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. 1)
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EXPLANATORY NOTE
This Amendment No. 1 (“Amendment”) amends the Definitive Proxy Statement (the “Proxy Statement”) filed by Portland General Electric ("PGE," the “Company,” “we” or “us”) with the Securities and Exchange Commission ("SEC") on March 7, 2023. The Proxy Statement was filed in connection with the Company’s 2023 Annual Meeting of Shareholders to be held on April 21, 2023.
This Amendment is being filed to add Proposal 5: Advisory Vote on the Frequency of Holding an Advisory Vote on Executive Compensation, which is required by SEC rules to be included every six years regardless of a company’s frequency of holding “say-on-pay” votes historically. We are asking shareholders to approve, on an advisory and non-binding basis, the frequency of holding an advisory vote on executive compensation, as described in the Supplement to Proxy Statement dated March 10, 2023 (the “Supplement”). Our recommendation is that we continue to hold such an advisory vote on an annual basis.
This Amendment includes (i) the Supplement, which adds Proposal 5 to the Proxy Statement; (ii) the amended proxy card to be distributed to the Company’s shareholders reflecting the addition of Proposal 5; and (iii) the transmittal letter to shareholders accompanying these items. No other changes are being made to the Proxy Statement.
Dear Shareholder:
You previously received our proxy statement dated March 7, 2023 (the “Proxy Statement”) in connection with our 2023 Annual Meeting of Shareholders to be held on April 21, 2023. The attached Supplement is designed solely to add a Proposal 5 to the Proxy Statement, which is the Advisory Vote on the Frequency of Holding an Advisory Vote on Executive Compensation. We are asking shareholders to approve, on an advisory and non-binding basis, the frequency of holding an advisory vote on executive compensation. This proposal, which is required by the SEC to be included every six years regardless of a company’s frequency of holding “say-on-pay” votes historically, is described in the attached Supplement. Please note that in 2017 we suggested, and shareholders approved, the inclusion of this say-on-pay proposal on an annual basis. We recommend that we continue to hold such an advisory vote on an annual basis.
We have also included an amended proxy card for your action.
If you have already voted and do not submit a new (amended) proxy card, your previously submitted proxy will be voted at the annual meeting with respect to all other proposals but will be considered a non-vote in determining the outcome of the Say-on-Pay Frequency Proposal.
PLEASE NOTE THAT IF YOU SUBMIT A NEW PROXY CARD IT WILL REVOKE ALL PRIOR PROXY CARDS, SO IT IS IMPORTANT TO INDICATE YOUR VOTE ON EACH PROPOSAL ON THE NEW PROXY CARD.
Important Notice Regarding the Availability of Proxy Materials for the 2023 Annual Meeting of Shareholders to be held on April 21, 2023
The attached Supplement dated March 10, 2023, the Proxy Statement dated March 7, 2023, the form of amended proxy card and the Company’s 2022 Annual Report to Shareholders are available electronically at https://investors.portlandgeneral.com/financial-information/annual-reports.
SUPPLEMENT TO PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 21, 2023
This Supplement amends our proxy statement dated March 7, 2023 (the “Proxy Statement”) which you received previously in connection with our 2023 Annual Meeting of Shareholders to be held on April 21, 2023. This Supplement is designed solely to add a Proposal Five: Advisory Vote on the Frequency of Holding an Advisory Vote on Executive Compensation. We are asking shareholders to approve, on an advisory and non-binding basis, the frequency of holding an advisory vote on executive compensation. Our recommendation is that we continue to hold such an advisory vote on an annual basis.
Capitalized terms used but not otherwise defined in this Supplement have the meanings ascribed to them in the Proxy Statement. This Supplement should be read together with the Proxy Statement.
PROPOSAL 5
ADVISORY VOTE ON THE FREQUENCY OF HOLDING AN ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Act enables shareholders to approve, on an advisory non-binding basis, the frequency of the advisory vote on the compensation of our Named Executive Officers. Accordingly, shareholders may indicate whether they would prefer an advisory vote on such executive compensation once every one, two, or three years, or whether they wish to abstain from casting a vote.
After considering the benefits and consequences of each option for the frequency of advisory say-on-pay votes, we believe that an advisory vote on executive compensation that occurs every year is the most appropriate approach for the Company. Our current corporate practices and governance trends favor an annual advisory vote. This gives shareholders the opportunity to react promptly to emerging trends in compensation, and gives the Board and the Compensation, Culture and Talent Committee the opportunity to evaluate compensation decisions in light of yearly feedback from shareholders.
As an advisory vote, the result will not be binding upon the Company, although the Compensation, Culture and Talent Committee and the Board of Directors value the opinions expressed by shareholders and will give consideration to the frequency option that receives the highest number of shareholder votes. Shareholders are being asked to indicate their choice among the frequency options.
Please mark on the Amended Proxy Card your preference as to the frequency of holding shareholder advisory votes on executive compensation, as every one, two or three years, or mark “abstain” on this proposal.
A plurality of the votes cast for Proposal 5 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 of Directors 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.
PLEASE NOTE THAT IF YOU SUBMIT A NEW (AMENDED) PROXY CARD IT WILL REVOKE ALL PRIOR PROXY CARDS, SO IT IS IMPORTANT TO INDICATE YOUR VOTE ON EACH PROPOSAL ON THE NEW PROXY CARD.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE OPTION OF ONCE EVERY YEAR AS THE FREQUENCY FOR THE ADVISORY VOTE ON EXECUTIVE COMPENSATION.
