Portland General Electric Company
PORTLAND GENERAL ELECTRIC CO /OR/ (Form: DEF 14A, Received: 03/16/2017 06:04:29)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.    )
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Portland General Electric Company
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PGEBLACKOUTOFSTATELOGO.JPG

March 16, 2017

To our shareholders:

On behalf of the Board of Directors, we are pleased to invite you to Portland General Electric Company’s 2017 Annual Meeting of Shareholders. The meeting will be held at 10:00 a.m. Pacific Time on Wednesday, April 26, 2017 , in the Conference Center Auditorium located at Two World Trade Center, 25 SW Salmon Street, Portland, Oregon 97204.
Details of the business we plan to conduct at the meeting are included in the attached Notice of Annual Meeting of Shareholders and proxy statement. Only holders of record of PGE common stock at the close of business on February 28, 2017 are entitled to vote at the meeting. Your vote is very important. Regardless of the number of shares you own, we encourage you to participate in the affairs of the company by voting your shares at this year’s annual meeting. Even if you plan to attend the meeting, it is a good idea to vote your shares before the meeting.
We hope you will find it possible to attend this year’s annual meeting, and thank you for your interest in PGE and your participation in this important annual process.
Cordially,
 

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Jack E. Davis
Chairman of the Board
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James J. Piro
President and Chief Executive Officer






NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 26, 2017

To our shareholders:
The 2017 Annual Meeting of Shareholders of Portland General Electric Company will be held at the Conference Center Auditorium located at Two World Trade Center, 25 SW Salmon Street, Portland, Oregon 97204, at 10:00 a.m. Pacific Time on Wednesday, April 26, 2017.
The meeting is being held for the following purposes, which are more fully described in the proxy statement that accompanies this notice:
1.
To elect directors named in the proxy statement for the coming year;
2.
To ratify the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for fiscal year 2017 ;
3.
To approve, in a non-binding vote, the compensation of the company's named executive officers;
4.
To recommend, in a non-binding vote, the frequency of future non-binding shareholder votes to approve the compensation of the company’s named executive officers; and
5.
To transact any other business that may properly come before the meeting and any adjournment or postponement of the meeting.
As of the date of this notice, the company has received no notice of any matters, other than those set forth above, that may properly be presented at the annual meeting. If any other matters are properly presented for consideration at the meeting, the persons named as proxies on the enclosed proxy card, or their duly constituted substitutes, are authorized to vote the shares represented by proxy or otherwise act on those matters in accordance with their judgment.
The close of business on February 28, 2017 has been fixed as the record date for determining shareholders entitled to vote at the annual meeting. Accordingly, only shareholders of record as of the close of business on that date are entitled to vote at the annual meeting or any adjournment or postponement of the annual meeting.
Your vote is very important. Please read the proxy statement and then, whether or not you expect to attend the annual meeting, and no matter how many shares you own, vote your shares as promptly as possible. You can vote by proxy over the Internet, by mail or by telephone by following the instructions provided in the proxy statement. Submitting a proxy now will help ensure a quorum and avoid added proxy solicitation costs. If you attend the meeting, you may vote in person, even if you have previously submitted a proxy.
You may revoke your proxy at any time before the vote is taken by delivering to the Corporate Secretary of PGE a written revocation or a proxy with a later date or by voting your shares in person at the meeting, in which case your prior proxy will be disregarded.

BY ORDER OF THE BOARD OF DIRECTORS,


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Marc S. Bocci
Corporate Secretary




TABLE OF CONTENTS

 
 
 
 
 
Proxy Statement Summary
1

 
Proposal 3: Non-Binding Advisory Vote on Approval of Compensation of Named Executive Officers
21

Security Ownership of Certain Beneficial Owners, Directors and Executive Officers
4

 
Proposal 4: Non-Binding Advisory Vote on the Frequency of Future Shareholder Votes on Compensation of Named Executive Officers
22

Section 16(a) Beneficial Reporting Compliance
4

 
Compensation and Human Resources Committee Report
23

Executive Officers
5

 
Compensation Discussion and Analysis
23

Corporate Governance
7

 
Executive Summary
23

Board of Directors
7

 
How We Make Compensation Decisions
24

Non-Employee Director Compensation
9

 
Elements of Compensation
27

Director Independence
10

 
Other Compensation Practices
35

Board Committees
11

 
Executive Compensation Tables
37

Policies on Business Ethics and Conduct
13

 
Summary Compensation
37

Certain Relationships and Related Persons Transactions
13

 
Grants of Plan-Based Awards
39

Compensation Committee Interlocks and Insider Participation
13

 
Outstanding Equity Awards at Fiscal Year-End
40

Equity Compensation Plans
14

 
Stock Units Vested
41

Audit Committee Report
14

 
Pension Benefits
41

Principal Accountant Fees and Services
15

 
Non-Qualified Deferred Compensation
42

Pre-Approval Policy for Independent Auditor Services
15

 
Termination and Change in Control Benefits
43

Proposal 1: Election of Directors
16

 
Additional Information
47

Board of Directors
16

 
Questions and Answers about the Annual Meeting
47

Director Nominees
16

 
Shareholder Proposals for the 2018 Annual Meeting
50

Proposal 2: Ratification of the Appointment of Independent Registered Public Accounting Firm
20

 
Communications with the Board of Directors
51





PROXY STATEMENT SUMMARY

This summary highlights information contained elsewhere in this proxy statement. It does not contain all of the information you should consider. Please review the entire proxy statement carefully before voting.
Annual Meeting of Shareholders                                        
Date and Time:        April 26, 2017, 10:00 a.m. Pacific Time
Place:            Conference Center Auditorium
Two World Trade Center
25 SW Salmon Street
Portland, Oregon 97204
Record Date:            February 28, 2017
Voting Matters and Board Voting Recommendations                         
    
Proposal 1: Election of Directors
The Board recommends a FOR vote for the election of each of the director nominees named in the proxy statement.                                
Proposal 2: Ratification of Appointment of Auditors
The Board recommends a FOR vote on this proposal.

Proposal 3: Advisory Vote on Executive Compensation
The Board recommends a FOR vote on this proposal.

Proposal 4: Advisory Vote on Frequency of Future Advisory Votes on Executive Compensation     
The Board recommends that you vote for a frequency of “One Year” on this proposal.
PROPOSAL 1: ELECTION OF DIRECTOR NOMINEES         
Name
Age
Director Since
John W. Ballantine
71
2004
Rodney L. Brown, Jr.
61
2007
Jack E. Davis, Chairman
70
2012
David A. Dietzler
73
2006
Kirby A. Dyess
70
2009
Mark B. Ganz
56
2006
Kathryn J. Jackson
59
2014
Neil J. Nelson
58
2006
M. Lee Pelton
66
2006
James J. Piro
64
2009
Charles W. Shivery
71
2014

1



PROPOSAL 2: RATIFICATION OF INDEPENDENT AUDITORS
We are asking our shareholders to ratify the selection of Deloitte & Touche LLP (“Deloitte”) as our independent auditor for 2017. Set forth below is a summary of information with respect to Deloitte's fees for services provided in 2016 and 2015 .
 
2016
 
2015
Audit Fees
$
1,625,000

 
$
1,555,000

Audit-Related Fees
79,564

 
57,000

Tax Fees

 

All Other Fees
5,700

 
5,300

Total
$
1,710,264

 
$
1,617,300


PROPOSAL 3: ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are asking shareholders to approve, on an advisory basis, our named executive officer compensation. The Board of Directors recommends a “FOR” vote because it believes that our compensation policies and practices help us achieve our goals of rewarding strong and sustained financial and operating performance, leadership excellence and alignment of our executives' long-term interests with those of our stakeholders.
Below are some of the key features of our executive compensation program that we believe help enable the company to achieve its performance goals:

A significant percentage of compensation at risk .
Incentive pay based on quantifiable company measures.
Balanced focus on financial results and operations .
Stock ownership guidelines that align executives’ interests with those of shareholders.
An independent compensation consultant that reports directly to the Compensation and Human Resources Committee.
Low burn rate (the rate at which equity incentive awards are made) .
No significant perquisites.
No tax gross-ups.

These features are reflected in the 2016 compensation of our named executive officers, which is summarized in the table below. This table should be read in conjunction with the additional information on our executive compensation program included in the Compensation Discussion and Analysis section of this proxy statement and the related executive compensation tables that follow it.




























2



EXECUTIVE COMPENSATION TABLE
Name and Principal Position
Year
 
Salary
 
Stock Award
 
Non-Equity Incentive Plan Compensation
 
Change in Pension Value and Non-Qualified Deferred Compensation Earnings
 
All Other Compensation
 
Totals
James J. Piro
President and Chief Executive Officer
2016
 
836,431

 
1,517,452

 
680,574

 
135,052

 
148,124

 
3,317,633

2015
 
805,549

 
1,395,704

 
688,826

 
41,221

 
138,451

 
3,069,751

2014
 
789,028

 
1,255,429

 
730,622

 
214,340

 
108,421

 
3,097,840

James F. Lobdell
Senior Vice President, Finance, Chief Financial Officer and Treasurer

2016
 
449,074

 
461,998

 
206,396

 
114,897

 
45,824

 
1,278,189

2015
 
413,356

 
402,470

 
201,648

 
14,470

 
44,943

 
1,076,887

2014
 
357,540

 
349,986

 
193,503

 
247,236

 
37,560

 
1,185,825

Maria M. Pope
Senior Vice President, Power Supply, Operations and Resource Strategy

2016
 
477,576

 
494,985

 
245,180

 
55,384

 
60,683

 
1,333,808

2015
 
464,728

 
438,582

 
234,258

 
25,302

 
64,135

 
1,227,005

2014
 
451,076

 
429,997

 
269,552

 
67,259

 
57,839

 
1,275,723

J. Jeffrey Dudley
Vice President, General Counsel and Corporate Compliance Officer

2016
 
398,086

 
332,983

 
166,364

 
54,397

 
48,352

 
1,000,182

2015
 
385,729

 
289,784

 
169,364

 
(1,375
)
 
48,796

 
892,298

2014
 
367,145

 
275,988

 
178,742

 
110,026

 
142,607

 
1,074,508

William O. Nicholson
Senior Vice President, Customer Service, Transmission & Distribution
2016
 
322,903

 
223,992

 
135,991

 
120,053

 
39,627

 
842,566

2015
 
317,720

 
216,781

 
142,684

 
46,614

 
43,586

 
767,385

2014
 
303,579

 
206,485

 
146,212

 
252,063

 
29,549

 
937,888



PROPOSAL 4: ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION
We are asking shareholders to recommend, in a non-binding vote, a frequency of one year for future non-binding shareholder votes to approve the compensation of the company’s named executive officers.
Important Dates for 2018 Annual Meeting                                
We plan to hold our 2018 Annual Meeting of Shareholders on April 25, 2018. Shareholder proposals submitted for inclusion in our 2018 proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 must be received by us by November 17, 2017. Shareholder proposals to be brought before the 2018 Annual Meeting of Shareholders outside of Rule 14a-8 must be received by us by December 27, 2017. After November 17, 2017, and up to December 27, 2017 a shareholder may submit a proposal to be presented at the annual meeting, but it will not be included in our proxy statement or form of proxy relating to the 2018 annual meeting.
Proxy Statement                                                
This proxy statement is being furnished to you by the Board of Directors of Portland General Electric Company (“PGE” or the “company”) to solicit your proxy to vote your shares at our 2017 Annual Meeting of Shareholders. The meeting will be held at the Conference Center Auditorium located at Two World Trade Center, 25 SW Salmon Street, Portland, Oregon 97204 at 10:00 a.m. Pacific Time on Wednesday, April 26, 2017 . This proxy statement and the enclosed proxy card and 2016 Annual Report are being mailed to shareholders, or made available electronically, on or about March 16, 2017 .


3



SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND EXECUTIVE OFFICERS
On February 28, 2017 there were 89,059,366 shares of PGE common stock outstanding. The following table sets forth, as of that date unless otherwise specified, the beneficial ownership of PGE common stock of (1) known beneficial owners of more than 5% of the outstanding shares of PGE common stock, (2) each director or nominee for director, (3) each of our “named executive officers” listed in the Summary Compensation Table, and (4) our executive officers and directors as a group. Each of the persons named below has sole voting power and sole investment power with respect to the shares set forth opposite his, her or its name, except as otherwise noted.
Name and Address of Beneficial Owner
Amount and Nature of Ownership
Percent of Class
5% or Greater Holders
 
 
The Vanguard Group, Inc.(1)
7,507,131

8.44
%
100 Vanguard Blvd.


 

Malvern, PA 19355


 

BlackRock, Inc.(2)
5,844,601

6.60
%
40 East 52nd Street




New York, NY 10022




Non-Employee Directors
 
 
John W. Ballantine
18,690 (3)

*

Rodney L. Brown, Jr.
18,014 (3)

*

Jack E. Davis
10,179 (3)

*

David A. Dietzler
18,690 (3)

*

Kirby A. Dyess
15,056 (3)

*

Mark B. Ganz
18,690 (3)(4)

*

Kathryn J. Jackson
6,867 (3)

*

Neil J. Nelson
18,290 (3)(4)

*

M. Lee Pelton
18,690 (3)

*

Charles W. Shivery
7,285 (3)

*

Named Executive Officers
 
 
James J. Piro
157,242

*

James F. Lobdell
31,530

*

Maria M. Pope
22,263 (4)

*

J. Jeffrey Dudley
44,472

*

William O. Nicholson
22,313

*

All of the above officers and directors and other executive officers as a group (22 persons)
486,397

*
 
*
Percentage is less than 1% of PGE common stock outstanding.

(1)
As reported on Schedule 13G/A filed with the Securities and Exchange Commission on February 13, 2017, reporting information as of December 31, 2016.
(2)
As reported on Schedule 13G/A filed with the Securities and Exchange Commission on January 25, 2017, reporting information as of December 31, 2016. The Schedule 13G/A indicates that the shares are held by 11 separate entities and that none of these entities beneficially own 5% or more of the outstanding PGE common stock.
(3)
Includes 513 shares of common stock that will be issued on March 31, 2017 upon the vesting of restricted stock units granted under the Portland General Electric Company 2006 Stock Incentive Plan. Restricted stock units do not have voting or investment power until the units vest and the underlying common stock is issued.
(4)
Shares are held jointly with the individual's spouse, who shares voting and investment power.
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE

The rules of the Securities and Exchange Commission require that we disclose late filings of reports of stock ownership (and changes in stock ownership) by our directors and executive officers and persons who beneficially own more than 10% of our common stock. To the best of our knowledge, all of the filings required by Section 16(a) of the Securities Exchange Act of 1934 for our directors and executive officers and persons who beneficially own more than 10% of our common stock were made on a timely basis in 2016 .

4



EXECUTIVE OFFICERS
JAMES J. PIRO President and Chief Executive Officer, age 64.     

Appointed President and Co-Chief Executive Officer on January 1, 2009 and appointed President and Chief Executive Officer on March 1, 2009. Served as Executive Vice President, Chief Financial Officer and Treasurer from July 2002 to December 2008. Served as Senior Vice President Finance, Chief Financial Officer and Treasurer from May 2001 until July 2002. Served as Vice President, Chief Financial Officer and Treasurer from November 2000 until May 2001. Served as Vice President, Business Development from February 1998 until November 2000.
JAMES F. LOBDELL Senior Vice President, Finance, Chief Financial Officer and Treasurer, age 58.
    
Appointed to current position on March 1, 2013. Served as Vice President, Power Operations and Resource Strategy from August 2, 2004 until appointed to current position. Served as Vice President, Power Operations from September 2002 until August 2, 2004. Served as Vice President, Risk Management Reporting, Controls and Credit from May 2001 until September 2002.
WILLIAM O. NICHOLSON Senior Vice President, Customer Service, Transmission and Distribution, age 58.
    
