer group so that the market capitalization of the company would be closer to the 50th percentile of the peer group of companies. Three members of the current peer group are principally in the water industry, two of which are also regulated by the CPUC, the regulator of the company’s principal subsidiary. The compensation committee often gives greater weight to the practices of the two CPUC-regulated companies since the company competes with these companies for executive talent and is subject to similar regulatory oversight. In addition, the compensation committee believes that the financial and operational performance of these companies and the compensation programs of these companies are particularly relevant since the ability of these companies to earn their authorized rate of return and to obtain rate adjustments for changes in employee compensation are also affected to some extent by the rules, regulations and practices of the CPUC. These companies are, to some extent, also affected by the same weather, climate and economic conditions as the company. The other companies in our current peer group are utilities or utility holding companies.

  55. Compensation Discussion and Analysis

    The compensation committee considered the competitive assessment of the company’s executive compensation program provided by Pearl Meyer in January 2023 based on information derived by Pearl Meyer from the peer group and Towers Watson-2022 Top Management Compensation Survey (all industries) and two confidential/proprietary general industry surveys. The survey information was summary in nature, did not identify any particular company and did not contain any information regarding the compensation program of any particular company. Accordingly, the compensation committee did not consider the compensation practice of any company, other than the compensation practices of members of our 2023 peer group in January 2023, in designing any of the company’s compensation plans. Pearl Meyer noted in the competitive assessment provided to the compensation committee that, in the aggregate, actual total direct compensation of the executive officers of the company was between the 25th and the 50th percentile. Target total direct compensation was set between the 25th and 50th percentile. All the members of the company’s peer group used a mix of financial and non-financial goals in determining both short-term incentive and long-term incentive compensation of executives. Ten of the members of the company’s 2023 peer group also used both performance-based and time-based vehicles in granting stock awards. One peer used performance-based long-term incentive awards exclusively. In addition to the information provided by Pearl Meyer, the compensation committee considered:

  56. Compensation Discussion and Analysis

    | ⯀ | objective measures of the company’s financial, operational and customer service performance established in the company’s short-term incentive program; |

  57. Compensation Discussion and Analysis

    | ⯀ | objective measures of the company’s financial performance used in establishing performance criteria for performance stock awards under the company’s employee stock plan; |

  58. Compensation Discussion and Analysis

    the year. Based on the review, the compensation committee determines, in its sole discretion, whether to adjust the base salary, annual cash incentive and equity award amounts for the chief executive officer. The decisions of the compensation committee for compensation (other than equity grants) are then recommended to the full board for approval. Risk Consideration The compensation committee has conducted a review of the company’s incentive compensation programs, the safeguards in place to prevent fraud by management in manipulating the company’s compensation programs and the potential risks associated with certain scenarios assuming management misreported the company’s performance for the purposes of inflating results under the company’s incentive compensation plans. The compensation committee has also considered whether the company’s overall compensation program encourages unnecessary or excessive risk taking and has concluded that it does not. Pay Mix Base salaries, which constitute the largest component of total direct compensation for all employees of the company, other than the CEO, are fixed in amount and thus should not encourage excessive risk taking. Balanced Performance Measures The compensation committee considers a variety of factors in awarding additional cash compensation based on the performance of its executive officers, including factors based on earnings performance, customer satisfaction, employee safety, supplier diversity, improvements in operations and internal controls. The committee believes that, because of this mix of factors, the company’s short-term cash incentive program appropriately balances risk and the committee’s desire to compensate executives for accomplishments that are important to the company’s customers and shareholders. The compensation committee also makes awards of restricted stock units and performance stock to executive officers. Restricted stock units and performance stock awards granted vest at the rate of 33% in the first year, 33% in the second year and 34% in the third year and, with respect to performance stock awards, provide for determination of whether the performance criteria have been satisfied after the end of a three-year performance period, subject to limited exceptions. In addition, we may not repurchase any options granted to any executive officer or manager or reprice any options awarded to any executive officer or manager. The compensation committee believes that these features of our equity plans further discourage excessive risk taking by executives. In addition, the vesting schedule serves as a retention vehicle for executive officers and managers. Recoupment Policy In order to mitigate risks that may be associated with performance-based compensation, the compensation committee adopted a new clawback policy to recoup cash and equity performance-based compensation payments from executive officers that became effective on October 2, 2023. Under this policy, the company will clawback compensation paid to an executive officer if the compensation committee determines that:

  59. Compensation Discussion and Analysis

    | ⯀ | the competitiveness of the compensation of each named executive officer compared to executive officers of our 2023 peer group in comparable positions, |

  60. Compensation Discussion and Analysis

    Under the short-term incentive program, executive officers are eligible for an award based on the objective performance criteria of 37.5% of objective target award at threshold performance and up to a maximum incentive of 120% of the objective target award (GSWC Administrative and General Officers); 115% (GSWC Operations Officers) or 135% (ASUS Officers). Under the subjective assessment component of the incentive, executive officers can earn 12.5% of the total incentive opportunity at threshold, 20% at target, and 35% of the total incentive opportunity at maximum. Under this program, the compensation committee approves specific performance metrics for each named executive officer for the objective cash incentive depending on his or her responsibilities within the company, established minimums, targets and maximums for each objective, and weights each executive’s goals so that target achievement of all performance metrics will result in target cash incentive payout for the year for the objective portion of the award. As part of the process of determining the metrics to include in the cash incentive program for 2023, the compensation committee reviewed actual performance of each executive officer on each of the performance metrics used in awarding cash incentive compensation in 2022 and management’s recommendations for changes in the metrics or the weighting of the metrics to be included in the 2023 program. The compensation committee may, in its discretion, reduce an award below the level earned for each of the criteria or upon the failure to satisfy other objective criteria, but may not in any event, increase the amount of the bonus above the level specified for that criterion. Information regarding the performance goals for 2023 applicable to our named executive officers and actual performance are set forth in the tables below along with the level of achievement in 2023. Compliance with performance goals is determined by the compensation committee in accordance with the terms of the short-term performance incentive program and adjustments were made to the budget and performance goals, as applicable, on the basis of generally accepted accounting principles or other objective performance measures. The performance goals differ depending upon whether an executive officer is an administrative officer, a GSWC operations officer or an ASUS officer. Mr. Sprowls, Ms. Tang and Ms. Farrow are GSWC administrative and general officers, Mr. Rowley is a GSWC operations officer and Mr. Connor is an ASUS officer.

