ComEd 2006 Annual Report Download - page 344

• Mr. Rowe’s length of service as CEO at Exelon and other companies in the industry;
• performance achieved against financial and operational goals; and
• the performance assessment discussed above.
Mr. Rowe’s annualized base salary was increased by 4% to $1,300,000 effective March 1, 2006.
Other Named Executives’ 2006 Base Salaries. At its January 23, 2006 meeting, the compensation
committee reviewed base salary data for the other NEOs listed in the Summary Compensation Table
as compared to compensation data at the 50th and 75th percentile of the proposed peer group for the
then-planned merger of Exelon and PSEG. However, in light of the delay in closing the proposed
merger, the compensation committee recommended that base salaries for several of the named
executive officers be increased modestly in 2006, with a further review of base salaries to be
conducted after the closing of the merger to determine whether more substantial increases would be
appropriate in light of increased responsibilities for the NEOs. Accordingly, the following NEOs
received base salary increases during 2006:
Exelon, Generation and PECO
Name Base Salary Percent Increase Effective Date
Skolds ........................................... $635,000 4.1% 3/1/2006
Young ........................................... 550,000 3.8% 3/1/2006
Mehrberg ........................................ 560,000 3.7% 3/1/2006
McLean .......................................... 445,000 3.5% 3/1/2006
Crane ........................................... 510,000 5.2% 3/1/2006
O’Brien .......................................... 400,000 6.7% 3/1/2006
ComEd
Name Base Salary Percent Increase Effective Date
Costello .......................................... $375,000 11.9% 8/1/2006
Due to the termination of the Merger, no further base salary increases occurred for NEOs in 2006.
Messrs. Clark, McDonald, Mitchell and Hilzinger received pay increases in late 2005 and did not
receive base salary increases in 2006.
How 2006 annual incentives were determined
For 2006, the annual incentive payments to Mr. Rowe and each of nine other senior executives
were funded by a notional incentive pool established by the Exelon compensation committee under the
Annual Incentive Plan for Senior Executives, a shareholder-approved plan, which is intended to comply
with Section 162(m). The incentive pool was funded with 1.5% of Exelon’s operating income, the same
percentage used in 2005, but was not fully distributed to participants because the committee decided
on substantially lesser awards.
Annual incentive payments for 2006 to Messrs. Rowe, Skolds, Young and Mehrberg were made
from the portion of the incentive pool available to fund awards for each of them based on the company’s
operating earnings per share, adjusted for non-operating charges and other one-time, unusual and
non-recurring items. The compensation committee reviewed 2006 earnings and decided not to include
the effects of certain items in adjusting earnings for purposes of making awards under the annual
incentive plan, such as, certain changes in GAAP, mark-to-market adjustments, investments in synthetic-
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