DEF 14A of Constellation Energy Corp
Filed Mar 20, 2024 · FY20230001552781-24-000159
Our Board and Director Nominees
Our Board and Director Nominees The Board of Directors is composed of a mix of highly experienced individuals who oversee Constellation’s strategy and business performance. The Board is currently classified and consists of three tiers of directors. In accordance with our bylaws, the Board will be fully de-classified following the 2026 Annual Meeting of Shareholders. The Corporate Governance Committee has recommended, and the Board has nominated, Bradley Halverson, Charles Harrington, Dhiaa Jamil and Nneka Rimmer for re-election as Class II directors. Upon election, each of the Class II directors will serve a two-year term or until his or her successor is elected and qualified, or his or her earlier death, resignation, or removal. All of the nominees are presently members of the Board. The Board is recommending that all four nominees be elected by shareholders. The following table provides summary information about each of the nominees for election at the 2024 Annual Meeting as well as the seven directors that are not currently standing for re-election.
Our Board and Director Nominees
| Name | Class | Age | Director Since | Independent | Current Committee Memberships | Other Current Public Company Boards | | Laurie Brlas Former Chief Financial Officer–Newmont Mining Corporation | III | 66 | 2022 | ✔ | Audit & Risk (Chair) Corporate Governance | • Albemarle Corporation • Graphic Packaging Holding Company • Autoliv, Inc. | | Yves C. de Balmann Executive Partner at Bridge Growth Partners | III | 77 | 2022 | ✔ | Compensation (Chair) Corporate Governance | None | | Joseph Dominguez President and Chief Executive Officer–Constellation | I | 61 | 2022 | | N/A | None | | Bradley M. Halverson Former Chief Financial Officer–Caterpillar Inc. | II | 62 | 2022 | ✔ | Compensation Corporate Governance | • Sysco Corporation • Lear Corporation • Satellogic, Inc. | | Charles L. Harrington Former Chairman– Parsons Corporation | II | 65 | 2022 | ✔ | Audit & Risk Corporate Governance (Chair) Nuclear Oversight | • J.G. Boswell Company • JBT Corporation • Korn Ferry | | Julie Holzrichter Chief Operating Officer–CME Group | I | 56 | 2022 | ✔ | Audit & Risk Compensation | None | | Dhiaa Jamil Former Chief Operating Officer–Duke Energy | II | 67 | 2023 | ✔ | Compensation Nuclear Oversight | None | | Ashish Khandpur President and Chief Executive Officer–Avient Corporation | I | 56 | 2022 | ✔ | Compensation Corporate Governance | • Avient Corporation | | Robert J. Lawless Former Chief Executive Officer–McCormick & Company, Inc. | III | 77 | 2022 | ✔ | Corporate Governance | None | | Admiral John M. Richardson Former Chief of Naval Operations–U.S. Navy | III | 63 | 2022 | ✔ | Audit & Risk Corporate Governance Nuclear Oversight (Chair) | • The Boeing Company • BWX Technologies, Inc. | | Nneka Rimmer Former President, Global Flavors & Extracts–McCormick & Company, Inc. | II | 52 | 2022 | ✔ | Audit & Risk Nuclear Oversight | • Energizer Holdings, Inc. |
Our Board and Director Nominees
| (1) In June 2023, the gender diversity percentage decreased from 30% to 27% when Mr. Jamil was appointed to the Board, see page 38 of this proxy statement for more information. |
Our Board and Director Nominees
| | Constellation Energy Corporation 2024 Proxy Statement | 8 |
Corporate Governance
Corporate Governance Constellation is committed to maintaining the highest standards of corporate governance that promote the long-term interests of shareholders, strengthens Board and management accountability, and helps build public trust. Strong corporate governance is a fundamental aspect of our long-term sustainable business operations. The Board provides oversight on the development and execution of our strategy, business operations and performance, enterprise risks, executive compensation, sustainability and environmental stewardship, and governance practices. Our Board is comprised of eleven directors. All members, excluding Constellation’s President and CEO, are independent under criteria established by The Nasdaq Stock Market LLC (Nasdaq). Board membership is reviewed on an annual basis to ensure our Board members have a diverse set of characteristics, skills and experience necessary to maximize the success of our business and effectively represent shareholder interests. We also consider a diversity of backgrounds and perspectives, including with respect to age, gender, and specialized experience. Currently, 27% of Board members are women and 45% are ethnically and/or racially diverse.
Corporate Governance
| Board Governance Our corporate governance structure consists of certain elements, including the following: | | | | Independent Board Chair Chief Executive Officer and Board Chair roles are separate | Committee Independence 100% of our committees are comprised of independent directors | Director Stock Ownership Robust ownership requirements (i.e., 5x annual cash retainer) | | Board Self-Evaluations Annual evaluations for full Board which includes director interviews | Outside Board Service Limit Maximum of 3 other public company Boards (CEO may only serve on the Board of one other public company) | Mandatory Director Retirement By the annual meeting of shareholders following a director’s 80th birthday | | Committee Self-Evaluations Annual evaluations for each committee | Succession Planning Annual evaluation of management succession and leadership | Governance Assessment Annual review/assessment of governance policies | | Enterprise Risk Board oversight of enterprise risk, overseen by the Audit & Risk Committee | Executive sessions Regular executive sessions of independent directors meeting without management | De-classification of Board Annual elections for all directors after 2026 annual meeting of shareholders |
Corporate Governance
| | Constellation Energy Corporation 2024 Proxy Statement | 12 |
Our Director Nominees
Our Director Nominees
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting A brief biography regarding the background and qualifications of each director nominee is provided on the following pages. Each nominee’s biographical information includes a description of the director’s experience, qualifications, attributes and skills that qualify him or her to serve on the Board of Directors.
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| | | | | Bradley M. Halverson – Independent Director | | | Former Group President, Financial Products and Corporate Services and Chief Financial Officer — Caterpillar Inc. |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| Age: 62 | Director Since: February 2022 | Committees: • Compensation • Corporate Governance | Other current public directorships: • Sysco Corporation (since 2016) • Lear Corporation (since 2020) • Satellogic, Inc. (since 2022) |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
Mr. Halverson is the former Group President, Financial Products and Corporate Services and Chief Financial Officer of Caterpillar, Inc., the world’s leading manufacturer of construction and mining equipment, diesel and gas engines, turbines and locomotives. Prior to serving in that leadership role from 2013 to 2018, Mr. Halverson held a series of positions with increasing responsibility during his 30-year tenure with the company, including: Vice President, Financial Services from 2010 to 2013; Corporate Controller, Global Finance & Strategic Services from 2004 to 2010; and Corporate Business Development Manager, Corporate Services from 2002 to 2004, among others since joining the company in 1988. Prior to his work at Caterpillar, Mr. Halverson worked as Financial Reporting Manager with Rolscreen Company and, before that, he worked in a series of roles with Price Waterhouse LLP. Mr. Halverson currently serves as: an independent director, Chair of the Audit Committee and a member of the Compensation and Leadership Development and Executive Committees of the board of Sysco Corporation, a food distributor; an independent director and a member of the Audit and People & Compensation Committees of the board of Lear Corporation, a global automotive technology company; and an independent director and chair of the Audit Committee of the board of Satellogic, Inc., a company specializing in Earth-observation satellites. He also served as a director for Custom Truck One Source from 2018-2021. Mr. Halverson currently serves as a member of the board of trustees of the Easterseals Central Illinois Foundation, and previously served as Chairman of the board of directors of Easterseals Central Illinois and member of the OSF St. Francis Medical Center Community Foundation Board.
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| Particular experience, attributes or skills that qualify director for Board membership: Mr. Halverson’s deep expertise in accounting, financial reporting and corporate finance, and his leadership experience in the areas of executive leadership and management, corporate strategy development, mergers and acquisitions, risk management, information technology systems oversight and international business provides the Board with critical perspectives on important strategic, financial, and other public company issues. In addition, Mr. Halverson provides the board with important insights regarding the financial services industry and financial markets that are relevant to the Board’s oversight of critical financial matters. |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 24 |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| | | | | Charles L. Harrington – Independent Director | | | Former Executive Chairman and Chief Executive Officer — Parsons Corporation |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| Age: 65 | Director Since: February 2022 | Committees: • Audit & Risk • Corporate Governance (Chair) • Nuclear Oversight | Other current public directorships: • J.G. Boswell Company (since 2015) • JBT Corporation (since 2021) • Korn Ferry (since 2022) |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
Mr. Harrington is the former Chairman, Chief Executive Officer and President of Parsons Corporation, a technology services company in the global defense, intelligence and critical infrastructure markets. Before becoming Executive Chairman in 2021 and retiring in 2022, Mr. Harrington served as Chairman, Chief Executive Officer and President of Parsons from 2008 to 2021, after serving in a series of positions with increasing responsibility, including: Executive Vice President, Chief Financial Officer and Treasurer from 2006 to 2008; President, Commercial Technology Group from 2003 to 2006; and President, Communications Technology Group, from 1999 to 2002, among others. Mr. Harrington also serves as a member of the board of directors of JBT Corporation, J.G. Boswell Company, Korn Ferry and the Cal Poly Foundation. He previously served as a member of the board of directors of The AES Corporation, a global energy company, from 2013 to 2020.
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| Particular experience, attributes or skills that qualify director for Board membership: Mr. Harrington’s extensive leadership experience in operations, finance, strategy development and execution, M&A, and business development that he developed while serving as the Chief Executive Officer and President of Parsons Corporation is important to the Board as it oversees the management of Constellation’s strategy and growth. Coupled with his financial expertise as a former Chief Financial Officer and Treasurer, along with his engineering technical expertise encompassing large infrastructure projects and nuclear projects, Mr. Harrington brings a broad range of expertise to the board. His deep executive leadership experience and his prior service on the board of a large public energy company that owns utilities and global power generation assets brings to the Board significant oversight expertise. Mr. Harrington also brings relevant experience from the building of a leading cyber practice at Parsons Corporation. |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 25 |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| | | | | Dhiaa M. Jamil – Independent Director | | | Former Executive Vice President and Chief Operating Officer — Duke Energy |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| Age: 67 | Director Since: June 2023 | Committees: • Compensation • Nuclear Oversight | Other current public directorships: • None |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
Prior to his retirement in June 2023, Mr. Jamil served as Executive Vice President and Chief Operating Officer of Duke Energy, one of the largest energy holding companies in the U.S., a position he held since 2015. In that role, Mr. Jamil was responsible for the company’s generating fleet, transmission grid, enterprise-wide project management and construction, environment, health and safety and other related support functions. From 2008 to 2015, Mr. Jamil served as Executive Vice President of Duke Energy’s regulated generation and as Chief Nuclear Officer, where he oversaw the largest regulated nuclear fleet in the country. During that time, he played a key role in Duke Energy’s 2012 merger with Progress Energy, integrating and transforming a fleet of 12 nuclear units. Earlier in his career, he held various leadership roles of increasing responsibility at Duke Energy’s Oconee, McGuire and Catawba nuclear stations, including station manager and site vice president. Mr. Jamil is a former chair of the UNC Charlotte Energy Production Infrastructure Center (Epic) Advisory Board and served as a trustee for the Duke Energy Foundation, the philanthropic arm of Duke Energy. He also served on the board of directors of the Nuclear Energy Institute from 2014 - 2023 and Nuclear Electric Insurance Limited, which insures all nuclear power plants in the U.S., from 2013 to 2022. He has also previously served on various utilities’ nuclear safety review boards and was a member of the National Nuclear Training Accrediting Board.