Appointed to current position on April 18, 2011. Served as Vice President, Distribution Operations from August 2009 until appointed to current position. Served as Vice President, Customers and Economic Development from May 2007 until August 2009. Served as General Manager, Distribution Western Region from April 2004 until May 2007. Served as General Manager, Distribution Line Operations and Services from February 2002 until April 2004.
MARIA M. POPE Senior Vice President, Power Supply, Operations and Resource Strategy, age 52.

Appointed to current position on March 1, 2013. Served as Senior Vice President, Finance, Chief Financial Officer and Treasurer from January 1, 2009 until appointed to current position. Previously served as a director of the company from January 2006 to December 2008. Served as Vice President and Chief Financial Officer of Mentor Graphics Corporation, a software company based in Wilsonville, Oregon, from July 2007 to December 2008. Prior to joining Mentor Graphics, served as Vice President and General Manager, Wood Products Division of Pope & Talbot, Inc., a pulp and wood products company, from December 2003 to April 2007. Pope & Talbot, Inc. filed a voluntary petition under Chapter 11 of the federal bankruptcy laws on November 19, 2007.
LARRY N. BEKKEDAHL Vice President, Transmission and Distribution, age 56.
    
Appointed to current position on August 25, 2014. Served as Senior Vice President of Transmission Services at Bonneville Power Administration from June 2012 to August 2014, and as Vice President of Engineering and Technical Services from April 2008 to June 2012.  Prior to joining Bonneville Power Administration, served as Director of Engineering and Technical Services for Clark Public Utilities from 2001 to 2008, and served in various capacities for PacifiCorp from 1984 to 2001. 
CAROL A. DILLIN Vice President, Customer Strategies and Business Development, age 59.

Appointed to current position on August 1, 2009. Served as Vice President, Public Policy from February 2004 until appointed to current position.
J. JEFFREY DUDLEY Vice President, General Counsel and Corporate Compliance Officer, age 68.

Appointed to current position on August 10, 2007. Served as Associate General Counsel from May 2001 until appointed to current position and was the lead regulatory attorney on state and federal matters.
CAMPBELL A. HENDERSON Vice President, Information Technology and Chief Information Officer, age 63.

Appointed to current position on August 1, 2006. Served as Chief Information Officer and General Manager, Information Technology from August 2005 until appointed to current position.
BRADLEY Y. JENKINS Vice President, Power Supply Generation, age 53.

Appointed to current position on September 1, 2015. Served as General Manager, Diversified Plant Operations, from November 2013 until appointed to current position. Served as Plant General Manager, Boardman Power Plant from September 2012 to November 2013 and as Operations Manager, Boardman Power Plant from March 2012 to September 2012. Prior to joining PGE, Mr. Jenkins served in a variety of leadership and management roles in the utility industry with 24 years of experience in large generating facilities. He served as Maintenance Manager for Sandvik Special Metals from March 2011 to March 2012, as Lead Maintenance Assessor for Tecmer from February 2011 to March 2011, and as Maintenance Manager for Energy Northwest from

5



April 2006 to November 2010. His experience also includes time at Entergy Louisiana, Entergy Nuclear South, Energy Northwest and the Tennessee Valley Authority.
ANNE F. MERSEREAU Vice President, Human Resources, Diversity and Inclusion, age 54.

Appointed to current position on January 4, 2016. Served as Employee Services Manager for Human Resources from January 2014 until appointed to current position. As Employee Services Manager, she led Human Resources Operations, including Systems Reporting and Analytics, Payroll, Human Resources Service Center, and Health Services. Served as Consultant to Change Management from January 2012 to January 2014 and as Human Resources Business Partner from July 2009 to December 2011. Prior to joining PGE, served as Senior Consultant for Waldron, a global human resources consulting firm, from December 2008 to July 2009 and held various positions with Marsh USA from January 2000 to October 2006, most
recently as Managing Director and U.S. Region Human Resources Director.
W. DAVID ROBERTSON Vice President, Public Policy and Corporate Resiliency, age 50.

Appointed to current position on August 1, 2009. Served as Director of Government Affairs from June 2004 until appointed to current position.
KRISTIN A. STATHIS Vice President, Customer Service Operations, age 53.

Appointed to current position on June 1, 2011. Served as general manager of Revenue Operations from August 2009 until May 2011. Served as assistant treasurer and manager of Corporate Finance from October 2005 until July 2009. Served as general manager of Power Supply Risk Management from August 2003 until September 2005.



6



CORPORATE GOVERNANCE
Our Board of Directors has implemented a corporate governance program, including the adoption of charters for our Audit Committee, Compensation and Human Resources Committee, Nominating and Corporate Governance Committee and Finance Committee; Corporate Governance Guidelines (including Categorical Standards for Determination of Director Independence); a Process for Handling Communications to the Board of Directors and Board Committees; a Code of Business Ethics and Conduct; and a Code of Ethics for Chief Executive and Senior Financial Officers. These documents are published under the “Corporate Governance” section of our website at investors.portlandgeneral.com and are available in print to shareholders, without charge, upon request to Portland General Electric Company at its principal executive offices at 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204, Attention: Corporate Secretary.
Board of Directors                                                
Our business, property and affairs are managed under the direction of our Board of Directors. Members of the board are kept informed of our business by consulting with our Chief Executive Officer and other officers and senior management, by reviewing and approving capital and operating plans and budgets and other materials provided to them, by visiting our offices and plants and by participating in meetings of the board and its committees.
During 2016 , the Board of Directors met five times. During 2016 , each director attended at least 75% of the aggregate of the meetings of the Board of Directors and meetings held by all committees on which the director served, except for Mr. Ballantine, who attended 71% of the aggregate of such meetings. Under our Corporate Governance Guidelines, the non-management directors must meet in executive session without management at least quarterly. The Chairman of the board (or if the Chairman is not an independent director, the lead independent director) presides over these executive sessions. The non-management directors met in executive session four times in 2016 , generally at the end of each regular quarterly board meeting. In the event that the non-management directors include directors who are not independent under the New York Stock Exchange listing standards, our Corporate Governance Guidelines require the independent directors to meet separately in executive session at least once a year. Throughout 2016, all of our non-management directors were independent under the New York Stock Exchange listing standards. Accordingly, the four meetings of our non-management directors in 2016 also constituted meetings of our independent directors.
It is our policy that directors are expected to attend the annual meeting of shareholders. A director who is unable to attend the annual meeting of shareholders (which it is understood may occur on occasion) is expected to notify the Chairman of the board. At the time of the 2016 annual meeting of shareholders, we had 11 directors. Ten of our directors attended the 2016 annual meeting of shareholders. Mr. Ballantine was unable to attend.
BOARD LEADERSHIP STRUCTURE
We separate the roles of Chief Executive Officer and Chairman of the board in recognition of the differences between the two roles. The Chief Executive Officer is responsible for setting the strategic direction for the company and the day-to-day leadership and performance of the company. The Chairman of the board provides leadership to the board in exercising its role of providing advice to, and independent oversight of, management. The Chairman of the board also provides leadership in defining the board’s structure and activities in the fulfillment of its responsibilities, provides guidance to the Chief Executive Officer, sets the board meeting agendas with board and management input, and presides over meetings of the Board of Directors and meetings of shareholders. The board recognizes the significant time, effort and energy that the Chief Executive Officer is required to devote to his position in the current business environment. The board also recognizes the significant commitment that is required from the Chairman, particularly as the board’s oversight responsibilities continue to grow. While our bylaws and Corporate Governance Guidelines do not require that our Chairman and Chief Executive Officer positions be separate, the board believes that having separate positions and having an independent outside director serve as Chairman is the appropriate leadership structure for the company at this time and demonstrates our commitment to good corporate governance. Jack E. Davis, our current Chairman, is an independent director as defined in the New York Stock Exchange listing standards and the company’s Categorical Standards for Determination of Director Independence.
BOARD OVERSIGHT OF RISK
Management is responsible for the day-to-day management of risks the company faces, while the board, as a whole and through its committees, has responsibility for the oversight of risk management. The board’s role in the company’s risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the company, including operational, financial, legal, regulatory and strategic risks. These reports help the board understand the company’s risk identification, risk management and risk mitigation strategies and processes.
While the board has ultimate responsibility for oversight of the risk management process, various committees of the board assist the board in fulfilling its oversight responsibilities for certain areas of risk. The Audit Committee oversees risk management in the areas of financial reporting, internal controls and compliance with legal and regulatory requirements and reviews quarterly

7



reports from the company’s Corporate Compliance Committee. In addition, the Audit Committee assists the board in fulfilling its responsibility for oversight of the risk management process by reviewing periodic reports on the guidelines and policies governing the process by which the company assesses and manages its exposure to risk and discussing the company’s major risk exposures and the steps management has taken to monitor and control such exposures. The Compensation and Human Resources Committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks arising from the company’s compensation policies and programs. The Nominating and Corporate Governance Committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks associated with board organization, membership and structure, succession planning for directors, and corporate governance. The Finance Committee assists the board in fulfilling its oversight responsibilities with respect to the management of risks associated with the company’s power operations, capital projects, finance activities, credit and liquidity.
SELECTION OF CANDIDATES FOR BOARD MEMBERSHIP
The Nominating and Corporate Governance Committee is responsible for identifying, screening and recommending candidates to the board for election as directors. The committee seeks candidates with the qualifications and areas of expertise that will enhance the composition of the board. The committee does not have a formal policy with respect to the consideration of diversity in identifying director nominees, but believes it is important that the board represent a diversity of backgrounds, experience, gender and race. The committee considers a number of criteria in selecting nominees, including:
    Demonstration of significant accomplishment in the nominee's field;
    Ability to make a meaningful contribution to the board's oversight of the business and affairs of the company;
    Reputation for honesty and ethical conduct in the nominee's personal and professional activities;
    Relevant background and knowledge in the utility industry;
    Experience and skills in areas important to the operation of the company; and
Business judgment, time availability, including the number of other boards of public companies on which a
nominee serves, and potential conflicts of interest.
The Nominating and Corporate Governance Committee will consider director candidates recommended by shareholders. In considering candidates recommended by shareholders, the committee will take into consideration the needs of the board and the qualifications of the candidate. To have a candidate considered by the Nominating and Corporate Governance Committee, a shareholder must submit the recommendation in writing and must include the following information:
The shareholder’s name and evidence of ownership of PGE common stock, including the number of shares owned and the length of time of ownership; and
The candidate’s name, resume or listing of qualifications to be a director and consent to be named as a director if selected by the Nominating and Corporate Governance Committee and nominated by the board.
The shareholder recommendation and information described above must be sent to the Chairman of the Nominating and Corporate Governance Committee, in care of our Corporate Secretary, at Portland General Electric Company, 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204.
The Nominating and Corporate Governance Committee retains an outside search firm to assist the committee members in identifying and evaluating potential nominees for the board. The committee also identifies potential nominees by asking current directors and executive officers to notify the committee if they become aware of persons meeting the criteria described above who might be available to serve on the board, especially business and civic leaders in the communities in our service area. As described above, the committee will also consider candidates recommended by shareholders.
Once a person has been identified by the Nominating and Corporate Governance Committee as a potential candidate, the committee may collect and review publicly available information to assess whether the person should be considered further. If the committee determines that the person warrants further consideration, the committee chair or another member of the committee will contact the person. Generally, if the person expresses a willingness to be a candidate and to serve on the board, the Nominating and Corporate Governance Committee may request information from the candidate, review the candidate’s accomplishments and qualifications and compare them to the accomplishments and qualifications of any other candidates that the committee might be considering. The committee may also choose to conduct one or more interviews with the candidate. In certain instances, committee members may contact references provided by the candidate or may contact other members of the business community or other persons who may have greater first-hand knowledge of the candidate’s accomplishments. The committee’s evaluation process does not vary based on whether a candidate is recommended by a shareholder.


8



Non-Employee Director Compensation                                
The following table describes the compensation earned by persons who served as non-employee directors during any part of 2016 .
2016 DIRECTOR COMPENSATION
Name
Fees Earned or
Paid in Cash(1)  
 
Stock Awards (2)
 
All Other
Compensation(3)  
 
Total  
John W. Ballantine
$
88,500

 
$
84,994

 
 
$
1,637

 
$
175,131

Rodney L. Brown, Jr.
81,000

 
84,994

 
 
1,637

 
167,631

Jack E. Davis
138,000

 
84,994

 
 
1,637

 
224,631

David A. Dietzler
81,000

 
84,994

 
 
1,637

 
167,631

Kirby A. Dyess
92,250

 
84,994

 
 
1,637

 
178,881

Mark B. Ganz
81,000

 
84,994

 
 
1,637

 
167,631

Kathryn J. Jackson
81,000

 
84,994

 
 
1,637

 
167,631

Neil J. Nelson
96,000

 
84,994

 
 
1,637

 
182,631

M. Lee Pelton
88,500

 
84,994

 
 
1,637

 
175,131

Charles W. Shivery
81,000

 
84,994

 
 
1,637

 
167,631

 
(1)    Amounts in this column include cash retainers, meeting fees and chair fees.
(2)
These amounts represent the grant date fair value of restricted stock unit grants made in 2016 , the terms of which are discussed below in the section entitled “Restricted Stock Unit Grants.” The annual equity grants (with a grant date fair value of $84,994) were made on May 4, 2016 in respect of services to be performed during the ensuing 12-month period.
(3)
This column represents amounts earned in respect of dividend equivalent rights under restricted stock unit awards. See the discussion below under “Restricted Stock Unit Grants.” The value of the dividend equivalent rights was not incorporated into the “Stock Awards” column.
Current Compensation Arrangements for Non-Employee Directors
The following table describes the current compensation arrangements with our non-employee directors:
Annual Cash Retainer Fees
 
Annual Cash Retainer Fee for Directors
$
45,000

Additional Annual Cash Retainer Fee for Chairman of the Board
75,000

Additional Annual Cash Retainer Fee for Audit Committee Chair
15,000

Additional Annual Cash Retainer Fee for Compensation and Human Resources Committee Chair
11,250

Additional Annual Cash Retainer Fee for Other Committee Chairs
7,500

Annual Committee Service Fee (per committee)
18,000

Value of Annual Grant of Restricted Stock Units
85,000

The annual cash retainers and the annual committee service fee are paid quarterly in arrears. We will also reimburse certain expenses related to the directors’ service on the board, including expenses in connection with attendance at board and committee meetings.
Restricted Stock Unit Grants
Each of our non-employee directors receives an annual grant of restricted stock units. The number of restricted stock units each director receives is determined by dividing $85,000 by the closing price of PGE common stock on the date of grant. These grants are typically made on or around the date of our annual meeting of shareholders.
Each restricted stock unit represents the right to receive one share of common stock at a future date. Provided that the director remains a member of the board, the restricted stock units will vest over a one-year vesting period in equal installments on the last day of each calendar quarter and will be settled exclusively in shares of common stock. Restricted stock units do not have voting rights with respect to the underlying common stock until the units vest and the common stock is issued.
Each director also is granted one dividend equivalent right with respect to each restricted stock unit. Each dividend equivalent right represents the right to receive an amount equal to the dividends that are paid on one share of common stock and that have a record date between the grant date and vesting date of the related restricted stock unit. The dividend equivalent rights will be settled exclusively in cash on the date that the related dividends are paid to holders of common stock.

