Progress Energy 2009 Annual Report Download - page 166

PROXY STATEMENT
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STOCK OWNERSHIP GUIDELINES
To align the interests of our executives with the interests of shareholders, the Board of Directors utilizes
stock ownership guidelines for all executive officers. The guidelines are designed to ensure that our management
maintains a significant ownership stake in the Company. The guidelines require each senior executive to own a
multiple of his or her base salary in the form of Company common stock generally within five years of assuming his
or her position. The required levels of ownership are designed to reflect the level of responsibility that the executive
positions entail.
Each year, the Committee benchmarks both the position levels and the multiples in our guidelines against
those of the Benchmarking Peer Group and general industry designs. The benchmarking for 2009 indicated that
the Company’s guidelines were “at market” with respect to ownership levels, the types of equity that count toward
ownership, and the timeframe for compliance. The stock ownership guidelines for our executive officer positions are
shown in the table below:
Position Level Stock Ownership Guidelines
Chief Executive Officer 5.0 times Base Salary
Chief Operating Officer 4.0 times Base Salary
Chief Financial Officer 3.0 times Base Salary
Presidents/Executive Vice Presidents/Senior Vice Presidents 3.0 times Base Salary
For purposes of meeting the applicable guidelines, the following are considered as common stock owned by
an executive: (i) shares owned outright by the executive; (ii) stock held in any defined contribution, Employee Stock
Ownership Plan or other stock-based plan; (iii) phantom stock deferred under an annual incentive or base salary
deferral plan; (iv) stock earned and deferred in any long-term incentive plan account; (v) restricted stock awards and
restricted stock units; and (vi) stock held in a family trust or immediate family holdings.
As of February 23, 2010, our named executive officers were in compliance with the guidelines (see
Management Ownership table on page 10 of this Proxy Statement for specific details). As an indication of
Mr. Johnson’s alignment of his interests with that of our shareholders, he currently holds equity more than 8½-times
his base salary which exceeds the 5-times base salary required under the guidelines. Further, he has not sold any of
the shares he received upon the vesting of his restricted stock awards, restricted stock units, and performance shares
since he became Chief Executive Officer.
II. ELEMENTS OF COMPENSATION
The various elements of our executive compensation program described above under the caption
“Compensation Program Structure” on page 24 are designed to meet the three key principles described under the
caption “Compensation Philosophy and Overview” on page 21 of this Proxy Statement. We have designed an allocation
of long-term to short-term compensation that reflects the job responsibilities of the executive, provides an incentive for
the executive to maximize his or her contribution to the Company, and is consistent with market practices. In general,
we believe that the more senior an executive’s position, the greater responsibility and influence he or she has regarding
the long-term strategic direction of the Company. Thus, the Chief Executive Officer’s target long-term compensation
is designed to account for approximately two-thirds of his total compensation package (i.e., base salary, target annual
incentives, and long-term incentives). By comparison, Senior Vice Presidents’ target long-term compensation is
designed to constitute approximately one-half of their total target compensation packages. Under this approach,
executives who bear the most responsibility for and influence over the Company’s long-term performance receive
compensation packages that provide greater incentives to achieve the Company’s long-term objectives.
The table below shows the mix of short-term and long-term incentive awards to each named executive
officer for 2009. Percentages for incentives are expressed as a percentage of base salary. Additional elements of
compensation are discussed further in this section.