  61. PERFORMANCE GOALS

    PERFORMANCE GOALS

  62. PAYOUT PERCENTAGES FOR GSWC ADMINISTRATIVE AND GENERAL OFFICERS

    PAYOUT PERCENTAGES FOR GSWC ADMINISTRATIVE AND GENERAL OFFICERS

  63. PAYOUT PERCENTAGES FOR GSWC ADMINISTRATIVE AND GENERAL OFFICERS

    | Performance Measure | Performance Target and Payout Percentage of Target Incentive | | | Actual Performance | Actual Payout Percentage of Target Incentive | | | Threshold | Target | Maximum | | | | Adjusted EPS – AWR Consolidated(1) | 80% of budget | 100% of budget | 120% of budget | Between Target and Maximum 102.5% of adjusted budget | 21.9% | | | 10.0% | 20.0% | 35.0% | | | | Adjusted EPS – Regulated Utilities (RU)(2) | 80% of budget | 100% of budget | 120% of budget | Between Target and Maximum 102.8% of adjusted budget | 21.4% | | | 11.5% | 20.0% | 30.0% | | | | Adjusted EPS – ASUS(2) | 80% of budget | 100% of budget | 130% of budget | Between Target and Maximum 106.3% of adjusted budget | 11.1% | | | 5.0% | 10.0% | 15.0% | | | | Capital Expenditures – RU(3) | ≥ $130 million | ≥ $145 million | ≥ $170 million | At Maximum $175.7 million | 15.0% | | | 5.0% | 10.0% | 15.0% | | | | Customer Complaints – Regulated Water Utility (RWU) | ≤ 0.11% | ≤ 0.065% | ≤ 0.03% | At Maximum 0.026% | 7.0% | | | 1.5% | 5.0% | 7.0% | | | | Supplier Diversity – RU | ≥ 26.5% | ≥ 30.5% | ≥ 34.5% | At Maximum 35.1% | 7.0% | | | 1.5% | 5.0% | 7.0% | | | | SOX Deficiencies – RU(4) | No MW, no SD and no more than 3 CDs | No MW, no SD and no more than 1 CD | No MW, no SD and no CD | At Target | 5.0% | | | 1.5% | 5.0% | 6.0% | | | | SOX Deficiencies – ASUS(4) | No MW, no SD and no more than 1 CD | No MW, no SD and no CD | N/A | At Target | 5.0% | | | 1.5% | 5.0% | 5.0% | | | | Objective Incentive Total as a Percentage of Target Incentive | 37.5% | 80.0% | 120.0% | Above Target | 93.4% |

  64. PAYOUT PERCENTAGES FOR GSWC ADMINISTRATIVE AND GENERAL OFFICERS

    | American States Water Company | 58 | 2024 Proxy Statement |

  65. PAYOUT PERCENTAGES FOR GSWC OPERATIONS OFFICERS

    PAYOUT PERCENTAGES FOR GSWC OPERATIONS OFFICERS

  66. PAYOUT PERCENTAGES FOR GSWC OPERATIONS OFFICERS

    | Performance Measure | Performance Target and Payout Percentage of Target Incentive | | | Actual Performance | Actual Payout Percentage of Target Incentive | | | Threshold | Target | Maximum | | | | Adjusted EPS – RWU(2) | 80% of budget | 100% of budget | 120% of budget | Between Target and Maximum 102.7% of adjusted budget | 42.7% | | | 20.0% | 40.0% | 60.0% | | | | Capital Expenditures – RWU(3) | ≥ $125 million | ≥ $135 million | ≥ $155 million | Between Target and Maximum $151.0 million | 22.4% | | | 8.0% | 16.0% | 24.0% | | | | Customer Complaints – RWU | ≤ 0.11% | ≤ 0.065% | ≤ 0.03% | At Maximum 0.026% | 8.0% | | | 2.5% | 6.0% | 8.0% | | | | Supplier Diversity – RWU | ≥ 26.0% | ≥ 30.0% | ≥ 34.0% | Between Target and Maximum 32.1% | 7.1% | | | 2.5% | 6.0% | 8.0% | | | | Safety – Recordable Incident Rate– RWU | ≤ 4.0 | ≤ 3.3 | ≤ 2.6 | At Maximum 2.4 | 8.0% | | | 2.5% | 6.0% | 8.0% | | | | SOX Deficiencies – RU(4) | No MW, no SD and no more than 3 CDs | No MW, no SD and no more than 1 CD | No MW, no SD and no CD | At Target | 6.0% | | | 2.0% | 6.0% | 7.0% | | | | Objective Incentive Total as a Percentage of Target Incentive | 37.5% | 80.0% | 115.0% | Above Target | 94.1%* |

  67. PAYOUT PERCENTAGES FOR GSWC OPERATIONS OFFICERS

    | * Line item does not total due to rounding. |

  68. PAYOUT PERCENTAGES FOR GSWC OPERATIONS OFFICERS

    | American States Water Company | 59 | 2024 Proxy Statement |

  69. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    PAYOUT PERCENTAGES FOR ASUS OFFICERS

  70. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    | Performance Measure | Performance Target and Payout Percentage of Target Incentive | | | Actual Performance | Actual Payout Percentage of Target Incentive | | | Threshold | Target | Maximum | | | | Adjusted EPS – ASUS(2) | 80% of budget | 100% of budget | 130% of budget | Between Target and Maximum 106.3% of adjusted budget | 46.4% | | | 15.0% | 40.0% | 70.0% | | | | Direct Operating Margin – ASUS(5) | ≥ budget less 100 basis points | ≥ budget | ≥ budget plus 100 basis points | At Maximum | 22.0% | | | 7.0% | 12.5% | 22.0% | | | | Direct Construction Margin – ASUS(6) | ≥ budget less 200 basis points | ≥ budget | ≥ budget plus 200 basis points | Between Target and Threshold | 10.9% | | | 7.0% | 12.5% | 22.0% | | | | Expense Optimization – ASUS(7) | ≤ 101% of budget | ≤ 99% of budget | ≤ 97% of budget | Between Target and Maximum 97.4% | 9.3% | | | 4.0% | 6.0% | 10.0% | | | | Safety – Recordable Incident Rate – ASUS | ≤ 3.4 | ≤ 2.9 | ≤ 2.4 | Between Target and Threshold 3.3 | 2.8% | | | 2.5% | 4.0% | 6.0% | | | | SOX Deficiencies – ASUS | No MW, no SD and no more than 1 CD | No MW, no SD and no CD | N/A | At Target | 5.0% | | | 2.0% | 5.0% | 5.0% | | | | Objective Incentive Total as a Percentage of Target Incentive | 37.5% | 80.0% | 135.0% | Above Target | 96.3%* |

  71. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    | * Line item does not total due to rounding. |

  72. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    (1) “Consolidated ‘EPS” was computed on the basis of fully diluted earnings per share determined in accordance with generally accepted accounting principles (GAAP). Actual performance was determined by the compensation committee based on the budget approved by the board of directors prior to the adoption of the short-term incentive program and actual earnings determined in accordance with GAAP in, each case, adjusted to remove (1) expenses associated with new business development at GSWC and BVES, (2) the performance of the rabbi trust assets, and (3) COVID-19 expenses related to travel, including lodging and meal expenses. (2) “Adjusted EPS” for the budget and actual earnings for each of the subsidiaries was determined on the same basis as set forth in footnote (1). (3) “Capital Expenditures” refers to capital expenditures recorded in the company’s financial statements. (4) The term “CD” refers to a control deficiency, the term “SD” refers to a significant deficiency and the term “MW” refers to a material weakness. (5) “Direct Operating Margin – ASUS” means a percentage determined by dividing total operations and maintenance revenues less direct operations expense by total operations and maintenance revenues as recorded in the company’s Form 10-K. Direct operations expense for this purpose includes other operation, administration and general, depreciation and amortization, and property and other taxes as reflected in the company’s Form 10-K, but excludes (i) expenses of any new base award during 2023, (ii) expenses of ASUS administration and centralized functions, (iii) general office expenses of GSWC approved by the CPUC to be allocated to ASUS, (iv) property and other taxes allocable to construction activities, (v) non-labor related maintenance expenses, and (vi) COVID-19 expenses related to travel, including lodging and meal expenses. (6) “Direct Construction Margin – ASUS” means a percentage determined by dividing total construction revenues less ASUS construction costs (reported as expenses in the company’s Form 10-K for 2023 filed with the SEC by total construction revenues. Construction revenues and construction costs for this purpose exclude COVID-19 expenses related to travel, including lodging and meal expenses. (7) “Expense Optimization – ASUS” means the sum of other operations, maintenance and administrative, and general expenses of ASUS in 2023 (as reflected in the company’s Form 10-K) excluding (i) non-labor related maintenance expenses, (ii) general office expenses of GSWC approved by the CPUC to be allocated to ASUS, (iii) expenses incurred in connection with ASUS’s new business development cost center, (iv) expenses included in the company’s Form 10-K for awards recorded under the 2023 short-term incentive plan and the 2016 plan, (v) COVID-19 expenses related to travel, including lodging and meal expenses, and (vi) expenses related to a legal settlement of a civil investigative demand by a U.S. governmental agency.

