Progress Energy 2010 Annual Report Download - page 182

PROXY STATEMENT
44
Chief Financial Officer Compensation
Mark F. Mulhern
In March 2010, Mr. Johnson recommended the Committee approve a market-based adjustment to
Mr. Mulhern’s base salary. The Committee approved a base salary of $450,000 for Mr. Mulhern, representing a
5.9% increase to his previous salary of $425,000. The new base salary was set at 15.9% below the 50th percentile
of the Benchmarking Peer Group. Mr. Mulhern’s base salary was established at this level due to his relatively short
tenure in the Chief Financial Officer position, and more significantly, the challenging economic environment. It is
the Committee’s intention to increase Mr. Mulhern’s salary over time to a level that is at the 50th percentile of the
Benchmarking Peer Group.
For 2010, Mr. Mulhern’s MICP target award was set at 55% of his base salary. This target award is the
same target Mr. Mulhern had in 2009 after he assumed the Chief Financial Officer position and represents a target
award opportunity that is below the 50th percentile of the market. Mr. Mulhern’s performance goals for 2010 focused
on the following general areas of Company success:
• Achievingfinancialobjectives;
• Successfullycommunicatingtothefinancialmarketmodificationsoffinancialgoalsthatreflect
changes resulting from PEF regulatory outcomes;
• FocusingoncapitaldisciplineandO&Mexpensemanagement;and
• ProvidingfinancialsupportforandensuringstrategicalignmentoftheCompany’sBalancedSolution
Strategy.
In recognition of his accomplishments in 2010 and on Mr. Johnson’s recommendation, the Committee
awarded Mr. Mulhern an MICP payout of $205,000, which is equal to 84% of Mr. Mulhern’s target award. The
Committee considered, among other things, Mr. Mulhern’s significant role in the Company achieving a 12.6%
shareholder return as of the end of the year; implementation of an integrated strategic planning process including
appropriate focus on capital discipline, O&M expense management, and long-term workforce planning; supporting
a successful rate settlement for PEF requiring adaptation of the Company’s financial plan to absorb no new cash
revenue during the settlement period; and negotiating and executing the Merger Agreement with Duke Energy. The
Committee also noted Mr. Mulhern’s leadership in coordinating the development of the financial components for the
Company’s regulatory strategy and strategic scenario planning.
With respect to his long-term incentive compensation, in 2010, Mr. Mulhern was granted 4,809 restricted
stock units and 12,126 performance shares in accordance with his pre-established targets of 58% and 117%,
respectively, of base salary. The performance shares are earned based on performance over the three years ending
December 31, 2012. Additionally, 7,131 shares of the 2007 annual grant vested in 2010 and were paid out at 125%
of target. Mr. Mulhern’s compensation in 2010, as noted in the “Summary Compensation Table” on page 47 of this
Proxy Statement, increased by 8.2% from the amount of total compensation he received in 2009, largely due to an
increase in his accrued pension benefits.
Compensation of Other Named Executive Officers
For 2010, Mr. Johnson recommended and the Committee approved no increases to the base salaries for
Messrs. Lyash, Yates, and McArthur.