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The grants of restricted stock units and dividend equivalent rights are made pursuant to the terms of the Portland General Electric Company 2006 Stock Incentive Plan. The grants are subject to the terms and conditions of the plan and agreements between PGE and each director.
Stock Ownership Requirements for Non-Employee Directors
Our Corporate Governance Guidelines require each non-employee director to own shares of PGE common stock with a value equal to at least three times the value of the annual equity grant to non-employee directors. Non-employee directors must meet this requirement within five years following the first annual meeting at which they are elected. All of our directors either meet the stock ownership requirement or are on track to do so by the applicable target date. Our stock ownership policy for executive officers is described on pages 35 to 36 of this proxy statement.
Outside Directors’ Deferred Compensation Plan
The company maintains the Portland General Electric Company 2006 Outside Directors’ Deferred Compensation Plan to provide directors with the opportunity to defer payment of compensation for their board service. Directors may defer fees and retainers, as well as any other form of cash remuneration. Deferral elections must be made no later than December 15 of the taxable year preceding the year in which the compensation is earned. Deferrals accumulate in an account that earns interest at a rate that is one-half a percentage point higher than the Moody’s Average Corporate Bond rate. Benefit payments under the plan may be made in a lump sum or in monthly installments over a maximum of 180 months.
Director Independence                                            
For a director to be considered independent under the New York Stock Exchange corporate governance listing standards, the Board of Directors must affirmatively determine that the director does not have any direct or indirect material relationship with the company, including any of the relationships specifically proscribed by the New York Stock Exchange independence standards. The board considers all relevant facts and circumstances in making its independence determinations. Only independent directors may serve on our Audit Committee, Compensation and Human Resources Committee, and Nominating and Corporate Governance Committee.
In addition to complying with New York Stock Exchange independence standards, our Board of Directors has adopted a formal set of categorical standards with respect to the determination of director independence. Under our Categorical Standards for Determination of Director Independence, a director must be determined to have no material relationship with the company other than as a director. These standards specify the criteria by which the independence of our directors will be determined, including guidelines for directors and their immediate families with respect to past employment or affiliation with the company, its customers or its independent registered public accounting firm. The standards also restrict commercial and not-for-profit relationships with the company, and prohibit Audit Committee members from having any accounting, consulting, legal, investment banking or financial advisory relationships with the company. Directors may not be given personal loans or extensions of credit by the company, and all directors are required to deal at arm’s length with the company and its subsidiaries, and to disclose any circumstance that may result in the director no longer being considered independent. The full text of our Categorical Standards for Determination of Director Independence is published as an addendum to our Corporate Governance Guidelines, which are available under the “Corporate Governance” section of our website at investors.portlandgeneral.com.
During its review of director independence, the board considered whether there were any transactions or relationships between the company and any director or any member of his or her immediate family (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder). As part of its review of director independence, the board considered Mark B. Ganz’ position as President and Chief Executive Officer and a director of Cambia Health Solutions, Inc. (“CHS”) and CHS’ business relationship with the company during the last three fiscal years. PGE and Local Union No. 125 of the International Brotherhood of Electrical Workers have established a trust that is partly funded by PGE to provide health and welfare benefits to employees and retirees who are covered by one of the collective bargaining agreements between PGE and the union. By action of the Board of Trustees that administers the trust, the trust engaged Regence BlueCross BlueShield of Oregon, a subsidiary of CHS, to provide health products and services. The board also considered whether there were charitable contributions to not-for-profit organizations for which a director or an immediate family member of a director serves as a board member or executive officer. In addition, the board considered that in the ordinary course of our business we provide electricity to some directors and entities with which they are affiliated on the same terms and conditions as provided to other customers of the company.
As a result of this review, the board affirmatively determined that the following directors nominated for election at the annual meeting are independent under the New York Stock Exchange listing standards and our independence standards: John W. Ballantine, Rodney L. Brown, Jr., Jack E. Davis, David A. Dietzler, Kirby A. Dyess, Mark B. Ganz, Kathryn J. Jackson, Neil J. Nelson, M. Lee Pelton and Charles W. Shivery.
The board determined that James J. Piro is not independent because of his employment as the company’s President and Chief Executive Officer.

10



Board Committees                                                
The Board of Directors has four standing committees: the Audit Committee, the Nominating and Corporate Governance Committee, the Compensation and Human Resources Committee and the Finance Committee. Current copies of the charters for each of these committees are available under the “Corporate Governance” section of our website at investors.portlandgeneral.com. The Board of Directors has determined that each of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation and Human Resources Committee is comprised solely of independent directors in accordance with the New York Stock Exchange listing standards.
The table below provides membership information for each of the committees as of March 16, 2017 .  
Name
 
Audit
Committee  
 
Nominating and
Corporate
Governance
Committee  
 
Compensation and
Human Resources
Committee  
 
Finance
Committee  
John W. Ballantine
 
 
 
 
 
ü
 
Chair
Rodney L. Brown, Jr.
 
 
 
ü
 
 
 
ü
Jack E. Davis
 
 
 
ü
 
 
 
 
David A. Dietzler
 
ü
 
ü
 
 
 
 
Kirby A. Dyess
 
ü
 
 
 
Chair
 
 
Mark B. Ganz
 
ü
 
 
 
ü
 
 
Kathryn J. Jackson
 
 
 
 
 
ü
 
ü
Neil J. Nelson
 
Chair
 
 
 
ü
 
 
M. Lee Pelton
 
 
 
Chair
 
 
 
ü
Charles W. Shivery
 
ü
 
 
 
 
 
ü
AUDIT COMMITTEE
The Audit Committee met four times in 2016 . Under the terms of its charter, the Audit Committee must meet at least once each quarter. The committee regularly meets separately with management, our internal auditor and our independent registered public accounting firm. The responsibilities of the committee include:
Retaining our independent registered public accounting firm;
Evaluating the qualifications, independence and performance of our independent registered public accounting firm;
Overseeing matters involving accounting, auditing, financial reporting and internal control functions, including the
integrity of our financial statements and internal controls;
Approving audit and permissible non-audit service engagements to be undertaken by our independent registered
public accounting firm through the pre-approval policies and procedures adopted by the committee;
Reviewing the performance of our internal audit function;
Reviewing the company’s annual and quarterly financial statements and the company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our reports on Forms 10-K and 10-Q and recommending to the Board of Directors whether the financial statements should be included in the annual report on Form 10-K; and
Assisting the board in fulfilling its responsibility to oversee our risk management program.
The committee has the authority to secure independent expert advice to the extent the committee determines it to be appropriate, including retaining independent counsel, accountants, consultants or others, to assist the committee in fulfilling its duties and responsibilities.
The Board of Directors has determined that Mr. Dietzler, Mr. Nelson and Mr. Shivery are “audit committee financial experts” as that term is defined under rules of the Securities and Exchange Commission.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating and Corporate Governance Committee met two times in 2016 . Under the terms of its charter, the committee must meet at least two times annually. The responsibilities of the committee include:
Identifying and recommending to the board individuals qualified to serve as directors and on committees of the
board;
Advising the board with respect to board and committee composition and procedures;

11



Developing and recommending to the board a set of corporate governance guidelines and reviewing such guidelines at least annually;
Reviewing the succession plans for the Chief Executive Officer and senior officers either as a committee, or together with the full board; and
Overseeing the self-evaluation of the board and coordinating the evaluations of the board committees.
The committee may retain search firms to identify director candidates, and has the sole authority to approve the search firm’s fees and other retention terms. The committee also may retain independent counsel or other consultants or advisers as it deems necessary to assist in its duties to the company.
COMPENSATION AND HUMAN RESOURCES COMMITTEE
The Compensation and Human Resources Committee met five times in 2016 . Under the terms of its charter, the committee must meet at least two times annually. The responsibilities of the committee include:
Together with the other independent directors, evaluating annually the performance of the Chief Executive Officer in light of the goals and objectives of our executive compensation plans, both generally and with respect to approved performance goals;
Evaluating annually the performance of the other executive officers in light of the goals and objectives applicable to such executive officers, which may include requesting that the Chief Executive Officer provide performance evaluations for such executive officers and recommendations with respect to the compensation of such executive officers (including long-term incentive compensation);
Together with the other independent directors, determining and approving the compensation of the Chief Executive Officer in light of the evaluation of the Chief Executive Officer’s performance;
Determining and approving the compensation of the other executive officers in light of the evaluation of such officers’ performance;
Reviewing and approving, or recommending approval of, perquisites and other personal benefits to our executive officers;
Reviewing and recommending the appropriate level of compensation for board and committee service by non-employee members of the board;
Reviewing our executive compensation plans and programs annually and approving or recommending to the board new compensation plans and programs or amendments to existing plans and programs; and
Reviewing and approving any severance or termination arrangements to be made with any executive officer.
Under its charter, the committee has authority to retain compensation consultants to assist the committee in carrying out its responsibilities, including sole authority to approve the consultants’ fees and other retention terms. The committee has engaged Frederic W. Cook & Co., Inc. (“F.W. Cook”) to advise it on matters related to executive compensation.
The committee is supported in its work by members of our Compensation and Benefits Department. The formal role of our executive officers in determining executive compensation is limited to the responsibility of the Chief Executive Officer to provide the committee with a self-evaluation, as well as an evaluation of the performance of the other executive officers. The committee may also seek input from our executive officers in developing an overall compensation philosophy and in making decisions about specific pay components.
The committee has authority to conduct or authorize investigations or studies of matters within the committee’s scope of responsibilities, and to retain independent counsel or other consultants or advisers as it deems necessary to assist it in those matters. To the extent permitted by applicable law, regulation or the New York Stock Exchange listing standards, the committee may form subcommittees and delegate to the subcommittees, or to the committee chairperson individually, such power and authority as the committee deems appropriate.
FINANCE COMMITTEE
The Finance Committee met four times in 2016 . Under the terms of its charter, the committee meets as often as it determines necessary to carry out its duties and responsibilities, but no less frequently than annually. The responsibilities of the committee include:
Reviewing and recommending to the board financing plans, and annual capital and operating budgets, proposed by management;
Reviewing, and approving or recommending, certain costs for projects, initiatives, transactions and other activities within the ordinary business of the company;
Reviewing our capital and debt structure, approving or recommending to the board the issuance of secured and unsecured debt, and recommending to the board the issuance of equity;

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Reviewing and recommending to the board dividends, including changes in dividend amounts, dividend payout goals and objectives;
Reviewing earnings forecasts;
Assisting the board in fulfilling its oversight responsibilities with respect to the management of risks associated with the company’s power operations, capital projects, finance activities, credit and liquidity;
Reviewing and recommending to the board investment policies and guidelines and the use of derivative securities to mitigate financial and foreign currency exchange risk; and
Overseeing the control and management of benefit plan assets and investments.
Policies on Business Ethics and Conduct                                
All of our directors, officers and employees are required to abide by our Code of Business Ethics and Conduct. This code of ethics covers all areas of professional conduct, including conflicts of interest, unfair or unethical use of corporate opportunities, protection of confidential information, compliance with all applicable laws and regulations, and oversight and compliance. Our Chief Executive Officer, Chief Financial Officer and Controller are also required to abide by the Code of Ethics for Chief Executive and Senior Financial Officers. These ethics codes form the foundation of a comprehensive program of compliance with our Guiding Behaviors - Be Accountable, Earn Trust, Dignify People, Make the Right Thing Happen, Positive Attitude and Team Behavior - and all corporate policies and procedures to ensure that our business is conducted ethically and in strict adherence to all laws and regulations applicable to us. Employees are responsible for reporting any violation, including situations or matters that may be considered to be unethical or a conflict of interest under the ethics codes.
The full texts of both the Code of Business Ethics and Conduct and the Code of Ethics for Chief Executive and Senior Financial Officers are available under the “Corporate Governance” section of our website at investors.portlandgeneral.com or in print to shareholders, without charge, upon request to Portland General Electric Company, 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204, Attention: Corporate Secretary. Any future amendments to either of these codes, and any waiver of the Code of Ethics for Chief Executive and Senior Financial Officers, and of certain provisions of the Code of Business Ethics and Conduct for directors, executive officers or our Controller, will be disclosed to our shareholders to the extent required by law.
As required by New York Stock Exchange rules, our audit committee has procedures in place regarding the receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing matters and allowing for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters. In addition, we have a Policy Regarding Compliance with Securities and Exchange Commission Attorney Conduct Rules that requires all of our lawyers to report to the appropriate persons at the company evidence of any actual, potential or suspected material violation of state or federal law or breach of fiduciary duty by the company or any of its directors, officers, employees or agents.
Certain Relationships and Related Persons Transactions                    
We do not have a separate written policy or procedures for the review, approval or ratification of transactions with related persons. However, our Corporate Governance Guidelines, our Code of Business Ethics and Conduct and our Conflict of Interest Policy address conflicts of interest and relationships with PGE. In its consideration of nominees for the Board of Directors, the Nominating and Corporate Governance Committee examines possible related person transactions as part of its review. The Board of Directors annually reviews the relationship that each director has with PGE, which includes relationships with our officers and employees, our auditors and our customers. Our Code of Business Ethics and Conduct requires any person, including our directors and officers, to report any violation of the code or any situation or matters that may be considered to be unethical or a conflict of interest. Any potential conflict of interest under the code involving a director, an executive officer or our Controller is reviewed by the Audit Committee. Only the Audit Committee may waive a conflict of interest involving a director, an executive officer or our Controller, which will be promptly disclosed to our shareholders to the extent required by law.
Compensation Committee Interlocks and Insider Participation                
The members of the Compensation and Human Resources Committee during 2016 were John W. Ballantine, Kirby A. Dyess, Mark B. Ganz, Kathryn J. Jackson and Neil J. Nelson. All members of the committee during 2016 were independent directors and no member was an employee or former employee. During 2016 , none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officer served on our Compensation and Human Resources Committee or Board of Directors.


13



EQUITY COMPENSATION PLANS
The following table provides information as of December 31, 2016 for the Portland General Electric Company 2006 Stock Incentive Plan and the Portland General Electric Company 2007 Employee Stock Purchase Plan. The 2006 Stock Incentive Plan was amended and restated as of October 24, 2007 and was originally approved by the shareholders on May 7, 2008 at the company’s 2008 annual meeting of shareholders. The 2007 Employee Stock Purchase Plan was approved by the shareholders on May 2, 2007 at the company’s 2007 annual meeting of shareholders.
Plan Category  
Number of  Securities to
be Issued Upon  Exercise
of Outstanding Options,
Warrants and Rights
(a)   
Weighted-Average
Exercise Price of
Outstanding
Options,  Warrants and Rights
(b)   
Number of Securities
Remaining Available
for Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected in
Column (a))
(c)   
Equity Compensation Plans approved by security holders
712,996(1)
N/A
3,421,136(2)(3)
Equity Compensation Plans not approved by security holders
N/A
N/A
N/A
Total
712,996(1)
N/A
3,421,136(2)(3)
 
(1)
Represents outstanding restricted stock units and related dividend equivalent rights issued under the 2006 Stock Incentive Plan, and assumes maximum payout for restricted stock units with performance-based vesting conditions. The restricted stock units do not have an exercise price and are issued when award criteria are satisfied. See “Non-Employee Director Compensation - Restricted Stock Unit Grants” above and “Long-Term Equity Incentive Awards” below for further information regarding the 2006 Stock Incentive Plan.
(2)
Represents shares remaining available for issuance under the 2006 Stock Incentive Plan and the 2007 Employee Stock Purchase Plan.
(3)
Includes approximately 15,000 shares available for future issuance under the 2007 Employee Stock Purchase Plan that are subject to purchase in the purchase period from January 1, 2017 to June 30, 2017. The number of shares subject to purchase during any purchase period depends on the number of current participants and the price of the common stock on the date of purchase.  
AUDIT COMMITTEE REPORT
The Audit Committee provides assistance to the Board of Directors in fulfilling its obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions of the company and its subsidiaries. Management is responsible for the company’s internal controls and the financial reporting process, including the integrity and objectivity of the company’s financial statements. The company’s independent registered public accounting firm, Deloitte & Touche LLP (“Deloitte”), is responsible for performing an independent audit of the company’s financial statements, expressing an opinion as to the conformity of the annual financial statements with generally accepted accounting principles, expressing an opinion as to the effectiveness of the company’s internal control over financial reporting and reviewing the company’s quarterly financial statements.
The committee has met and held discussions with management and Deloitte regarding the fair and complete presentation of the company’s financial results and the effectiveness of the company’s internal control over financial reporting. The committee has discussed with Deloitte significant accounting policies that the company applies in its financial statements, as well as alternative treatments. The committee also discussed with the company’s internal auditor and Deloitte the overall scope and plans for their respective audits.
Management represented to the committee that the company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the committee has reviewed and discussed the consolidated financial statements with management and Deloitte. The committee has discussed with Deloitte the matters required to be discussed under the applicable rules adopted by the Public Company Accounting Oversight Board.
The committee has reviewed and discussed with Deloitte all communications required by generally accepted auditing standards. In addition, the committee has received the written disclosures and the letter regarding independence from Deloitte, as required by applicable requirements of the Public Company Accounting Oversight Board, and has discussed such information with Deloitte.
Based upon the review, discussions and representations referenced above, the committee recommended to the Board of Directors that the audited consolidated financial statements be included in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for filing with the Securities and Exchange Commission.