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| Particular experience, attributes or skills that qualify director for Board membership: With more than 40 years of experience in the energy industry, Mr. Jamil is a trusted and dependable leader with a track record of operating generation assets safely, reliably and effectively. As an executive with 14,000 employees under his scope of responsibility while at Duke Energy, Mr. Jamil gained valuable insight into the demands and challenges associated with managing large organizations, which is important to the Board as it oversees the management of Constellation’s strategy and growth. In addition to his extensive operational leadership experience in the energy industry, Mr. Jamil also brings to the Board robust expertise in the nuclear power generation business, as well as a deep and desired appreciation for the reliability and environmental benefits of nuclear energy. |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 26 |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| | | | | Nneka Rimmer – Independent Director | | | Former President, Global Flavors & Extracts – McCormick & Company, Inc. |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| Age: 52 | Director Since: November 2022 | Committees: • Audit & Risk • Nuclear Oversight | Other current public directorships: • Energizer Holdings, Inc. (since 2018) |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
Prior to her retirement in 2021, Ms. Rimmer served as President, Global Flavors & Extracts, for McCormick & Company, Inc., a global leader that manufactures, markets and distributes spices, seasoning mixes, condiments and other products to the food industry. Ms. Rimmer held a series of roles with increasing responsibility at McCormick & Company, including: Senior Vice President, Business Transformation, from 2019-2020, Senior Vice President, Strategy and Global Enablement, from 2017-2019; and Senior Vice President, Corporate Strategy & Development, from 2015-2017. Prior to joining McCormick, Ms. Rimmer spent 15 years with Boston Consulting Group (BCG) focused on advising Fortune 100 C-Suite executives and board directors on global growth, M&A strategy, talent development and change management. She rose to become BCG’s first Black female partner, with leadership positions across the consumer goods and retail, public sector and strategy practices. Ms. Rimmer currently serves as an independent director and member of the Audit and Human Capital Committees of the board of Energizer Holdings, Inc., a manufacturer of batteries and other products. She is also on the boards of Wellness Pet LLC and Wheel Pros LLC, two private equity-owned consumer products companies. Additionally, Ms. Rimmer serves as a trustee of the University of Maryland, Baltimore.
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| Particular experience, attributes or skills that qualify director for Board membership: Ms. Rimmer’s extensive financial, leadership and risk management skills that she developed by serving in various senior leadership roles at McCormick & Company, combined with her broad experience serving on boards and key committees of other companies, provides the Board with relevant insights and expertise when overseeing Constellation’s strategy, risk management and growth. Ms. Rimmer’s deep experience with identifying and driving growth opportunities through mergers, acquisitions and other strategic investments provides the Board with valuable perspectives when considering potential opportunities for growth. |
Biographies of Class II Directors with Terms Expiring at the 2024 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 27 |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting The Board is classified until the 2026 Annual Meeting and, therefore, the following individuals who are Class I directors will not stand for re-election at the 2024 Annual Meeting of Shareholders.
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| | | | | Joseph Dominguez – Non-Independent Director | | | President and Chief Executive Officer — Constellation |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| Age: 61 | Director Since: February 2022 | Committees: • None | Other current public directorships: • None |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
Mr. Dominguez is the President and Chief Executive Officer of Constellation. As President and Chief Executive Officer, Mr. Dominguez oversees Constellation’s carbon-free energy fleet of nuclear, wind, solar, hydro-electric and natural gas facilities in 19 states, and the nation’s top competitive retail and commodities business, which provides electricity, natural gas and other energy-related products and services to two million residential, public sector and business customers nationwide, including more than three-fourths of the Fortune 100. Previously, Mr. Dominguez served as Chief Executive Officer of ComEd, a subsidiary of Exelon Corporation. In that role, he was responsible for the safe and reliable delivery of electricity to customers and oversight of the management of the electric grid for over four million residential and business customers in Chicago and most of northern Illinois. Prior to joining ComEd, Mr. Dominguez served as Executive Vice President of Governmental and Regulatory affairs and Public Policy for Exelon, where he led the development and implementation of federal, state, and regional governmental, regulatory, and public policy strategies. Mr. Dominguez was also a partner in the law firm of White and Williams, LLP, with a broad-based litigation practice counseling large and small corporations, institutions and government entities. Prior to joining White and Williams LLP, Mr. Dominguez served as an Assistant U.S. Attorney in the Eastern District of Pennsylvania.
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| Particular experience, attributes or skills that qualify candidate for Board membership: As the President and Chief Executive Officer of Constellation and through his prior experience at ComEd, Exelon and as a practicing attorney, Mr. Dominguez brings to the Board an extensive knowledge and understanding of the company’s business, operations, finances, risks and strategy, as well as extensive regulatory, risk management and oversight expertise. His diverse experience and deep knowledge of the energy industry is crucial to the company’s strategic planning and operational success. As the only employee-director on the Board, Mr. Dominguez is able to provide the Board with management’s view of all facets of the company, supplying the Board with invaluable information to utilize in overseeing the business and affairs of the company. |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 28 |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| | | | | Julie Holzrichter – Independent Director | | | Chief Operating Officer — CME Group Inc. |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| Age: 56 | Director Since: February 2022 | Committees: • Audit & Risk • Compensation | Other current public directorships: • None |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
Ms. Holzrichter is Chief Operating Officer of CME Group Inc., the world’s leading derivatives marketplace. In this role, she is responsible for managing the company’s global operations and clearing and post-trade service division. During the course of her more than twenty- five year career with the company, Ms. Holzrichter has held a series of roles with increasing responsibility at CME Group Inc. Prior to being appointed to her current role in 2014, Ms. Holzrichter served as: senior managing director of Global Operations from 2012 to 2014; managing director, Global Operations from 2007 to 2012; and director, Operations, from 2006 to 2007, among others. Additionally, she has led the integration of global operations for a number of multi-billion-dollar mergers and acquisitions throughout her tenure. Ms. Holzrichter serves on the board of the National Futures Association and she is a member of the Futures Industry Association and Women in Listed Derivatives, ChicagoFirst and the CME Group Women’s Initiative Network. She previously served on DePaul University’s Finance Advisory Board and DePaul University’s Arditti Center for Risk Management Advisory Board.
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| Particular experience, attributes or skills that qualify candidate for Board membership: Ms. Holzrichter brings substantial senior management, operational and financial experience to the Board through her long tenure of increasing responsibility with CME Group, which is a highly regulated global business. She has served as the Chief Operating Officer of CME Group since 2014 and leads CME Group's trading floor operations, global market solutions and services, data centers and critical infrastructure, global security, and business continuity and crisis management functions. Her operational, leadership, financial derivatives market, and technology experience provides the Board with valuable insight and expertise that is relevant to the Board’s oversight of complex financial, operational, cybersecurity, technology and investment risks that are critical to Constellation’s operations, business and growth. |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 29 |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| | | | | Ashish Khandpur – Independent Director | | | President and Chief Executive Officer — Avient Corporation |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| Age: 56 | Director Since: February 2022 | Committees: • Compensation • Corporate Governance | Other current public directorships: • Avient Corporation (since 2023) |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
Dr. Ashish Khandpur is President and Chief Executive Officer of Avient Corporation, a leading provider of specialized and sustainable material solutions. Previously, he was Group President of the multi-billion Transportation & Electronics business group for 3M Company, a global corporation operating in the fields of transportation, electronics, industrial, worker safety, health care and consumer. During his 28-year career with 3M, Dr. Khandpur held a series of roles with increasing responsibility, including Executive Vice President, Transportation & Electronics business group, from 2019 to 2021; Executive Vice President, Electronics & Energy business group, from 2017 to 2019; Senior Vice President, Research & Development and Chief Technology Officer, from 2014 to 2017, among other roles. Dr. Khandpur is a member of the Dean’s Advisory Board, College of Science and Engineering, for the University of Minnesota and served as a trustee for the University of St. Thomas from 2017 to 2021. Dr. Khandpur also served as a director for the 3M Foundation from 2012 to 2017, and he also served as a director for 3M India in 2014.
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| Particular experience, attributes or skills that qualify candidate for Board membership: Dr. Khandpur’s extensive technical and business background combination, deep experience in complex global operations and research and development provide an invaluable perspective to the Board. Based on his 28 years of experience at 3M, and his current role as President and Chief Executive Officer of Avient Corporation, Dr. Khandpur brings to the Board his unique perspectives on leadership, innovation, and new business creation through application of technology to customer or market needs and challenges. Additionally, his technological and operational experience provides the Board with valuable insight and expertise that is relevant to the Board’s oversight of complex financial, operational, cybersecurity and technology risks that are critical to Constellation’s business, operations, and growth. |
Biographies of Continuing Class I Directors with Terms Expiring at the 2026 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 30 |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting As explained above, the Board is classified until the 2026 Annual Meeting and, therefore, the following individuals who are Class III directors will not stand for re-election at the 2024 Annual Meeting of Shareholders.
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| | | | | Laurie Brlas – Independent Director | | | Former Executive Vice President and Chief Financial Officer — Newmont Mining Corporation |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| Age: 66 | Director Since: February 2022 | Committees: • Audit & Risk (Chair) • Corporate Governance | Other current public directorships: • Albemarle Corporation (since 2017) • Graphic Packaging Holding Company (since 2019) • Autoliv, Inc. (since 2020) |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
Prior to her retirement in 2016, Ms. Brlas served as Executive Vice President and Chief Financial Officer of Newmont Mining Corporation, a leading gold and copper producer with U.S. and international operations. From 2006 to 2013, Ms. Brlas served in a series of senior leadership positions at Cliffs Natural Resources, an iron ore producer, including as Executive Vice President and President, Global Operations. Prior to that, Ms. Brlas served as Senior Vice President and Chief Financial Officer of STERIS Corporation, a provider of infection prevention and other procedural products and services, from 2000 to 2006, and from 1995 to 2000 she held a series of positions with increasing responsibility with Office Max, Inc., an office products retailer. Ms. Brlas is a certified public accountant and certified management accountant. Ms. Brlas currently serves as an independent director, Chair of the Audit & Finance Committee and a member of the Capital Investment Committee of the board of Albemarle Corporation, a global chemical manufacturer; an independent director and member of the Compensation and Management Development and Nominating and Corporate Governance Committees of Graphic Packaging Holding Company, which specializes in the design and manufacturing of packaging for commercial products; and an independent director and member of the Audit and Risk and Nominating and Corporate Governance Committees of the board of Autoliv, Inc., an automotive safety supplier. She previously served as a director of Perrigo Company plc, a global healthcare company, from 2003 to 2019, Calpine Corporation, an energy company, from 2016 to 2018 and NOVA Chemical Corporation, a plastics and chemical manufacturer, from 2008 to 2009. Ms. Brlas previously served as a member of the board of Exelon Corporation from 2018 to 2022.
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| Particular experience, attributes or skills that qualify director for Board membership: Ms. Brlas has deep expertise in accounting, financial reporting and corporate finance, and has executive leadership and management experience that she brings to the Board as it oversees Constellation’s business, financing and public reporting. Ms. Brlas’ service on the board of directors of several companies also provides the Board with critical perspectives on complex financial and operational issues. Her past executive leadership experience and extensive service on the boards of publicly traded companies also provides the Board with valuable insight and expertise that is relevant to the Board’s oversight of complex financial, operational and investments risks that are critical to Constellation’s operations, business, and growth. |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 31 |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| | | | | Yves C. de Balmann – Independent Director | | | Executive Partner at Bridge Growth Partners |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| Age: 77 | Director Since: February 2022 | Committees: • Compensation (Chair) • Corporate Governance | Other current public directorships: • None |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
Mr. de Balmann has been an Executive Partner at Bridge Growth Partners, a private equity firm, since 2019. Mr. de Balmann served as the Co-Chairman of Bregal Investments LP, a private equity investing firm, from 2002 to 2012. Previously, he served as Vice-Chairman of Bankers Trust Corporation, where he was in charge of Global Investment Banking, until that firm’s merger with Deutsche Bank in 1999, at which time he became Co-Head of Deutsche Bank’s Global Investment Bank and Co-Chairman and Co-Chief Executive Officer of Deutsche Banc Alex. Brown from 1999 to 2001. Previously, Mr. de Balmann served as a director of ESI Group, a provider of virtual prototyping software and services, which was listed on the Euronext Paris. Mr. de Balmann also served as a director of Laureate Education, Inc. (listed on Nasdaq) and as the non-executive chairman of Conversant Intellectual Property Management. Mr. de Balmann served as a member of the board of Exelon Corporation from 2012 to 2022.
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| Particular experience, attributes or skills that qualify director for Board membership: Mr. de Balmann brings extensive leadership, financial, risk management, strategic investment and mergers and acquisition experience to the Board. Through this unique experience managing a global investment bank, Mr. de Balmann provides the Board with important perspectives in managing the operations and overseeing the financial condition of Constellation. Mr. de Balmann also brings to the Board a deep understanding of the power utility and power generation businesses, having served on board of Exelon Corporation, the company’s former parent corporation, for over ten years. |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 32 |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| | | | | Robert J. Lawless – Independent Director | | | Former Chairman, President and Chief Executive Officer— McCormick & Company, Inc. |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| Age: 77 | Director Since: February 2022 | Committees: • Corporate Governance | Other current public directorships: • None |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
Mr. Lawless served as Chairman of the Board of McCormick & Company, Inc., a global leader that manufactures, markets, and distributes spices, seasoning mixes, condiments and other products to the food industry from 1997 until 2009. Mr. Lawless also served as President from 1996 to 2006 and Chief Executive Officer from 1997 to 2007, after serving in a series of positions with increasing responsibility, including Chief Operating Officer; Executive Vice President; Senior Vice President – The Americas; Group Vice President – Europe; Vice President & Deputy Managing Director, International Group, among others. Mr. Lawless previously served as a director of Constellation Energy Group from 2002 to 2012, when Constellation Energy Group merged with Exelon Corporation. He also served as a member of the board of Exelon Corporation from 2012 to 2022. Mr. Lawless serves as a director for various non-profit organizations, including Operation Walk Canada and Teen Challenge Canada, and Habitat for Humanity in Fort Myers, FL as well as London, ON, Canada. He previously served as a director for Baltimore Life Companies.