  73. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    | American States Water Company | 60 | 2024 Proxy Statement |

  74. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    The adjustments discussed above, in the aggregate, resulted in a decrease in the objective bonus payouts from that which would have been paid if such adjustments had not been made to the budget and actual results, except for Mr. Connor, primarily due to adjustments made due to the performance of the rabbi trust assets. In each case, the objective bonus payout was less than the maximum objective bonus payable under each named executive officer’s award agreement and our CEO’s relative pay rank for the period 2021-2023 continues to be aligned with relative total shareholder return of our current peer group. The compensation committee recognizes that these objective measures do not encompass all the objectives of the company in a given year and may not fully reflect the company’s performance depending on outside factors such as weather, water quality, water supply and other factors beyond the control of the executive. As a result, the payout structure includes a limited discretionary bonus component based on a subjective assessment of the performance of each executive officer by the compensation committee after the end of the year, taking into account the assessment of each executive officer by the independent directors after considering the chief executive officer’s assessment of the performance of each of the other executive officers during the year and the total overall compensation of the named executive officer. The discretionary bonus payout under the short-term cash incentive award made to Mr. Sprowls for 2023 was 162.2% of the target aggregate discretionary reward. The discretionary bonus payout under short-term cash incentive awards made to Ms. Tang, Mr. Rowley and Mr. Connor was 145.0%, and to Ms. Farrow was 150.0% of the target aggregate discretionary award. The discretionary bonus payout under the short-term cash incentive award made to Mr. Sprowls for 2023 was 32.4% of base pay. The discretionary bonus payout under the short-term cash incentive award made to Ms. Tang and Mr. Rowley was 10.8% of base pay. The discretionary bonus payout under the short-term cash incentive award made to Mr. Connor was 13.0% of base pay. The discretionary bonus payout under the short-term cash incentive award made to Ms. Farrow was 9.4% of base pay. Equity Awards The compensation committee considered the following factors in determining the amount and type of equity awards to be made to the chief executive officer and to named executive officers who were either senior vice presidents or vice presidents in January 2023:

  75. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    | ⯀ | the past practices of the committee in awarding equity, |

  76. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    | ⯀ | a desire to have a higher percentage of the compensation of the chief executive officer of the company consist of equity, and |

  77. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    | ⯀ | a comparison of the design of our equity compensation programs to that of our peers. |

  78. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    The policy of the compensation committee is generally to grant all equity awards to named executive officers through a combination of time-vested restricted stock units and performance stock awards in order to base a significant portion of equity compensation on achieving objective performance goals established by the compensation committee. The compensation committee also concluded in January 2023 that approximately 75% of the value of Mr. Sprowls’ equity awards should be based upon the satisfaction of performance conditions and that approximately 50% of the value of equity awards to Ms. Tang, Mr. Rowley, Mr. Connor, and Ms. Farrow should be subject to the satisfaction of performance conditions. The compensation committee determined the amount of the equity awards made in February 2023 based on the target equity value and determined the number of shares based on the average closing price of the company’s common shares for the thirty trading days preceding the date of the compensation committee meeting commencing on the last trading day prior to the compensation committee meeting.

  79. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    | American States Water Company | 61 | 2024 Proxy Statement |

  80. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    Each equity award granted in 2023 generally vests over a three-year period, provided that, with respect to performance stock awards, the performance criteria have been satisfied at the end of the three-year performance period, with exceptions for earlier vesting upon retirement pursuant to the Rule of 75 (defined later under “Equity Compensation”), death, disability or a change in control event. The compensation committee believes that granting equity awards with three-year vesting periods creates a retention incentive and encourages the named executive officers to focus on the company’s long-term business objectives and stock performance. Each time-vested restricted stock unit and performance stock award granted in 2023 provides for the accumulation of dividend equivalent rights through the service or performance period and are paid only to the extent the employee vested in the underlying restricted stock unit or performance stock award. The compensation committee believes that granting stock units with dividend equivalent rights helps align the interests of the named executive officers with the interests of the shareholders of a utility holding company who, in many cases, purchase and retain the stock of the holding company based on the dividends that the holding company consistently pays. Dividends have also historically been an important component of our total shareholder return. The time-vested restricted stock units and performance stock awards further provided that if the named executive officer’s employment terminated because of a change in control event (other than for cause, death or disability) or the executive terminated his or her employment for good reason, in each case, within two years following the change in control, each restricted stock unit and performance stock award would have vested upon termination of employment free of restrictions. The compensation committee believed that the vesting of equity awards permits named executive officers whose employment would have been terminated as a result of the change in control to share in the value that they created for shareholders at the same time that the shareholders recognize that value upon a change in control. The performance criteria applicable to the performance award made to Mr. Sprowls, Ms. Tang and Ms. Farrow in 2023 were based 25% on total shareholder return at target, 60% on aggregate GSWC operating expense level at target and 15% on ASUS cumulative net earnings at target. The mix of performance criteria for performance awards at target for 2023 was the same as the table below for Mr. Rowley. The performance criteria applicable to the performance award made to Mr. Connor in 2023 was based 25% on total shareholder return at target, 40% on ASUS cumulative net earnings at target and 35% on ASUS new base acquisition success rate at target.

  81. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    | American States Water Company | 62 | 2024 Proxy Statement |

  82. PAYOUT PERCENTAGES FOR ASUS OFFICERS

    The tables below set forth the mix of performance criteria and number of restricted stock units earned by each named executive officer based upon satisfaction of the performance criteria set forth in each named executive officer’s 2021 performance award agreement. Satisfaction of the criteria is based on objective performance measures certified by the Compensation Committee in March 2024.

