Xcel Energy 2011 Annual Report Download - page 111

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101
Stock Equivalent Unit Plan — Non-employee members of the Xcel Energy Inc. Board of Directors receive annual awards of
stock equivalent units, with each unit having a value equal to one share of Xcel Energy Inc. common stock. The annual grants are
vested as of the date of each member’s election to the board of directors; there is no further service or other condition attached to
the annual grants after the member has been elected to the board. Additionally, directors may elect to receive their fees in stock
equivalent units in lieu of cash, and similarly have no further service or other conditions attached. Dividends on Xcel Energy
Inc.’s common stock are converted to stock equivalent units and granted based on the number of stock equivalent units held by
each participant as of the dividend date. The stock equivalent units are payable as a distribution of Xcel Energy Inc.’s common
stock upon a director’s termination of service.
The stock equivalent units granted for the years ended Dec. 31 were as follows:
(Units in Thousands) 2011 2010 2009
Granted units................................
............................
60 66 72
Grant date fair value ................................
.....................
$
25.12 $
21.14 $
17.87
A summary of the stock equivalent unit changes for the year ended Dec. 31, 2011 are as follows:
(Units in Thousands) Units
Weighted
Average
Grant Date
Fair Value
Stock equivalent units at Jan. 1 ................................
...........................
471 $
19.90
Granted................................................................
.................
60 25.12
Units distributed................................................................
.........
(29) 20.31
Dividend equivalents ................................................................
....
20 24.38
Stock equivalent units at Dec. 31................................
..........................
522 20.65
PSP Awards — Xcel Energy Inc.’s Board of Directors has granted PSP awards under the Xcel Energy Inc. 2005 Long-term
Incentive Plan (as amended and restated effective in 2010). The plan allows Xcel Energy to attach various performance goals to
the PSP awards granted. The PSP awards have been historically dependent on a single measure of performance, Xcel Energy
Inc.’s TSR measured over a three-year period. Xcel Energy Inc.’s TSR is compared to the TSR of other companies in the EEI
Investor-Owned Electrics index. At the end of the three-year period, potential payouts of the PSP awards range from 0 percent to
200 percent, depending on Xcel Energy Inc.’s TSR compared to the peer group.
The PSP awards granted for the years ended Dec. 31 were as follows:
(In Thousands) 2011 2010 2009
Awards granted ................................
.........................
311 225 207
The total amounts of performance awards settled during the years ended Dec. 31 were as follows:
(In Thousands) 2011 2010 2009
Awards settled ................................
..........................
305 267 293
Settlement amount (cash and common stock)
.............................
$
7,200 $
5,460 $
5,195
The amount of cash used to settle Xcel Energy’s PSP awards was $3.6 million and $2.7 million in 2011 and 2010, respectively.
Share-Based Compensation Expense — The vesting of the RSUs is predicated on the achievement of a performance condition,
which is the achievement of an earnings per share or environmental measures target. RSU awards and restricted stock are
considered to be equity awards, since the plan settlement determination (shares or cash) resides with Xcel Energy and not the
participants. In addition, these awards have not been previously settled in cash and Xcel Energy plans to continue electing share
settlement. The grant date fair value of RSUs and restricted stock is expensed as employees vest in their rights to those awards.
The PSP awards have been historically settled partially in cash, and therefore, do not qualify as an equity award, but rather are
accounted for as a liability award. As liability awards, the fair value on which ratable expense is based, as employees vest in their
rights to those awards, is remeasured each period based on the current stock price and performance conditions, and final expense
is based on the market value of the shares on the date the award is settled.