Progress Energy 2009 Annual Report Download - page 170

PROXY STATEMENT
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In determining long-term incentive targets, the Committee may choose to establish targets at a higher
percentile of the market to address such factors as competition, retention, succession planning and the uniqueness
and complexity of a position; however, on average, the targets established for the named executive officers for 2009
were 15% lower than comparable aggregate long-term incentive opportunities of our peer group. The Committee
expects that, over time, the long-term incentive opportunities will continue to approximate the 50th percentile of
the peer group. We discuss how individual named executive officers’ long-term incentive targets compared to the
targeted benchmarks in “2009 COMPENSATION DECISIONS” on page 40 below. Grants of equity-based awards
typically occur in the first quarter, after the annual earnings release. This timing allows current financial information
to be fully disclosed and publicly available prior to any grants.
After October 2004, we ceased granting stock options. All previously granted stock options remain valid in
accordance with their terms and conditions.
Performance Shares
The PSSP authorizes the Committee to issue performance shares to executives as selected by the
Committee in its sole discretion. The value of a performance share is equal to the value of a share of the Company’s
common stock, and earned performance share awards are paid in Company common stock. The performance period
for a performance share is the three-consecutive-calendar-year period beginning in the year in which it is granted.
The closing stock price on the last trading day of the year prior to the beginning of the performance period is used to
calculate the number of performance shares granted to each participant in that performance period. The Committee
may exercise discretion in determining the size of each performance share grant, with the maximum grant size
at 125% of target. In 2009, the Committee did not exercise this discretion with respect to any grant of the named
executive officers.
2007 Performance Share Sub-Plan
The PSSP, as redesigned in 2007 (the “2007 PSSP”), provides for an adjusted measure of total shareholder
return to be utilized as the sole measure for determining the amount of a performance share award upon vesting. The
Committee and management designed the total shareholder return performance measure to be calculated assuming
a constant price to earnings ratio, which was set at the beginning of each performance period. The performance
measure also uses the Company’s publicly reported ongoing earnings as the earnings component for determining
performance share awards. The Committee chose this method, which we will refer to as “Total Business Return,” as
the sole performance measure to support its desire to better align the long-term incentives with the interests of our
shareholders and to emphasize our focus on dividend and earnings per share growth. The performance measure for
the 2007 and 2008 performance share grants made under the 2007 PSSP are shown in the table below.
Threshold Target Outstanding
2007 Total Business Return* 5% 8% 
2007 Percentage of Target Award Earned 50% 100% 200%
2008 Total Business Return* 5% 8% 
2008 Percentage of Target Award Earned 25% 100% 200%
* Total shareholder return, adjusted to reflect a constant price to earnings ratio set at January 1 of the grant year and to
reflect the Company’s ongoing earnings per share for each year of the performance period.
Additionally, the Committee retained the discretion to reduce the number of performance shares awarded if
it determines that the payouts resulting from the Total Business Return do not appropriately reflect the Company’s
actual performance.