14



The committee has appointed Deloitte as the company’s independent registered public accounting firm for fiscal year 2017 .
Audit Committee
Neil J. Nelson, Chair
David A. Dietzler
Kirby A. Dyess
Mark B. Ganz
Charles W. Shivery

February 14, 2017
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates, for 2016 and 2015 were as follows:
 
 
2016
2015
Audit Fees(1)
$
1,625,000

$
1,555,000

Audit-Related Fees(2)
79,564

57,000

Tax Fees(3)


All Other Fees(4)
5,700

5,300

Total
$
1,710,264

$
1,617,300

 
(1)
For professional services rendered for the audit of our consolidated financial statements for the fiscal years ended December 31, 2016 and 2015 and for the review of the interim consolidated financial statements included in quarterly reports on Form 10-Q. Audit Fees also include services normally provided in connection with statutory and regulatory filings or engagements, assistance with and review of documents filed with the Securities and Exchange Commission, the issuance of consents and comfort letters, as well as the independent auditor’s report on the effectiveness of internal control over financial reporting.
(2)
For assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements not reported under Audit Fees above, including attest services that are not required by statute or regulation, consultations concerning financial accounting and reporting standards, and audits of the statements of activities of jointly owned facilities. Also includes amounts reimbursed to PGE in connection with cost sharing arrangements for certain services.
(3)
For professional tax services, including consulting and review of tax returns.
(4)
For all other products and services not included in the above three categories, including reference products related to income taxes and financial accounting matters.
PRE-APPROVAL POLICY FOR INDEPENDENT AUDITOR SERVICES
The Audit Committee must separately pre-approve the engagement of the independent registered public accounting firm to audit our consolidated financial statements. Prior to the engagement, the Audit Committee reviews and approves a list of services, including estimated fees, expected to be rendered during that year by the independent registered public accounting firm.
In addition, the Audit Committee requires pre-approval of all audit and permissible non-audit services provided by the company’s independent auditors, pursuant to a pre-approval policy adopted by the committee. The term of pre-approval is 12 months, unless the Audit Committee specifically provides for a different period. A detailed written description of the specific audit, audit-related, tax and other services that have been pre-approved, including specific monetary limits, is required. The Audit Committee may also pre-approve particular services and fees on a case-by-case basis. Management and the independent auditors are required to report at least quarterly to the Audit Committee regarding the actual services, and fees paid for such services, compared to the services and fees that were pre-approved in accordance with this policy.
All audit and permissible non-audit services provided by the independent auditors during 2016 and 2015 were pre-approved by the Audit Committee.  


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PROPOSAL 1: ELECTION OF DIRECTORS
Board of Directors                                                
The board has nominated all of the 11 current directors for re-election as directors. The nominees are: John W. Ballantine, Rodney L. Brown, Jr., Jack E. Davis, David A. Dietzler, Kirby A. Dyess, Mark B. Ganz, Kathryn J. Jackson, Neil J. Nelson, M. Lee Pelton, James J. Piro and Charles W. Shivery. This slate of nominees satisfies the New York Stock Exchange listing standards for board composition and majority director independence. See the section above entitled “Corporate Governance - Director Independence” for further details regarding director independence.
All of our directors are elected annually by shareholders. Directors hold office until their successors are elected and qualified, or until their earlier death, resignation or removal. Our bylaws provide that the Board of Directors may determine the size of the board. Effective April 26, 2014, the board has set the size of the board at 11 directors. At the annual meeting, proxies cannot be voted for a greater number of individuals than the number of nominees named in this proxy statement.
All of the nominees have agreed to serve if elected. If any director is unable to stand for election, the board may reduce the number of directors or designate a substitute. If the board designates a substitute, shares represented by proxies will be voted for the substitute director. We do not expect that any nominee will be unavailable or unwilling to serve.
Director Nominees                                                
In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led our board to the conclusion that he or she should serve as a director, we also believe that all of our director nominees have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated an ability to exercise sound judgment, as well as a commitment of service to the company and the board.
PICTURE1.JPG
John W. Ballantine , age 71, director since February 2004; Chairman of the Finance Committee and member of the Compensation and Human Resources Committee.

Mr. Ballantine has been an active, self-employed private investor since 1998, when he retired from First Chicago NBD Corporation where he had most recently served as Executive Vice President and Chief Risk Management Officer. During his 28-year career with First Chicago, Mr. Ballantine was responsible for international banking operations, New York operations, Latin American banking, corporate planning, U.S. financial institutions business and a variety of trust operations. Mr. Ballantine also serves as a director of Deutsche Funds, as a member of the audit committee and the investment oversight committee of Deutsche Funds, and as chair of the contract committee of Deutsche Funds. We believe that Mr. Ballantine’s qualifications to serve on our board include his extensive experience in finance and risk management, his experience in various executive and leadership roles for First Chicago NBD Corporation, as well as his experience on the boards of other companies. Mr. Ballantine’s expertise in finance and risk management is of great value to the board, given the company’s significant ongoing and anticipated capital programs and the company’s focus on enterprise risk management.
PICTURE2.JPG
Rodney L. Brown, Jr. , age 61, director since February 2007; member of the Nominating and Corporate Governance Committee and the Finance Committee.


Mr. Brown is a founding partner of Cascadia Law Group PLLC, a Seattle, Washington law firm that specializes in environmental law in the Pacific Northwest. He is the principal author of Washington’s Superfund law, the Model Toxics Control Act, and has worked for years to reform and improve the environmental regulatory system. From 1992 to 1996, Mr. Brown was a Managing Partner at the Seattle office of Morrison & Foerster, LLP, a large international law firm. We believe that Mr. Brown’s qualifications to serve on our board include his experience as an environmental lawyer, his extensive knowledge of environmental laws and regulations to which the company is subject, his general knowledge of government and public affairs, and his experience as a management consultant for organizations handling large infrastructure projects and projects with challenging environmental issues.


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PICTURE3.JPG
Jack E. Davis , age 70,   director since June 2012; Chairman of the Board of Directors and member of the Nominating and Corporate Governance Committee.



Mr. Davis  served as Chief Executive Officer of Arizona Public Service Company (“APS”), Arizona’s largest electricity provider, from September 2002 until his retirement in March 2008 and as President of APS from October 1998 to October 2007. Mr. Davis also served as President and Chief Operating Officer of Pinnacle West Capital Corporation (”Pinnacle West”) from September 2003 to March 2008 and as a director of Pinnacle West from January 2001 to March 2008 and a director of APS from October 1998 to May 2008. Pinnacle West is the parent company of APS. During his 35 years at APS, Mr. Davis held executive and management positions in various areas of the company, including commercial operations, generation and transmission, customer service, and power operations. Mr. Davis has served on the boards of the Edison Electric Institute and the National Electric Reliability Council. He also served as Chairman of the Western Systems Coordinating Council in 2000. We believe that Mr. Davis’ qualifications to serve on our board include his extensive knowledge of the utility industry, his experience as Chief Executive Officer, senior executive and director of APS and his experience as President, Chief Operating Officer, senior executive and director of Pinnacle West.


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David A. Dietzler , age 73, director since January 2006; member of the Audit Committee and the Nominating and Corporate Governance Committee.



Mr.  Dietzler was a certified public accountant for over 40 years and retired as a partner of KPMG LLP, a public accounting firm, in 2005. During his last 10 years with KPMG LLP he served in both administrative and client service roles, which included serving on the firm’s board of directors, including the governance, nominating, and board process and evaluation committee, and was the Pacific Northwest partner in charge of the Audit Practice for KPMG’s offices in Anchorage, Boise, Billings, Portland, Salt Lake City, and Seattle, as well as the Managing Partner of the Portland office. Mr. Dietzler has served on the boards of Columbia Banking System, Inc. and Columbia State Bank since April 2013 and also serves as chair on the audit committee of each of those boards. Mr. Dietzler served on the board of directors of West Coast Bancorp and as chair of the audit committee from January 2012 to April 2013 when West Coast Bancorp was acquired by Columbia Banking System, Inc. We believe that Mr. Dietzler’s qualifications to serve on our board include his 37 years of experience auditing public companies and working with audit committees of public companies, his experience as a director of KPMG LLP, his knowledge of Securities and Exchange Commission filing requirements, financial reporting, internal control and compliance requirements, and the experience he acquired through his leadership roles for the Pacific Northwest offices of KPMG.


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Kirby A. Dyess , age 70, director since June 2009; Chair of the Compensation and Human Resources Committee and member of the Audit Committee.




Ms. Dyess is a principal in Austin Capital Management LLC, where she evaluates, invests in, and assists early stage companies in the Pacific Northwest. In addition, she serves on the board of Itron, Inc. She has served on the audit committees of Itron, Inc. and Menasha Corporation, the governance committees of Merix Corporation, Itron, Inc., Viasystems Group, Inc. and Menasha Corporation, and as chair of the compensation committees of Viasystems Group, Inc. and Itron, Inc. She also serves as chair of the board of directors of Prolifiq Software, a provider of sales content management and compliance software, as a member of the board of Compli, a provider of workforce compliance management software, and as a member of the board of the Oregon Community Foundation. Prior to forming Austin Capital Management LLC in 2003, Ms. Dyess spent 23 years in various executive and management positions at Intel Corporation, most recently serving as Corporate Vice President of Intel Corporation from 1994 to 2002. Her assignments included Director of Intel Capital Operations from June 2001 to December 2002, Director of Strategic Acquisitions/New Business Development from November 1996 to June 2001, and Director of Worldwide Human Resources from January 1993 to November 1996. We believe that Ms. Dyess’ qualifications to serve on our board include the experience she acquired during her career at Intel Corporation in the areas of risk management, human resources, operations, government relations, mergers and acquisitions, sales and marketing, information technology, and the initiation of start-up businesses, and her experience serving on boards of other companies.




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Mark B. Ganz , age 56, director since January 2006; member of the Audit Committee and the Compensation and Human Resources Committee.





Mr. Ganz has served since 2004 as president and chief executive officer of Cambia Health Solutions, Inc., a parent corporation of 22 companies offering products and services in the health care sector, including BlueCross and BlueShield health plans, to providers of care, consumers and employers. Cambia Health Solutions, Inc.’s family of companies range from software and mobile applications, health care marketplaces, non-traditional health care delivery models, health insurance, life insurance, pharmacy benefit management, and wellness. Mr. Ganz has been with Cambia Health Solutions, Inc. since 1992, holding various positions, including president, chief operating officer, chief legal officer and corporate secretary, and chief compliance officer. Mr. Ganz also serves on the board of directors of Cambia Health Solutions, Inc. In addition, Mr. Ganz serves as vice chair of the Board of Regents of the University of Portland and as president of the Boy Scouts of America Cascade-Pacific Council, serves on the boards of Blue Cross Blue Shield Association, Oregon Business Council, Greater Portland Inc., the Western Conference of Prepaid Health Plans, and The Conservation Project, and has served as chairman of the board of America’s Health Insurance Plans . We believe that Mr. Ganz’ qualifications to serve on our board include his experience overseeing multiple companies within a large diversified corporate group, his experience in various executive roles, his 29 years of experience in the practice of corporate and regulatory law, and his expertise in executive compensation and compensation structures, corporate governance, and ethics and compliance programs.





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Kathryn J. Jackson , Ph.D., age 59, director since April 2014; member of the Finance Committee and Compensation and Human Resources Committee.





Dr. Jackson  has served since January 2016 as the Director of Energy and Technology Consulting at KeySource, Inc., where she provides consulting services to clients in business growth, technology development and energy services. In addition, she has served since July 2015 as a director of Hydro One Inc., an electricity transmission and distribution company serving the Province of Ontario, Canada, and since January 1, 2017 as a director of Cameco Corporation - one of the world’s largest uranium producers, headquartered in Saskatchewan, Canada. Dr. Jackson previously served as Chief Technology Officer and Senior Vice President at RTI International Metals, Inc. from June 2014 to July 2015, where she was responsible for global research and technology development, technology strategy, and development of alloys and manufacturing processes, including 3D printing and powder metallurgy. Prior to joining RTI International Metals, Inc., Dr. Jackson served as the Chief Technology Officer and Senior Vice President of Research & Technology at Westinghouse Electric Company, LLC, a nuclear energy company, from 2009 to June 2014 and as the Vice President of Strategy, Research & Technology from 2008 to 2009. Prior to joining Westinghouse Electric Company, LLC, Dr. Jackson worked for 17 years at the Tennessee Valley Authority, where she held various executive positions. From 2008 to April of 2014, Dr. Jackson served on the board of directors of the Independent System Operator of New England, the grid system operator for the six New England states, where she served as Chair of the board of directors, Chair of the compensation and human resources committee and a member of the system planning and reliability committee. Dr. Jackson serves on the Electricity Industry Center Advisory Board at Carnegie Mellon University, the Carnegie Mellon University Engineering School Dean’s Advisory Board, the Electricity Institute Advisory Board at the University of Pittsburgh, and the Industry Advisory Board at Oregon State University School of Mechanical, Industrial, and Manufacturing Engineering. Dr. Jackson holds a Ph.D. in Engineering and Public Policy from Carnegie Mellon University. We believe that Dr. Jackson’s qualifications to serve on our board include her extensive background in engineering, her experience in senior executive roles at Westinghouse Electric Company, LLC and the Tennessee Valley Authority, her experience serving on the board of the Independent System Operator of New England, her experience with large capital projects, contracts and vendor negotiations, her experience with generation facilities and energy trading operations, her experience in research and development across a broad range of utility assets and systems, and her experience in the areas of environmental health and safety.




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Neil J. Nelson , age 58, director since October 2006; Chair of the Audit Committee and member of the Compensation and Human Resources Committee.






Mr. Nelson has served as President and Chief Executive Officer of Siltronic Corporation, a global leader in the market for hyperpure silicon wafers and a partner to many top-tier chip manufacturers, since July 2003. He previously served as Vice President of Operations of Siltronic from 2000 to 2003. From 1987 to 2000, he served in various positions with Mitsubishi Silicon America. Mr. Nelson also serves on the board of directors and the compensation committee of Siltronic Corporation. We believe that Mr. Nelson’s qualifications to serve on our board include his experience in overseeing company-wide and divisional operations for Siltronic Corporation and divisional operations for Mitsubishi Silicon America, his experience in overseeing manufacturing operations at the department, division and company-wide levels, his experience in risk oversight and environmental issues, his experience overseeing safety systems and the financial reporting process for Siltronic Corporation, and his experience in developing and overseeing compensation programs over the past 15 years for Siltronic Corporation and, prior to that, for Mitsubishi Silicon America.






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M. Lee Pelton , Ph.D., age 66, director since January 2006; Chair of the Nominating and Corporate Governance Committee and member of the Finance Committee.







Dr. Pelton has served as President of Emerson College in Boston, Massachusetts since July 2011. From July 1999 to July 2011, he served as President of Willamette University in Salem, Oregon. From 1991 until 1998, he was Dean of Dartmouth College. Prior to 1991, he held faculty and administrative posts at Colgate University and Harvard University. Dr. Pelton also served on the board of directors of PLATO Learning, Inc. from March 2007 to May 2010 and on the compensation and audit committees of PLATO Learning, Inc. We believe that Dr. Pelton’s qualifications to serve on our board include his experience in leadership positions at several universities, his connections to the academic community, his knowledge in the area of university relations and collaborations, his experience serving on boards of other companies, and the unique perspective he brings to various issues considered by the board as a result of his academic background and accomplishments.