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| Particular experience, attributes or skills that qualify director for Board membership: Mr. Lawless brings to the Board valuable experience in managing a large public company based on his service as Chairman, President and Chief Executive Officer of McCormick & Company. Mr. Lawless has significant experience in program management, finance, manufacturing, and operations. Mr. Lawless also brings to the Board his extensive leadership experience and skills in managing and operating a complex business, as well as extensive financial, international, technology, risk management and strategic planning expertise. In addition, Mr. Lawless contributes to the Board his deep understanding of the power utility and power generation businesses, having served for more than 20 years on the boards of Exelon Corporation and Constellation Energy Group. |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 33 |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| | | | | Admiral John M. Richardson – Independent Director | | | Former Chief of Naval Operations — U.S. Navy |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| Age: 63 | Director Since: February 2022 | Committees: • Audit and Risk • Corporate Governance • Nuclear Oversight (Chair) | Other current public directorships: • The Boeing Company (since 2019) • BWX Technologies, Inc. (since 2020) |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
Admiral John Richardson (Ret.) served 37 years in the U.S. Navy, completing his service as the Chief of Naval Operations (CNO), the top officer in the Navy. While in the Navy, Admiral Richardson served in the submarine force. He commanded the attack submarine USS HONOLULU in Pearl Harbor, Hawaii, for which he was awarded the Vice Admiral James Bond Stockdale Inspirational Leadership Award. He went on to command at every level of the Navy. Admiral Richardson served as the Director of Naval Reactors from 2012 until 2015, with responsibility for the full life-cycle, including regulatory responsibilities of more than 90 reactors operating around the world on nuclear-powered warships. After serving in this role, Admiral Richardson served as the 31st Chief of Naval Operations, the senior officer in the Navy, from 2015 until 2019. Admiral Richardson retired from the Navy in August 2019. Admiral Richardson currently serves as an independent director, Chair of the Special Programs Committee and a member of the Aerospace Safety and Finance Committees of the board of The Boeing Company, an aerospace company; and as an independent director and member of the Audit and Finance and Compensation Committees of BWX Technologies, Inc., a supplier of nuclear components and fuel. Admiral Richardson served as a member of the board of Exelon Corporation from 2019 to 2022. He also serves on the boards of the Center for New American Security and the Navy League of the United States. He is a senior advisor to the Johns Hopkins University Applied Physics Laboratory and a member of the National Academy of Engineering.
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| Particular experience, attributes or skills that qualify director for Board membership: Admiral Richardson brings deep expertise to the Board in the areas of safety, regulation, and oversight of complex, high-risk systems, as well as extensive crisis management and national security experience. Admiral Richardson’s experience leading the U.S. Navy as well as his expertise in nuclear oversight and operational excellence brings invaluable knowledge to the Board and richly informs his leadership of the Nuclear Oversight Committee. Admiral Richardson also brings desired knowledge of the nuclear energy and cybersecurity threats, as well as valued experience with the demands and challenges associated with managing large organizations from his service as Chief of Naval Operations and other senior leadership positions in the U.S. Navy. |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
| | Constellation Energy Corporation 2024 Proxy Statement | 34 |
Biographies of Continuing Class III Directors with Terms Expiring at the 2025 Annual Meeting
Constellation and the Board are committed to maintaining the highest standards of corporate governance, which we believe are essential for sustained success and creating long-term shareholder value. We believe our strong corporate governance practices will help us achieve our performance goals and maintain the trust and confidence of our shareholders, employees, customers, regulators, and other stakeholders.
Corporate Governance Committee
| • | periodically reviewing and making recommendations to the Board on the compensation of non-employee directors; |
Director Compensation
Director Compensation Equity Compensation
Director Compensation Changes
Director Compensation Changes The compensation for non-employee directors as well as additional fees paid to the independent chair and committee chairs were set prior to our separation from Exelon in February 2022. Following the separation, our non-employee director compensation program was subject to the review and approval of our Board upon the recommendation of the Corporate Governance Committee. In 2023, the Corporate Governance Committee and the Board approved changes to the non-employee director compensation program. After a review of the director compensation program and the amounts payable thereunder by an outside consultant, the Board increased the equity portion of the annual retainer by $15,000, from $155,000, to $170,000 annually. The decision to increase compensation was based on the recommendation of the outside consultant to align the non-employee director compensation with the prevailing level of compensation at similarly sized companies in the market and our industry.
2023 Director Compensation
2023 Director Compensation The following table summarizes the compensation paid to each of our non-employee directors who served as a member of the Board and its committees in 2023.
2023 Director Compensation
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total Compensation ($) | | de Balmann | 145,000 | 166,250 | — | 311,250 | | Brlas | 150,000 | 166,250 | — | 316,250 | | Halverson | 125,000 | 166,250 | — | 291,250 | | Harrington | 165,000 | 166,250 | — | 331,250 | | Holzrichter | 125,000 | 166,250 | — | 291,250 | | Jamil | 80,069 | 93,874 | — | 173,943 | | Khandpur | 125,000 | 166,250 | — | 291,250 | | Lawless | 325,000 | 166,250 | 28,987 | 520,237 | | Richardson | 165,000 | 166,250 | — | 331,250 | | Rimmer | 145,000 | 166,250 | — | 311,250 |
2023 Director Compensation
| (1) Annual Board and committee retainers including any amounts voluntarily deferred into the Director Deferred Compensation Plan. |
2023 Director Compensation
| (2) The aggregate award value in the “Stock Awards” column for each director represents four quarterly awards representing a grant date fair value under FASB ASC Topic 718 of $77.55, $93.29, $108.64 and $121.69 for the first through fourth quarters. See Note 20 “Stock Based Compensation Plans” of the Consolidated Financial Statements contained in our 2023 Form 10-K for an explanation of the assumptions made in valuing these awards. |
2023 Director Compensation
| (3) The amount included in this column for Mr. Lawless represents the aggregate incremental cost incurred by Constellation for his approved personal use of corporate aircraft. |
2023 Director Compensation
| | Constellation Energy Corporation 2024 Proxy Statement | 51 |
Chief Executive Officer Compensation
Chief Executive Officer Compensation The Compensation Committee reviews and recommends, and the Board of Directors considers and approves, the compensation of our CEO annually, based on a comprehensive evaluation of his individual performance and our company’s performance relative to our peers and the market. The committee considers both quantitative and qualitative factors, such as financial results, strategic initiatives, leadership development, succession planning, stakeholder engagement, corporate responsibility, and risk management. The committee also benchmarks the CEO’s compensation against independent peer group data provided by an external consultant, to ensure that the compensation is competitive, reasonable, and aligned with shareholder interests. Given the effectiveness of the CEO’s leadership in driving strong financial results, superior shareholder returns, strategic growth, and operational success, the committee determined that the CEO’s compensation for fiscal year 2023 should be competitive with the market median of the peer group, which is reflected in the 2023 pay decisions above.
CEO Incentive Pay Strongly Aligned to Stock Performance Relative to Peer Group Average and S&P 500
CEO Incentive Pay Strongly Aligned to Stock Performance Relative to Peer Group Average and S&P 500 One of the key objectives of our executive compensation program is to align the interests of our executives with those of our shareholders. We believe that our compensation program reflects this objective by linking a significant portion of our executives’ pay to the achievement of financial and strategic goals that drive shareholder value creation. As a result, our executives’ compensation varies with company performance and the market value of our common stock.
Response to Shareholder Feedback
Response to Shareholder Feedback The key theme that emerged from our shareholder engagement meetings, from a compensation perspective, was the desire to include a total shareholder return (TSR) component in our long-term incentive program to further align the interests of our executives with those of our shareholders. The Compensation Committee carefully considered this feedback and decided to make a design change effective with the 2024-2026 Performance Share (PShare) Program. Starting with the 2024 grant of long-term incentive awards, the long-term incentive program will consist of two components:
Response to Shareholder Feedback
| PShares (67%) – performance based LTI comprises the majority of total LTI; |
Response to Shareholder Feedback
| • | 33% of PShares will be based on relative TSR versus a custom peer group of companies with a high degree of comparability over a three-year period; and |
Response to Shareholder Feedback
| RSUs (33%) – to further strengthen alignment with shareholders, stock ownership and retention. |
Response to Shareholder Feedback
| What We Do: | | • Align pay for performance • Maintain significant stock ownership requirements for directors and executive officers • Cap incentive awards and conduct an annual risk assessment of the compensation programs • Subject change-in-control benefits to double trigger vesting • Retain an independent compensation consultant who advises the Compensation Committee • Provide limited perquisites based on sound business rationale • Subject incentive compensation awards to clawback provisions • Review of pay equity by an independent third party • Engage in comprehensive shareholder outreach • Prohibit hedging, short sales, derivative transactions or pledging of company stock • Assess our programs against peer companies and best practices • Set appropriate levels of “stretch” in incentive targets |
Response to Shareholder Feedback
| What We Don’t Do: | | • No guaranteed minimum payout of AIP or LTIP programs • No employment agreements • No excise tax gross-ups for charge-in-control agreements • The value of LTIP awards is not included in pension or severance calculations • No option repricing or buyouts without stockholder approval |
2023 Target Total Direct Compensation for NEOs
| | Cash Compensation | | | Long-Term Incentives | | | Target Total Direct Compensation | | Name | Base | AIP Target | Total Cash Compensation | RSUs 33% | PShares 67% | LTI Target | | | Dominguez | $1,200,000 | 150% | $3,000,000 | $3,300,000 | $6,700,000 | $10,000,000 | $13,000,000 | | Eggers | $710,000 | 95% | $1,384,500 | $759,000 | $1,541,000 | $2,300,000 | $3,684,500 | | Hanson | $850,000 | 95% | $1,657,500 | $924,000 | $1,876,000 | $2,800,000 | $4,457,500 | | McHugh | $707,366 | 85% | $1,308,627 | $589,050 | $1,195,950 | $1,785,000 | $3,093,627 | | Barrón | $692,900 | 85% | $1,281,865 | $504,900 | $1,025,100 | $1,530,000 | $2,811,865 |
2023 Annual Incentive Plan
2023 Annual Incentive Plan The Annual Incentive Plan (AIP) is designed to promote the achievement of critical financial and operational goals that are aligned with our business plan and drive shareholder value. For the 2023 AIP, the Compensation Committee approved financial goals related to adjusted EBITDA (weighted 70%) and operational goals based on customer satisfaction (weighted 10%), fleetwide capacity factor (weighted 10%), dispatch match (weighted 7%), and renewable energy capture (weighted 3%). The Compensation Committee most heavily weighed the financial metric to align the interests of executives with shareholders. Based on achieved performance, AIP payouts may range from 50% to 200% of an NEO’s target incentive opportunity. However, if threshold performance is not achieved with respect to a specific performance metric, no payout would be earned for that metric. The Compensation Committee may exercise its discretion to adjust awards otherwise earned under the AIP; however, no such discretion was exercised in 2023. The pie chart below summarizes the performance metrics and their respective weights. In addition, each NEO’s annual incentive target opportunity expressed as a percentage of their base salary is summarized below. The Compensation Committee determined each NEO’s AIP target as part of its annual review of executive compensation after considering the same factors as those considered for base salaries.
2023 Annual Incentive Plan
| | Constellation Energy Corporation 2024 Proxy Statement | 61 |
2023 Annual Incentive Plan
The Compensation Committee set the target of each performance metric goal to be challenging but achievable to motivate officers to strive for continuous improvement. The committee considered our long-term financial plan as well as the current economic and regulatory environment when setting financial goals, and operational and strategic plan when setting non-financial goals.