  83. 2021 PERFORMANCE AWARDS

    compared to that of executives in comparable positions in members of our peer group. Changes in pension value also differ by executive due to differences in cash compensation, the age of the executive, the number of years of service with the company and whether he or she participates in a plan to which the pension plan calculation applies. Total compensation of our named executive officers was impacted by changes in pension values under our pension plan and supplemental retirement plan. Mr. Sprowls’ total compensation increased by $1,841,077 in 2023 including an increase of $1,463,711 in the change in pension values compared to last year even though we made no changes in the terms of our pension plan or supplemental retirement plan. Excluding the change in pension values, Mr. Sprowls’ total compensation in 2023 increased by $377,366 due primarily to an increase in his “at-risk” related compensation (stock awards and objective short-term cash incentives). The change in the pension values is affected by changes in actuarial assumptions, such as discount rates. The increase in the pension values in 2023 compared to 2022 was primarily due to an increase in his accrued benefit and a decrease in the discount rates. The decrease in the discount rate also impacted the total compensation of our other named executive officers. We have no non-qualified deferred compensation arrangements. Welfare and Other Benefits and Perquisites We provide welfare and other benefits that we believe are comparable to the benefits provided by other members of our peer group and other perquisites that we believe are reasonable to attract, retain and motivate talented and experienced executives. Except as described under the heading “How were certain named executive officers compensated in 2023?” and in this section, we provide the same benefits to named executive officers as we provide to other employees of the company. We do not have employment agreements with any of our named executive officers. Tax and Accounting Implications In evaluating our executive compensation structure, the compensation committee considers the tax and accounting treatment, balancing the effects on the individual and the company. The compensation committee believes that the potential deductibility and the accounting treatment of the compensation payable under those programs should be only one of a number of relevant factors taken into consideration. Section 162(m) of the Internal Revenue Code (“Section 162(m)”) generally limits to $1.0 million the amount of remuneration that we may deduct in any calendar year for certain executive officers. While the compensation committee considers the effect of the Section 162(m) deduction limit and financial accounting implications when designing our compensation programs, the compensation committee’s primary focus in its compensation decisions will remain our business objectives, and the compensation committee will continue to maintain flexibility and the ability to pay competitive compensation by not requiring all compensation to be deductible or to be subject to any particular accounting treatment. Stock Ownership Guidelines We have requested each of our named executive officers to own common shares, restricted stock units, and other equity equivalents, including common shares held in our 401(k) plan, equal in value to:

  84. SUMMARY COMPENSATION TABLE(1)

    SUMMARY COMPENSATION TABLE(1)

  85. SUMMARY COMPENSATION TABLE(1)

    | Name and Principal Position | Year | Salary ($)(2) | Bonus ($)(3) | Stock Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(6) | All Other Compensation ($)(7) | Total ($) | Total Excluding Change in Pension Value and Non- Qualified Deferred Compensation Earnings ($)(8) | | Robert J. Sprowls President and Chief Executive Officer | 2023 | $924,519 | $300,000 | $1,742,567 | $863,950 | $1,463,711 | $29,524 | $5,324,271 | $3,860,560 | | | 2022 | 899,231 | 288,000 | 1,421,725 | 845,100 | — | 29,138 | 3,483,194 | 3,483,194 | | | 2021 | 859,538 | 280,000 | 1,348,531 | 842,800 | 1,184,796 | 26,763 | 4,542,428 | 3,357,632 | | Eva G. Tang Senior Vice President- Finance, Chief Financial Officer, Corporate Secretary and Treasurer | 2023 | 566,235 | 60,993 | 145,168 | 196,439 | 473,193 | 29,707 | 1,471,735 | 998,542 | | | 2022 | 531,719 | 55,418 | 125,156 | 179,439 | — | 22,381 | 914,113 | 914,113 | | | 2021 | 501,768 | 52,269 | 164,848 | 170,744 | 672,657 | 25,611 | 1,587,897 | 915,240 | | Paul J. Rowley Senior Vice President- Regulated Water Utility of Golden State Water Company | 2023 | 431,385 | 46,479 | 145,168 | 150,816 | 445,573 | 26,900 | 1,246,321 | 800,748 | | | 2022 | 400,000 | 40,208 | 125,156 | 128,953 | — | 27,688 | 722,005 | 722,005 | | | 2021 | 295,727 | 25,256 | 95,259 | 86,375 | 228,502 | 24,434 | 755,553 | 527,051 | | Christopher H. Connor Senior Vice President of American States Utility Services, Inc. and its subsidiaries((9)) | 2023 | 386,573 | 50,477 | 151,501 | 167,620 | 97,674 | 29,352 | 883,197 | 785,523 | | | 2022 | 310,097 | 34,064 | 117,782 | 117,947 | — | 57,445 | 637,335 | 637,335 | | Gladys M. Farrow Vice President – Finance, Treasurer and Assistant Secretary of Golden State Water Company | 2023 | 350,687 | 32,863 | 104,502 | 102,313 | 402,758 | 24,010 | 1,017,133 | 614,375 | | | 2022 | 329,240 | 28,580 | 90,016 | 92,539 | — | 23,690 | 564,065 | 564,065 | | | 2021 | 310,694 | 26,955 | 124,866 | 88,053 | 199,431 | 19,222 | 769,221 | 569,790 |

  86. SUMMARY COMPENSATION TABLE(1)

    (1) We have not granted any stock option awards during the past three years. (2) This column sets forth the amount paid to each named executive officer during the calendar year based on 26 pay periods in each year except for Mr. Connor who was hired in February 2022. (3) This column sets forth the amounts paid to a named executive officer as a discretionary bonus for 2021, 2022 and 2023 under the short- term cash incentive plan. (4) This column sets forth the aggregate fair value of the stock awards on the date of grant computed in accordance with FASB ASC Topic 718. We provide information regarding the assumptions used in the calculation of the value of these awards in Note 13 to our financial statements for the year ended December 31, 2023. Stock awards consist of time-vested restricted stock units and performance stock awards in the form of restricted stock units. For the performance stock awards granted in 2023 subject to performance conditions that have not been satisfied, we assumed that each executive officer would earn performance stock awards at the target level with a value of $1,321,230, $74,139, $74,139, $77,472, and $53,407 for Mr. Sprowls, Ms. Tang, Mr. Rowley, Mr. Connor, and Ms. Farrow, respectively. If each named executive officer was instead to earn performance stock awards for awards granted in 2023 at the maximum level, the grant date fair value of stock awards granted to Mr. Sprowls, Ms. Tang, Mr. Rowley, Mr. Connor, and Ms. Farrow in 2023 would be $2,263,267, $126,988, $121,665, $167,911, and $91,476, respectively.

  87. SUMMARY COMPENSATION TABLE(1)

    | American States Water Company | 66 | 2024 Proxy Statement |

  88. SUMMARY COMPENSATION TABLE(1)

    (5) Each named executive officer earned non-equity incentive compensation based upon a percentage of base salary and satisfaction of performance criteria under the short-term cash incentive programs approved by the compensation committee. (6) This column sets forth the sum of the change in the value of the pension plan and the supplemental retirement plan for each of the named executive officers at December 31, 2023. The change in the pension value under the Golden State Water Company Pension Plan, or pension plan, for 2023 was $108,318, $188,324, $149,715 and $168,396 for each of Mr. Sprowls, Ms. Tang, Mr. Rowley and Ms. Farrow, respectively. Mr. Connor is not eligible to participate in the pension plan. The change in the pension value under the supplemental retirement plan for 2023 was $1,355,393, $284,869, $295,858, $97,674 and $234,362 for each of Mr. Sprowls, Ms. Tang, Mr. Rowley, Mr. Connor and Ms. Farrow, respectively. Mr. Connor is not eligible for any benefits under the supplemental retirement plan until he has five years of credited service with the company or any of its subsidiaries. See the Pension Benefits Table for additional information regarding the retirement age assumptions used in making these calculations. We provide additional information regarding the assumptions used to calculate the change in pension value in Note 12 to our audited financial statements in our Form 10-K for the year ended December 31, 2023. We do not sponsor any non-qualified deferred compensation plans. (7) We provide information on the amount and types of benefits included under the heading “All Other Compensation” in the table below. (8) The values in this column represent “Total” compensation for the named executive officers when excluding the year-over-year changes to the present values of accumulated benefits under the pension benefits, which are volatile and can change significantly from year-to-year due to the actuarial assumptions used in a given year (primarily due to the changes in discount rates used to determine the present value of accumulated benefits). The amounts reported in this column differ substantially from, and are not a substitute for, the amounts reported in the “Total” column. (9) Mr. Connor was not a named executive officer in 2021.