The date of this Supplement is March 10, 2023
 | ||
 Jim Torgerson Incoming Board Chair |  Message to our Shareholders from our Incoming Board Chair and CEO | ||||||||||||||||||||||
DEAR FELLOW SHAREHOLDERS, We are pleased to invite you to attend Portland General Electric’s (PGE) Annual Meeting of shareholders to be held virtually on Friday, April 21, 2023, at 8:00 a.m. Pacific. The Proxy Statement describes PGE's corporate governance policies and practices that foster the Board’s effective oversight of the Company’s business strategies and practices. As an independent Board, we continue to play an important role in providing oversight of PGE’s work in building and operating a safe, reliable, resilient and affordable electric utility that is leading the transition to a clean energy future. Our Board represents a wide range of backgrounds and expertise. We believe this diversity of experiences, perspectives and skills contributes to the Board’s effectiveness in managing risk and providing strategic guidance that positions the Company for long-term success. In 2022, amidst challenging weather events and significant market volatility, we continued our critical work, delivering safe, reliable energy to our customers. We also made progress in our commitment towards decarbonization and electrification. As described later in this Proxy Statement and in our 2022 Environmental, Social and Governance Report, we supplied retail customers with 39% specified, non-emitting energy, up from 35% in 2021 and 30% in 2020 as we continue making investments in renewable energy and forming important partnerships ranging from regional hydro producers to global technology companies. We recently brought online the first of its scale combined wind, solar and storage facility at Wheatridge and announced plans for the new Clearwater 311 MW wind energy facility. We also invested in substations, transmission line upgrades and improvements to our generating facilities, as well as significant cyber and physical security upgrades to ensure reliability and resilience. We also extend heartfelt thanks to two Board members, Jack Davis and Rod Brown, as they complete their Board terms, for their service to our company, customers, and community. Mr. Davis served as Board Chair for ten years, and we will greatly miss his leadership and mentorship, as well as Mr. Brown’s significant environmental and legal expertise. | |||||||||||||||||||||||
 Maria Pope President and CEO | |||||||||||||||||||||||
i | Portland General Electric | 2023 Proxy Statement | ||||||||||||||||||||||
In 2022, we continued our active engagement with investors, regulators, and other stakeholders to listen, learn and bring input back to the Board. We value your feedback. The Company is well positioned to provide long-term, sustainable value for shareholders and all stakeholders. On behalf of the entire Board, thank you for your continued investment in PGE. Sincerely, | |||||||||||
 Jim Torgerson Incoming Board Chair |  Maria Pope President and CEO | ||||||||||
ii | Portland General Electric | 2023 Proxy Statement | ||||||||||
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Notice of Virtual Annual Meeting of Shareholders
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| Date & Time | Virtual meeting Location | Record Date | |||||||||||||||
| April 21, 2023 8:00 a.m., Pacific Time | virtualshareholdermeeting.com/POR2023 There will be no physical location for shareholders to attend. | February 21, 2023 | |||||||||||||||
You can vote if you were a shareholder of record on February 21, 2023. | |||||||||||||||||
| ITEMS OF BUSINESS | |||||||||||||||||
| 1 | Election to our Board of Directors of the 10 nominees identified in the Proxy Statement. | Your vote is important to us. Please exercise your shareholder right to vote as soon as possible, regardless of whether you plan to attend the meeting. | |||||||||||||||
| 2 | Advisory vote to approve the compensation of our named executive officers. | ||||||||||||||||
| 3 | Ratification of the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for fiscal year 2023. | ||||||||||||||||
| 4 | Approval of PGE's Amended and Restated Stock Incentive Plan. | ||||||||||||||||
| 5 | Other business matters properly brought before our 2023 Annual Meeting. | ||||||||||||||||
WAYS TO VOTE
 Online Vote online in advance of the meeting: proxyvote.com |  By Phone Vote by phone from the US or Canada: 1-800-690-6903 |  By Mail If you have received a printed version of our proxy materials, you may vote by mail. |  By Ballot Attend our virtual Annual Meeting and vote by following the instructions on the meeting website. | |||||||||||||||||
For the Board of Directors,
Sujata Pagedar
Corporate Secretary
Annual Meeting of shareholders to be held on April 21, 2023 As permitted under SEC rules, we are mailing our shareholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials and submit proxy votes online. Our Proxy Statement and 2022 Annual Report are available on our website at https://investors.portlandgeneral.com/financial-information/annual-reports. You may also access our proxy materials at www.proxyvote.com. We are making the Proxy Statement and the form of proxy first available on or about March 7, 2023. | ||
Table of Contents to the Proxy Statement
Oregon's Clean Energy Future | |||||||||||
Corporate Governance Highlights | |||||||||||
Proxy Statement Summary
This summary highlights selected information to assist you in your review of this Proxy Statement. It does not contain all of the information you should consider, and you should read the entire Proxy Statement carefully before voting. Information regarding our performance is available in our 2022 Annual Report, which accompanies this Proxy Statement and is available on our website at https://investors.portlandgeneral. com/financial-information/annual-reports. For additional information about the Annual Meeting and voting, please see the Questions and Answers section. This Proxy Statement and the accompanying form of proxy card or voting instruction form are first being made available to shareholders on or about March 7, 2023. All website references in our proxy materials are inactive textual references, and the information on, or that can be accessed through, such websites does not constitute a part of these materials.
