Progress Energy 2010 Annual Report Download - page 214

PROXY STATEMENT
76
PROPOSAL 2—ADVISORY (NONBINDING) VOTE ON
EXECUTIVE COMPENSATION
Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Dodd-Frank
Act”) requires that companies seek a nonbinding shareholder vote to approve the compensation package of their
named executive officers (“NEOs”), as disclosed in the annual proxy statement. On January 25, 2011, the SEC
adopted final rules to implement the provisions of the Dodd-Frank Act that relate to shareholder approval of
executive compensation arrangements. This proposal, commonly known as a “say-on-pay” proposal, gives you as a
shareholder the opportunity to express your views on the Company’s executive compensation program.
The advisory vote on executive compensation is a nonbinding vote on the compensation of the Company’s
NEOs, as described in the Compensation Discussion and Analysis section, the tabular disclosure regarding such
compensation and the accompanying narrative disclosure set forth in this Proxy Statement. The advisory vote is not
a vote on the compensation of the Company’s Board of Directors or the Company’s compensation policies as they
relate to risk management. Your vote will not directly affect or otherwise limit any existing compensation or award
arrangements of any of our NEOs. Your vote is advisory and is not binding on the Board of Directors; however,
the Compensation Committee of the Board will take the outcome of the vote into account when considering future
executive compensation arrangements.
The Company’s executive compensation philosophy is designed to provide competitive compensation
consistent with key principles we believe are critical to our long-term success. The Company is committed to
providing an executive compensation program that aligns our management team’s interests with shareholders’
expectations of earnings per share growth and a competitive dividend yield; effectively compensates our
management team for actual performance over the short- and long-term; rewards operating performance results that
are sustainable and consistent with reliable and efficient electric service; attracts and retains an experienced and
effective management team; motivates and rewards our management team to produce growth and performance for
our shareholders that are sustainable, consistent with prudent risk-taking and based on sound corporate governance
practices; and provides market competitive levels of target (i.e., opportunity) compensation.
We urge you to consider the following highlights of our 2010 executive compensation program in
connection with your vote on this proposal:
• TheCompanydeliveredtotalshareholderreturnfor2010andannualizedtotalshareholderreturn
for the three-years ending December 31, 2010 that were between the median of the total shareholder
returns of the Company’s Benchmarking and Performance Share Sub-Plan Peer Group.
• OurChiefExecutiveOfficer’stotal compensation is largely flat since 2008 (+0.6%) (the first full year
he was in the position) and decreased 3.5% from the amount of total compensation he received in 2009.
• Metourcommitmenttoourcustomerstoprovesafe,reliableandcompetitivelypricedelectricservice.
• TheCompanyreportedongoingearningsfor2010of$889million,or$3.06pershare,comparedto
$846 million, or $3.03 per share, in 2009.
• OurNEOs’ target (i.e., opportunity) total compensation levels were approximately 25% below the 50th
percentile of our benchmarking peer group.
• Wecontinuetoprovideonlyminimalexecutiveperquisites(onlythoseprevalentinthemarketplace
and that are conducive to promoting our desired business outcomes). No tax gross-ups were made on
any perquisites.
• AllofourNEOscurrentlymeetorexceedtheCompany’smarketcompetitiveexecutivestock
ownership guidelines.