2023 Annual Incentive Plan
| | Constellation Energy Corporation 2024 Proxy Statement | 62 |
2023 Annual Incentive Plan
| | Constellation Energy Corporation 2024 Proxy Statement | 63 |
2023 Annual Incentive Plan
With respect to each performance metric, the following table details the 2023 threshold, target, and distinguished or maximum performance goals, achieved performance, unweighted percentage of target earned, and weighted percentage of target earned. Based on achieved performance, the Compensation Committee approved the 2023 AIP payout equal to 188.25% of target. The Compensation Committee did not exercise discretion to adjust this formulaic payout. The following table shows how the formula was applied and the actual amounts awarded. The AIP targets presented below are prorated based on salary and the AIP payouts were distributed to the NEOs on March 15, 2024.
2023 Annual Incentive Plan
| NEO | AIP Target % | AIP Target | Formulaic Performance Factor | Actual Award | | Dominguez | 150% | $1,757,973 | 188.25% | $3,309,384 | | Eggers | 95% | $662,397 | 188.25% | $1,246,962 | | Hanson | 95% | $786,083 | 188.25% | $1,479,802 | | McHugh | 85% | $592,026 | 188.25% | $1,114,489 | | Barrón | 85% | $579,918 | 188.25% | $1,091,696 |
2023 Annual Incentive Plan
| | Constellation Energy Corporation 2024 Proxy Statement | 64 |
2023 Annual Incentive Plan
Long-Term Incentive Plan
Long-Term Incentive Plan (LTIP)
Long-Term Incentive Plan (LTIP) Our long-term incentive structure aligns pay with performance and our company’s business. The Compensation Committee grants PShares and RSUs annually at its February meeting. For 2023, the Compensation Committee determined each NEO’s total target long-term incentive value based on competitive market data and other factors that are discussed under the heading “Setting Target Compensation for NEOs” in the executive summary of this Compensation Discussion and Analysis. Each NEO’s 2023 LTIP value was allocated between grants of RSUs (33%) and PShares (67%), as described in the chart below.
Long-Term Incentive Plan (LTIP)
| | RSUs (33% of LTIP) | PShares (67% of LTIP) | | Dominguez | 39,635 | 80,471 | | Eggers | 9,117 | 18,509 | | Hanson | 11,098 | 22,532 | | McHugh | 7,075 | 14,365 | | Barrón | 6,065 | 12,313 |
2023 – 2025 Restricted Stock Units (RSUs)
2023 – 2025 Restricted Stock Units (RSUs) In February 2023, the Compensation Committee approved the grant of RSUs for each NEO. RSUs vest ratably over a three- year period. During the vesting period, RSUs receive dividend equivalents that are reinvested as additional RSUs which remain subject to the same vesting conditions as the underlying RSUs. RSUs are not subject to any performance metrics. On each vesting date, the number of RSUs that vest is settled in a like number of shares of our common stock, less applicable taxes, provided that the NEO was continuously employed by the company through the vesting date.
2023 – 2025 Performance Share (PShare) Program
2023 – 2025 Performance Share (PShare) Program In February 2023, the Compensation Committee approved the grant of PShares for each NEO. PShares are earned over the three-year period ending December 31, 2025, based on our achievement against free cash flow before growth goals, subject to a negative modifier based on credit ratings. Based on achieved performance, the number of PShares earned at the end of the performance period may range from 50% to 200% of an NEO’s target PShares. However, if threshold performance is not achieved with respect to a specific performance metric, no payout would be earned for that metric. PShares receive dividend equivalents that are reinvested as additional PShare awards which remain subject to the same vesting and performance conditions as the underlying award. Pursuant to the terms of the long-term incentive program, NEOs who have achieved 200% or more of their stock ownership target receive PShare awards settled in cash. PShare awards are settled 50% in cash and 50% in stock for NEOs that have not achieved 200% or more of their stock ownership target. Reinvested dividends are settled in the same form as the underlying award. The performance metrics underlying the 2023 – 2025 PShare awards and the formula used to determine the earned PShare award are described below.
2023 – 2025 Performance Share (PShare) Program
| | Constellation Energy Corporation 2024 Proxy Statement | 65 |
2023 – 2025 Performance Share (PShare) Program
2023 - 2025 Performance Share (PShare) Program
2023 – 2025 Performance Share (PShare) Program
| PShare Metrics | Metric Rationale and Link to Long-Term Shareholder Value | | Free Cash-Flow before Growth “Free Cash Flow” as used by the company is Cash From Operations net of Cash From Investing (e.g., capital expenditures or Capex). Free Cash Flow is adjusted for certain non-recurring and other items to calculate Free Cash Flow before Growth. These adjustments include items such as non-recurring Capex, growth Capex, and collateral. For compensation purposes only, Free Cash Flow before Growth is adjusted to exclude impacts of changes in working capital. | • Aligned with our strategy to deliver strong free cash flows, optimized through industry-leading operations. | | Credit Ratings The relative credit rating metric is based on the ratings assigned by two independent credit rating agencies: Moody’s and S&P. Both agencies use a combination of quantitative and qualitative factors to assess the creditworthiness of an issuer and assign a rating that indicates the probability of default or non-payment of debt obligations. | • Aligned with our strategy to deliver on a disciplined capital allocation strategy and the maintenance of a strong investment grade balance sheet. • By using the credit ratings from Moody’s and S&P in our long-term incentive program, we aim to incentivize our executives to manage the business in a way that balances growth and profitability with prudent risk-taking and financial discipline, and that enhances our reputation and credibility among investors and other stakeholders. |
2023 – 2025 Performance Share (PShare) Program
Setting PShare Performance Targets. PShare performance targets are set based on external commitments and analysis of sensitivities at the beginning of the performance period. The modifier ranges are calibrated with the expectations of credit rating agencies. Actual Targets Disclosed After Each 3-Year Performance Cycle. Actual performance targets used in our PShare program are not disclosed until each 3-year performance cycle is completed to safeguard the confidentiality of our long-term outlook on projected performance. This policy supports the propriety of our longstanding disclosure practices to only issue annual performance guidance as part of our financial disclosure policies.
2021-2023 Performance Share Program Payout Determination
2021-2023 Performance Share Program Payout Determination Prior to the separation of Constellation from Exelon, the Compensation Committee of the Exelon board of directors approved the conversion of the 2021 – 2023 PShare award’s target number of shares into target Constellation shares at the date of spin, based on the spin value ratio with an adjustment based on the Exelon TSR multiplier for the period ending December 31, 2021. The Constellation Compensation Committee approved the performance scale aligned to the Constellation business strategy below at separation. Based on achieved performance, the Constellation Compensation Committee approved the 2021-2023 PShare payout at 200% of target. The Compensation Committee did not exercise discretion to adjust this formulaic payout.
2021-2023 Performance Share Program Payout Determination
| | Constellation Energy Corporation 2024 Proxy Statement | 66 |
2021-2023 Performance Share Program Payout Determination
2021-2023 Performance Share Program Payout Determination The table below shows the determination of the number of PShares earned under the 2021-2023 PShares award. The awards vested on February 5, 2024.
2021-2023 Performance Share Program Payout Determination
| NEO | PShare Target | Formulaic Performance Factor | Actual Award | | Dominguez | 23,887 | 200% | 47,774 | | Eggers | 11,627 | 200% | 23,254 | | Hanson | 46,507 | 200% | 93,014 | | McHugh | 35,409 | 200% | 70,818 | | Barrón | 14,797 | 200% | 29,594 |
Changes to Annual Incentive Program
Changes to Annual Incentive Program We have replaced adjusted EBITDA with Adjusted (non-GAAP) Operating Earnings as the primary financial metric for the annual incentive program. Adjusted (non-GAAP) Operating Earnings is defined as GAAP net income excluding certain costs, expenses, gains and losses and other specified items, including mark-to-market adjustments from economic hedging activities and fair value adjustments related to gas imbalances and equity investments, decommissioning related activity, asset impairments, certain amounts associated with plant retirements and divestitures, pension and other post-employment benefits (OPEB) non-service credits, and separation related costs. The weighting of the annual incentive program metrics for 2024 will be as follows:
Changes to Performance Share Program
Changes to Performance Share Program In response to feedback and input from shareholders during engagement meetings, the Compensation Committee has introduced relative TSR as a new metric for the performance share program, which will complement the existing Free Cash-Flow before Growth metric and negative credit rating modifier. Relative TSR will measure our total shareholder return over the three-year performance period compared to a custom peer group of companies in similar industries and markets. In the development of the custom relative TSR group, screening criteria included market cap, capital intensity, long-lived assets, and sensitivity to commodity prices. The Compensation Committee believes that relative TSR will enhance the alignment of our long-term incentives with shareholder value creation and market expectations, while also providing a balanced mix of internal and external performance indicators. Additionally, this change is responsive to our shareholders and will enhance the balance and rigor of our long-term incentive program while reinforcing our pay-for-performance philosophy. The weighting of the performance share program metrics for 2024 will be as follows: Relative TSR: 33% Free Cash-flow before Growth: 67% Negative Modifier: Credit Ratings from Moody’s and S&P
Changes to Performance Share Program
| | Constellation Energy Corporation 2024 Proxy Statement | 67 |
Changes to Performance Share Program
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant The Compensation Committee retains Meridian Compensation Partners, an independent compensation consultant, to support its duties and responsibilities. Meridian provides advice and counsel on executive and director compensation matters and provides information and advice regarding market trends, competitive compensation programs, and strategies including, but not limited to, the following:
Role of the Independent Compensation Consultant
| • | Market data for each senior executive position, including evaluating Constellation’s compensation strategy and reviewing and confirming the peer group used to prepare the market data, |
Role of the Independent Compensation Consultant
| • | An independent assessment of management recommendations for changes in the compensation structure, |
Role of the Independent Compensation Consultant
| • | Assisting management to ensure Constellation’s executive compensation programs are designed and administered consistent with the Compensation Committee’s requirements, and |
Role of the Independent Compensation Consultant
| • | Ad hoc support on executive compensation matters and related governance trends. |
Role of the Independent Compensation Consultant
The Compensation Committee will annually review the compensation, performance, and independence of Meridian and approve the firm’s fees and other retention terms. In December 2023, the Compensation Committee assessed the independence of Meridian and concluded that it is independent and that no conflict of interest exists that would prevent Meridian from serving as an independent consultant to the Compensation Committee.
2023 Executive Compensation Peer Groups
2023 Executive Compensation Peer Groups Constellation uses a blended peer group that consists of energy services peers, independent power producers (“IPPs”), and general industry peers for assessing our executive compensation program and the competitive positioning of our NEO’s compensation. We utilize this method because (1) there are not enough energy services and IPPs peers with size, scale and complexity comparable to Constellation to create a robust peer group, and (2) Constellation’s market for attracting talent includes general industry peers, with key executives hired from several Fortune 100 companies. When selecting general industry peers, we consider capital asset-intensive companies with size, scale and complexity similar to Constellation, and we also consider the extent to which they may be subject to the effects of volatile commodity prices similar to Constellation’s sensitivity to commodity price volatility. Constellation evaluates its peer group on an annual basis and adjusts the peer group for changes with our energy and general industry peers when needed.
2023 Executive Compensation Peer Groups
| | Constellation Energy Corporation 2024 Proxy Statement | 68 |
2023 Executive Compensation Peer Groups
2023 Executive Compensation Peer Groups Due to the correlation between the size of an organization and its compensation levels, market data is statistically adjusted using a regression analysis. Utilizing this commonly applied technique allows for a more precise estimate of the market value of Constellation given the size and scope of responsibility for Constellation’s executive roles. Each element of executive compensation is then compared to these size-adjusted medians of the peer group. This peer group, in part, is also used to assess program design practices.