  89. SUMMARY COMPENSATION TABLE(1)

    | American States Water Company | 67 | 2024 Proxy Statement |

  90. SUMMARY COMPENSATION TABLE(1)

    The following table provides information regarding the amount and types of benefits included under the heading “All Other Compensation” in the previous table.

  91. GRANTS OF PLAN-BASED AWARDS IN 2023

    GRANTS OF PLAN-BASED AWARDS IN 2023

  92. GRANTS OF PLAN-BASED AWARDS IN 2023

    | Name | Award Type | Grant Date | Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(6) | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#)(3) | Target (#)(4) | Maximum (#)(5) | | | | Robert J. Sprowls | RSU | 2/7/23 | | | | | | | 4,354 | $421,337 | | | PSU | 2/7/23 | | | | 5,831 | 13,062 | 22,206 | | 1,321,230 | | | STIP - Objective Performance | 3/28/23 | $346,875 | $740,000 | $1,110,000 | | | | | | | Eva G. Tang | RSU | 2/7/23 | | | | | | | 734 | $71,029 | | | PSU | 2/7/23 | | | | 327 | 733 | 1,246 | | 74,139 | | | STIP - Objective Performance | 3/28/23 | $78,870 | $168,256 | $252,384 | | | | | | | Paul J. Rowley | RSU | 2/7/23 | | | | | | | 734 | $71,029 | | | PSU | 2/7/23 | | | | 327 | 733 | 1,191 | | 74,139 | | | STIP - Objective Performance | 3/28/23 | $60,102 | $128,218 | $184,313 | | | | | | | Christopher H. Connor | RSU | 2/7/23 | | | | | | | 765 | $74,029 | | | PSU | 2/7/23 | | | | 342 | 766 | 1,666 | | 77,472 | | | STIP - Objective Performance | 3/28/23 | $65,273 | $139,248 | $234,981 | | | | | | | Gladys M. Farrow | RSU | 2/7/23 | | | | | | | 528 | $51,095 | | | PSU | 2/7/23 | | | | 236 | 528 | 898 | | 53,407 | | | STIP - Objective Performance | 3/28/23 | $41,079 | $87,635 | $131,452 | | | | | |

  93. GRANTS OF PLAN-BASED AWARDS IN 2023

    (1) These amounts represent the threshold, target and maximum payouts, which could be earned by each of our named executive officers under the objective performance criteria of our short-term incentive plan assuming all goals are met at threshold, all goals are met at target, and all goals are met at maximum. Actual annual incentive amounts earned by the named executive officers for 2023 under the objective performance criteria of our short-term incentive plan are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. (2) These calculations assume that (i) the number of members of the company’s peer group at the end of the performance period will be seven, (ii) the compensation committee will not make any downward adjustment in the amount of the award following the end of the performance period, and (iii) the executive officer will continue to be employed by or provide service to the company throughout the performance period or will be vested pursuant to the Rule of 75. (3) This calculation assumes that the executive officer will achieve the minimum performance level established by the compensation committee for each performance condition set forth in the performance stock award granted to the named executive officer in 2023. The performance required to achieve the total shareholder return minimum condition, the aggregate GSWC operating expense level minimum condition, the ASUS cumulative net earnings minimum condition and the ASUS new base acquisition minimum success rate in the performance stock awards granted in 2023 is 28.57%, 50.00%, 50.00%, and 50.00% of the target performance level, respectively. (4) This calculation assumes that the named executive officer will achieve the target performance level established by the compensation committee for each performance condition set forth in the performance stock award granted to the named executive officer in 2023.

  94. GRANTS OF PLAN-BASED AWARDS IN 2023

    | American States Water Company | 72 | 2024 Proxy Statement |

  95. GRANTS OF PLAN-BASED AWARDS IN 2023

    (5) This calculation assumes that the named executive officer will achieve the maximum performance level established by the compensation committee for each performance condition set forth in the performance stock award granted to the named executive officer in 2023. The performance required to achieve the total shareholder return maximum condition, the aggregate GSWC operating expense level maximum condition, the ASUS cumulative net earnings maximum condition and ASUS new base acquisition maximum success rate is 200%, 150%, 200% and 250% of the target performance level, respectively. (6) We provide information regarding the assumptions used to calculate the value of time-vested restricted stock units and performance stock granted on February 7, 2023 pursuant to the 2016 plan in Note 13 to our audited financial statements in our Form 10-K for the year ended December 31, 2023. Mr. Sprowls, Ms. Tang and Ms. Farrow can earn between 0% to 170.0%, Mr. Rowley can earn between 0% to 162.5%, and Mr. Connor can earn between 0% to 217.5% of the target amount set forth in the 2023 named executive officer’s performance award depending on the company’s performance against the performance goals during the performance period, which consist of the following metrics: (i) 25% of the performance stock awards granted at target are based on the company’s total shareholder return compared to the total shareholder return of the company’s defined peer group, referred to as the total shareholder return criteria and (ii) 75% of the performance stock awards will be earned based upon the satisfaction of performance conditions, including aggregate GSWC operating expense level, ASUS cumulative net earnings and ASUS new base acquisition success rate. The performance period commenced on January 1, 2023 and ends on December 31, 2025. The performance goals for Mr. Sprowls, Ms. Tang and Ms. Farrow are based on the total shareholder return, the aggregate GSWC operating expense level (60% of award) and the ASUS cumulative net earnings criteria (15% of award). The performance stock award for Mr. Rowley is based on the total shareholder return criteria and the aggregate GSWC operating expense level criteria (75% of award). The performance stock award for Mr. Connor is based on the total shareholder return criteria, ASUS cumulative net earnings criteria (40% of award) and ASUS new base acquisition success rate (35% of award). Adjustments permitted to be made to performance shares awards described in the 2016 plan may be made in addition to the adjustments described below. If the U.S. government does not award at least two of the targeted new bases to all competitors, including ASUS, the payout for the performance period will be made at target for the new base acquisition success rate criteria. We disclose in the tables set forth below the performance goals for each of these performance criteria for performance stock awards granted in 2023:

  96. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023(1)

    OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023(1)

  97. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023(1)

    | Name | Stock Awards | | | | | | Number of Shares or Units That Have Not Vested (#) | Market Value of Shares or Units That Have Not Vested ($)(2) | Equity Incentive Plan Awards; Number of Unearned Shares, Units or Rights or Other Rights That Have Not Vested(8) | Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Rights That Have Not Vested(2)(8) | | Robert J. Sprowls | (3) | (3) | 43,637 | $3,509,288 | | Eva G. Tang | (4) | (4) | 2,503 | 201,291 | | Paul J. Rowley | (5) | (5) | 2,359 | 189,711 | | Christopher H. Connor | 1,266(6) | $101,811(6) | 3,295 | 264,984 | | Gladys M. Farrow | (7) | (7) | 1,801 | 144,836 |

  98. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023(1)