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James J. Piro , age 64, director since January 2009.







Mr. Piro has served as President and Chief Executive Officer since March 1, 2009 and as President and Co-Chief Executive Officer from January 1, 2009 to March 1, 2009. He was appointed to the Board of Directors effective January 1, 2009 in conjunction with his appointment as President and Co-Chief Executive Officer. From July 2002 to December 2008, he served as Executive Vice President Finance, Chief Financial Officer and Treasurer. From May 2001 to July 2002, he served as Senior Vice President Finance, Chief Financial Officer and Treasurer. From November 2000 to May 2001, he served as Vice President, Chief Financial Officer and Treasurer. Prior to November 2000, he served in various positions with the company, including Vice President, Business Development and General Manager, Planning Support, Analysis and Forecasting. We believe that Mr. Piro’s qualifications to serve on our board include his current role as President and Chief Executive Officer of the company, his more than 30 years of diverse experience as an employee of the company (which includes various executive and management positions) and his extensive knowledge of the company and the utility industry.







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Charles W. Shivery , age 71, director since February 2014; member of the Audit Committee and the Finance Committee.
Mr. Shivery  served as Chairman, President and Chief Executive Officer of Northeast Utilities, New England’s largest utility system, from March 2004 until his retirement in April 2012 following the completion of the merger between Northeast Utilities and NSTAR. Following his retirement, he served as Chairman of the Board of Trustees of Northeast Utilities from April 2012 to October 2013, and as a member of the Board of Trustees from October 2013 to May 2014. From 2007 to 2012, Mr. Shivery also served as Chairman of the boards of several wholly-owned subsidiaries of Northeast Utilities, including The Connecticut Light and Power Company, Public Service Company of New Hampshire, Western Massachusetts Electric Company and Yankee Gas Services Company. Prior to joining Northeast Utilities in 2002, Mr. Shivery worked for 29 years at Constellation Energy Group, Inc. and its wholly-owned subsidiary, Baltimore Gas & Electric Company, where he served in various executive positions, including Co-President of Constellation Energy Group. Mr. Shivery is a director of Webster Financial Corporation and is chair of the compensation committee and a member of the executive committee. We believe that Mr. Shivery’s qualifications to serve on our board include his nearly 40 years of experience in the utility industry, including policy-making level director and executive officer positions while employed at Constellation Energy Group, Inc. and Northeast Utilities, and his senior management level experience in capital and financial markets and credit markets throughout his career at Constellation Energy and Northeast Utilities.
Directors are elected by a majority of the votes cast at the annual meeting. Election by a majority means that a director nominee is elected if the number of votes cast “FOR” such director nominee exceeds the number of votes cast “AGAINST” such director nominee, provided that a majority of the outstanding shares of common stock are present in person or represented by proxy at the annual meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH NOMINEE FOR ELECTION TO THE BOARD OF DIRECTORS.

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PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm to audit the consolidated financial statements of PGE and its subsidiaries for the fiscal year ending December 31, 2017 and to audit the effectiveness of internal control over financial reporting as of December 31, 2017.
The Audit Committee carefully considered the firm’s qualifications as an independent registered public accounting firm. This included a review of the qualifications of the engagement team, the quality control procedures the firm has established, the issues raised by the most recent quality control review, the coordination of the firm’s efforts with our internal audit department and its reputation for integrity and competence in the fields of accounting and auditing. The Audit Committee’s review also included matters required to be considered under the Securities and Exchange Commission’s rules on auditor independence, including the nature and extent of non-audit services, to ensure that the provision of those services will not impair the independence of the auditors. The Audit Committee expressed its satisfaction with Deloitte in all of these respects.
Under New York Stock Exchange and Securities and Exchange Commission rules, and the Audit Committee Charter, the Audit Committee is directly responsible for the selection, appointment, compensation, and oversight of the company’s independent registered public accounting firm and is not required to submit this appointment to a vote of the shareholders. The Board of Directors, however, considers the appointment of the independent registered public accounting firm to be an important matter of shareholder concern and is submitting the appointment of Deloitte for ratification by the shareholders as a matter of good corporate practice. One or more representatives of Deloitte are expected to be present at the annual meeting and will have an opportunity to make a statement and respond to appropriate questions from shareholders. In the event that our shareholders fail to ratify the appointment, it will be considered as a direction to the Audit Committee to consider the appointment of a different firm. Even if the appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the company and its shareholders.
Ratification of the appointment of Deloitte as the company’s independent registered public accounting firm will require that a majority of the outstanding shares of common stock be present in person or represented by proxy at the annual meeting and that the number of votes cast in favor of this proposal exceeds the number of votes cast against this proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.



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PROPOSAL 3: NON-BINDING ADVISORY VOTE ON APPROVAL OF COMPENSATION OF NAMED EXECUTIVE OFFICERS
As described in detail in the Compensation Discussion and Analysis section of this proxy statement, our executive compensation programs are designed to attract and retain our named executive officers and to provide them with incentives to advance the interests of our key stakeholders, which include our customers, our shareholders, our employees, and the communities we serve. In designing these programs, we focus on the following principles:
PERFORMANCE BASED PAY     
A significant portion of our executives’ pay should vary based on performance relative to key stakeholder interests;
Greater responsibility should be accompanied by a greater share of the risks and rewards of company performance; and
Executive pay should encourage financial and operational improvements, but not at the expense of the safety and reliability of our operations.
REASONABLE, COMPETITIVE PAY    
Executive pay should be competitive, but other considerations, such as individual qualifications, corporate performance and internal pay equity should also play a role in determining executive compensation.
SOUND GOVERNANCE AND COMPENSATION PRACTICES
In the Compensation Discussion and Analysis, under the heading “Executive Summary” (which begins on page 23), we highlight features of our compensation program that we believe reflect sound governance and compensation practices. We urge shareholders, in considering their vote, to review these actions and features and to read the entire Compensation Discussion and Analysis, appearing on pages 23 to 36 of this proxy statement, which describes in more detail how the company’s executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the 2016 Summary Compensation Table and other related compensation tables and narrative, appearing on pages 37 to 46 of this proxy statement, which provide detailed information on the compensation of our named executive officers. Our Compensation and Human Resources Committee and our Board of Directors believe that the policies and procedures articulated in the Compensation Discussion and Analysis are effective in achieving our compensation objectives.
We are asking our shareholders to indicate their support for our named executive officer compensation as described in this proxy statement by voting to approve the resolution set forth below. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the annual meeting:
“RESOLVED, that the shareholders of the Portland General Electric Company (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Compensation Discussion and Analysis, the 2016 Summary Compensation Table and the other related tables and disclosure in the proxy statement for the Company’s 2017 Annual Meeting of Shareholders.”
The vote on this proposal is advisory, and therefore not binding on the company, the Compensation and Human Resources Committee or the Board of Directors. However, we value the opinions of our shareholders and to the extent there is a significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns and the Compensation and Human Resources Committee will evaluate whether any actions are necessary to address those concerns.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.


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PROPOSAL 4: NON-BINDING, ADVISORY VOTE ON THE FREQUENCY OF FUTURE SHAREHOLDER VOTES ON COMPENSATION OF NAMED EXECUTIVE OFFICERS
As described in Proposal 3 above, our shareholders have the opportunity to cast an advisory vote to approve the compensation of our named executive officers (a “say-on-pay proposal”). This Proposal 4 affords shareholders the opportunity to cast an advisory vote on how often we should seek an advisory shareholder vote on such a say-on-pay proposal.
In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934 and and the related rules of the Securities and Exchange Commission, we are providing shareholders the option of selecting a frequency of every year, every two years or every three years. For the reasons described below, the Board of Directors recommends that our shareholders select a frequency of every year, or an annual vote.
Our shareholders voted on a similar proposal in 2011 with the majority voting for a frequency of every year. Accordingly, we have thereafter submitted a say-on-pay proposal to our shareholders on an annual basis, which has allowed our shareholders to annually express their views on our executive compensation program.
As a result of the preference indicated by our shareholders in 2011, our Board of Directors has determined that an annual advisory vote on executive compensation is the most appropriate option for PGE. The Board of Directors also believes that an annual advisory vote on executive compensation provides shareholders with an opportunity to provide timely, direct input on our executive compensation philosophy, policies and practices. We therefore request that our shareholders select “One Year” when voting on the frequency of advisory votes on executive compensation. We understand that our shareholders may have different views as to what is the best approach for PGE, and we look forward to hearing from our shareholders on this proposal. While the results of voting on this proposal will not be binding on our Board of Directors, the board values shareholders’ opinions and will take the results of the vote into account when determining the frequency of a shareholder advisory vote on executive compensation.
You may cast your vote on your preferred voting frequency by choosing the option of one year, two years, three years or abstain from voting when you vote in response to the resolution set forth below.
“RESOLVED, that the option of once every one year, two years, or three years that receives the highest number of votes cast for this resolution will be determined to be the preferred frequency with which the Company is to hold a shareholder vote to approve the compensation of the named executive officers as disclosed pursuant to the Securities and Exchange Commission’s compensation disclosure rules (which disclosure shall include the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and disclosure).”
A plurality of the votes cast for Proposal 4 will determine the shareholders’ preferred frequency for conducting an advisory vote on executive compensation. This means that the option of one year, two years or three years that receives the greatest number of votes cast by shareholders will be the frequency for the advisory vote on executive compensation that has been selected by shareholders. However, because this vote is advisory and not binding on the Board of Directors or PGE, the board may decide that it is in the best interests of our shareholders and PGE to hold an advisory vote on executive compensation more or less frequently than the option preferred by our shareholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU SELECT “ONE YEAR” FOR THE FREQUENCY OF ADVISORY VOTES ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.
 




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COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT
The Compensation and Human Resources Committee of the Board of Directors reviewed and discussed with the company’s management the following Compensation Discussion and Analysis. Based on that review and discussion, the Compensation and Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
THE COMPENSATION AND HUMAN RESOURCES COMMITTEE
Kirby A. Dyess (Chair)
John W. Ballantine
Mark B. Ganz
Kathryn J. Jackson
Neil J. Nelson
February 14, 2017
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes the executive compensation policies and practices at PGE, as they relate to the following individuals, who were our “named executive officers” (our principal executive officer, principal financial officer and three other most highly compensated executive officers) in 2016 :
James J. Piro , President and Chief Executive Officer;
James F. Lobdell , Senior Vice President, Finance, Chief Financial Officer and Treasurer;
Maria M. Pope , Senior Vice President, Power Supply, Operations and Resource Strategy;
J. Jeffrey Dudley , Vice President, General Counsel and Corporate Compliance Officer; and
William O. Nicholson , Senior Vice President, Customer Service, Transmission and Distribution.
Executive Summary                                                
2016 BUSINESS HIGHLIGHTS
In 2016 we extended our strong track record of achieving solid operating performance while implementing our long-term strategic plans. While we faced some unexpected challenges that affected our financial performance, we were able to finish the year toward the upper end of our revised earnings guidance. Below we describe some of our accomplishments for the year.
Financial Performance
Net income, return on equity (“ROE”), and diluted earnings per share (“EPS”) were up relative to 2015.
Net income and ROE for 2016 were $192.7 million and 8.38%, respectively.
EPS was $2.16, slightly below our initial guidance of $2.20 to $2.35, but within the revised guidance range of $2.05 to $2.20 provided at our first quarter earnings call. The primary negative drivers of our financial performance were milder than forecasted weather conditions during 2016 (approximately $0.22 per share) and increased costs to complete our Carty Generating Station and begin the process to pursue litigation against the contractor and sureties (approximately $0.05 per share).
Utility Operations
Our customer satisfaction national rankings were top quartile for residential, general business and key customers.
Generation plant availability was 93.43% for 2016, above the maximum performance target under our annual incentive plan. (See “Annual Cash Incentive Awards” below for details about how we calculate and set performance targets for generation plant availability.)
Our net variable power cost savings exceeded the maximum performance level under our annual incentive award program.
Capital Investments
On July 29, 2016, we placed the Carty Generating Station, a 440 MW natural gas-fired baseload resource in Eastern Oregon, into service. The plant continues to operate as designed and had a 92.01% availability rate through December 2016. Beginning

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August 1, 2016, PGE began recovering $514 million of capital costs for the construction of the Carty Generating Station, as well as the plant’s operating costs approved as a part of the 2016 General Rate Case. As a result of the default and termination of the general contractor for the project, PGE expects the total capital expenditures to exceed this amount, and is currently forecasting costs, including allowance for funds used during construction, of $640 million. This forecast does not reflect offsetting amounts that may be received under a performance bond PGE obtained on the project, or from the contractor or its parent company . PGE continues to pursue legal action against the contractor and Liberty Mutual and Zurich North America, the two sureties that issued the performance bond.
Regulatory Progress
PGE partnered with a diverse group of stakeholders, including consumer advocates and environmental organizations, on a proposal to transition Oregon off coal-fired electricity generation and to double the renewable portfolio standard to 50% for the state’s two largest utility companies. The bill received bipartisan support in the Oregon legislature and was signed into law as the Oregon Clean Electricity and Coal Transition Plan on March 11, 2016.
On November 15, 2016, we filed our 2016 Integrated Resource Plan (“IRP”) with the Oregon Public Utility Commission (“OPUC”), which would put PGE on target for meeting Oregon’s expanded renewable energy requirements. The IRP calls for increases in energy efficiency and customer-side demand response, renewable energy resources, and flexible dispatchable resources. PGE is targeting mid-2017 for acknowledgement of the IRP, after a period for review and comment by OPUC staff and stakeholders.
On December 27, 2016, we filed our Transportation Electrification Plan with the OPUC, as contemplated by the Oregon Clean Electricity and Coal Transition Plan. In its filing, PGE proposed a variety of pilots to build more electric transportation infrastructure, educate customers about the benefits of electricity as a fuel, and implement innovative programs to test new technologies.
ALIGNMENT OF EXECUTIVE PAY WITH PERFORMANCE
Our executive pay for 2016 reflected the alignment of our incentive program with company performance. We performed at maximum levels relative to three of the goals of our annual cash incentive program (customer satisfaction, generation plant availability and power cost management) but below target relative to two of our goals (electric service power quality and earnings per share), which resulted in executive awards that were 85.8% to 99.8% of annual cash incentive target awards. Under our 2014-2016 equity incentive awards, above-target regulated asset base performance and total shareholder return performance were partially offset by below-target performance relative to our ROE goal, resulting in payouts that were 116.3% of target awards. For a detailed discussion of these awards, see pages 28 to 35.

How We Make Compensation Decisions                                
COMPENSATION PHILOSOPHY
The goals of our executive compensation program are to attract and retain highly qualified executives and to provide them with incentives to advance the interests of our stakeholders, which include our customers, our shareholders, our employees, and the communities we serve. To accomplish these goals, we observe the following principles:
Performance-Based Pay
A significant portion of our executives’ pay should be based on company performance relative to key stakeholder interests.
Greater responsibility should be accompanied by a greater share of the risks and rewards of company performance.
Executive pay should encourage financial and operational improvements, but not at the expense of the safety and reliability of our operations.
Reasonable, Competitive Pay
Executive pay should be competitive, but other considerations, such as individual qualifications, company performance, and internal equity should also play a role in determining executive compensation.
COMPENSATION PRACTICES
The Compensation and Human Resources Committee (which we sometimes refer to as our “Compensation Committee”) regularly reviews the company’s compensation practices and policies to ensure that they promote the interests of the company’s stakeholders. Listed below are some of the most important aspects of our program.

Significant pay at risk . In 2016, incentive awards with no guaranteed payouts constituted 54.5% to 74.0% of our named executive officers' target total direct compensation (base salary plus variable incentive awards, assuming target performance).

