Progress Energy 2008 Annual Report Download - page 154

PROXY STATEMENT
18
COMPENSATION PROGRAM STRUCTURE
The table below summarizes the current elements of our executive compensation program.
Element Brief Description Primary Purpose
Short- or
Long-Term
Focus
Base Salary Fixed compensation.
Annual merit increases
reward performance.
Aids in attracting and retaining executives
and rewards operating performance
results that are consistent with reliable
and efficient electric service.
Short-term
(annual)
Annual Incentive Variable compensation
based on achievement of
annual performance goals.
Rewards operating performance results
that are consistent with reliable and
efficient electric service.
Short-term
(annual)
Long-Term Incentives —
Performance Shares Variable compensation based on achievement of
long-term performance
goals.
Align interests of shareholders and
management and aid in attracting and
retaining executives.
Long-term
Long-Term Incentives —
Restricted Stock/Restricted
Stock Units
Fixed compensation
based on target levels.
Service-based vesting.
Align interests of shareholders and
management and aid in attracting and
retaining executives.
Long-term
Supplemental Senior
Executive Retirement Plan Formula-based compensation, based on
salary, bonus and eligible
years of service.
Aids in attracting and retaining executive
officers. Long-term
Management Change-In-
Control Plan Elements based on specific plan eligibility. Aligns interests of shareholders and management and aids in (i) attracting
executives; and (ii) retaining executives
during transition following a change-in-
control.
Long-term
Employment Agreements Define Company’s
relationship with its
executives and provide
protection to each of the
parties.
Aid in attracting and retaining executives. Long-term
Executive Perquisites Personal benefits awarded
outside of base salaries. Aid in attracting and retaining executives. Short-term (annual)
Other Broad-Based
Benefits Employee benefits such as health and welfare
benefits, 401(k) and
pension plan.
Aid in attracting and retaining executives. Both Short-
and Long-
term
Deferred Compensation Provides executives with
tax deferral options in
addition to those available
under our qualified plans.
Aids in attracting and retaining
executives. Long-term
The Committee believes the various compensation program elements:
• linkcompensationwithourshort-termandlong-termsuccessbyusingoperatingand
financial performance measures in determining payouts for annual and long-term incentive
plans;