    (1) All options held by the named executive officers have been exercised as of December 31, 2023. (2) We determined the market value of restricted stock units and performance share awards that have not vested by multiplying the number of unvested restricted stock units and unvested performance share awards outstanding on December 31, 2023 by the closing price of our common shares on December 29, 2023, as reported on The Wall Street Journal website (www.wsj.com) as $80.42. (3) Restricted stock unit awards made to Mr. Sprowls in the amount of 8,644 shares have vested pursuant to the Rule of 75 but have not yet been paid out. At December 31, 2023, these awards had a market value of $695,150. (4) Restricted stock unit awards made to Ms. Tang in the amount of 1,593 shares have vested pursuant to the Rule of 75 but have not yet been paid out. At December 31, 2023, these awards had a market value of $128,109. (5) Restricted stock unit awards made to Mr. Rowley in the amount of 1,442 shares have vested pursuant to the Rule of 75 but have not yet been paid out. At December 31, 2023, these awards had a market value of $115,966. (6) Of this amount, 257 restricted stock units vested February 6, 2024, 239 restricted stock units vested on March 10, 2024, 257 restricted stock units will vest on February 6, 2025, 247 restricted stock units will vest on March 10, 2025 and the remaining will vest on February 6, 2026. (7) Restricted stock unit awards made to Ms. Farrow in the amount of 1,160 shares have vested pursuant to the Rule of 75 but have not yet been paid out. At December 31, 2023, these awards had a market value of $93,287. (8) We assumed for the purpose of this disclosure that each named executive officer would earn performance stock awards at the maximum level for the 2022 and 2023 grant. The value listed includes dividend equivalent rights granted as of December 31, 2023 on these awards. Although the performance share awards granted to Mr. Sprowls, Ms. Tang, Mr. Rowley and Ms. Farrow have vested pursuant to the Rule of 75, they have not been earned since the performance conditions have not been met and will only be determined at the end of the performance period.

  99. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023(1)

    | American States Water Company | 75 | 2024 Proxy Statement |

  100. OPTION EXERCISES AND STOCK VESTED IN 2023(1)

    OPTION EXERCISES AND STOCK VESTED IN 2023(1)

  101. OPTION EXERCISES AND STOCK VESTED IN 2023(1)

    | Name | Stock Awards | | | | No. of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(1)(2) | | Robert J. Sprowls | 28,608(3) | $1,514,152 | | Eva G. Tang | 3,738(4) | 171,205 | | Paul J. Rowley | 2,782(5) | 108,695 | | Christopher H. Connor | 236 | 20,455 | | Gladys M. Farrow | 2,767(6) | 128,013 |

  102. OPTION EXERCISES AND STOCK VESTED IN 2023(1)

    (1) We determined the value realized on vesting of restricted stock units based on the closing market price of our common shares on the business day prior to the date of vesting as reported on The Wall Street Journal website (www.wsj.com). (2) Includes performance stock award granted in 2021, which vested in 2023. (3) Out of 28,608 shares fully vested in 2023, Mr. Sprowls acquired 3,988 common shares on February 10, 2023, upon the payout of restricted stock units with a market value of $369,091 on the date of acquisition based on a closing price of $92.54. Mr. Sprowls is entitled to acquire the remaining 24,620 common shares, which were not payable during 2023, because of the immediate vesting of these common shares under the Rule of 75. Mr. Sprowls acquired 4,310 of these common shares on February 9, 2024 with a market value of $323,702 on the date of acquisition based on a closing price of $75.11. On March 15, 2024, Mr. Sprowls acquired 15,950 of these common shares (including 95 common shares with respect to dividends declared on February 6, 2024 pursuant to dividend equivalent rights on these shares) with an aggregate market value of $1,145,061 on the date of acquisition based on a closing price of $71.79. Mr. Sprowls was entitled to acquire the remaining 4,360 common shares, which were not payable during 2023, because of the vesting of these common shares under the Rule of 75. Mr. Sprowls has the right to acquire 1,368 of these common shares within 30 days from January 30, 2025, 1,474 of these common shares within 30 days from February 6, 2025 and 1,518 of these common shares within 30 days from February 6, 2026 as a result of the previous vesting of the 4,360 restricted stock units, the value of which was not realized during 2023, plus common shares with respect to dividends declared after December 31, 2023 on these common shares pursuant to dividend equivalent rights on these shares until the date of acquisition of these shares. (4) Out of 3,738 shares fully vested in 2023, Ms. Tang acquired 841 common shares on February 10, 2023, upon the payout of restricted stock units with a market value of $77,847 on the date of acquisition based on a closing price of $92.54. Ms. Tang is entitled to acquire the remaining 2,897 common shares, which were not payable during 2023, because of the immediate vesting of these common shares under the Rule of 75. Ms. Tang acquired 852 of these common shares on February 9, 2024 with a market value of $63,989 on the date of acquisition based on a closing price of $75.11. On March 15, 2024, Ms. Tang acquired 1,300 of these common shares (including 8 common shares with respect to dividends declared on February 6, 2024 pursuant to dividend equivalent rights on these shares) with an aggregate market value of $93,358 on the date of acquisition based on a closing price of $71.79. Ms. Tang was entitled to acquire the remaining 745 common shares, which were not payable during 2023, because of the vesting of these common shares under the Rule of 75. Ms. Tang has the right to acquire 241 of these common shares within 30 days from January 30, 2025, 248 of these common shares within 30 days from February 6, 2025 and 256 of these common shares within 30 days from February 6, 2026 as a result of the previous vesting of the 745 restricted stock units, the value of which was not realized during 2023, plus common shares with respect to dividends declared after December 31, 2023 on these common shares pursuant to dividend equivalent rights on these shares until the date of acquisition of these shares. (5) Out of 2,782 shares fully vested in 2023, Mr. Rowley acquired 607 common shares on February 10, 2023 upon the payout of restricted stock units with a market value of $56,211 on the date of acquisition based on a closing price of $92.54. Mr. Rowley acquired 19 common shares on December 15, 2023 upon the payout of restricted stock units with a market value of $1,575 on the date of acquisition based on a closing price of $83.61. Mr. Rowley is entitled to acquire the remaining 2,156 common shares, which were not payable during 2023, because of the immediate vesting of these common shares under the Rule of 75. Mr. Rowley acquired 682 of these common shares on February 9, 2024 with a market value of $51,243 on the date of acquisition based on a closing price of $75.11. On March 15, 2024, Mr. Rowley acquired 709 of these common shares (including 4 common shares with respect to dividends declared on February 6, 2024 pursuant to dividend equivalent rights on these shares) with an aggregate market value of $50,909 on the date of acquisition based on a closing price of $71.79. Mr. Rowley was entitled to acquire the remaining 765 common shares, which were not payable during 2023, because of the immediate vesting of these common shares under the Rule of 75. Mr. Rowley has the right to acquire 20 of these common shares within 30 days from December 9, 2024, 241 of these common shares within 30 days from January 30, 2025, 248 of these common shares within 30 days from February 6, 2024 and 256 of these common shares within 30 days

  103. OPTION EXERCISES AND STOCK VESTED IN 2023(1)

    | American States Water Company | 76 | 2024 Proxy Statement |

  104. OPTION EXERCISES AND STOCK VESTED IN 2023(1)

    from February 6, 2026 as a result of the previous vesting of the 765 restricted stock units, the value of which was not realized during 2023, plus common shares with respect to dividends declared after December 31, 2023 on these common share pursuant to the dividend equivalent rights on these shares until the date of acquisition of these shares. (6) Out of 2,767 shares fully vested in 2023, Ms. Farrow acquired 619 common shares on February 10, 2023, upon the payout of restricted stock units with a market value of $57,290 on the date of acquisition based on a closing price of $92.54. Ms. Farrow is entitled to acquire the remaining 2,148 common shares, which were not payable during 2023, because of the immediate vesting of these common shares under the Rule of 75. Ms. Farrow acquired 627 of these common shares on February 9, 2024 with a market value of $47,105 on the date of acquisition based on a closing price of $75.11. On March 15, 2024, Ms. Farrow acquired 985 of these common shares (including 6 common shares with respect to dividends declared on February 6, 2024 pursuant to dividend equivalent rights on these shares) with an aggregate market value of $70,723 on the date of acquisition based on a closing price of $71.79. Ms. Farrow was entitled to acquire the remaining 536 common shares, which were not payable during 2023, because of the vesting of these common shares under the Rule of 75. Ms. Farrow has the right to acquire 173 of these common shares within 30 days from January 30, 2025, 179 of these common shares within 30 days from February 6, 2025 and 184 of these common shares within 30 days from February 6, 2026 as a result of the previous vesting of the 536 restricted stock units, the value of which was not realized during 2023, plus common shares with respect to dividends declared after December 31, 2023 on these common shares pursuant to dividend equivalent rights on these shares until the date of acquisition of these shares.