Risk Management Assessment of Compensation Policies and Practices
| • | the AIP includes multiple incentive performance measures with a balance of financial and non-financial metrics; |
Risk Management Assessment of Compensation Policies and Practices
| • | long-term incentives include multiple vehicles and performance metrics and three-year overlapping performance periods that are aligned with long-term stock ownership requirements; |
Risk Management Assessment of Compensation Policies and Practices
| • | incentive metrics, performance goals, and capital allocation require multiple approval levels and oversight; |
Risk Management Assessment of Compensation Policies and Practices
| • | total compensation pay mix includes effective and market aligned balance of short and long-term incentive compensation elements; |
Risk Management Assessment of Compensation Policies and Practices
| • | short and long-term incentive awards contain award caps or modifiers; |
Risk Management Assessment of Compensation Policies and Practices
| • | reasonable change-in-control and severance benefits are within common market norms; |
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name | Year | Salary(a) | Bonus | Stock Awards(b) | Non-Equity Incentive Plan Compensation(c) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(d) | All Other Compensation(e) | Total | | Joseph Dominguez | | | | | | | | | | President and Chief | 2023 | $1,181,944 | — | $10,000,025 | $3,309,384 | $471,090 | $222,942 | $15,185,385 | | Executive Officer | 2022 | 1,090,972 | — | 6,699,193 | 2,016,404 | 385,830 | 246,683 | 10,439,082 | | | 2021 | 752,504 | — | 1,130,048 | 846,880 | 181,413 | 441,432 | 3,352,277 | | Daniel Eggers | | | | | | | | | | Executive Vice President and Chief Financial Officer | 2023 | 702,101 | — | 2,300,140 | 1,246,962 | 156,637 | 102,560 | 4,508,400 | | | 2022 | 663,316 | — | 1,569,750 | 788,386 | 120,179 | 73,211 | 3,214,842 | | | 2021 | 561,051 | — | 550,024 | 478,698 | 82,699 | 48,901 | 1,721,373 | | Bryan C. Hanson | | | | | | | | | | Executive Vice President and Chief Generation Officer | 2023 | 831,945 | — | 2,800,033 | 1,479,802 | 3,566,930 | 162,443 | 8,841,153 | | | 2022 | 745,486 | — | 3,445,564 | 883,137 | — | 283,564 | 5,357,751 | | | 2021 | 720,486 | — | 2,220,056 | 660,374 | 560,922 | 74,320 | 4,236,158 | | James McHugh | | | | | | | | | | Executive Vice President and Chief Commercial Officer | 2023 | 702,453 | — | 1,785,095 | 1,114,489 | 216,706 | 72,008 | 3,890,751 | | | 2022 | 677,164 | — | 1,489,761 | 715,417 | 538,434 | 71,476 | 3,492,252 | | | 2021 | 662,384 | — | 2,564,644 | 422,298 | 27,257 | 45,655 | 3,722,238 | | Kathleen Barrón | | | | | | | | | | Executive Vice President and Chief Strategy Officer | | | | | | | | | | | 2023 | 688,088 | — | 1,530,152 | 1,091,696 | 169,065 | 166,392 | 3,645,393 |
Summary Compensation Table
| (a) The amounts shown represent base earnings. |
Summary Compensation Table
| (b) The amounts shown in this column represent the aggregate grant date fair value of restricted stock unit and performance share unit awards granted in the year indicated, with such grant date fair values prepared in accordance with ASC Topic 718. The values set forth for the performance shares above reflect the vesting of such awards based on the probable outcome of target levels, however, values may be higher based on performance. For a discussion of threshold, target and maximum levels of vesting on these awards, see the “Long-Term Incentive Plan” description in the Compensation Discussion and Analysis section of this proxy. |
Summary Compensation Table
| | Performance Share Award Value | | | Name | At Target | At Maximum | | Dominguez | $6,700,015 | $13,400,030 | | Eggers | 1,541,059 | 3,082,118 | | Hanson | 1,876,014 | 3,752,028 | | McHugh | 1,196,030 | 2,392,060 | | Barrón | 1,025,180 | 2,050,360 |
Summary Compensation Table
| (c) The amounts shown in this column for 2023 represent payments made pursuant to the Annual Incentive Plan. |
Summary Compensation Table
| (d) The amounts shown in this column represent the change in the accumulated pension benefit for the NEOs from December 31, 2022 to December 31, 2023. |
Summary Compensation Table
| (e) The following table describes the incremental cost of other benefits provided in 2023 that are shown in this column. |
Summary Compensation Table
| | Constellation Energy Corporation 2024 Proxy Statement | 71 |
Summary Compensation Table
2023 All Other Compensation 2023 All Other Compensation
Summary Compensation Table
| Name | Perquisites (a) | Reimbursement for Income Taxes (b) | Constellation Contributions to Savings Plans (c) | Constellation Paid Executive LTD Premiums (d) | Other (e) | Total | | Dominguez | $138,396 | $9,011 | $71,000 | $4,535 | $ — | $222,942 | | Eggers | 58,386 | — | 40,665 | 3,509 | — | 102,560 | | Hanson | 107,482 | 1,572 | 49,275 | 4,114 | — | 162,443 | | McHugh | 27,083 | — | 40,549 | 4,376 | — | 72,008 | | Barrón | 86,742 | 35,436 | 40,271 | 3,943 | — | 166,392 |
Summary Compensation Table
| (a) Amounts reported for personal benefits provided to NEOs include: (1) transportation related benefits (including corporate aircraft, car and driver, as well as spousal and family travel); and (2) other benefits (including personal financial planning, company gifts, and matching charitable contributions). |
Summary Compensation Table
| i. | Amounts reported for the personal use of corporate aircraft are based on the aggregate incremental cost to Constellation and are calculated using the hourly incremental cost for flights, including costs for fuel, maintenance, airport charges, and other variable costs, as applicable. Certain NEOs are also entitled to limited personal use of the company’s cars and drivers including commuting to work locations. Amounts reported in this column for Mr. Dominguez, Mr. Eggers, Mr. Hanson, and Ms. Barrón include $42,914, $27,159, $69,550 and $11,775, respectively, for personal use of corporate aircraft. The amounts also include $48,566 for spousal/domestic partner and other family member usage. |
Summary Compensation Table
| ii. | Amounts include the aggregate incremental value of relocation costs received by Ms. Barrón which were provided for under Constellation’s Relocation Program and the cost of temporary housing totaling $49,782. These expenses were incurred as part of her move from Washington D.C. to Maryland coinciding with becoming Constellation’s Chief Strategy Officer. |
Summary Compensation Table
| iii. | Limited personal financial planning benefits valued at $16,840 were provided for each NEO. Executive officers may request matching gifts to qualified charitable organizations in amounts up to $10,000. Comprehensive Executive Health Physicals are provided with the aggregate incremental value ranging from $2,500 to $5,000 depending on service provider. |
Summary Compensation Table
| (b) Constellation provides reimbursements of tax obligations incurred when: employees are required to work outside their state of home residence and encounter double taxation in states and localities where tax credits are not permitted in home state tax filings; when business-related spousal travel involves personal benefits and income is imputed to the employee; and for required relocation and housing/living expenses incurred in compliance with regulatory requirements. |
Summary Compensation Table
| (c) The amounts represent the respective corporate matching contributions to the NEOs’ accounts. Each of the NEOs participated in the 401(k) Plan and the Deferred Compensation Plan. |
Summary Compensation Table
| (d) Constellation provides basic term life insurance, accidental death and disability insurance, and long-term disability insurance to all employees, including NEOs. The values shown in this column include the premiums paid during 2023 for long-term disability over and above the basic coverage provided to all employees. |
Summary Compensation Table
| | Constellation Energy Corporation 2024 Proxy Statement | 72 |
Summary Compensation Table
Grants of Plan-Based Awards Grants of Plan-Based Awards
Summary Compensation Table
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(a) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards(b) | | | | | | Name | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | All other Stock Awards: Number of Shares or Units(c) | Grant Date Fair Value of Stock and Option Awards(d) | | Dominguez | 2/6/2023 | $26,370 | $1,757,974 | $3,515,948 | | | | | | | | 2/6/2023 | | | | 30,177 | 80,471 | 160,942 | | $6,700,015 | | | 2/6/2023 | | | | | | | 39,635 | 3,300,010 | | Eggers | 2/6/2023 | 9,936 | 662,397 | 1,324,794 | | | | | | | | 2/6/2023 | | | | 6,941 | 18,509 | 37,018 | | 1,541,059 | | | 2/6/2023 | | | | | | | 9,117 | 759,081 | | Hanson | 2/6/2023 | 11,791 | 786,083 | 1,572,166 | | | | | | | | 2/6/2023 | | | | 8,450 | 22,532 | 45,064 | | 1,876,014 | | | 2/6/2023 | | | | | | | 11,098 | 924,019 | | McHugh | 2/6/2023 | 8,880 | 592,026 | 1,184,052 | | | | | | | | 2/6/2023 | | | | 5,387 | 14,365 | 28,730 | | 1,196,030 | | | 2/6/2023 | | | | | | | 7,075 | 589,065 | | Barrón | 2/6/2023 | 8,699 | 579,918 | 1,159,836 | | | | | | | | 2/6/2023 | | | | 4,617 | 12,313 | 24,626 | | 1,025,180 | | | 2/6/2023 | | | | | | | 6,065 | 504,972 |
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| (a) All NEOs have annual incentive plan target opportunities based on a fixed percentage of base salaries. Under the terms of the AIP, threshold performance earns 50% of the respective target, while performance at plan earns 100% of the respective target, and the maximum payout is capped at 200% of target. For 2023, the possible payout at threshold for AIP was calculated at 1.5% of target based on a threshold payout (50%) of the lowest weighted metric of 3%. For additional information about the terms of this program, see the “Compensation Discussion and Analysis” section above. |
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| (b) NEOs have a long-term performance share unit target opportunity that is a fixed number of performance share units which is commensurate with the officer’s position. The possible payout at threshold for performance share unit awards was calculated at 37.50% of target. The possible maximum payout for performance share units was calculated at 200% of target. For additional information about the terms of these programs, see the “Compensation Discussion and Analysis” section and the footnotes to the Summary Compensation Table above. |
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| (c) This column shows restricted stock unit awards made during the year. The vesting dates of the awards are provided in footnote (b) to the Outstanding Equity Table below. |
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| (d) This column indicates the grant date fair value, calculated in accordance with FASB ASC Topic 718, of the performance share unit awards and restricted stock units granted to each NEO during 2023. Fair value of performance share unit awards granted on February 6, 2023, are based on an estimated payout of 100% of target. |
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| | Constellation Energy Corporation 2024 Proxy Statement | 73 |
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Outstanding Equity Awards at Year End Outstanding Equity Awards at Year End
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| | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options That Are Exercise | Number of Securities Underlying Unexercised Option That Are Not Exercisable | Options Exercise or Base Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Yet Vested(a)(b) | Market Value of Shares or Units of Stock That Have Not Yet Vested Based on 12/29/23 Closing Price $116.89(a)(b) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested(a)(c) | Equity Incentive Plan Awards: Market or Payout Value or Unearned Shares, Units or Other Rights That Have Not Yet Vested Based on 12/29/23 Closing Stock Price(a)(c) | | Dominguez | — | — | — | — | 76,505 | $8,942,669 | 407,917 | $47,681,418 | | Eggers | — | — | — | — | 18,600 | 2,174,154 | 106,940 | 12,500,217 | | Hanson | — | — | — | — | 58,851 | 6,879,093 | 198,855 | 23,244,161 | | McHugh | — | — | — | — | 42,660 | 4,986,527 | 143,762 | 16,804,340 | | Barrón | — | — | — | — | 36,868 | 4,309,501 | 89,348 | 10,443,888 |
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| (a) Prior to the separation of Constellation from Exelon, the Compensation Committee of Exelon’s Board of Directors approved the conversion of equity awards held immediately prior to the separation into Constellation equity awards under the Constellation Stock Plan. The awards were converted in a manner to maintain the value of the equity awards immediately prior to and immediately after the separation. The Exelon pre- separation price used to value the outstanding awards was $56.81 and was based upon the volume-weighted average stock price (VWAP) for the five days prior to the transaction. The Constellation post- separation stock price of $51.16 was based on the VWAP for the five days after the transaction. The effective date of the separation was February 1, 2022. |
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| (b) The amount shown is composed of: the converted final third of the unvested restricted stock units (RSUs) originally granted in January 2021, which vested on February 5, 2024; two-thirds of the RSUs originally awarded in February 2022, half of which vested on February 5, 2024, and half of which will vest on the date of the Constellation Compensation Committee’s first regular meeting in 2025; and the RSUs awarded February 6, 2023, one-third of which vested on February 5, 2024, and one-third of which will vest on the date of each of the Constellation’s Compensation Committee’s first regular meetings in 2025 and 2026, respectively. For Mr. Hanson, the amount also includes 31,004 retention RSUs inclusive of accrued dividends. Mr. Hanson’s retention award was awarded on February 7, 2022, and will vest on February 7, 2025. For Mr. McHugh, the amount also includes 23,183 retention RSUs inclusive of accrued dividends. Mr. McHugh’s retention award was initially awarded on April 5, 2021, and will vest on April 5, 2025. For Ms. Barrón, the amount also includes 22,819 retention RSUs inclusive of accrued dividends. Ms. Barrón’s retention award was initially granted October 29, 2021, and the award will vest on October 29, 2025. All unvested RSUs accrue additional shares through automatic dividend reinvestment. All shares are valued at $116.89, the closing price on December 29, 2023. |
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| (c) The amount shown includes the target performance share awards granted on January 25, 2021, for the performance period ending December 31, 2023, and converted per footnote (a) above. Also included are the target performance share awards granted post-separation on February 7, 2022, for the performance period ending December 31, 2024, and the performance share awards granted on February 6, 2023, for the performance period ending December 31, 2025. All target awards have been increased to reflect the highest level of performance for the period, 200%. All shares are valued at $116.89, the closing price on December 29, 2023. |