SHAREHOLDER VOTING MATTERS
| Item One | Board Recommendation | For More Information | ||||||||||||
| Election to our Board of Directors of the 10 Nominees named in the Proxy Statement | FOR Each Director | |||||||||||||
| The Board, acting upon the recommendation of the Nominating, Governance and Sustainability Committee, has nominated each of the 10 directors for election to our Board. | ||||||||
| James Torgerson | Kathryn Jackson | Patricia Salas Pineda | ||||||
| Dawn Farrell | Michael Lewis | Maria Pope | ||||||
| Mark Ganz | Michael Millegan | |||||||
| Marie Oh Huber | Lee Pelton | |||||||
•The Board believes its members encompass a range of talents, skills, expertise and qualifications to sufficiently provide sound and prudent oversight of PGE's business and oversee its operations, risks and long-term strategy. The directors reflect the diversity of PGE's shareholders, employees, customers and the communities in which we serve. •Shareholders are being asked to elect each director to serve until the 2024 Annual Meeting of shareholders. | ||||||||
Top Skills and Backgrounds of Board Members | Independent Directors on Board | Women/Ethnically Diverse Board Members | ||||||
 |  |  | ||||||
1 | Portland General Electric | 2023 Proxy Statement | ||||
| Proxy Statement Summary | |||||
| Item Two | Board Recommendation | For More Information | ||||||||||||
| Advisory vote to approve the compensation of our named executive officers | FOR | |||||||||||||
•Our executive compensation program is described in the Compensation Discussion and Analysis section of the Proxy Statement. •The Compensation, Culture and Talent Committee and the Board believe our executive compensation structure is competitive, aligns compensation with shareholder value and serves stakeholders well. •Shareholders are being asked for an advisory vote to approve the compensation of our named executive officers described in the Compensation Discussion and Analysis section and related compensation tables. | ||||||||||||||
Compensation Best Practices
| What We Do | What We Do Not Do | ||||||||||||||||||||||
ü | Meaningful stock ownership guidelines | û | No long-term employment contracts | ||||||||||||||||||||
ü | Appropriate compensation peer group | û | Executives employed at will | ||||||||||||||||||||
| ü | Annual compensation program risk assessment | û | No excise tax gross-ups on change in control payments | ||||||||||||||||||||
| ü | Robust incentive compensation clawback policy | û | No significant perquisites to executive officers | ||||||||||||||||||||
| ü | Independent compensation consultant that performs no services for the Company other than services for the Compensation, Culture and Talent Committee | û | No short sales, transactions in derivatives, hedging or pledging of Company securities by directors or executive officers | ||||||||||||||||||||
| ü | Incentive award payouts are based on a balanced mix of short-term and long-term Company performance | û | No single trigger change in control payouts | ||||||||||||||||||||
û | No dividends on unvested equity | ||||||||||||||||||||||
ü | Double-trigger change in control provisions for equity award vesting | ||||||||||||||||||||||
ü | Significant performance-based compensation aligned with strategy | ||||||||||||||||||||||
Pay for Performance
2 | Portland General Electric | 2023 Proxy Statement | ||||
| Proxy Statement Summary | |||||
| Item Three | Board Recommendation | For More Information | ||||||||||||
| Ratification of the appointment of independent registered public accounting firm for fiscal year 2023 | FOR | |||||||||||||
•Shareholders are being asked to ratify the Audit and Risk Committee's selection of Deloitte & Touche LLP (Deloitte) as our independent registered public accounting firm for fiscal year 2023. •The Audit and Risk Committee and the Board believe the continued retention of Deloitte is in the best interest of PGE and its shareholders. | ||||||||||||||
| Item Four | Board Recommendation | For More Information | ||||||||||||
| Approval of Amended and Restated Stock Incentive Plan | FOR | |||||||||||||
•The Board believes the Amended and Restated Stock Incentive Plan is a valuable tool to attract and retain top talent. •The Amended and Restated Stock Incentive Plan follows strong governance practices and is carefully managed. •Shareholders are being asked to approve the Amended and Restated Stock Incentive Plan, which includes the addition of 1.0 million shares, and the extension of the termination date. | ||||||||||||||
| Cautionary Note Regarding Forward-Looking Statements | ||
This Proxy Statement contains forward-looking statements, including those regarding implementation of our business plans, technology transitions, our business, strategies and financial performance, our offerings of new services, and other statements that are not historical fact, and actual results could differ materially from these forward-looking statements. Risk factors that could cause actual results to differ are set forth in the “Risk Factors” section, as well as other sections of our 2022 Annual Report on Form 10-K, available on our website at investors.portlandgeneral.com/financial-information/sec-filings, as well as, or in addition to, other filings with the SEC. All forward-looking statements are based on management’s estimates, projections, and assumptions as of the date of this Proxy Statement, and we undertake no obligation to update any such statements. | ||
3 | Portland General Electric | 2023 Proxy Statement | ||||
Strategy, Performance and Sustainability
OREGON'S CLEAN ENERGY FUTURE
Portland General Electric exists to power the advancement of society. We energize lives, strengthen communities and foster energy solutions that promote social, economic and environmental progress. We lead by reducing emissions and increasing electrification, doing so with the competence and credibility earned over our 130-year history. Together with customers, communities, partners and investors, we are creating a safe, reliable, clean and accessible energy future. We are actively reducing greenhouse gas (GHG) emissions from our system, electrifying the economy from transportation to homes and buildings, and offering products and services that put customers in control of their energy journey. Our customers remain at the forefront of our priorities, driving us to continuously innovate, to deploy new technologies, simplify processes and reduce costs as we deliver exceptional value for our customers.
Customers count on us to power their lives with safe, reliable and affordable clean energy. Today, we are focused on building one of the cleanest energy portfolios in the country. By accelerating the addition of renewable resources as part of our system, we are working towards making our energy supply cost-effective and diverse, while delivering the reliability our customers expect. At the same time, we are building an increasingly smart, resilient, integrated, and interconnected grid, partnering with customers, communities and organizations across the West and beyond to enable a reliable and affordable clean energy future benefiting all.
