Progress Energy 2008 Annual Report Download - page 170

PROXY STATEMENT
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3 Executives’ spouses may travel on the Company’s aircraft to accompany the executives to “business-
related” events that executives’ spouses are requested to attend. For 2008, the named executive officers whose
perquisites included spousal travel for business purposes were Messrs. Johnson, Scott, McArthur, Lyash and Yates.
4 Including home use of Company-owned computer.
The Committee believes that the perquisites we provide to our executives are reasonable,
competitive and consistent with our overall executive compensation program in that they help us attract
and retain skilled and qualified executives. We believe that these benefits generally allow our executives
to work more efficiently and, in the case of the tax and financial planning services, help them to optimize
the value received from all of the compensation and benefits programs offered. The costs of these benefits
constitute only a small percentage of each named executive officer’s total compensation.
8. OTHER BROAD-BASED BENEFITS
The named executive officers receive our general corporate benefits provided to all of our regular,
full-time, nonbargaining employees. These broad-based benefits include the following:
• participationinour401(k)Plan(includingalimitedCompanymatchofupto6percentof
eligible compensation);
• participationinourfunded,tax-qualified,noncontributorydefined-benefitpensionplan,
which uses a cash balance formula to accrue benefits; and
• generalhealthandwelfarebenefitssuchasmedical,dental,visionandlifeinsurance,aswell
as long-term disability coverage.
9. DEFERRED COMPENSATION
We sponsor the Management Deferred Compensation Plan (the “MDCP”), an unfunded, deferred
compensation arrangement. The plan is designed to provide executives with tax deferral options, in addition
to those available under the existing qualified plans. An executive may elect to defer, on a pre-tax basis,
payment of up to 50 percent of his or her salary for a minimum of five years or until his or her date of
retirement. Historically, as a make-up for the 401(k) statutory compensation limits, executives also received
deferred compensation credits of up to 6 percent of their base salary over the Internal Revenue Code
statutory compensation limit on 401(k) retirement plans. This was accomplished through a base Company
contribution of 3 percent plus an incentive contribution of up to an additional 3 percent. Beginning
January 1, 2008, the Company increased the Company’s base contribution to 6 percent of base salary and
eliminated the incentive portion of the additional contribution. This change was made to replicate similar
changes made in the Company’s broad-based 401(k) plan. The Committee viewed the matching feature as
a restoration benefit designed to restore the matching contribution the executive would have received if the
Internal Revenue Service compensation limits remained in effect. These Company matching allocations are
allocated to an account that will be deemed initially to be invested in shares of a stable value fund within
the MDCP. Each executive may reallocate his or her deferred compensation among the other available
deemed investment funds that mirror those options available under the 401(k) plan.
Executives can elect to defer up to 100 percent of their MICP and/or performance share awards.
The deferral option is provided as an additional benefit to executive officers to provide flexibility in the
receipt of compensation. Historically, all deferred awards were deemed to be invested in performance
units, generally equivalent to shares of the Company’s common stock and received a 15 percent discount
to the Company’s then-current common stock price. Beginning January 1, 2009, the discount feature was
eliminated and deferred awards may be allocated among investment options that mirror the Company’s
401(k) Plan.