Progress Energy 2008 Annual Report Download - page 171

Progress Energy Proxy Statement
35
III. 2008 COMPENSATION DECISIONS
Chief Executive Officer Compensation
William D. Johnson
For 2008, the Committee recommended Mr. Johnson’s salary remain at $950,000 due to the fact
that in December 2007, the Committee approved increasing Mr. Johnson’s salary from $790,000 as a result
of his promotion to Chairman, President, and Chief Executive Officer of the Company. Mr. Johnson’s base
salary was established at $154,000 below the 50th percentile of the market primarily due to Mr. Johnson’s
short tenure in the position.
For 2008, the Committee set Mr. Johnson’s MICP target award at 85 percent of base salary. This
target award was the same as the target Mr. Johnson had in 2007 after he assumed his new position, and
represents a target award opportunity consistent with the 50th percentile of market. The payout of the 2008
award was based on Mr. Johnson’s achievement of his performance goals, which were focused on the
following general areas of Company success:
• Deliveringoperationalexcellenceandcustomersatisfaction;
• Achievingfinancialobjectives;
• Managingconstructionprojectseffectively;
• BuildingsupportfortheCompany’sBalancedSolutionstrategy;
• AchievingacceptableLevyEPCagreement and need case ruling;
• Achievingacceptableenergy-efficiencyregulatorytreatment;and
• Excellingininternalcommunications,alignment,andcollaboration.
Mr. Johnson’s performance goals for 2008 were similar to the focus areas that he assumed when
he was promoted in 2007. In recognition of his accomplishments during 2008, the Committee awarded
Mr. Johnson an MICP payout of $929,000, which is equal to 115 percent of Mr. Johnson’s target award.
With respect to his long-term incentive compensation during 2008, Mr. Johnson was granted
22,951 restricted stock units and 45,705 performance shares in accordance with his pre-established targets
of 117 percent and 233 percent, respectively, of his base salary. The performance shares are earned based on
performance over the three years ending December 31, 2011. Additionally, 29,456 of the 58,912 transitional
performance shares Mr. Johnson was granted in 2007 vested in 2008. The remaining 29,456 will vest in
2009. These transitional performance shares were granted to address the ineffectiveness of the former
long-term incentive plans as described in the “Performance Shares” discussion of the “LONG-TERM
INCENTIVES” section on page 26 above. The significant decrease in total year-over-year compensation to
Mr. Johnson for 2008, as compared to 2007, as noted in the “Summary Compensation Table” on page 40 of
this Proxy Statement, was largely due to the expensing impacts pursuant to SFAS No. 123(R) of these one-
time transitional performance share grants made in 2007.