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Rigorous performance metrics. We base incentive award payouts on company performance relative to quantifiable goals whose achievement represents a meaningful stretch.
Diversified incentive awards. Our incentive awards reflect a reasonable balance between short-term and long-term performance, and awards are based on both operational and financial results.
Modest stock award program. Our three-year average burn rate (the total number of equity award shares granted over a three-year period divided by the weighted average of the shares outstanding) was 0.23% for 2014 through 2016, which puts us near the median relative to our peers.
Meaningful stock ownership guidelines . Our stock ownership guidelines are three times base salary for our CEO and one times base salary for our other executives, targets that are significant but commensurate with the size of the our executives’ stock awards.
Clawback of incentive pay. We have a clawback policy that authorizes our Compensation Committee to seek reimbursement of incentive compensation from executive officers if the board of directors determines that the officer has engaged in certain misconduct that caused or contributed to the need for a material restatement of our financial results.
No employment agreements. We believe that executive employment agreements that guarantee levels of compensation generally do not advance the interests of our stakeholders. None of our current executive officers has an employment contract.
Double-trigger stock vesting and enhanced cash severance. Following a change in control, our executives are entitled to accelerated vesting of long-term incentive awards and enhanced cash severance payments only if their employment is terminated.
No hedging or pledging . Our insider trading policy prohibits directors, officers and employees from entering into hedging or pledging transactions or short sales of our company stock.
Reasonable use of compensation market data. We evaluate our executive pay by reference to the median of our compensation peer group, but we do not set compensation components to meet specific benchmarks.
No significant perquisites. Our executives participate in health and welfare benefit programs on the same basis as other full-time employees and enjoy only modest perquisites.
No guaranteed tax gross-ups . We have no arrangements that entitle our executives to tax gross-ups.
No current SERP program . None of the company’s current executives participate in a supplemental executive retirement program.
No dividends or dividend equivalents on unvested shares . Recipients of awards under our long-term incentive program earn dividend equivalent rights only on shares that vest.
Reasonable severance arrangements . The maximum amount payable under our severance plan is one year’s base salary absent a change in control, and one year’s base salary plus the target value of an executive’s annual incentive award in the case of a termination following a change in control.
ROLES AND RESPONSIBILITIES
Compensation Committee and Independent Directors
The Compensation Committee, which consists of five independent directors, is responsible for developing and overseeing the company’s executive compensation program. The Compensation Committee reviews the performance of all of the executive officers, and establishes base salaries and grants incentive awards for the executive officers other than the CEO. The committee also reviews the company’s executive compensation plans and makes or recommends plan changes to the Board of Directors.
Beginning in 2016, we modified the process for establishing our CEO’s annual compensation. In prior years, the committee approved the CEO’s annual compensation, including base salary, and annual cash incentive and long-term equity awards and incentive award payouts, after discussing its recommendations with the other independent directors. Under the process implemented in 2016, independent directors, acting as a committee of the board, approve the CEO’s annual compensation following a recommendation from the Compensation Committee.
In carrying out its responsibilities, the Compensation Committee is assisted by the company’s management, Human Resources staff, and an independent compensation consultant.
Management
The company’s officers do not determine executive pay. Management provides information and recommendations on compensation matters to the Compensation Committee, particularly in areas requiring detailed knowledge of company operations and the utility industry. Our CEO evaluates the performance of the other officers and makes recommendations regarding their pay based on his assessment of a variety of factors, including their individual performance, experience, job scope, business unit or business function performance, competitive market conditions and retention risk. Our CEO does not make recommendations regarding his own compensation.

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Compensation Consultant
The Compensation Committee retained F.W. Cook to serve as its executive compensation consultant in 2016. F.W. Cook’s assignments for 2016 included the following:
Recommendation of a group of peer companies used for purposes of market comparisons;
Review of the company’s executive compensation program, including compensation philosophy, compensation levels in relation to company performance, pay opportunities relative to those at comparable companies, short- and long-term mix and metric selection, executive benefits and perquisites, stock ownership levels and wealth potential, and stock ownership guidelines;
Review of the company’s director compensation program, including design considerations such as ownership guidelines and vesting terms;
Reporting on emerging trends, legislative developments and best practices in the area of executive and director compensation; and
Attendance at Compensation Committee meetings.

Before engaging F.W. Cook, the Compensation Committee reviewed the firm’s qualifications, as well as its independence and the potential for conflicts of interest. The committee determined that F.W. Cook is independent and its services to the committee do not create any conflicts of interest. The committee has the sole authority to approve F.W. Cook’s compensation, determine the nature and scope of its services, and terminate the engagement. F.W. Cook does not perform other services for or receive other fees from the company.
USE OF COMPENSATION MARKET DATA
We consider compensation market comparisons to ensure the competitiveness of our executives’ pay. We evaluate pay by reference to the median of the market, but we do not automatically adjust pay elements to meet specific benchmarks.
For its 2016 compensation decisions, the Compensation Committee relied on information provided by F.W. Cook regarding the compensation practices of a peer group of companies as well as broader utility industry survey data. The peer group data were compiled from proxy statements and other public filings as well as data derived from the Willis Towers Watson Comp Online database. Utility industry survey data were collected from the Willis Towers Watson Energy Services Executive Database. Historical cash compensation data were updated at a 3% annual growth rate.
To select our peer group, each year we begin with the group of companies that we use to evaluate our performance relative to financial metrics. Our financial peer group includes companies that we believe represent the best match with PGE based on the following criteria:
Vertically Integrated Utility .  Our peer companies should be vertically integrated utilities, with a business mix either focused on regulated electric operations or a balance of regulated electric and regulated gas operations.
Minimal Non-Regulated Business Activities . Non-regulated businesses should not be key drivers of the financial performance and strategy of our peer companies.
Market Capitalization .  Our peer companies should be in the small to mid-cap range ($1 to $10 billion in market capitalization), with adequate liquidity and size to attract key utility-focused institutional investors while also maintaining a retail investor base.
Investment-Grade Credit Ratings . Our peer companies should have credit ratings that allow for financing at a reasonable cost in most market environments.
Balanced Customer Mix . Our peer companies should have a balanced retail, commercial and industrial mix and service territories not overly reliant on one key customer or industry sector.
Regulatory Environment . Our peer companies should have a comparable cost of service ratemaking process and allowed return on equity, as well as a history of allowed recovery on regulatory assets, fuel and power costs and legitimate deferred costs.
Capital Structure . Our peer companies should demonstrate moderate leverage (generally less than 60% debt to total capitalization ratio) and no significant liquidity concerns.
Growth Opportunities . Our peer companies should have growth opportunities centered on adding to rate base and a majority of rate base investments recovered through a state-level regulatory process.
We then review this group for suitability as a peer group for compensation matters. We seek to maintain a peer group in which we are positioned near the median relative to certain key financial measures, including company revenues, market capitalization and enterprise value.

26



After considering information provided by F.W. Cook, the Compensation Committee selected the following companies to serve as our peer group for 2016:
2016 PEER GROUP
Allete, Inc.
Great Plains Energy Incorporated
PNM Resources, Inc.
Alliant Energy Corporation
IDACORP, Inc.
SCANA Corporation
Avista Corporation
Northwest Natural Gas Company
TECO Energy, Inc.
Black Hills Corporation
NorthWestern Corporation
UIL Holdings Corporation
Cleco Corporation
OGE Energy Corp.
Westar Energy, Inc.
El Paso Electric Company
Pinnacle West Capital Corporation
 

As shown below, PGE is positioned near the median of its current compensation peer group in terms of revenue, net income, market capitalization and enterprise value.

PGE vs. PEER GROUP
 
Revenues (1)
Net Income (2)
Market Capitalization (as of 12/31/16)
Enterprise Value (as of 12/31/16)
75th Percentile
$
2,582

$
321

$
7,335

$
10,995

Median
1,428

197

4,060

6,132

25th Percentile
1,308

111

2,740

4,700

PGE
1,898

183

3,853

6,142

PGE Percentile Rank
53

47

47

53


(1)
These amounts are based on revenues for PGE and the peer group companies as reported for the 12 months ending September 30, 2016.
(2)
These amounts are based on net income for PGE and the peer group companies as reported for the 12 months ending September 30, 2016.
CONSIDERATION OF “SAY-ON-PAY” VOTE
The Compensation Committee considers the results of the annual shareholder “Say-on-Pay” advisory vote in developing the company’s executive compensation program. At our 2016 annual meeting of shareholders, over 99.2% of the votes cast approved our compensation program as described in our 2016 proxy statement. We believe these results reflect broad shareholder support for our compensation programs and decisions. Accordingly, while we made some changes to our incentive pay programs to improve alignment with stakeholder interests, we retained the core design of our compensation program for 2016. We will continue to consider the results of annual shareholder advisory votes on executive compensation, as well as any feedback we may receive from shareholders during the course of the year.
Elements of Compensation                                        
Our executive pay includes the following elements:
Base salaries;
Annual cash incentive awards;
Long-term equity incentive awards; and
Other standard benefits, including retirement benefits, health and welfare benefits and modest perquisites.
We discuss each of these elements in the following sections.


27



BASE SALARIES
Overview
We pay base salaries to provide a fixed amount of compensation at levels needed to attract and retain qualified executives. The Compensation Committee considers the recommendations of our CEO before setting the base salaries of the executive officers other than the CEO. For 2016, the committee made a recommendation to the other independent directors, and all independent directors as a group set the CEO’s base salary.
2016 Base Salaries
For 2016, base salary increases for our named executive officers averaged 3%.
2015 and 2016 BASE SALARIES
 
2015 Salary*
2016 Salary**
Annual Increase
James J. Piro
$
775,400

$
798,662

3.0
%
James F. Lobdell
402,500

420,000

4.3
%
Maria M. Pope
438,600

450,000

2.6
%
J. Jeffrey Dudley
362,250

370,000

2.1
%
William O. Nicholson
309,750

320,000

3.3
%
* Effective April 13, 2015. ** Effective April 11, 2016.
ANNUAL CASH INCENTIVE AWARDS
Overview
We make annual cash incentive awards to our executives to provide them with incentives to advance stakeholder interests by linking their pay to short-term company performance in key financial and operational areas.
We grant annual cash incentive awards to our executives under our 2008 Annual Cash Incentive Master Plan for Executive Officers (“Annual Cash Incentive Plan”). The plan authorizes the Compensation Committee to make cash awards for the achievement of individual, department, or corporate goals. Each year the Compensation Committee establishes performance goals and a formula for calculating awards. In the first quarter of the following year the committee determines the amount of the awards by comparing performance against the goals.
Under the terms of the Annual Cash Incentive Plan, the Compensation Committee is required to exclude the effect of non-recurring, unusual or extraordinary events in determining the achievement of performance goals if the awards are intended to qualify for the exemption for “performance-based compensation” under Internal Revenue Code section 162(m) (“162(m) awards”). Examples of these types of events include: (i) regulatory disallowances, (ii) corporate restructuring, (iii) gains or losses on the disposition of a major asset, (iv) changes in regulatory, tax or accounting regulations or laws, (v) resolution or settlement of litigation and (vi) the effect of a merger. The committee also has discretion to adjust 162(m) awards downward by any amount it deems appropriate, but does not have discretion to adjust 162(m) awards upward. The 2016 annual cash incentive awards made to the company’s executive officers were intended to qualify as 162(m) awards.  The committee did not identify any non-recurring, unusual or extraordinary events that required adjustments to actual performance results under these awards and did not exercise its discretion under the plan to adjust the awards downward.
See page 36 under the heading “Tax Considerations” for a discussion of Internal Revenue Code section 162(m).
2016 Annual Cash Incentive Award Program
Under our 2016 annual cash incentive program, each officer’s award was calculated by multiplying a target award by the sum of two percentages: a “financial performance percentage” and an “operating performance percentage,” each weighted equally:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AWARD
 
=
 
TARGET AWARD
 
X
 
 
 
FINANCIAL PERFORMANCE %
X 50%
 
+
 
OPERATING PERFORMANCE %
X 50%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Target Awards.  Target awards (shown below) were established by multiplying base salary paid in 2016 by the applicable percentage shown below. The target awards of all of our executives were close to the competitive reference point for their positions.

28



2016 ANNUAL CASH INCENTIVE AWARDS
 
Target Awards (Award at Target Performance)
Award at Maximum Performance
Target Award as Multiple of Base Salary
James J. Piro
$
751,933

$
1,065,263

95.0%
James F. Lobdell
228,037

323,059

55.0%
Maria M. Pope
245,573

347,903

55.0%
J. Jeffrey Dudley
183,807

260,399

50.0%
William O. Nicholson
158,424

224,439

50.0%

Financial Performance Percentage . The financial performance percentage was based on the company’s 2016 diluted earnings per share (EPS) relative to a target established by the Compensation Committee. The table below shows the EPS required for threshold, target and maximum performance and the associated financial performance percentages. Results between threshold, target and maximum were interpolated to determine the actual performance percentage. EPS of at least 70% of the target was required to achieve any payout under the awards.

FINANCIAL PERFORMANCE TARGETS AND ASSOCIATED PAYOUT PERCENTAGES
 
Threshold   
Target   
Maximum   
Percentage of Target
85.0
%
100.0
%
115.0
%
Earnings Per Share
$
1.98

$
2.33

$
2.68

Performance Percentage
50.0
%
100.0
%
150.0
%

Operating Performance Percentage . The operating performance percentage for each named executive officer was based on results relative to three operating goals—generation plant availability, customer satisfaction, and electric service power quality and system reliability—and, in the case of Ms. Pope, a fourth operating goal of power cost management. To determine the overall operating performance percentage, a weighting for each goal was multiplied by a payout multiplier determined by results for that goal, and the resulting figures were summed. Performance results between threshold, target and maximum were interpolated to determine a specific payout multiplier.
To select the appropriate threshold, target and maximum levels of performance for the goals, we considered a variety of factors, including the probability of goal achievement, current performance relative to industry peers, and the need for further improvement. The following table describes the operating goals and shows the targets for threshold, target and maximum of performance. It also shows the payout multipliers associated with each of these performance levels.

29



OPERATING PERFORMANCE TARGETS AND ASSOCIATED PAYOUT PERCENTAGES
GENERATION PLANT AVAILABILITY
 
 
 
 
 
 
Threshold  
Target  
Maximum  
 
Performance Percentage
50.0
%
100.0
%
133.33
%
 
Performance Targets
86.14
%
88.93
%
91.60
%
 
 
 
 
 
 
Generation plant availability is measured by the amount of time that a generating plant is able to produce electricity over a certain period (determined by subtracting from total hours in the period all maintenance outage hours, planned outage hours and forced outage hours), divided by the number of hours in the period. To set the threshold, target and maximum performance levels for this goal, we established individual plant goals, which were then weighted to produce overall performance targets. To establish each individual plant goal, we subtracted, from the total number of hours in the year, the number of hours of expected outages for that plant for maintenance and other planned activities, plus a performance target for forced outage hours. Maximum performance targets for forced outages were set at 50% of the industry mean forced outage hours for a peer group of companies, while target and threshold performance levels were set at 2.9% and 5.9% less than the maximum, respectively, for each class of generating plant.