Advancing Our Clean Energy Future | ||||||||||||||
| Strategic Goals | ||||||||||||||
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| Decarbonize Power | Electrify the Economy | Advance our Performance | ||||||||||||
| Reduce greenhouse gas emissions associated with electricity served to retail customers by at least 80% by 2030 and 100% by 2040. | Increase beneficial electricity use to capture the benefits of new technologies while building an increasingly clean, flexible and reliable grid. | Improve efficiency, safety, and system and equipment reliability while maintaining affordable energy service and growing earnings per share 5% to 7%. | ||||||||||||
| How we will achieve our goals | ||||||||||||||
Ensure resource adequacy as we decarbonize | Scale customer solutions that deliver value | Drive enterprise operational excellence and innovation | ||||||||||||
4 | Portland General Electric | 2023 Proxy Statement | ||||
| Strategic Performance | |||||
STRATEGIC PERFORMANCE HIGHLIGHTS
| | | ||||||||||||
Decarbonize Power | Electrify the Economy | Advance our Performance | ||||||||||||
•Served 39% of retail customer load in 2022 from specified non-emitting energy sources. •Executed agreement to acquire 311 MW Clearwater Wind Project in Montana (208 MW PGE owned + 103 MW purchased power). •Successfully used flexible load programs, distributed resources and batteries in our "Virtual Power Plant" to contribute to system needs and improve grid reliability, demonstrating that, as distributed energy resources scale, we have the technology to use them to support resource adequacy and decarbonization goals. | •Customer energy usage increased 3.4% or 2% weather-adjusted, with high tech and digital customers up 12%. •Through PGE programs, we have deployed over 100 public charging sites. •Deployed a pubic, web-based interactive tool that helps people understand the costs and savings of electric vehicles versus gas-powered vehicles. •Electrified 11% of PGE's fleet vehicles, including 26% of light duty vehicles. | •Invested over $800 million, including accruals, in capital assets to address customer growth, system hardening, resiliency infrastructure and grid modernization. •Executed a quality assurance program relating to PGE's utility pole inspections and repairs, resulting in a 95% quality rating of the work performed by crews in the field. •Overall incidents (recordables and injuries) decreased by 9%. •Achieved the No. 3 utility ranking in the United States for customer experience according to Forrester (The US Customer Experience Index, 2022). •Named a “2022 Environmental Champion Utility” according to Escalent (Utility Trusted Brand & Customer Engagement™ Residential Study, 2022). | ||||||||||||
5 | Portland General Electric | 2023 Proxy Statement | ||||
| Strategic Performance | |||||
2022 PERFORMANCE
We are focused on leading the clean energy future and our business is centered on three long-term imperatives: Decarbonize, Electrify and Perform. We reflect our customers, Oregon's values and our Guiding Behaviors of customer focus, valuing differences, always learning, accountability, collaboration and instilling trust. Our #1 focus is to deliver safe, reliable, affordable, and clean electricity. We are enhancing our electric grid to improve reliability and integrate new, clean technologies.
In 2022, like many others, we faced market volatility, increasing energy prices, supply chain uncertainties and severe weather challenges. Despite these challenges, we achieved strong financial performance across key metrics. Our 2022 achievements built on our long-term financial performance. We have had total shareholder return of 128% since 2018. We also have continued to provide returns to shareholders by growing our common stock dividend. From 2018 to 2022, we increased our annual dividend from $1.41 to $1.77 per common share, a compound annual growth rate (CAGR) of 6% over the last five years.
6 | Portland General Electric | 2023 Proxy Statement | ||||
| Strategic Performance | |||||
SUSTAINABILITY
Sustainability is an integral part of our strategy to achieve a clean and reliable energy future, which is aligned with Oregon's ambitious, economy-wide goal to combat climate change. We are taking a holistic approach that balances our commitment to reducing greenhouse gas emissions with core values that define our culture, and high standards of corporate governance. We continue to implement our strategic goals: Decarbonize, Electrify and Perform to address broader sustainability commitments which are reflected in our environmental, social and governance (ESG) priorities and practices, described in our 2022 ESG Report.
Our 2022 ESG Report also describes and illustrates our progress on our long-term commitments to advance ESG issues including 1) clean and renewable energy and GHG emission reductions, 2) workforce engagement and development, 3) community support, 4) environmental stewardship and 5) sustainable green financing. Our ESG Report includes disclosures referencing the Sustainability Accounting Standards Board (SASB), Edison Electric Institute (EEI) Template, Task Force on Climate-related Financial Disclosures (TCFD) framework and United Nation Sustainable Development Goals (UN SDGs).
Our top sustainability priorities
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| Decarbonization | Climate change risk mitigation | Clean energy access and reliability | Water, air, ecosystem health | Health and safety | ||||||||||
 |  |  |  |  | ||||||||||
| Supply chain diversity | Diversity, equity, and inclusion | Workforce and leadership diversity | Community involvement | Governance, reporting and transparency | ||||||||||
Our top sustainability priorities have been informed by an extensive stakeholder centered and inclusive analysis. The priorities are not listed in accordance to their relative importance or the impact that they have on PGE.
Our ESG Report and additional sustainability information and reports are available at https://investors.portlandgeneral.com/esg. These reports and any other information on our website are not part of, nor incorporated by reference into, this Proxy Statement. | ||||||||
7 | Portland General Electric | 2023 Proxy Statement | ||||
| Strategic Performance | |||||
Environmental and Social Highlights