  105. What pension benefits are payable to these named executive officers?

    What pension benefits are payable to these named executive officers? We provide information in the table below reflecting the present value of the accumulated retirement benefits provided to each of our named executive officers as of December 31, 2023.

  106. PENSION BENEFITS(1)

    PENSION BENEFITS(1)

  107. PENSION BENEFITS(1)

    | Name | Plan Name | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(4) | | Robert J. Sprowls(2) | Pension Plan Supplemental Retirement Plan | 19 19 | $1,227,052 11,342,449 | | Eva G. Tang(2) | Pension Plan Supplemental Retirement Plan | 27 27 | 1,802,958 4,118,498 | | Paul J. Rowley(2) | Pension Plan Supplemental Retirement Plan | 16 16 | 1,015,077 1,043,003 | | Christopher H. Connor(3) | Pension Plan Supplemental Retirement Plan | N/A 1 | — 144,690 | | Gladys M. Farrow(2) | Pension Plan Supplemental Retirement Plan | 20 20 | 1,309,864 1,395,254 |

  108. PENSION BENEFITS(1)

    (1) The present value of the accumulated benefit is based on the age when the executive officer would be eligible to retire with full benefits, which is at age 62 for participants with sufficient service. Mr. Sprowls and Ms. Tang are already eligible to retire with full benefits, therefore their calculations are based on their current ages. The present value for Mr. Rowley and Ms. Farrow is based on age 62. Mr. Connor will not be eligible to retire from the supplemental retirement plan with full benefits until age 65. He is not a participant in the pension plan. If we had assumed that Mr. Rowley and Ms. Farrow would retire at age 65, the normal retirement age under each of these plans, the present value of the accumulated benefit under the pension plan as of December 31, 2023 would instead be $822,147, and $1,065,964, respectively. If we had assumed that Mr. Rowley, Mr. Connor and Ms. Farrow would retire at age 65, the present value of the accumulated benefit under the supplemental retirement plan as of December 31, 2023 would be $846,954, $144,690 and $1,137,428, respectively. (2) Mr. Rowley and Ms. Farrow were eligible to retire with a 26.67% and 14.17% reduction in benefits, respectively, at December 31, 2023. Mr. Sprowls and Ms. Tang are eligible to retire with full benefits. If we had assumed that Mr. Rowley and Ms. Farrow retired at December 31, 2023, the present value of accumulated benefits for the pension plan would be $870,963 and $1,355,977, respectively, and the present value of accumulated benefit for the supplemental retirement plan would be $893,280 and $1,442,715, respectively. (3) Mr. Connor is not eligible for any benefits under the supplemental retirement plan until he has five years of credited service with the company or any of its subsidiaries. (4) We used the same assumptions to calculate the change in pension value in Note 12 to our audited financial statements in our Form 10-K for the year ended December 31, 2023, except that retirement age is assumed to be the earliest date on which any of the named executive officers may retire under the plan without any benefit reduction due to age. We ignored for the purpose of this calculation what actuaries refer to as pre-retirement decrements.

  109. PENSION BENEFITS(1)

    | American States Water Company | 77 | 2024 Proxy Statement |

  110. PENSION BENEFITS(1)

    Each of our named executive officers is a participant in the pension plan except for Mr. Connor who was hired in 2022. This plan is a defined benefit pension plan available to all eligible employees hired prior to January 1, 2011 who are 21 years or older and have completed 1,000 hours of service in the first year of employment or in any subsequent plan year. The normal retirement benefit is 2% of an employee’s five highest consecutive years’ average earnings multiplied by the number of years of credited service, up to a maximum of 40 years, reduced by a percentage of primary social security benefits. Normal retirement age is 65. An employee must have five years of service in order to receive benefits under this plan. For purposes of this plan, compensation includes a named executive officer’s salary and all other reportable compensation received by the executive, except bonuses, the imputed value of the personal use of company-owned vehicles, unused vacation pay, and long-term incentive program payments, up to the maximum amount permitted under the Internal Revenue Code. Any employee hired after December 31, 2010 is eligible for participation in a defined contribution plan. Employees that are eligible under the defined contribution plan at GSWC and BVES will receive 5.25% of their annual base pay into their 401(k) account. Employees that are eligible under the defined contribution plan at ASUS and its subsidiaries will receive 3.0% of their annual base pay into their 401(k) account. The amounts do not vest under these plans until the employee has at least three years of credited service. Mr. Connor is a participant in the defined contribution plan, but he is not yet vested since he has not yet had three years of credited service with the company or any of its subsidiaries. We also provide each of our named executive officers pension benefits under the supplemental executive retirement plan. Mr. Connor is not eligible for any benefits under the supplemental executive retirement plan until he has five years of credited service with the company or any of its subsidiaries. Each named executive officer who is also a participant in the pension plan has the right to receive a benefit under the terms of the supplemental retirement plan equal to the sum of 2% of average compensation for each year of service before 2006 plus 3% of average compensation for each year of service after 2005, up to a combined maximum of 60% of average compensation, less a percentage of primary social security benefits and amounts payable to the executive under the pension plan. For purposes of the supplemental retirement plan, compensation includes all compensation included under the pension plan (without regard to qualified plan compensation limits) and cash incentive compensation. Average compensation is in general the average of the highest five consecutive years of compensation. For executives who were also employed by the company on January 1, 2006, the benefit is the greater of the benefit under the formula described in the previous sentence or the benefit under the old plan formula. Under the old plan formula, each executive was entitled to receive a benefit equal to the sum of 2% of average compensation for each year of service, up to a maximum of 40 years, less a percentage of primary social security benefits and amounts payable to the executive under the pension plan. Other than Mr. Connor, each of the named executive officers is a participant in the pension plan. Each named executive officer who is not a participant in the pension plan has the right to receive a benefit under the terms of the supplemental retirement plan if he or she has five years of credited service with the company equal to 2.5% of average compensation, less a percentage of primary social security benefits, multiplied by the number of years of service up to 20 years. Mr. Connor is the only named executive officer who is not a participant in the pension plan. Under the terms of each of the pension and supplemental executive retirement plans, an employee who is eligible may retire and receive benefits at age 55, with a 50% reduction in his or her benefits for early commencement. An employee who retires after age 55 but before age 62 will also receive benefits reduced for early commencement. The amount of the reduction will depend upon the employee’s age at the date payment of his or her benefits begins and whether the sum of his or her age and completed years of service, as of the date of his or her termination, is equal to or greater than 80. An employee who retires at or after age 62 but before age 65 will also receive benefits reduced for early commencement based on his or her age at retirement

  111. PENSION BENEFITS(1)

    | American States Water Company | 78 | 2024 Proxy Statement |

  112. PENSION BENEFITS(1)

    unless the sum of his or her age and completed years of service, as of the date of his or her termination, is equal to or greater than 80, in which case the employee will be entitled to full, unreduced benefits. Under the terms of the supplemental retirement plan, an employee who is vested will begin receiving benefits within 60 days following the later of separation from service, age 55 or an age over 55 previously elected by the employee, subject to any delay required under Section 409A of the Internal Revenue Code. We did not make payments to any named executive officer under the supplemental pension plan during the last year.