 
CUSTOMER SATISFACTION
 
 
 
 
 
 
Threshold  
Target  
Maximum  
 
Performance Percentage
50.0
%
100.0
%
133.33
%
 
Performance Targets
79.40
%
82.20
%
89.40
%
 
 
 
 
 
 
Customer satisfaction is measured by the average of the company’s residential, general business and key customer satisfaction scores, determined by calculating the weighted average of the following:
• Average of 4 quarterly ratings of the Market Strategies Study for Residential Customers.
• Average of 2 semiannual ratings of the Market Strategies Study for Business Customers.
• Annual rating results from the TQS Research, Inc. 2016 Annual Benchmark of Large Key Accounts.
These ratings are weighted by the annual revenue from each customer group that produces the annual rating.
ELECTRIC SERVICE POWER QUALITY & SYSTEM RELIABILITY
 
 
 
 
 
 
Threshold  
Target  
Maximum  
 
Performance Percentage
50.0
%
100.0
%
133.3
%
 
Performance Targets
 
 
 
 
SAIDI (weighted 70%)
83.00

76.00

71.00

 
SAIFI (weighted 15%)
0.80

0.70

0.65

 
MAIFI (weighted 15%)
2.00

1.60

1.30

 
 
 
 
 
 
• SAIDI is a service reliability index equal to the sum of customer outage durations (in minutes) divided by total number of customers served.
• SAIFI is the total number of customer outages divided by total number of customers served.
• MAIFI is the total number of customer momentary interruptions divided by total number of customers.
POWER COST MANAGEMENT
 
 
 
 
 
 
Threshold  
Target  
Maximum  
 
Performance Percentage
50.0
%
100.0
%
133.33
%
 
Performance Targets
$11.1M

$22.2M

$29.5M

 
 
 
 
 
 
Power Cost Management is measured by net variable power cost reduction, which is equal to wholesale power and fuel sales less the sum of all variable power costs, including wholesale (physical and financial) power purchases, fuel costs, and other costs that change as power output changes.

30



The weightings assigned to the goals that determine the operating performance percentage for the named executive officers were as follows:
James J. Piro, James F. Lobdell and J. Jeffrey Dudley:
Generation Plant Availability
40%
Customer Satisfaction
30%
Electric Service Power Quality & System Reliability
30%
Maria M. Pope:
Generation Plant Availability
40%
Power Cost Management
40%
Electric Service Power Quality & System Reliability
10%
Customer Satisfaction
10%
William O. Nicholson:
Generation Plant Availability
20%
Electric Service Power Quality & System Reliability
40%
Customer Satisfaction
40%
2016 Annual Cash Incentive Award Results
In 2016 , we achieved maximum levels of performance with respect to the customer satisfaction, generation plant availability and power cost management goals. Results for the electric service power quality and system reliability goals were at maximum on two performance measures, below threshold on one measure, and below target overall. These results yielded operating performance percentages between 96% to 124% for the named executive officers, depending on the weighting assigned to the goals. 2016 earnings per share of $2.16 was approximately 93% of the target of $2.33, which resulted in a financial performance percentage of 75.7%.
ANNUAL CASH INCENTIVE PERFORMANCE RESULTS
Annual Cash Incentive Metrics
Actual
Threshold
Target
Max
Performance %
Financial Goal
 
 
 
 
 
EPS
$
2.16

$
1.98

$
2.33

$
2.68

75.7%
Operating Goals
 
 
 
 
 
Generation Plant Availability
93.43%
86.14%
88.93%
91.6%
133.3%
Customer Satisfaction
89.60
%
79.40
%
82.20
%
89.40
%
133.3%
Electric Service Power Quality and System Reliability
SAIDI: 97.0
SAIFI: 0.59
MAIFI: 1.10
SAIDI: 83.0
SAIFI: 0.80
MAIFI: 2.00
SAIDI: 76.0
SAIFI: 0.70
MAIFI: 1.60
SAIDI: 71.0
SAIFI: 0.65
MAIFI: 1.30
SAIDI: 0.0%
SAIFI: 133.3%
MAIFI: 133.3%
Power Cost Management
$44.2M
$11.1M
$22.2M
$29.5M
133.3%
After considering the results relative to the performance goals, the Compensation Committee approved cash incentive awards for the named executive officers, other than the CEO, that were determined by applying the performance results to the methodology under the plan for calculating awards. In the case of the CEO, the committee made a recommendation to the other independent directors with respect to the CEO’s cash incentive award, and all of the independent directors, as a group, approved the final payout. The committee did not identify any non-recurring, unusual or extraordinary events that required adjustments to actual performance results for 2016 and did not exercise its discretion under the plan to adjust awards downward.

31



NAMED EXECUTIVE OFFICER ANNUAL INCENTIVE AWARD PAYOUTS
Named Executive Officer
Financial Performance Percentage
Operating Performance Percentage
Final Award
Final Award as % of Target
James J. Piro
75.7%
105.3%
$
680,574

90.5%
James F. Lobdell
75.7%
105.3%
206,396
90.5%
Maria M. Pope
75.7%
124.0%
245,180
99.8%
J. Jeffrey Dudley
75.7%
105.3%
166,364
90.5%
William O. Nicholson
75.7%
96.0%
135,991
85.8%
LONG-TERM EQUITY INCENTIVE AWARDS
Overview
We believe the interests of our management should be aligned with the long-term interests of our shareholders by ensuring that they share the risks and rewards of company stock ownership. We accomplish this goal by granting stock-based incentive awards under our 2006 Stock Incentive Plan. The Compensation Committee is authorized under the plan to grant stock-based awards to directors, officers and other employees. The committee has authority to determine the amount and type of awards, up to certain maximum amounts described in the plan.
In 2016 , as in prior years, all of our stock-based awards to executives consisted of restricted stock units with performance-based vesting conditions (“performance RSUs”). There are no guaranteed payouts under these awards, meaning 100% of the performance RSUs granted to executives are at risk. To focus our executives’ efforts on long-term results, we grant awards that vest over a three-year performance period. We grant performance RSUs because we believe they are the best vehicle to advance several of the objectives of our compensation program:
Pay for Performance . Performance RSUs create incentives to achieve key company goals.
Retention . Performance RSUs further the goal of retention, because the receipt of an award requires continued employment by the company.
Cost-Effectiveness . Performance RSUs are relatively easy to administer and straightforward from an accounting standpoint.
Alignment with Shareholders . RSUs create a focus on shareholder return because the value of an award is based on the value of the underlying common stock, and awards can create an ongoing stake in the company through stock ownership once they vest.
2016-2018 Long-Term Incentive Awards
In 2016 , equity grants constituted approximately 32.1% to 49.4% of our named executive officers’ target total direct compensation (base salary, cash incentive and equity incentive award opportunities, assuming target levels of performance).
Number of Performance RSUs Granted.  The number of RSUs granted was the product of each officer’s 2016 base salary and an award multiple, divided by the closing price of the company’s common stock on the grant date:
# of RSUs Granted
=
2016 Base Salary x Award Multiple
Grant Date Closing Common Stock Price
The table below shows the award multiples we used to calculate the awards for the named executive officers and the estimated value of the awards on the grant date (assuming that the company will perform at target levels over the performance period and using the closing price of the company’s common stock on the grant date).
2016-2018 LONG-TERM INCENTIVE AWARDS
Name
Award Value
at Target Performance
Award Value at Maximum Performance
Target Award as Multiple of Base Salary
James J. Piro
$
1,517,452

$
2,276,178

1.9
James F. Lobdell
461,998

693,016

1.1
Maria M. Pope
494,985

742,496

1.1
J. Jeffrey Dudley
332,983

499,493

0.9
William O. Nicholson
206,485

309,727

0.7

32



Performance Measures For our 2016 awards, we retained the three measures we have used since 2013: total shareholder return, ROE as a percentage of allowed ROE, and regulated asset base growth.
Total Shareholder Return
Measured by:  Total shareholder return (TSR) over the three-year performance period relative to the TSR achieved by a comparison group of companies over the same three-year period. TSR measures the change in a company’s stock price for a given period, plus its dividends (or other earnings paid to investors) over the same period, as a percentage of the stock price at the beginning of the period. To calculate the value of stock at the beginning and end of the period, we use the average daily closing price for the 20-trading day period ending on the measurement date. Relative TSR will be determined by ranking the company and the peer companies from highest to lowest according to their respective TSR. The percentile performance of the company relative to the peer companies will be determined based on this ranking. The comparator group consists of companies on the Edison Electric Institute regulated index on December 31, 2015, excluding those that have completed or announced a merger, acquisition, business combination, “going private” transaction or liquidation. Companies that are in bankruptcy will be assigned a negative one TSR.
Why we use this measure:   TSR is a direct measure of value creation for shareholders. We use relative rather than absolute TSR to ensure that payouts reflect the company’s performance rather than general market conditions. To minimize the risk of a single day extreme impacting the measurement of long-term shareholder return, we calculate share value using the average daily closing price for the 20-trading day period ending on the measurement date.
Return on Equity
Measured by:  The average of each of three consecutive years’ Accounting ROE as a percentage of Allowed ROE. “Accounting ROE” is defined as annual net income, as shown on the company’s income statement, divided by the average of the current year’s and prior year’s shareholders’ equity, as shown on the balance sheet. “Allowed ROE” is the return on equity that the Oregon Public Utility Commission (OPUC) permits the company to include in the rates it charges its customers.
Why we use this measure:  This goal measures how successful the company is at generating a return on dollars invested by its shareholders. Because the company’s return on its investment can fluctuate based on OPUC rate case orders, we believe the appropriate measure of our ability to generate earnings on shareholder investments is Accounting ROE as a percentage of Allowed ROE.
Regulated Asset Base
Measured by:  Regulated asset base at the end of the three-year period measured against an asset base target established by the Compensation Committee.
Why we use this measure : Asset base provides a measure of the amount the company invests in its base business. By executing our investment strategy — bringing capital projects into service on time and within budget — we meet the needs of our customers while also creating value for our shareholders.
Determination of Awards. At the end of the performance period, the Compensation Committee will determine the results for the three performance goals. Performance results will be interpolated between threshold, target and maximum payout levels to determine payout percentages for each goal based on the schedule below. Results below threshold for any goal will result in zero payouts for that goal. These results will then be weighted equally and added to determine a payout percentage ranging from 0 to 150% of the target number of shares, subject to the Compensation Committee’s right to adjust payouts downward, as described below. The following table presents the threshold, target and maximum levels for the three performance measures, as a percentage of the target awards.


33



PERFORMANCE TARGETS AND PAYOUT PERCENTAGES
 
 
Threshold*
Target
Maximum
 
Weighting
 
Percentage Earned
 
(50% Payout)
(100% Payout)
(150% Payout)
 
 
 
 
Goals
 
 
 
 
 
 
 
Total Shareholder Return
30 th  Percentile
of EEI Regulated Index
50 th  Percentile
of EEI Regulated Index
70 th  Percentile
of EEI Regulated Index
 
33.3%
 
0 to 50%
Return on Equity
75%
of Allowed ROE
90%
of Allowed ROE
100%
of Allowed ROE
 
33.3%
 
0 to 50%
Regulated Asset Base
(Thousands)
90%
of Targeted Asset Base ($4,931,000)
95%
of Targeted Asset Base ($5,100,000)
100%
of Targeted Asset Base ($5,368,000)
 
33.3%
 
0 to 50%
 
 
 
 
 
 
 
 
 
 
 
Total Percentage of Target Award Earned
0 to 150%
*Performance results below the threshold level for any goal willl result in zero payouts with respect to that goal.
Dividend Equivalent Rights.   Each named executive officer will receive a number of dividend equivalent rights (“DERs”) equal to the number of vested performance RSUs. A DER represents the right to receive an amount equal to dividends paid on the number of shares of common stock equal to the number of the vested performance RSUs, which dividends have a record date between the date of the grant and the end of the performance period. DERs will be settled in shares of common stock after the related performance RSUs vest. The number of shares payable on the DERs will be calculated using the fair market value of common stock as of the date the committee determines the number of vested performance RSUs.
Service Requirement.   Vesting of the performance RSUs and their related DERs generally requires that the officer continue to be employed by the company during the performance period. However, if the officer’s employment is terminated due to retirement, death or disability before the normal vesting under the terms of the grant, a portion of the award will vest at the end of the performance period. See the discussion of this issue in the section below entitled “Termination and Change in Control Benefits.”
Tax Treatment. These awards were intended to constitute “performance-based compensation” for purposes of Internal Revenue Code section 162(m). Consequently, under the terms of the 2006 Stock Incentive Plan, the Compensation Committee is required to adjust for extraordinary, unusual, or non-recurring events in determining performance results. Examples of these types of event include: (i) regulatory disallowances or other adjustments, (ii) restructuring or restructuring-related charges, (iii) gains or losses on the disposition of a business or major asset, (iv) changes in regulatory, tax or accounting regulations or laws, (v) resolution and/or settlement of litigation and other legal proceedings or (vi) the effect of a merger or acquisition. In the case of 162(m) awards, the committee also has discretion under the plan to adjust awards downward, but not upward, and may exercise its discretion to include the impact of events that decrease performance results.
2014-2016 Long-Term Incentive Awards
On February 14, 2017, the Compensation Committee met to determine the results for the three performance goals and the number of shares that would vest under the performance RSUs granted to officers and employees, other than the CEO, in 2014. In the case of the CEO, the Compensation Committee made a recommendation to the other independent directors concerning the vesting of the CEO’s performance RSUs, and the independent directors, as a group, determined the number of shares that would vest under such RSUs. These awards were made under the company’s 2006 Stock Incentive Plan. The maximum number of performance RSUs that could vest under the awards was a function of company performance relative to the three performance RSU goals described above.
Actual performance results were interpolated between threshold, target and maximum payout levels to determine payout percentages and are shown in the following tables:

34



RETURN ON EQUITY RESULTS
 
 
REGULATED ASSET BASE RESULTS
 
TSR RESULTS
 
2014
2015
2016
Average
 
 
As of 12/31/2016 (Thousands)
 
 
2016
Allowed ROE
9.75
%
9.68
%
9.60
%
 
 
Target Asset Base
$5,269,224
 
Target
50th Percentile
Accounting ROE
9.40
%
8.26
%
8.38
%
 
 
Actual Asset Base
$5,321,995
 
Actual
50th Percentile
Accounting ROE as % of Allowed ROE
96.4
%
85.3
%
87.3
%
89.7%
 
Actual Amount as % of Target
101.0%
 
 
 
Payout Percentage
 
 
98.9%
 
 
150.0%
 
 
100.0%

The Compensation Committee did not exercise its discretion under the 2006 Stock Incentive Plan to adjust award amounts downward. Based on these results, 116.3% of the 2014-2016 performance RSUs vested, resulting in the award values set forth below. These values reflect the closing price of the company’s common stock on the vesting date of February 15, 2017.
2014-2016 LONG-TERM INCENTIVE AWARD PAYOUTS
 
RSUs Vested
Vesting Date Award Value *
James J. Piro
46,132

$
1,985,060

James F. Lobdell
12,860

553,366

Maria M. Pope
15,801

679,917

J. Jeffrey Dudley
10,141

436,367

William O. Nicholson
7,587

326,469

*Based on company stock price of $43.03 on vesting date of February 15, 2017.

