Progress Energy 2010 Annual Report Download - page 168

PROXY STATEMENT
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The table below shows the target awards of short-term and long-term incentives to each NEO for 2010.
Percentages for incentives are expressed as a percentage of base salary. Additional elements of compensation are
discussed further in this section.
Incentive Targets
Named Executive
Officer Base Salary (as of 1/1/11)
Short-Term
(annual)
Incentive
Target1
Long-Term Incentive
Targets as a Percentage
of Salary Total
Incentive
Target
Performance
Shares2Restricted
Stock
William D. Johnson $990,000 85% 233% 117% 435%
Mark F. Mulhern $450,000 55% 117% 58% 230%
Jeffrey J. Lyash $453,000 55% 117% 58% 230%
Lloyd M. Yates $448,000 55% 117% 58% 230%
John R. McArthur $488,000 55% 117% 58% 230%
1 Annual incentive awards can range from 0%-200% of target percentages.
2 Payout opportunities can range from 0%-200% of target percentages.
1. BASE SALARY
The primary purpose of base salaries is to provide a basic element of compensation necessary to attract and
retain executives. Base salary levels are established based on data from the Benchmarking Peer Group identified on
page 27 and consideration of each executive officer’s skills, experience, responsibilities and performance. Market
compensation levels that approximate the 50th percentile of the Benchmarking Peer Group are used to assist in
establishing each executive’s job value (commonly called the “midpoint” at other companies). Job values serve as
the market reference for determining base salaries.
Each year, the compensation consultant provides the market values for our executive officer positions.
Based, in part, on these market values and, in part, on the executives’ achievement of individual and Company goals,
the Chief Executive Officer then recommends to the Committee base salary adjustments for our executive officers
(excluding himself). The Committee reviews the proposed base salaries, adjusts them as it deems appropriate based
on the executives’ achievement of individual and Company goals and market trends that result in changes to job
values, and approves them in the first quarter of each year. The Committee meets in executive session with the
compensation consultant to review and establish the Chief Executive Officer’s base salary.
2. ANNUAL INCENTIVE
We sponsor the MICP, an annual cash incentive plan, in which our executives, managers and supervisors
participate. The Company includes managers and supervisors in the MICP to increase accountability for all levels
of the Company’s management team and to better align compensation with management performance. Annual
incentive opportunities are provided to executive officers to promote the achievement of annual performance
objectives. MICP targets are based on a percentage of each executive’s base salary and are intended to offer target
award opportunities that approximate the 50th percentile of the market for the Benchmarking Peer Group.