311MW Investment in Renewable Energy Generation PGE will own 208 MW of the Clearwater Wind project | OUR CLEAN ENERGY AND GHG EMISSIONS REDUCTION GOALS •We are preparing a Clean Energy Plan in-line with the legislation in House Bill 2021 that will further articulate our strategy to meet the 2030 and 2040 decarbonization targets outlined in the legislation. •We continue to work towards our own company-wide goals to achieve net zero emissions by 2040 across our operations, which include fleet and facilities, as well as power generation and supply. •Our path to meet our goals will be achieved through: ◦Increasing non-emitting energy resources and capacity in our portfolio. In 2022, PGE and NextEra Energy Resources, LLC entered into agreements to construct a 311 MW wind energy facility, which will be part of the larger Clearwater Wind development in eastern Montana. PGE will own 208 MW of the 311 MW being acquired. ◦Continuing to evaluate the possibility of existing the ownership of Colstrip Units 3 and 4 as part of meeting our regulatory and legislative requirements. ◦Supporting decarbonization in other sectors of the economy through energy efficiency, electrification and smart energy use. ◦Investing in our generation facilities to reduce emissions. ◦Supporting customers' call for clean energy through our voluntary customer programs. For the 13th year, PGE has held the U.S. Department of Energy's National Renewable Energy Laboratory's No. 1 ranking for the largest participation of business and residential renewable energy customers in a renewables program of any U.S. electric utility.1 1.NREL did not release rankings in 2011. | |||||||||||||||||||||||||
 Our Guiding Behaviors empower our employees to lead the energy future | WORKFORCE ENGAGEMENT AND DEVELOPMENT •We are committed to pay equity, and offer a wide range of market-competitive benefits to our over 2,800, full-time employees. •We provide employees with benefits that address their needs holistically and support their wellness. In 2022, we received recognition in Portland Business Journal's Healthy Employer Awards for our Human Resources leadership and commitment to workplace wellness for our employees. •We continue to follow a flexible workplace model providing our employees with in-person, hybrid, and remote working options based on organization and employee needs. •We invest in our people: almost 50% of our open positions were filled by internal candidates. We continue to be an employer of choice in our community, with an offer acceptance rate of over 90%. •We provide a variety of training and development programs for employees, including tuition reimbursement for job-related coursework. •We launched our updated Guiding Behaviors in 2022, giving everyone a single set of standards to follow, and defining our culture as customer-centric, purpose-driven and results-oriented. | |||||||||||||||||||||||||
8 | Portland General Electric | 2023 Proxy Statement | ||||
| Strategic Performance | |||||
 DE&I Recognition In 2022, PGE received recognition for our DE&I and Human Rights programs | DIVERSITY, EQUITY AND INCLUSION •14% of our total spend with suppliers was with diverse-owned suppliers in 2022. •We continue to lead in diversity, equity and inclusion (DEI) practices: ◦Black, Indigenous and People of Color (BIPOC) comprise over 26% of our employees and nearly 26% of our management. ◦A third of our employees and our management, including our CEO, are female. ◦Our pay equity practices, racial equity training and development opportunities for women and people of color to advance into management are hallmarks of our commitment to an inclusive workforce. •We once again received two notable recognitions that reflect our ongoing dedication to creating a diverse, equitable and inclusive workplace. ◦For the 9th year in a row we scored a perfect score on the Human Rights Campaign Foundation's Corporate Equity Index as a Best Place to Work for LGBTQ Equality. ◦Bloomberg LP recognized PGE by including us for the fourth time in its annual Gender-Equality Index, which tracks the performance of companies committed to supporting gender equality through policy development, representation and transparency. | |||||||||||||||||||||||||
$5.5M contributed to non-profits by the PGE Foundation, employee/retiree donations and the Company | MAKING A DIFFERENCE FOR OUR COMMUNITIES •Our Community Benefits and Impact Advisory Group, launching in March 2023, will work at the intersection of environmental, social, and racial justice on topics of distribution infrastructure and community benefits, so that we hear from and address impacts on all of the communities we serve. •We reached over 46,000 students though Project Zero, an innovative and award winning program that empowers young adults and students to create cleaner, greener and more equitable communities. •The PGE Foundation, employee/retiree donations and PGE contributed close to $5.5 million to non-profits. The PGE Foundation improves the quality of life for Oregonians and has awarded approximately $28 million to community organizations across the state since its inception in 1997. •22% of our employees volunteered in the community, contributing to over 18,000 volunteer hours from employees and retirees. •PGE’s Renewable Development Fund awarded twelve projects with grants totaling $2.4 million. •PGE's Drive Change Fund awarded 15 projects with grants totaling $2.25 million. | |||||||||||||||||||||||||
$2.4M Renewable Development Fund was awarded to twelve organizations by PGE | ||||||||||||||||||||||||||
9 | Portland General Electric | 2023 Proxy Statement | ||||
| Strategic Performance | |||||
 Invested in Habitat Restoration PGE is committed to caring for natural habitat and creating conditions that are safe and restorative for fish and wildlife. | ENVIRONMENTAL STEWARDSHIP •We have invested more than $200 million since 2006 to modernize and improve passage for salmon and steelhead to move past our dams on the Clackamas, Willamette, and Deschutes Rivers. Additionally, we continue to invest annually on fish passage, habitat, water quality and wildlife protection at our hydropower projects. •Through adaptive management changes and improving ocean conditions, we had record-breaking adult Chinook salmon runs above Round Butte Dam — the highest number since 2012. On the Clackamas River, we are helping fish migrate safely around our dams and achieving record returns. In 2021 and 2022 over 10,000 coho returned to North Fork Dam, compared to an average of approximately 3,000 coho between 2010 and 2020. •In 2022, we added or replaced more than 4,290 poles and 1,950 transformers with ones that feature avian-safe protective covers or design features. We also installed nesting platforms for birds found nesting on poles to keep them away from electrical equipment. | |||||||||||||||||||||||||
 Green Financing PGE established a green financing program to support investments in decarbonization projects | GREEN FINANCING FRAMEWORK •In 2021, we established a Green Financing Framework. This framework highlights our ongoing commitment to a wide range of sustainability and social issues and should allow us to leverage our work in these areas to help optimize our balance sheet and benefit customers. •We issued $460 million in debt, $100 million of which was funded in 2023 under our Green Financing Framework to tie debt financing to our sustainability strategy through capital investments. •In October 2022, we executed a $499 million equity forward sale agreement to improve balance sheet metrics, fund system improvements, and accelerate clean energy investments. •The Green Financing Framework can be found at https://investors.portlandgeneral.com/green-financing. | |||||||||||||||||||||||||