The terms of the 2014-2016 long-term incentive awards are described more fully in the company’s 2015 proxy statement under the heading “2014 Grants of Plan-Based Awards.”
OTHER BENEFITS
As employees of PGE, our named executive officers are eligible to participate in a number of broad-based company-sponsored benefits programs on the same basis as other full-time employees. These include the company’s health and welfare programs (including medical/dental/vision plans, disability insurance, and life insurance) and 401(k) plan. Employees hired before February 1, 2009 — including all of the current named executive officers — also accrue benefits under our defined benefit pension plan. In addition, our executive officers and other key employees are eligible to participate in a non-qualified deferred compensation plan, which allows participants to defer their compensation above the Internal Revenue Service limits imposed on 401(k) plans. The deferred compensation plan and 401(k) plan also contribute to the competitiveness of our pay by providing a modest matching contribution for salary deferrals and compensating participants for lower pension payments they may receive as a result of participating in the plans. See “Executive Compensation Tables — Non-Qualified Deferred Compensation” below for more details. Finally, our executive officers are eligible for severance pay and outplacement assistance to help them with a transition to new employment in the event of a reorganization or similar business transaction resulting in an involuntary termination or a voluntary termination in response to a change in job duties. These benefits are described below under “Executive Compensation Tables — Termination and Change in Control Benefits.” We do not provide our executives with significant perquisites.
Other Compensation Practices                                        
STOCK OWNERSHIP POLICY
In 2011 we adopted a stock ownership and holding policy for our executive officers. The primary objectives of the policy are to:
Create financial incentives that align the interests of executive officers with strong operating and financial performance of the company; and

35



Encourage executive officers to operate the business of the company with a long-term perspective.
Under the policy, our CEO is required to hold company stock with a value equal to at least three times his annual base salary, while the other executive officers are required to hold company stock with a value equal to at least one times their annual base salary. The policy does not require executive officers to immediately acquire shares in an amount sufficient to meet the holding requirement. However, until the holding requirement is met, executive officers are subject to certain restrictions on their ability to dispose of shares of company stock. The CEO is required to retain 100% of his shares until he meets the holding requirement. All other executive officers are required to retain an amount of shares equal to 50% of their net after-tax performance-based equity awards until the holding requirement is met. Under an amendment to our stock ownership requirements adopted in 2016, the number of shares required to satisfy the stock ownership requirements is re-calculated annually, based on the closing price of the company’s common stock on the date of the calculation. The Compensation Committee also reviews each officer’s holdings annually to ensure that appropriate progress toward the ownership goals is being made. Our stock ownership policy for non-employee directors is described on page 10 of this proxy statement.
CURRENT EQUITY GRANT PRACTICES
Under the terms of our 2006 Stock Incentive Plan, the Compensation Committee is authorized to make grants of equity awards, but may delegate this authority as it deems appropriate. The committee has delegated authority to our CEO to make annual discretionary grants of RSUs with performance-based or time-based vesting conditions to non-executive employees for the purposes of attracting and retaining qualified employees. The maximum RSU value that the CEO is authorized to award is $500,000 in the aggregate and $50,000 per award. The Compensation Committee has not delegated the authority to make executive awards.
We expect that we will continue to grant performance RSUs to the executive officers and other key employees, and to delegate authority to our CEO to make limited discretionary equity awards for attraction and retention purposes. We also expect to make annual grants of restricted stock units with time-based vesting conditions to the company’s directors.
The committee has not adopted a formal policy governing the timing of equity awards. However, we have generally made awards to officers in the first quarter of the fiscal year, and we expect to continue this practice.
TAX CONSIDERATIONS
Section 162(m) of the Internal Revenue Code generally places a limit of $1 million on the compensation that a publicly held corporation may deduct with respect to its CEO and its three next most highly paid executive officers other than the CFO. Regulations under Internal Revenue Code section 162(m) provide that awards will be considered “performance-based compensation” exempt from the $1 million limit under section 162(m) if, among other requirements: (i) the awards are payable solely on account of shareholder-approved performance goals having been satisfied; (ii) the method of computing the amount payable upon satisfaction of the performance goals is stated in an objective formula; and (iii) the objective formula precludes discretion to increase the amount payable upon satisfaction of the goal, although discretion to adjust awards downward is permitted. We generally attempt to structure our incentive awards to executives so that they qualify as exempt performance-based compensation under section 162(m). Nevertheless, the Compensation Committee reserves the discretion to award compensation that is not deductible for federal income tax purposes if it determines that doing so is appropriate in light of the company’s compensation policies and goals.
CLAWBACK POLICY
In February 2017, our board of directors adopted a compensation clawback policy. Under the clawback policy, if our board of directors determines that a current or former executive officer has engaged in fraud, willful misconduct, a knowing violation of law or one of our corporate policies, or any act or omission not in good faith, that caused or otherwise contributed to the need for a material restatement of our financial results, the Compensation Committee will review all performance-based compensation earned by that executive officer during fiscal periods materially affected by the restatement. If, in the Compensation Committee’s view, the performance-based compensation would have been materially lower if it had been based on the restated results, the Compensation Committee will seek recovery from that executive officer of any portion of such performance-based compensation as it deems appropriate under the circumstances after a review of all relevant facts and circumstances. The board of directors has sole discretion in determining whether an executive officer’s conduct has or has not met any particular standard of conduct. The clawback policy applies to performance-based compensation awards made after the adoption of the policy.



36



EXECUTIVE COMPENSATION TABLES
Summary Compensation                                            
The table below shows the compensation earned by the company’s named executive officers during the years ended December 31, 2014 , 2015 and 2016 .
SUMMARY COMPENSATION TABLE
Name and Principal Position
Year
 
Salary (1)
 
Stock Awards
(2)
 
Non-Equity Incentive Plan Compensation (3)
 
Change in Pension Value and Non-Qualified Deferred Compensation Earnings
(4)
 
All Other Compensation (5)
 
Totals
James J. Piro
President and Chief Executive Officer
2016
 
$
836,431

 
$
1,517,452

 
$
680,574

 
$
135,052

 
$
148,124

 
$
3,317,633

2015
 
805,549

 
1,395,704

 
688,826

 
41,221

 
138,451

 
3,069,751

2014
 
789,028

 
1,255,429

 
730,622

 
214,340

 
108,421

 
3,097,840

James F. Lobdell
Senior Vice President, Finance, Chief Financial Officer and Treasurer

2016
 
449,074

 
461,998

 
206,396

 
114,897

 
45,824

 
1,278,189

2015
 
413,356

 
402,470

 
201,648

 
14,470

 
44,943

 
1,076,887

2014
 
357,540

 
349,986

 
193,503

 
247,236

 
37,560

 
1,185,825

Maria M. Pope
Senior Vice President, Power Supply, Operations and Resource Strategy

2016
 
477,576

 
494,985

 
245,180

 
55,384

 
60,683

 
1,333,808

2015
 
464,728

 
438,582

 
234,258

 
25,302

 
64,135

 
1,227,005

2014
 
451,076

 
429,997

 
269,552

 
67,259

 
57,839

 
1,275,723

J. Jeffrey Dudley
Vice President, General Counsel and Corporate Compliance Officer

2016
 
398,086

 
332,983

 
166,364

 
54,397

 
48,352

 
1,000,182

2015
 
385,729

 
289,784

 
169,364

 
(1,375
)
 
48,796

 
892,298

2014
 
367,145

 
275,988

 
178,742

 
110,026

 
142,607

 
1,074,508

William O. Nicholson
Senior Vice President, Customer Service, Transmission & Distribution

2016
 
322,903

 
223,992

 
135,991

 
120,053

 
39,627

 
842,566

2015
 
317,720

 
216,781

 
142,684

 
46,614

 
43,586

 
767,385

2014
 
303,579

 
206,485

 
146,212

 
252,063

 
29,549

 
937,888

(1)
Amounts in the Salary column include base salary earned and, where applicable, the value of paid time off deferred under the company's 2005 Management Deferred Compensation Plan (“2005 MDCP”).
(2)
Amounts in the Stock Awards column constitute the aggregate grant date fair value of awards of restricted stock units with performance-based vesting conditions (“performance RSUs”), computed in accordance with Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) Topic 718, Compensation - Stock Compensation, excluding the effect of estimated forfeitures related to service-based vesting. These amounts reflect the grant date fair value, in each case valued using the closing market price of the company's common stock on the New York Stock Exchange on the grant date, and may not correspond to the actual value that will be realized. The grant date fair values of the performance RSUs assume performance at target levels, which would allow the vesting of 100% of the RSUs awarded. If the maximum number of shares issuable under the performance RSUs had been used in this calculation in lieu of the target number of shares, the amounts in the table for fiscal 2016 would have been as follows:
Name
Maximum 2016 Performance RSU Value
James J. Piro
$
2,276,178

James F. Lobdell
693,016

Maria M. Pope
742,496

J. Jeffrey Dudley
499,493

William O. Nicholson
335,989


37




(3)
Amounts in the Non-Equity Incentive Plan Compensation column represent cash payments under the company's 2008 Annual Cash Incentive Master Plan for Executive Officers (“Annual Cash Incentive Plan”). The terms of the 2016 awards are discussed below in the section entitled “Grants of Plan-Based Awards.”
(4)    Amounts in this column include the increase or decrease in the actuarial present value of the named executive officers' accumulated benefits under the Portland General Electric Company Pension Plan (“Pension Plan”) and above-market interest in the 2005 MDCP. Also included are increases or decreases in deferred compensation account balances arising from the Pension Plan benefit restoration feature of the 2005 MDCP. This feature is explained below in the section entitled “Pension Benefits — MDCP Restoration of Pension Benefits.” These amounts for 2016 are shown below:
Name
 
Plan  
 
Increase or  Decrease in
Actuarial Present Value  
James J. Piro
 
Pension Plan
 
$
135,052

 
 
2005 MDCP
 

James F. Lobdell
 
Pension Plan
 
114,897

 
 
2005 MDCP
 

Maria M. Pope
 
Pension Plan
 
55,384

 
 
2005 MDCP
 

J. Jeffrey Dudley
 
Pension Plan
 
27,617

 
 
2005 MDCP
 
26,780

William O. Nicholson
 
Pension Plan
 
122,440

 
 
2005 MDCP
 
(2,387
)
The balance of the amounts in the Change in Pension Value and Non-Qualified Deferred Compensation Earnings column reflects above-market interest (defined as above 120% of the long-term Applicable Federal Rate) earned on balances under the 2005 MDCP and the Management Deferred Compensation Plan adopted in 1986 (”1986 MDCP”).
(5)
The figures in this column for 2016 include company contributions under the 2005 MDCP, the value of dividend equivalent rights earned under the 2006 Stock Incentive Plan (“DERs”), and company contributions to the 401(k) Plan, in the following amounts:

ALL OTHER COMPENSATION
Name 
2005 MDCP Contributions
DERs*
401(k) Contributions
Total
James J. Piro
$
4,749

$
117,967

$
15,900

$
138,616

James F. Lobdell
995

28,116

15,900

45,011

Maria M. Pope

48,235

15,900

64,135

J. Jeffrey Dudley
4,963

31,128

12,131

48,222

William O. Nicholson
95

27,595

15,900

43,590

*The value of the dividend equivalent rights was not incorporated into the “Stock Awards” column in the Summary Compensation Table.



38



Grants of Plan-Based Awards                                        
The following table provides information about awards granted to the named executive officers in 2016 .
 
 
 
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)   
 
Estimated Future Payouts Under Equity Incentive Plan Awards (2)   
 
 
Name
Grant Date   
 
Threshold  
 
Target   
 
Maximum  
 
Threshold
(Number  of
Shares)   
 
Target
(Number of
Shares)   
 
Maximum
(Number
of Shares)   
 
Grant Date Fair
Value of Stock
Awards (3)   
James J. Piro

 
$
375,966

 
$
751,933

 
$
1,065,263

 


 


 


 


 
2/17/2016
 
 
 


 


 
20,195

 
40,390

 
60,585

 
$
1,517,452

James F. Lobdell

 
114,018

 
228,037

 
323,059

 


 


 


 


 
2/17/2016
 


 


 


 
6,149

 
12,297

 
18,446

 
461,998

Maria M. Pope

 
122,786

 
245,573

 
347,903

 


 


 


 


 
2/17/2016
 
 
 


 


 
6,588

 
13,175

 
19,763

 
494,985

J. Jeffrey Dudley

 
91,904

 
183,807

 
260,399

 


 


 


 


 
2/17/2016
 


 


 


 
4,432

 
8,863

 
13,295

 
332,983

William O. Nicholson

 
79,212

 
158,424

 
224,439

 
 
 
 
 
 
 
 
2/17/2016
 

 

 

 
2,981

 
5,962

 
8,943

 
223,992

(1)
These columns show the range of potential payouts for cash incentive awards made in 2016 under the Annual Cash Incentive Plan. The amounts shown in the Threshold column are the payouts when threshold performance is achieved, which are 50.0% of target awards for each executive. The amounts in the Target column reflect payouts at target level of performance, which are 100.0% of the target awards. The amounts shown in the Maximum column reflect maximum payouts, which are 141.7% of the target awards. See the section of the Compensation Discussion and Analysis entitled “Annual Cash Incentive Awards” on pages 28 to 32 for a description of the terms of the awards.
(2)
These columns show the estimated range of potential payouts for awards of performance RSUs made in 2016 under the 2006 Stock Incentive Plan. The amounts shown in the Threshold column reflect the minimum number of RSUs that could vest, which is 50.0% of the target amount shown in the Target column. The number of RSUs shown in the Maximum column is equal to 150.0% of the target amount. See the section of the Compensation Discussion and Analysis entitled “Long-Term Equity Incentive Awards” on pages 32 to 35 for a description of the terms of the awards.
(3)
The grant date fair values for the performance RSUs assume performance at target levels and a stock price of $ 37.57 (the closing price of the company’s common stock on February 17, 2016, the date of the grant). The grant date fair values of the performance RSUs assume that the executive will continue to be employed by the company throughout the performance period.


39



Outstanding Equity Awards at Fiscal Year-End                            
The following table shows, for each named executive officer, the unvested performance RSUs that were outstanding on December 31, 2016 .
Name
Grant Date   
Number of
Units
of Stock
That Have
Not Vested   
Market Value
of Units of Stock
That Have Not
Vested
(4)   
Equity Incentive Plan  
Awards: Number of
Unearned Units That
Have Not Vested
(5)
Equity Incentive  
Plan Awards:
Market Value of
Unearned Units
That Have Not
Vested
(6)  
James J. Piro
02/17/2016 (1)


60,585

$
2,625,148

 
02/18/2015 (2)


56,294

2,439,219

 
03/05/2014 (3)
46,132

$
1,998,900



James F. Lobdell
02/17/2016 (1)


18,446

799,265

 
02/18/2015 (2)


16,233

703,376

 
03/05/2014 (3)
12,860

557,224



Maria M. Pope
02/17/2016 (1)


19,763

856,331

 
02/18/2015 (2)


17,690

766,508

 
03/05/2014 (3)
15,801

684,657



J. Jeffrey Dudley
02/17/2016 (1)


13,295

576,072

 
02/18/2015 (2)


11,688

506,441

 
03/05/2014 (3)
10,141

439,410



William O. Nicholson
02/17/2016 (1)


8,943

387,500

 
02/18/2015 (2)


8,744

378,878

 
03/05/2014 (3)
7,587

328,745



(1)
Amounts in this row relate to performance RSUs with a three-year performance period ending December 31, 2018. The awards will vest in the first quarter of 2019, when the Compensation Committee (or in the case of Mr. Piro, the independent directors) determines the performance results and whether to make any downward adjustments to payouts under the awards.
(2)
Amounts in this row relate to performance RSUs with a three-year performance period ending December 31, 2017. The awards will vest in the first quarter of 2018, when the Compensation Committee (or in the case of Mr. Piro, the independent directors) determines the performance results and whether to make any downward adjustments to payouts under the awards.
(3)
Amounts in this row relate to performance RSUs with a three-year performance period ending December 31, 2016. The awards vested on February 15, 2017, when the Compensation Committee (or in the case of Mr. Piro, the independent directors) determined the performance results and whether to make any downward adjustments to payouts under the awards. Amounts in this row are based on a performance percentage of 116.3%.
(4)
Amounts in this column reflect a value of $43.33 per unit (the closing price of the company's common stock on December 31, 2016 ) and performance percentage of 116.3%.
(5)
Amounts in this column are the number of performance RSUs granted in 2015 and 2016, none of which had vested as of December 31, 2016 . The amounts shown assume the maximum level of performance.
(6)
Amounts in this column reflect the value of performance RSUs granted in 2015 and 2016, assuming a value of $43.33 per unit (the closing price of the company's common stock on December 31, 2016 ) and performance at maximum levels.


40



Stock Units Vested                                                
The following table shows, for each of the named executive officers, the number and aggregate value of restricted stock units with performance-based vesting conditions and related dividend equivalent rights that vested during 2016.
Name
Number of Shares Acquired on Vesting of Restricted Stock Units
 
Value Realized on Vesting
James J. Piro
40,994

 
$
1,540,145

James F. Lobdell
9,300

 
349,401

Maria M. Pope
14,407

 
541,271

J. Jeffrey Dudley
10,061

 
377,992

William O. Nicholson