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| | Constellation Energy Corporation 2024 Proxy Statement | 74 |
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Option Exercises and Stock Vested Option Exercises and Stock Vested
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| | Option Awards | | Stock Awards(a)(b)(c) | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Dominguez | — | — | 41,474 | $3,417,440 | | Eggers | — | — | 15,582 | 1,283,928 | | Hanson | — | — | 39,450 | 3,250,653 | | McHugh | — | — | 40,900 | 3,370,156 | | Barrón | — | — | 17,552 | 1,446,257 |
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| (a) Share amounts shown are composed of the following tranches of prior awards that vested on January 30, 2023; the final third of the RSU awards granted in January 2020, the second third of the RSU awards granted in January 2021 and the first third of the RSU awards granted in February 2022. All of these awards were valued at $82.40 per share upon vesting. |
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| (b) Also included are performance share awards earned under the 2020-2022 Performance Plan which vested on January 30, 2023. All of these awards were valued at $82.40 per share upon vesting |
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| (c) Prior to the separation of Constellation from Exelon, the Compensation Committee of Exelon’s Board of Directors approved the conversion of equity awards held immediately prior to the separation into substitute Constellation equity awards under the Constellation Stock Plan. The awards were converted in a manner to maintain the value of the equity awards immediately prior to and immediately after the separation. The Exelon pre-separation price per share used to value the outstanding awards was $56.81 and was based upon the volume-weighted average stock price (VWAP) for the five days prior to the transaction. The Constellation post-separation stock price of $51.16 was based on the VWAP for the five days after the transaction. The effective date of the separation was February 1, 2022. |
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| | Constellation Energy Corporation 2024 Proxy Statement | 75 |
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Pension Benefits Benefit Plans Pension Benefits Constellation sponsors the Constellation Retirement Program, a defined benefit pension plan that includes the Commonwealth Edison Company Constellation Service Annuity System (SAS), a traditional pension plan covering NEOs who commenced employment prior to January 1, 2001, and the Constellation Cash Balance Pension Plan (CBPP), an account-based plan covering eligible NEOs hired between January 1, 2001, and February 1, 2018. The Constellation Retirement Program is intended to be tax- qualified under Section 401(a) of the Internal Revenue Code. Commonwealth Edison Company Constellation Service Annuity System (SAS) Only one NEO (Mr. Hanson) participates in the SAS. Under the SAS, the annuity benefit payable at normal retirement age is equal to the sum of 1.25% of the participant’s earnings as of December 25, 1994, reduced by a portion of the participant’s earned Social Security benefit as of that date, plus 1.6% of the participant’s highest average annual pay, multiplied by the participant’s years of credited service (up to a maximum of 40 years). Pension-eligible compensation for the SAS’s Final Average Pay Formula includes base pay and annual incentive awards. Benefits under the SAS are vested after five years of service. “Normal retirement age” under the SAS is 65 and the plan also offers early retirement benefits, which are payable if a participant retires after attainment of age 50, but before attainment of age 65 and completion of 10 years of service. The annual pension payable under the plan is determined as of the early retirement date, reduced by 2% for each year of payment before age 60 to age 58, then 3% for each year before age 58 to age 50. In addition, the early retirement benefit is supplemented prior to age 65 by a temporary payment equal to 80% of the participant’s estimated monthly Social Security benefit. The supplemental benefit is partially offset by a reduction in the regular annuity benefit. Constellation Cash Balance Pension Plan (CBPP) Four NEOs (Messrs. Dominguez, Eggers, and McHugh and Ms. Barrón) participate in the CBPP. Under the CBPP, a notional account is established for each participant, and the account balance grows as a result of annual benefit credits and annual investment credits. When the CBPP was initially established in 2001, it provided an annual benefit credit of 5.75% of an employee’s base pay and annual incentive award for the year and an annual investment credit based on the average of that year’s S&P 500 stock index return and the 30-year Treasury rate for the month of November (subject to 4% minimum). The benefit and investment credit rates have been subsequently modified periodically pursuant to U.S. Treasury Department guidance on cash balance plans. NEO participants in the CBPP currently receive an annual benefit credit of 7% of base salary and annual incentive award, and an annual investment credit based on either the third segment spot rate of interest on long-term investment grade corporate bonds for the month of November of the year credited (subject to a 4% minimum) or the second segment spot rate of interest on long- term investment grade corporate bonds for the month of November of the year credited (subject to a 3.8% minimum), depending on length of service. Benefits vest after three years of service and are payable in an annuity or a lump sum at any time following termination of employment. Apart from the benefit credits and the vesting requirement, years of service are not relevant to a determination of accrued benefits under the CBPP. A one-time transition benefit credit as of December 31, 2018 was provided to all CBPP participants in recognition of the transition to a fully fixed income investment credit rate. The amount of the credit ranged from 0% to 30.5% of 2018 annualized base pay, based on years of service as of December 31, 2007. Constellation ceased offering the SAS to all new entrants as of January 1, 2009, and the CBPP was closed to all new entrants as of January 1, 2023. Instead, an annual enhanced non-discretionary 401(k) contribution is provided for new employees not eligible for pension benefits.
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| | Constellation Energy Corporation 2024 Proxy Statement | 76 |
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Constellation Supplemental Management Retirement Plan (SMRP) Constellation Supplemental Management Retirement Plan (SMRP) All NEOs participate in the SMRP which provides supplemental benefits to the benefits provided under the tax-qualified Constellation Retirement Program for individuals whose annual compensation exceeds the limits imposed under the Internal Revenue Code. Under the terms of the SMRP, participants are provided the amount of benefits they would have received under the SAS or CBPP, as applicable, but for the application of the Internal Revenue Code limits. The SMRP offers a lump sum as an optional form of payment. Tax benefits are provided for SMRP participants when FICA and state taxes are not imposed on qualified pension plan benefits, but are imposed on non-qualified retirement benefits, such as those provided under the SMRP. Constellation provides these tax benefits in order to equalize the tax treatment of non-qualified benefits to those received under qualified plans. These tax benefits are provided to all participants in the SMRP (currently over 160, approximately 45% of which are executives (i.e., Vice President level or above)). For participants in the SAS, the SMRP lump sum includes the value of the marital annuity, death benefits and other early retirement subsidies at a designated interest rate. The interest rate applicable for distributions to participants in the SAS in 2023 is 3.66%. For participants in the CBPP, the lump sum is the value of the non-qualified account balance. The values of the lump sum amounts do not include the value of any pension benefits covered under the tax-qualified pension plans, and the methods and assumptions used to determine the non-qualified lump sum amount are different from the assumptions used to generate the present values shown in the tables of benefits to be received upon retirement, termination due to death or disability, involuntary separation not related to a change in control, or upon a qualifying termination following a change in control which appear later in this proxy statement. Since 2004, the provision of additional years of credited service to executives was ended under the SMRP for any period in which services are not actually performed, except that up to two years of service credits may be provided under the SMRP upon a qualifying termination of employment under severance or up to 2.99 years of service under change in control agreements, and performance-based awards or awards that are intended to make up for lost pension benefits from another employer. Service credits previously available under employment, change in control or severance agreements or arrangements (or any successor arrangements) are not affected. The amount of the change in the pension value for each of the NEOs is the amount included in the Summary Compensation Table above. The present value of each NEO’s accumulated pension benefit is shown in the Pension Benefits table below. A portion of 2022 accumulated pension benefit were accrued under Exelon, prior to February 1, 2022. The assumptions used in estimating the present values include the following: pension benefits are assumed to begin at each participant’s earliest unreduced retirement age; the SMRP lump sum amounts for SAS participants are determined using the rate of 4.03% as of December 31, 2023, at the assumed retirement age; the account balances for CBPP participants are assumed to grow at the annual investment credit rate of 5.09% or 5.16% as of December 31, 2023, depending on length of service, to the assumed retirement age; the lump sum amounts are discounted from the assumed retirement date at the applicable discount rates of 5.52% as of December 31, 2022 and 5.17% as of December 31, 2023; and the applicable mortality tables.
Summary Compensation Table
| Name | Plan Name | Number of Years Credited Service | Present Value of Accumulated Benefit | | Dominguez | CBPP | 21.35 | $683,832 | | | SMRP | 21.35 | 1,703,873 | | Eggers | CBPP | 7.76 | 173,181 | | | SMRP | 7.76 | 444,515 | | Hanson | SAS | 35.30 | 2,385,387 | | | SMRP | 35.30 | 10,272,226(a) | | McHugh | CBPP | 20.79 | 538,789 | | | SMRP | 20.79 | 925,037 | | Barrón | CBPP | 13.47 | 354,050 | | | SMRP | 13.47 | 590,686 |
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| (a) Mr. Hanson’s non-qualified Supplemental Management Retirement Plan (SMRP) present value is $10,272,226. Based on lump sum conversion interest rates defined for immediate distributions under the non-qualified plan, the comparable lump sum amount applicable for service through December 31, 2023 is $12,072,856. Note that, in any event, payments made upon termination may be delayed by six months in accordance with U.S. Treasury Department guidance. |
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| | Constellation Energy Corporation 2024 Proxy Statement | 77 |
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Deferred Compensation Deferred Compensation Constellation Deferred Compensation Plan The Constellation Deferred Compensation Plan is a non-qualified plan that permits NEOs to defer certain cash compensation to facilitate tax and retirement planning. The Constellation Deferred Compensation Plan also permits Constellation to credit related matching contributions that would have been contributed to the Constellation Employee Savings Plan (Constellation’s tax-qualified 401(k) plan) but for the applicable limits under the Internal Revenue Code. Constellation Employee Savings Plan The Constellation Employee Savings Plan is intended to be tax-qualified under Sections 401(a) and 401(k) of the Internal Revenue Code. Constellation maintains the Constellation Employee Savings Plan to attract and retain qualified employees, including the NEOs, and encourage retirement savings, which under the plan may be supplemented by company matching and profit-sharing contributions. The excess matching feature of the Constellation Deferred Compensation Plan is maintained to enable highly compensated employees to save for retirement to the extent they otherwise would have, were it not for the limits established by the IRS. Once participants in the Constellation Employee Savings Plan reach their statutory contribution limit during the year, their elected payroll contributions and company matching contribution will be credited to their accounts in the Constellation Deferred Compensation Plan to the extent provided in an election filed in the prior year. The investment options under the Constellation Deferred Compensation Plan consist of a basket of investment fund benchmarks substantially the same as those funds available through the Constellation Employee Savings Plan. Deferred amounts represent unfunded, unsecured obligations of Constellation.
Summary Compensation Table
| Name | Executive Contributions in 2023(a) | Constellation Contributions in 2023(b) | Aggregate Earnings in 2023(c) | Aggregate Withdrawals/ Distributions | Aggregate Balance at 12/31/23(d) | | Dominguez | $45,000 | $54,000 | $42,331 | — | $300,252 | | Eggers | 17,750 | 21,477 | 48,742 | — | 257,337 | | Hanson | 42,500 | 31,875 | 39,236 | — | 406,194 | | McHugh | 17,684 | 21,221 | 45,190 | — | 285,858 | | Barrón | 51,967 | 20,787 | 47,680 | — | 429,166 |
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| (a) The full amount shown for executive contributions is included in the base salary figures for each NEO shown above in the Summary Compensation Table. |
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| (b) The full amount shown under the “Constellation contributions in 2023” column is included in the “Constellation contributions to savings plans” column for each NEO shown above in the All Other Compensation Table. |
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| (c) The amount shown under aggregate earnings reflects the NEOs’ gain or loss based upon the individual allocation of their notional account balance into the basket of mutual fund benchmarks. These gains or losses do not represent current income to the NEOs and have not been included in any of the compensation tables shown above. |
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| (d) For all NEOs, the aggregate balance shown includes those amounts, both executive contributions and Constellation contributions, that have been disclosed either as base salary as described in footnote (a) or as Constellation contributions under all other compensation as described in footnote (b) for the current fiscal year ending December 31, 2023. |
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Potential Payments Upon Termination or Change in Control The amount of benefits payable upon termination or a change in control is contingent upon a variety of factors, including the circumstances under which employment terminates.