 Working Together with Our Customers In 2022, PGE enhanced programs that help customers manage their energy usage | WORKING TOGETHER WITH OUR CUSTOMERS •We launched a new income-qualified bill discount program that provides a 15-25% discount for income qualified customers, with over 47,000 customers participating in the first year. •We achieved customer delight of 56% among PGE residential customers, remaining in the top decile of utilities nationwide according to Escalent's national Utility Energy Benchmark. •We continued our focus on supporting our customers impacted by the Covid-19 pandemic in finding personalized solutions to catch-up on bills, and empowering customers with personal consumption tips. In 2022, PGE also provided $3.5 million to residential customers through the COVID-19 Bill Assistance Program. •We enhanced programs that help customers manage their energy usage, including smart thermostats for homes and businesses. | |||||||||||||||||||||||||
10 | Portland General Electric | 2023 Proxy Statement | ||||
Corporate Governance
CORPORATE GOVERNANCE HIGHLIGHTS
We are committed to maintaining sound corporate governance policies and practices that create long-term value for our shareholders and other stakeholders. The Nominating, Governance and Sustainability Committee regularly reviews our key corporate governance policies to ensure that they reflect best practices and comply with legal and regulatory requirements. The Nominating, Governance and Sustainability Committee refers suggestions for how to improve upon our governance policies to the full Board for approval. Highlights of our corporate governance program include:
Strong independent oversight of management | •Independent Board Chair •Fully independent membership on all standing Board committees •All directors are independent other than the CEO •Executive sessions of non-management directors at all regularly scheduled Board meetings | |||||||
| Leadership accountability | •Annual election of directors by majority vote of the shareholders •Shareholder right to act by written consent •No "poison pill" anti-takeover defenses •No supermajority voting requirements •Robust Board and executive stock ownership guidelines (see pages 27 and 67 for details) •Annual Advisory Vote on Executive Compensation | |||||||
| Focus on leadership refreshment and quality | •Active Board refreshment program (4 new directors since the beginning of 2021) •Annual Board review of succession planning and talent development for senior leadership •Regular Board training focused on significant business risks and opportunities •Overboarding policy implemented in 2022 •Directors' orientation and continuing education | |||||||
| Engaged Board oversight of strategy and risk management | •Oversight of strategy, risk and ESG practices •Annual Board strategy session •Quarterly updates to Audit and Risk Committee on enterprise risk management •Annual independent compensation risk analysis | |||||||
Find our Corporate Governance Guidelines and other governance documents online. The Board has adopted Corporate Governance Guidelines, which, together with our articles of incorporation and bylaws, establish the governance framework for the management of the Company. Our Corporate Governance Guidelines address, among other matters, the role of our Board, Board membership criteria, director retirement policies, director independence criteria, director and officer stock ownership requirements, Board committees and leadership development. Our Corporate Governance Guidelines, Board committee charters, and certain other corporate governance policies are available on our website at https://investors.portlandgeneral.com/corporate-governance. These documents are also 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. | ||||||||
11 | Portland General Electric | 2023 Proxy Statement | ||||
| Corporate Governance | |||||
STAKEHOLDER ALIGNMENT
We believe our strategy is aligned with the following key trends and stakeholder interests:
| Industry and Societal Trends | Stakeholder Alignment | ||||||||||||||||
•Need to address climate change using clean and renewable energy and new technologies •Increased interest in sustainability from shareholders, customers, employees and other stakeholders •Growing need for companies to address social issues and play a broader role tied to sustainability and racial and social justice •Increasing grid security, resiliency and reliability in the face of extreme weather, cyber and physical threats | •Our customers expect us to deliver safe, reliable, affordable clean power •Communities rely on us to contribute to economic growth and community development •Our employees drive our vision and are fueled by purpose •Shareholders seek confidence in our ability to operate effectively and meet both short-term and long-term objectives, with an increasing focus on sustainability •Regulators and policy-makers expect us to deliver safe, clean, reliable and affordable service, and advance local, state and federal policies | ||||||||||||||||
Additional information about how we will execute this strategy can be found on our website at
https://portlandgeneral. com/about/who-we-are.
https://portlandgeneral. com/about/who-we-are.
SHAREHOLDER AND STAKEHOLDER ENGAGEMENT
The Board and PGE value our shareholders' views and are committed to ongoing constructive dialogue with shareholders to advance long-term value. Executive management and members of our Investor Relations team engage regularly with our shareholders to seek their input on a variety of matters. In 2022, we had over 200 investor engagements. In addition, in 2022, we conducted proactive outreach with the governance teams of our top 20 largest shareholders. Our Board chair participated in many of these meetings. Topics included:
| Strategy and value proposition | Financial operation and performance | Board leadership, composition, diversity and refreshment | ||||||||||||||||||||||||
| Progress on decarbonization goals | Executive compensation | Regulatory and legislative developments | ||||||||||||||||||||||||
We communicate with shareholders through routine forums, including quarterly earnings presentations and other significant events, as well as direct communications.
12 | Portland General Electric | 2023 Proxy Statement | ||||
| Corporate Governance | |||||
In addition, our management and Board regularly engage with other stakeholders, including representatives of local communities and organizations, political bodies, and our regulators. In 2022, the Board met with customer advocates so that they could hear directly about customer concerns and expectations. To further enhance their oversight of PGE, the Board has hosted meetings with innovators in the energy space, as well as employees in key areas of the Company. When the Board is not a direct participant, we relay the feedback we obtain through these conversations to the Board and its committees, and work to adequately address the concerns of our stakeholders.
