Progress Energy 2010 Annual Report Download - page 156

PROXY STATEMENT
18
Organization and Compensation Committee
The Organization and Compensation Committee (the “Compensation Committee”) is presently composed
of the following seven nonmanagement directors: Ms. E. Marie McKee—Chair, and Messrs. John D. Baker II,
Harris E. DeLoach, Jr., James B. Hyler, Jr., Robert W. Jones, Melquiades R. “Mel” Martinez, and John H. Mullin,
III. All members of the Compensation Committee are independent as that term is defined under the general
independence standards contained in the NYSE listing standards. The Compensation Committee verifies that
personnel policies and procedures are in keeping with all governmental rules and regulations and are designed to
attract and retain competent, talented employees and develop the potential of these employees. The Compensation
Committee reviews all executive development plans, makes executive compensation decisions, evaluates the
performance of the Chief Executive Officer and oversees plans for management succession.
The Compensation Committee may hire outside consultants, and the Compensation Committee has
no limitations on its ability to select and retain consultants as it deems necessary or appropriate. Annually, the
Compensation Committee evaluates the performance of its compensation consultant to assess its effectiveness in
assisting the Committee with implementing the Company’s compensation program and principles. For 2010, the
Compensation Committee retained Meridian Compensation Partners, LLC (“Meridian”) as its executive compensation
and benefits consultant to assist the Compensation Committee in meeting its compensation objectives for our
Company. Under the terms of its engagement, in 2010, Meridian reported directly to the Compensation Committee.
The Compensation Committee relies on its compensation consultant to advise it on various matters relating
to our executive compensation and benefits program. These services include:
• AdvisingtheCompensationCommitteeongeneraltrendsinexecutivecompensationandbenefits;
• Summarizingdevelopmentsrelatingtodisclosure,riskassessmentprocessandothertechnicalareas;
• Performingbenchmarkingandcompetitiveassessments;
• Assistingindesigningincentiveplans;
• PerformingfinancialanalysisrelatedtoplandesignandassistingtheCompensationCommitteein
making pay decisions in light of results; and
• Recommendingappropriateperformancemetricsandfinancialtargets.
The Compensation Committee has adopted a policy for Pre-Approval of Compensation Consultant Services
(the “Policy”). Pursuant to the Policy, the compensation consultant may not provide any services or products to the
Company without the express prior approval of the Compensation Committee. The compensation consultant did not
provide any services or products to the Company other than those that are provided to the Committee and that are
related to the Company’s executive compensation and benefits program.
The Compensation Committee’s chair or the chairman of our Board of Directors may call meetings,
other than previously scheduled meetings, as needed. The Compensation Committee may form subcommittees
for any purpose that the Compensation Committee deems appropriate and may delegate to such subcommittees
such power and authority as the Compensation Committee deems appropriate. Appropriate executive officers of
the Company ensure that the Compensation Committee receives administrative support and assistance, and make
recommendations to the Committee to ensure that compensation plans are aligned with our business strategy
and compensation philosophy. John R. McArthur, our Executive Vice President, General Counsel and Corporate
Secretary, serves as management’s liaison to the Compensation Committee. William D. Johnson, our Chief
Executive Officer, is responsible for conducting annual performance evaluations of the other executive officers and
making recommendations to the Compensation Committee regarding those executives’ compensation.
The Compensation Committee held eight meetings in 2010.