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| | Constellation Energy Corporation 2024 Proxy Statement | 78 |
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Severance Benefits Severance Benefits The NEOs are entitled to certain payments and benefits in connection with a termination of employment other than for cause (which generally includes willful or reckless acts or omissions, commission of a felony, a material violation of the Code of Business Conduct, or any breach of a restrictive covenant), disability or resignation for good reason (which generally includes certain reductions in salary, demotions or material reductions in the NEO’s position or duties) as provided for in the Constellation Senior Management Severance Plan (“SMSP”). The “Severance Period” is 24 months after termination of employment for all NEOs. Benefits under the SMSP include the following items:
Summary Compensation Table
| Severance Pay | Continued payment of base salary for the applicable Severance Period. | | | Annual Incentive | Target annual incentive awards for the applicable Severance Period and a pro-rated annual incentive award for the year in which the termination of employment occurs. | | | Equity Awards | Retiree Eligible(a) | 1. RSUs: Unvested awards accelerate vesting 2. LTIP (including performance shares): Prorated portion vests based on actual performance; payable at the time provided for in the award terms. | | | Non-Retiree Eligible | 1. RSUs: Unvested awards are prorated based on date of termination and accelerate vesting 2. LTIP (including performance shares): Prorated portion vests based on actual performance; payable at the time provided for in the award terms. | | SMRP Benefits | Benefit equal to the amount payable under the SMRP determined as if the SMSP benefit were fully vested and the severance pay constituted covered compensation for purposes of the SMSP. | | | Retirement Benefits | If applicable, benefits equal to the actuarial equivalent present value of any non-vested accrued benefit under Constellation’s qualified defined benefit retirement plan. All current NEOs are fully vested. | | | Insurance, Health and Welfare Benefits | Life, disability, accident, health and other welfare benefit coverage continues during the severance pay period on the same terms and conditions applicable to active employees, followed by retiree health coverage, if applicable.(b) | | | Financial Planning | Outplacement and financial planning services for at least 12 months. | |
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| (a) Executives are considered retiree eligible for equity awards, if they are at least 55 years old and have completed at least 10 years of service. |
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| (b) Executives are eligible for retiree medical, if they are at least 50 years old and have completed at least 10 years of service. |
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Payments under the SMSP are subject to reduction by the company to the extent necessary to avoid imposition of excise taxes imposed by Section 4999 of the Internal Revenue Code on excess parachute payments or under similar state or local law. Change in Control Benefits The NEOs are eligible for benefits upon certain involuntary terminations or a resignation for “good reason” (which generally includes certain reductions in compensation and benefits, reductions in position, duties or responsibilities, relocations or breaches by the company of the SMSP) in connection with a change in control of the company. Under the SMSP, a “change in control” includes any of the following: (a) when any person or group acquires 20% of Constellation’s then outstanding common stock or of voting securities; (b) the incumbent members of the Constellation Board (or new members nominated by a majority of incumbent directors) cease to constitute at least a majority of the members of the Constellation Board; (c) consummation of a reorganization, merger or consolidation, or sale or other disposition of at least 50% of Constellation’s operating assets (excluding a transaction where Constellation shareholders retain at least 60% of the voting power); or (d) upon shareholder approval of a plan of complete liquidation or dissolution.
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| | Constellation Energy Corporation 2024 Proxy Statement | 79 |
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Change in Control Benefits If the executive resigns for good reason or his or her employment is terminated by Constellation other than for cause or disability, during the period commencing 90 days before a change of control or during the 24-month period following a change in control, the executive is entitled to the benefits outlined below.
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| Severance Pay | The executive receives 2.99 times base salary to be paid in substantially equal regular payroll installments. | | Annual Incentive | Target annual incentive award for a period of 2.99 years after termination of employment and a pro- rated annual incentive award for the year in which the termination of employment occurs. | | Equity Awards | 1. RSUs: Unvested awards vest. 2. LTIP (including performance shares): Award shall become fully vested and payable based on the extent to which the performance goals established under the LTIP for such performance period are attained as of the last day of the performance period. | | SMRP Benefits | Benefit equal to the amount payable under the SMRP determined as if (1) the executive had 2.99 years of age and years of service and (2) the severance pay constituted covered compensation for purposes of the SMRP. | | Retirement Benefits | Benefits equal to the actuarial equivalent present value of any non-vested accrued benefit under Constellation’s qualified defined benefit retirement plan. All current NEOs are fully vested. | | Insurance, Health and Welfare Benefits | Life, disability, accident, health and other welfare benefit coverage continues during the severance pay period on the same terms and conditions applicable to active employees, followed by retiree health coverage, if applicable.(a) | | Financial Planning | Outplacement and financial planning services for at least 12 months. |
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| (a) Executives are eligible for retiree medical, if they are at least 50 years old and have completed at least 10 years of service. |
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2023 Estimated Value of Benefits to be Received Upon Retirement The following table shows the estimated value of payments and other benefits to be conferred upon the NEOs assuming they retired as of December 31, 2023. As of December 31, 2023, Mr. Eggers, Mr. McHugh and Ms. Barrón had not reached the minimum age required to be eligible for retirement benefits. These payments and benefits are in addition to the present value of the accumulated benefits from each NEO’s qualified and non-qualified pension plans shown in the tables within the Pension Benefit section and the aggregate balance due to each NEO that is shown in the tables within the Deferred Compensation section.
Summary Compensation Table
| Name | Cash Payment(a) | Value of Unvested Equity Awards(b) | Total Value of All Payments and Benefits(c) | | Dominguez | $3,309,000 | $35,575,000 | $38,884,000 | | Eggers | 1,247,000 | — | 1,247,000 | | Hanson | 1,480,000 | 20,313,000 | 21,793,000 | | McHugh | 1,114,000 | — | 1,114,000 | | Barrón | 1,092,000 | — | 1,092,000 |
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| (a) Under the terms of the 2023 AIP, a pro-rated actual incentive award is payable upon retirement based on the number of days worked during the year of retirement. A pro-rated actual incentive award is also payable based on the number of days worked to employees who are not retiree eligible provided they are actively employed through December 31, 2023. The amount above represents the executive’s 2023 annual incentive payout after company/business unit performance was determined. |
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| (b) Includes the value of the executives’ unvested performance shares, which will vest upon death or disability at the actual level earned and awarded. The 2021-2023 award is inclusive of the 200% earned performance. The 2021-2023 award vested February 5, 2024. The 2022-2024 and 2023-2025 performance shares are assumed earned at target. This column also includes the accelerated portion of the executives’ RSUs that would vest upon an involuntary separation not related to a change in control. The value of the shares is based on the closing stock price on December 29, 2023 of $116.89. |
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| (c) Estimate of total payments and benefits based on a December 31, 2023 retirement date. |
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| | Constellation Energy Corporation 2024 Proxy Statement | 80 |
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2023 Estimated Value of Benefits to be Received Upon Termination due to Death or Disability 2023 Estimated Value of Benefits to be Received Upon Termination due to Death or Disability The following table shows the estimated value of payments and other benefits to be conferred upon the NEOs assuming employment is terminated due to death or disability as of December 31, 2023. These payments and benefits are in addition to the present value of the accumulated benefits from the NEOs’ qualified and non-qualified pension plans shown in the tables within the Pension Benefit section and the aggregate balance due to each NEO that is shown in tables within the Deferred Compensation section.
Summary Compensation Table
| Name | Cash Payment(a) | Value of Unvested Equity Awards(b) | Total Value of All Payments and Benefits(c) | | Dominguez | $3,309,000 | $35,575,000 | $38,884,000 | | Eggers | 1,247,000 | 9,783,000 | 11,030,000 | | Hanson | 1,480,000 | 23,937,000 | 25,417,000 | | McHugh | 1,114,000 | 17,527,000 | 18,641,000 | | Barrón | 1,092,000 | 11,261,000 | 12,353,000 |
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| (a) Under the terms of the 2023 AIP, a pro-rated actual incentive award is payable upon death or disability based on the number of days worked during the year of termination. The amounts in this column represent the executives’ 2023 annual incentive payout after company/business unit performance was determined. |
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| (b) Includes the value of the executives’ unvested performance shares, which will vest upon death or disability at the actual level earned and awarded. The 2021-2023 award is inclusive of the 200% earned performance. The 2021-2023 award vested February 5, 2024. The 2022-2024 and 2023-2025 performance shares are assumed earned at target. This column also includes the accelerated portion of the executives’ RSUs that would vest upon an involuntary separation not related to a change in control. The value of the shares is based on the closing stock price on December 29, 2023 of $116.89. |
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| (c) Estimate of total payments and benefits based on a December 31, 2023 termination due to death or disability. |
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2023 Estimated Value of Benefits to be Received Upon Involuntary Separation Not Related to a Change in Control The following table shows the estimated value of payments and other benefits to be conferred upon the NEOs assuming they were terminated as of December 31, 2023 under the terms of the SMSP. These payments and benefits are in addition to the present value of the accumulated benefits from the NEOs’ qualified and non-qualified pension plans shown in the tables within the “Pension Benefit” section and the aggregate balance due to each NEO that is shown in the tables within the “Deferred Compensation” section.
Summary Compensation Table
| Name | Cash Payment(a) | Retirement Benefit Enhancement(b) | Value of Unvested Equity Awards(c) | Health and Welfare Benefit Continuation(d) | Perquisites and Other Benefits(e) | Total Value of All Payments and Benefits(f) | | Dominguez | $9,309,000 | $480,000 | $35,575,000 | $50,000 | $40,000 | $45,454,000 | | Eggers | 4,016,000 | 194,000 | 6,161,000 | 44,000 | 40,000 | 10,455,000 | | Hanson | 4,795,000 | 2,937,000 | 22,609,000 | 48,000 | 40,000 | 30,429,000 | | McHugh | 3,731,000 | 209,000 | 13,601,000 | 49,000 | 40,000 | 17,630,000 | | Barrón | 3,656,000 | 179,000 | 7,504,000 | 47,000 | 40,000 | 11,426,000 |
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| (a) Represents the estimated cash severance benefit equal to the severance multiple times the sum of the executive’s (i) current base salary and (ii) the annual incentive award at target, plus a pro-rated annual incentive award for the year in which termination occurs. The amount above represents the executives’ 2023 annual incentive payout after company/business unit performance was determined. |
Summary Compensation Table
| (b) Represents the estimated retirement benefit enhancement that consists of a one-time lump sum payment based on the actuarial present value of a benefit under the non-qualified pension plan assuming that the severance pay period was taken into account for purposes of vesting, and the severance pay constituted covered compensation for purposes of the non-qualified pension plan. |
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| (c) Includes the value of the executives’ unvested performance shares, which will vest upon termination at the actual level earned and awarded. The 2021-2023 award is inclusive of the 200% earned performance. The 2021-2023 award vested February 5, 2024. The 2022-2024 and 2023-2025 performance shares are assumed earned at target. This column also includes the accelerated portion of the executives’ RSUs that would vest upon an involuntary separation not related to a change in control. The value of the shares is based on the closing stock price on December 29, 2023 of $116.89 per share. |
Summary Compensation Table
| (d) Estimated costs of healthcare, life insurance, and long-term disability coverage which continue during the severance period. |
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| (e) Estimated costs of outplacement and financial planning services for up to 12 months for all NEOs. |
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| (f) Estimate of total payments and benefits based on a December 31, 2023 termination date. |
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| | Constellation Energy Corporation 2024 Proxy Statement | 81 |
Summary Compensation Table
2023 Estimated Value of Benefits to be Received Upon a Qualifying Termination following a Change in Control 2023 Estimated Value of Benefits to be Received Upon a Qualifying Termination following a Change in Control The following table shows the estimated value of payments and other benefits to be conferred upon the NEOs assuming they were terminated upon a qualifying change in control as of December 31, 2023. These payments and benefits are in addition to the present value of accumulated benefits from the NEOs’ qualified and non-qualified pension plans shown in the tables within the “Pension Benefits” section and the aggregate balance due to each NEO that is shown in tables within the “Deferred Compensation” section.