Our Engagement Strategy
13 | Portland General Electric | 2023 Proxy Statement | ||||
14 | Portland General Electric | 2023 Proxy Statement | ||||
Item 1: Election of Directors OUR BOARD IS EXPERIENCED, DIVERSE AND INDEPENDENT The Board, acting upon the recommendation of the Nominating, Governance and Sustainability Committee, has nominated the following 10 directors for election to our Board. All elected directors will serve until the 2024 Annual Meeting, or until their successors are elected and qualified, except in the case of earlier death, resignation or removal. Except for Ms. Pineda, who was appointed to the Board in October 2022, all of the nominees were elected at the 2022 Annual Meeting. Our Board reflects the diversity of skills, attributes, experiences, backgrounds, gender, race and ethnicity needed to provide effective oversight of PGE. Our nominees have held senior leadership roles at public companies or other large organizations and have extensive experience in a variety of fields, including utility operations and regulation, technology, health care, academia, finance and accounting, corporate governance, law, public policy, and consulting. All of our nominees have a reputation for integrity, honesty and adherence to high ethical standards. We have a strong track record of board refreshment. Six of our independent directors have been added since the beginning of 2019: two in 2019, two in 2021 and two in 2022. This board refreshment brings a variety of perspectives to strategic, financial, operational and sustainability deliberations. If any of the nominees becomes unable to serve or for good cause will not serve as a director, it is intended that votes will be cast for a substitute nominee designated by the Board, or the Board may elect to reduce its size. The Board has no reason to believe that nominees named in this proxy will be unable to serve if elected. Each of the nominees has consented to being named in this proxy statement and to serve if elected. The Board selected our director nominees based on their demonstration of the core attributes described above, and the belief that each director can make substantial contributions to our Board and to PGE. See pages 16 to 22 for more information about the backgrounds and qualifications of our nominees. | ||||||||||||||
What are you voting on? We are asking shareholders to elect ten directors to hold office until the 2024 annual meeting. | ||||||||||||||
"FOR" The Board of Directors unanimously recommends a vote "FOR" the re-election of the nominated directors, as disclosed in this Proxy Statement. | ||||||||||||||
15 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
| Name | Age | Director Since | Industry/Experience | Diversity | Committee Assignments | Other Public Boards | |||||||||||||||||
 | Dawn Farrell Independent | 63 | 2022 | Utilities | White/Female | •Finance •Governance | 1 | ||||||||||||||||
 | Mark Ganz Independent | 62 | 2006 | Healthcare/Law | White/Male | •Audit & Risk •Compensation | 0 | ||||||||||||||||
 | Marie Oh Huber Independent | 61 | 2019 | Law/Technology | Asian/Female | •Compensation •Governance | 1 | ||||||||||||||||
 | Kathryn Jackson Independent | 65 | 2014 | Technology/Environmental | White/Female | •Audit & Risk, Chair •Finance | 2 | ||||||||||||||||
 | Michael Lewis Independent | 60 | 2021 | Utilities | African American/Male | •Audit & Risk •Finance, Chair | 1 | ||||||||||||||||
 | Michael Millegan Independent | 64 | 2019 | Technology | African American/Male | •Audit & Risk •Finance | 2 | ||||||||||||||||
 | Lee Pelton Independent | 72 | 2006 | Education/ Non-Profit Foundations | African American/Male | •Audit & Risk •Governance, Chair | 0 | ||||||||||||||||
 | Patricia Salas Pineda Independent | 71 | 2022 | Human Resources/ Automotive | Latina/Female | •Compensation •Finance | 3 | ||||||||||||||||
 | Maria Pope President and CEO | 58 | 2018 | Utilities/Finance | White/Female | 1 | |||||||||||||||||
 | Jim Torgerson Independent | 70 | 2021 | Energy/Finance | White/Male | •Compensation, Chair •Governance | 0 | ||||||||||||||||
Key to Committees
Compensation: Compensation, Culture and Talent Committee
Governance: Nominating, Governance and Sustainability Committee
16 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
SKILLS, EXPERIENCE AND BACKGROUNDS
Our Board of Directors brings diverse skills, experiences and backgrounds to inform and enrich their oversight functions and deliberations. The following skills matrix captures some of these characteristics. We considered these skills, experiences and backgrounds, together with the biographical information provided on pages 16 to 22, in determining the nominees to our Board.
| Skill | Number of Director Nominees (Out of 10) | |||||||||||||||||||||||||||||||||||||
 | Finance and Accounting | |||||||||||||||||||||||||||||||||||||
| 7 | ||||||||||||||||||||||||||||||||||||||
 | Utility Operations | |||||||||||||||||||||||||||||||||||||
| 5 | ||||||||||||||||||||||||||||||||||||||
 | Technology, Cybersecurity and Information Security | |||||||||||||||||||||||||||||||||||||
| 5 | ||||||||||||||||||||||||||||||||||||||
 | Transformation | |||||||||||||||||||||||||||||||||||||
| 8 | ||||||||||||||||||||||||||||||||||||||
 | Environmental and Sustainability | |||||||||||||||||||||||||||||||||||||
| 6 | ||||||||||||||||||||||||||||||||||||||
 | Government, Regulatory and Public Policy | |||||||||||||||||||||||||||||||||||||
| 8 | ||||||||||||||||||||||||||||||||||||||
 | Human Capital Management and Culture | |||||||||||||||||||||||||||||||||||||
| 8 | ||||||||||||||||||||||||||||||||||||||
 | Major Capital Projects Oversight | |||||||||||||||||||||||||||||||||||||
| 8 | ||||||||||||||||||||||||||||||||||||||
 | Risk Management and Compliance | |||||||||||||||||||||||||||||||||||||
| 8 | ||||||||||||||||||||||||||||||||||||||
 | Strategic Planning, Business Development and/or M&A | |||||||||||||||||||||||||||||||||||||
| 8 | ||||||||||||||||||||||||||||||||||||||
 | Regional Business and Community Ties | |||||||||||||||||||||||||||||||||||||
| 8 | ||||||||||||||||||||||||||||||||||||||
 | Corporate Governance | |||||||||||||||||||||||||||||||||||||
| 8 | ||||||||||||||||||||||||||||||||||||||
 | ||||||||||||||||||||||||||||||||||||||
| Consumer Products / Customer Expectations | 5 | |||||||||||||||||||||||||||||||||||||
NOMINEES FOR ELECTION
A biography of each director is presented below. Each biography includes the experience, qualifications, attributes and skills that led the Board to conclude that the nominee should serve as a director. While each nominee’s entire range of experience and skills is important, particular experience and skills that contribute to the effectiveness of the Board are identified below. The biographical information is current as of March 1, 2023.