  113. Do any named executive officers participate in a non-qualified deferred compensation plan or otherwise receive post-retirement compensation?

    Do any named executive officers participate in a non-qualified deferred compensation plan or otherwise receive post-retirement compensation? None of our named executive officers are participants in a non-qualified deferred compensation plan, other than the supplemental retirement plan described above.

  114. What is our CEO to median employee pay ratio?

    What is our CEO to median employee pay ratio? We estimated the median of the 2023 total annual compensation of our employees, excluding Mr. Sprowls, to be $86,427, using a new median employee identified in 2023. We selected our median employee based on the annual gross wages reflected in our payroll record in 2023 for each of our employees on December 31, 2023 and our determination as to which employee was the most representative of our workforce. We annualized the compensation of employees who did not work a full year but did not make any other adjustments to our calculation of annual compensation. We then computed the new median employee’s 2023 total annual compensation using the same methodology used in calculating Mr. Sprowls’ total annual compensation in the Summary Compensation Table. The 2023 total annual compensation of Mr. Sprowls set forth on the Summary Compensation Table is $5,324,271. The ratio of the total annual compensation of Mr. Sprowls to the estimated total annual compensation of our median employee in 2023 was 61.6 to 1. We believe this pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. This ratio is very sensitive to whether the median employee is a participant in the defined benefit pension plan, which in turn is sensitive to changes in actuarial assumptions, such as changes in mortality and discount rates. All employees hired before January 1, 2011 are enrolled in our defined benefit retirement plan. All employees hired on or after January 1, 2011 participate in our defined contribution plan. Under SEC rules, the inclusion of the change in pension value only applies to employees who are participants in the pension plan. It does not apply to changes in participant’s value in a defined contribution plan. Mr. Sprowls is a participant in the pension plan. The person who was identified as the median employee this year is a participant in the defined contribution plan. If we eliminated the actuarial change in pension value from our calculation for Mr. Sprowls’ total annual compensation, the ratio of the total annual compensation to Mr. Sprowls to the estimated total annual compensation of our median employee would be 44.7 to 1. Because the SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s total annual compensation allow companies to use a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. These companies may also operate in different industries and different geographic locations, be of a different size, have different revenues, earnings and market capitalization and be subject to different regulations than the company.

  115. What is our CEO to median employee pay ratio?

    | American States Water Company | 84 | 2024 Proxy Statement |

  116. Pay Versus Performance

    Pay Versus Performance The following table has been prepared in accordance with item 402(v) of Regulation S-K. Compensation Actually Paid, as determined under SEC requirements, does not reflect the actual amount of compensation earned by or paid to our executive officers during a covered year. The compensation committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. For information regarding the company’s pay-for-performance philosophy and how the company aligns executive compensation with the company’s performance, see the “Compensation Discussion Analysis” section.

  117. Pay Versus Performance Table

    Pay Versus Performance Table

  118. Pay Versus Performance Table

    | Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO(1) | Average Summary Compensation Table Total for Non-PEO NEOs(2) | Average Compensation Actually Paid to Non-PEO NEOs(1) | Value of $100 Initial Fixed Investment Based on TSR | | Net Income (millions) | Adjusted EPS – AWR Consolidated(4) | | | | | | | Total Shareholder Return(3) | Peer Group Total Shareholder Return(3) | | | | 2023 | $5,324,271 | $4,154,877 | $1,154,596 | $876,384 | 99.48 | 105.92 | $124.9 | $3.29 | | 2022 | $3,483,194 | $3,896,729 | $709,380 | $782,979 | 112.32 | 123.66 | $78.4 | $2.23 | | 2021 | $4,542,428 | $5,214,978 | $877,912 | $847,883 | 123.32 | 144.50 | $94.3 | $2.48 | | 2020 | $5,926,137 | $3,048,843 | $1,556,224 | $745,626 | 93.25 | 117.02 | $86.4 | $2.30 |

  119. Pay Versus Performance Table

    (1) Compensation actually paid (CAP) to our PEO and the average CAP for our remaining NEOs for each year as determined under SEC rules. CAP for our PEO and average CAP for other NEOs represents the “Total” compensation reported in the Summary Compensation Table for each year shown, adjusted as set forth below. We did not grant any stock options during the past three years and no equity or cash incentive compensation was forfeited in 2023 for the PEO and other NEOs listed in the table. Awards are considered unvested if the executive was not entitled to receive common shares during 2023 for the award. (2) The other NEOs in 2020 were Eva G. Tang, Denise L. Kruger, Bryan K. Switzer and Gladys M. Farrow. The other NEOs in 2021 were Eva G. Tang, Paul J. Rowley, Gladys M. Farrow, Bryan K. Switzer and Denise L. Kruger. Ms. Kruger retired as Senior Vice President-Regulated Water Utility of GSWC on July 9, 2021. Her total compensation reported in the Summary Compensation Table was $598,932, including $22,181 in change in pension value and non-qualified deferred compensation earnings, $144,215 paid upon termination of her employment for her unused accrued vacation pay based on her then current salary as required by California law and $20,405 in consulting fees paid in 2021 for services rendered after termination of employment. Mr. Rowley was promoted to Senior Vice President- Regulated Water Utility of GSWC in December 2021. The other NEOs in 2022 and 2023 were Eva G. Tang, Paul J. Rowley, Christopher H. Connor and Gladys M. Farrow. Mr. Connor was hired as Senior Vice President-ASUS on February 28, 2022. (3) Based on an initial investment of $100 and cumulative total shareholder return, including reinvestment of dividends, of the company and a customized peer group of seven water utilities (American Water Works Company, Inc., Artesian Resources Corporation, California Water Service Group, Essential Utilities, Inc., Middlesex Water Company, SJW Group and The York Water Co.) weighted by market capitalization. This peer group is the same as the peer group shown in the Form 10-K for each of the years shown in the table. (4) This is not a generally accepted accounting principles measure. For a description of how this is calculated, see “Compensation Discussion and Analysis.” Adjusted EPS-AWR Consolidated was used in determining the amount of the short-term incentive compensation of Mr. Sprowls, Ms. Tang and Ms. Farrow in each year presented in the Pay Versus Performance Table. Although neither Mr. Rowley nor Mr. Connor were compensated based on this performance measure, Adjusted EPS was used in determining short-term incentive compensation in each of the years in which they were NEOs based upon the earnings of the subsidiary for which they worked using the same types of adjustments that were permitted to be made to the Adjusted EPS - AWR Consolidated performance measure to the extent applicable to the EPS of that subsidiary. There are no performance measures under either our short-term cash incentive program or our performance share award programs applicable to all the NEOs, other than relative total shareholder return.

  120. Pay Versus Performance Table

    | American States Water Company | 85 | 2024 Proxy Statement |