Summary Compensation Table
| Name | Cash Payment(a) | Retirement Benefit Enhancement(b) | Value of Unvested Equity Awards(c) | Health and Welfare Benefit Continuation(d) | Perquisites and Other Benefits(e) | Potential Scaleback | Total Value of All Payments and Benefits(f) | | Dominguez | $12,279,000 | $718,000 | $35,575,000 | $75,000 | $40,000 | $— | $48,687,000 | | Eggers | 5,387,000 | 290,000 | 9,783,000 | 65,000 | 40,000 | — | 15,565,000 | | Hanson | 6,436,000 | 3,436,000 | 23,937,000 | 71,000 | 40,000 | (4,379,000) | 29,541,000 | | McHugh | 5,027,000 | 313,000 | 17,527,000 | 73,000 | 40,000 | (1,318,000) | 21,662,000 | | Barrón | 4,925,000 | 268,000 | 11,261,000 | 70,000 | 40,000 | — | 16,564,000 |
Summary Compensation Table
| (a) Represents the estimated cash severance benefit equal to the change in control severance multiple times the sum of the executive’s (i) current base salary and (ii) the annual incentive award at target, plus a pro-rated annual incentive award for the year in which termination occurs. The amount above represents the executives’ 2023 annual incentive payout after company/business unit performance was determined. |
Summary Compensation Table
| (b) Represents the estimated retirement benefit enhancement that consists of a one-time lump sum payment based on the actuarial present value of a benefit under the non-qualified pension plan assuming that the respective severance pay constituted covered compensation for purposes of the non-qualified pension plan. |
Summary Compensation Table
| (c) Includes the value of the executives’ unvested performance shares, which will vest upon termination at the actual level earned and awarded. The 2021-2023 award is inclusive of the 200% earned performance. The 2021-2023 award vested February 5, 2024. The 2022-2024 and 2023-2025 performance shares are assumed earned at target. This column also includes the accelerated portion of the executives’ RSUs that would vest upon an involuntary separation related to a change in control. The value of the shares is based on the closing stock price on December 29, 2023 of $116.89 per share. |
Summary Compensation Table
| (d) Estimated costs of healthcare, life insurance and long-term disability coverage which continue during the severance period. |
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| (e) Estimated costs of outplacement and financial planning services for up to 12 months for all NEOs. |
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| (f) Estimate of total payments and benefits based on a December 31, 2023 termination date. |
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| | Constellation Energy Corporation 2024 Proxy Statement | 82 |
Summary Compensation Table
Pay Versus Performance Pay Versus Performance As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the company. For further information concerning the company’s compensation philosophy and how the company aligns executive compensation with performance, refer to “Compensation Discussion and Analysis” section. The table discloses two years of data since the company became publicly traded in 2022.
Summary Compensation Table
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Total Shareholder Return(5) | S&P 500 Industrials Total Shareholder Return(6) | Net Income (millions)(7) | Adjusted EBITDA (millions)(8) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $15,185,385 | $30,945,947 | $5,221,424 | $11,798,444 | $240 | $116 | $1,623 | $4,025 | | 2022 | $10,439,082 | $23,640,761 | $4,078,360 | $11,598,514 | $175 | $98 | ($160) | $2,667 |
Summary Compensation Table
| 1 | The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Dominguez (our President and Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to the Summary Compensation Table above. |
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| 2 | The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Dominguez, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Dominguez during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Dominguez total compensation for each year to determine the compensation actually paid: |
Summary Compensation Table
| Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards(a) | Equity Award Adjustments(b) | Reported Change in the Actuarial Present Value of Pension Benefits(c) | Pension Benefit Adjustments(d) | Compensation Actually Paid to PEO | | 2023 | $15,185,385 | ($10,000,025) | $26,114,450 | ($471,090) | $117,227 | $30,945,947 | | 2022 | $10,439,082 | ($6,699,193) | $20,167,014 | ($385,830) | $119,688 | $23,640,761 |
Summary Compensation Table
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” columns in the Summary Compensation Table for the applicable year. |
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| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
Summary Compensation Table
| Year | Year End Fair Value of Equity Awards | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2023 | $19,636,100 | $6,513,919 | $— | ($35,569) | $— | $— | $26,114,450 | | 2022 | $17,991,666 | $— | $2,175,348 | $— | $— | $— | $20,167,014 |
Summary Compensation Table
| | Constellation Energy Corporation 2024 Proxy Statement | 83 |
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| (c) The amounts included in this column are the amounts reported in “Change in Pension and Nonqualified Deferred Compensation” column of the Summary Compensation Table for each applicable year. |
Summary Compensation Table
| (d) The total pension benefit adjustments for each applicable year include the aggregate of two components: (i) the actuarially determined service cost for services rendered by Mr. Dominguez during the applicable year (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension benefit adjustments are as follows: |
Summary Compensation Table
| Year | Service Cost | Prior Service Cost | Total Pension Benefit Adjustments | | 2023 | $117,227 | $— | $117,227 | | 2022 | $119,688 | $— | $119,688 |
Summary Compensation Table
| 3 | The dollar amounts reported in column (d) represent the average of the amounts reported for the NEOs as a group (excluding Mr. Dominguez) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Dominguez) included for purposes of calculating the average amounts in 2023 are Messrs. Eggers, Hanson and McHugh and Ms. Barrón. The names of each of the NEOs (excluding Mr. Dominguez) included for purposes of calculating the average amounts in 2022 are Messrs. Eggers, Hanson, Koehler, and McHugh. |
Summary Compensation Table
| 4 | The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Dominguez), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Dominguez) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Dominguez) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: |
Summary Compensation Table
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments(a) | Average Reported Change in the Actuarial Present Value of Pension Benefits | Average Pension Benefit Adjustments(b) | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $5,221,424 | ($2,103,855) | $9,598,297 | ($1,027,335) | $109,912 | $11,798,444 | | 2022 | $4,078,360 | ($2,116,985) | $9,735,277 | ($203,718) | $105,580 | $11,598,514 |
Summary Compensation Table
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
Summary Compensation Table
| Year | Average Year End Fair Value of Equity Awards | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Average Equity Award Adjustments | | 2023 | $4,444,809 | $5,038,451 | $— | $115,037 | $— | $— | $9,598,297 | | 2022 | $9,469,938 | $— | $265,339 | $— | $— | $— | $9,735,277 |
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| | Constellation Energy Corporation 2024 Proxy Statement | 84 |
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| (b) The amounts deducted or added in calculating the total pension benefit adjustments are as follows: |
Summary Compensation Table
| Year | Average Service Cost | Average Prior Service Cost | Total Average Pension Benefit Adjustments | | 2023 | $109,912 | $— | $109,912 | | 2022 | $105,580 | $— | $105,580 |
Summary Compensation Table
| 5 | Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the company’s share price at the end and the beginning of the measurement period by the company’s share price at the beginning of the measurement period. |
Summary Compensation Table
| 6 | Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the following published industry index: S&P 500 Industrials. |
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| 7 | The dollar amounts reported represent the amount of net income attributable to common shareholders reflected in the company’s audited financial statements for the applicable year. |
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| 8 | Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation and amortization, and excludes certain costs, expenses, gain and losses and other specified items, including mark-to-market adjustments from economic hedging activities and fair value adjustments related to gas imbalances and equity investments, decommissioning related activity, asset impairments, certain amounts associated with plant retirements and divestitures, pension and other post-employment benefits non-service credits, separation related costs and other items as set forth in Appendix A. While the company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the company’s compensation programs, the company has determined that Adjusted EBITDA is the financial performance measure that, in the company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the company to link compensation actually paid to the company’s NEOs, for the most recently completed fiscal year, to company performance. |
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Financial Performance Measures As described in greater detail in the “Compensation Discussion and Analysis” section, the company’s executive compensation program reflects an alignment to shareholder interest. The metrics that the company uses for both our long-term and short- term incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the company to link executive compensation actually paid to the NEOs, for the most recently completed fiscal year, to the company’s performance are as follows:
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| • | Adjusted EBITDA |
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| • | Free Cash Flow before Growth |
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| • | CFO/Debt |
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| • | Fleetwide Capacity Factor |
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| • | Dispatch Match |
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| • | Customer Satisfaction |
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Analysis of the Information Presented in the Pay versus Performance Table While the company utilizes several performance measures to align executive compensation with company performance, all of those measures are not presented in the Pay versus Performance table. Moreover, we generally seek to incentivize long-term performance, and, therefore, do not specifically align the company’s performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay versus Performance table. Compensation Actually Paid and Cumulative TSR As demonstrated by the following graph, the amount of compensation actually paid to Mr. Dominguez and the average amount of compensation actually paid to NEOs as a group (excluding Mr. Dominguez) is aligned with the company’s TSR for the year presented in the table. The alignment of compensation actually paid with the company’s cumulative TSR over the period presented is a result of having a significant portion of the compensation actually paid to Mr. Dominguez and to the other NEOs comprised of equity awards. As described in more detail in the “Compensation Discussion and Analysis” section, the company targets that approximately 77% of the value of total compensation awarded to the CEO and 60% of the value of total compensation awarded to other NEOs be comprised of equity awards, including restricted stock units and performance-based restricted stock units.
Summary Compensation Table
| | Constellation Energy Corporation 2024 Proxy Statement | 85 |
Summary Compensation Table
Compensation Actually Paid, Net Income and Adjusted EBITDA As demonstrated by the following tables, the amount of compensation actually paid to Mr. Dominguez and the average amount of compensation actually paid to NEOs as a group (excluding Mr. Dominguez) is generally aligned with the company’s net income and Adjusted EBITDA performance over the post-separation results presented in the table. While the company does not use net income as a performance measure in the overall executive compensation program, the measure of net income is the GAAP measure used to reconcile to the Adjusted EBITDA measure, which the company does use when setting goals in our short-term incentive compensation program. Adjusted EBITDA represents earnings before interest, income taxes, depreciation and amortization, and excludes certain costs, expenses, gain and losses and other specified items, including mark-to-market adjustments from economic hedging activities and fair value adjustments related to gas imbalances and equity investments, decommissioning related activity, asset impairments, certain amounts associated with plant retirements and divestitures, pension and other post-employment benefits non-service credits, separation related costs and other items as set forth in Appendix A. While the company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for our compensation programs, we have determined that Adjusted EBITDA is the financial performance measure that, in our assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the company to link compensation actually paid to NEOs, for the most recently completed fiscal year, to company performance. As described in more detail in the “Compensation Discussion and Analysis” section, approximately 14% of the value of total compensation awarded to the CEO and 19% of the value of total compensation awarded to other NEOs is comprised of amounts determined under the short-term incentive compensation program.
Summary Compensation Table
| | Constellation Energy Corporation 2024 Proxy Statement | 86 |
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Cumulative TSR of Constellation and Cumulative TSR of the Peer Group As demonstrated by the graph below, our cumulative TSR over the two years since becoming a publicly traded company presented in the table was 139.8%, while the cumulative TSR of the peer group presented for this purpose, the S&P 500 Industrials, was 15.55% over the years presented in the table. Constellation’s cumulative TSR outperformed the S&P Industrials, during the period presented in the table, representing the company’s superior financial performance as compared to the companies comprising the S&P 500 Industrials peer group. For more information regarding our performance and the companies that the Compensation Committee considers when determining compensation, refer to the “Compensation Discussion and Analysis” section above.
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| | Constellation Energy Corporation 2024 Proxy Statement | 87 |
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CEO Pay Ratio CEO Pay Ratio As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and item 402(u) of Regulation S-K, we are providing the following information regarding the ratio of the annual total compensation of our median employee to the annual total compensation of Mr. Joseph Dominguez, our President and Chief Executive Officer (our “CEO”). We consider the pay ratio specified below to be a reasonable estimate, calculated in a manner that is consistent with the requirements of 402(u) of Regulation S-K. For 2023:
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| • | the annual total compensation of the employee who represents our median compensated employee (other than our CEO) was $174,797; and |
Summary Compensation Table
| • | the annual total compensation of our CEO, as reported in the Summary Compensation Table included above was $15,185,385. |
Summary Compensation Table
Based on this information, for 2023, the annual total compensation of our CEO was approximately 87 times the annual total compensation for the median employee from all employees (other than the CEO). The rules governing the CEO Pay Ratio allow for utilization of the same individual for a 3-year period, provided that employee is actively employed at the company. As such, we used the same individual identified in 2022 that was included in the compilation of our CEO pay ratio as reported in the 2023 proxy statement. The methodology utilized to identify that person is described below. On December 31, 2022, the employee population consisted of 13,504 employees of which nine were located in England and six were located in Canada. We chose to exclude these 15 employees from our determination of the “median employee”, as permitted under SEC rules, given the small number of non-U.S. employees as compared to our overall employee population. Upon identifying the employee population to be included, we consistently applied the compensation measure of 2022 W-2 Box 1 wages to identify the median employee. Once identified, the annual total compensation for that employee was calculated using the same methodology used in compiling the Summary Compensation Table in this proxy statement. The ratio is a reasonable estimate calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. The comparability of pay ratios across companies may be constrained because SEC regulations allow flexibility in determining the pay ratio approach.
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| | Constellation Energy Corporation 2024 Proxy Statement | 88 |