17 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
| Dawn Farrell INDEPENDENT DIRECTOR SINCE 2022 COMMITTEES Finance; Nominating, Governance and Sustainability | EDUCATION BC, MA Economics, University of Calgary AMP, Harvard University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Chairperson, The Chemours Company Member, Trilateral Commission Chancellor, Mount Royal University SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board member, Business Council of Canada, Alberta Business Council, Canadian Natural Resources Limited TOP SKILLS Major Capital Projects Technology, Cybersecurity and Information Security Utility Operations | ||||||||||||
BACKGROUND AND QUALIFICATIONS Ms. Farrell served from 2012 until her retirement in 2021 as President and CEO of TransAlta Corporation, one of Canada's largest producers of wind power and Alberta, Canada's largest producer of hydro-electric power. Ms. Farrell is currently serving as President and CEO of the Trans Mountain Corporation, a Canadian federally owned entity operating Canada's only pipeline system. She has over 35 years of experience in the energy industry and held a variety of executive leadership positions in TransAlta and British Columbia Hydro & Power Authority (BC Hydro) including leading the commercial operations and development at TransAlta and generation and engineering at BC Hydro. Ms. Farrell’s qualifications to serve on our Board include her in-depth knowledge of the western energy markets, generation operations, energy trading, her leadership in transforming a carbon- based company into a leading clean and renewable focused company, and her extensive leadership experience gained in senior executive positions at energy companies. | ||||||||||||||
| Mark Ganz INDEPENDENT DIRECTOR SINCE 2006 COMMITTEES Audit and Risk; Compensation, Culture and Talent | EDUCATION BA, History/Theology, Georgetown University JD, Georgetown University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board of Regents, University of Portland, Georgetown University Board member, Coalition to Transform Advanced Illness Care SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board member, Cambia Health Solutions, Inc. Board & Executive Committee, Oregon Business Council BlueCross Blue Shield Association Chair, America's Health Insurance Plans, Greater Portland Inc. TOP SKILLS Finance and Accounting Regional Business and Community Ties Strategic Planning | ||||||||||||
BACKGROUND AND QUALIFICATIONS Mr. Ganz served from 2003 until his retirement in 2020 as President and CEO of Cambia Health Solutions, Inc. (Cambia), a parent corporation of several companies offering healthcare products and services. He is the founder and managing principal of Lion Creek Partners LLC. Previously, Mr. Ganz held a number of positions with Cambia, including president and CEO of Regence BlueCross of Oregon, chief legal officer, corporate secretary, and chief ethics and compliance officer; he also had responsibility for federal public policy. Mr. Ganz was a member of Cambia’s board of directors until his retirement in 2020, as well as a board member of a number regional and national organizations. Mr. Ganz’s qualifications to serve on our Board include his experience overseeing multiple companies within a large diversified corporate group, including oversight of the financial functions, his knowledge of health care as a regulated industry, 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. | ||||||||||||||
18 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
| Marie Oh Huber INDEPENDENT DIRECTOR SINCE 2019 COMMITTEES Compensation, Culture and Talent; Nominating, Governance and Sustainability | EDUCATION BA, Economics, Yale University JD, Northwestern Pritzker University School of Law SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Adevinta University Council, Yale University Law Board, Northwestern Pritzker School of Law SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board member, Silicon Valley Community Foundation Board member, James Campbell Company LLC TOP SKILLS Corporate Governance Government, Regulatory, Public Policy Technology, Cybersecurity, Information Security | ||||||||||||
BACKGROUND AND QUALIFICATIONS Ms. Huber has over 25 years of strategic business, legal and public policy experience in global Fortune 500 companies. She heads the global legal and government relations and public policy functions for eBay, Inc., where she serves as Senior Vice President, Chief Legal Officer, General Counsel and Secretary. Ms. Huber joined eBay in 2015 from Agilent Technologies, where she served as senior vice president, general counsel and secretary since 2009. At Agilent Technologies, Ms. Huber held positions of increasing responsibility, and was responsible for communications, regulatory affairs and quality assurance, government affairs and philanthropy. She started her career at large firms in New York and San Francisco. Ms. Huber's qualifications to serve on our Board include her extensive track record as a business leader in advising boards of directors and her executive leadership of legal and operational matters, M&A, corporate governance, legal and compliance, public policy, IP, litigation, privacy and cybersecurity matters. | ||||||||||||||
| Kathryn Jackson, PhD INDEPENDENT DIRECTOR SINCE 2014 COMMITTEES Chair, Audit and Risk; Finance | EDUCATION BS, Physics, Grove City College MS, Industrial Engineering Management, University of Pittsburgh MS and PhD, Engineering and Public Policy, Carnegie Mellon University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Cameco Corporation, and EQT Corporation Advisory Board, Carnegie Mellon University, University of Pittsburgh Swanson School Member, National Academy of Engineering SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board member, Duquesne Light Holdings, Inc., Duquesne Light Company, Inc. TOP SKILLS: Finance and Accounting Risk Management and Compliance Technology, Cybersecurity, Information Security | ||||||||||||
BACKGROUND AND QUALIFICATIONS Dr. Jackson is a senior advisor at Energy Impact Partners, and from 2016 to 2021 served as the director of Energy and Technology Consulting at KeySource, Inc. where she provided strategic consulting services to clients in business growth, technology development and energy services. From 2014 to 2015, Dr. Jackson was chief technology officer and senior vice president at RTI International Metals, Inc., a leading U.S. producer of titanium mill products. She served as chief technology officer and senior vice president of Research and Technology at Westinghouse Electric Company, LLC, from 2009 to 2014; she served as vice president of Strategy, Research and Technology from 2008 to 2009. Prior to joining Westinghouse Electric Company, LLC, Dr. Jackson served for 17 years at the Tennessee Valley Authority where she held various executive positions including executive vice president of River System Operations and Environment, and was the corporate environmental officer. Dr. Jackson’s qualifications to serve on our Board include her background in engineering, her experience in senior executive roles and as a member and chair of the board of the Independent System Operator of New England, and her knowledge and experience in the areas of technology, large capital projects, risk management, generation facilities and energy trading operations, research and development on utility assets and systems, and environmental health and safety. | ||||||||||||||
19 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
| Michael Lewis INDEPENDENT DIRECTOR SINCE 2021 COMMITTEES Chair, Finance; Audit and Risk | EDUCATION BS, Electrical Engineering, University of Florida MBA, Nova Southeastern University AMP, Duke University EMP, University of Pennsylvania Wharton School SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Newpark Resources, Inc., Osmose Utilities Services Senior Advisor, TRC Consulting, Engineering and Construction SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Pacific Gas & Electric Interim President; Board member, Association of Edison Illuminating Companies Member, California Governor's Earthquake Advisory Commission TOP SKILLS Human Capital Management Major Capital Projects Utility Operations | ||||||||||||
BACKGROUND AND QUALIFICATIONS Mr. Lewis is a retired senior executive with more than 35 years of experience in electric utility operations. He served as Interim President of Pacific Gas and Electric Company (PG&E) from August to December 2020. During that time, he oversaw PG&E's gas and electric operations including wildfire prevention and response efforts, grid resiliency initiatives, vegetation management programs and emergency preparedness. Prior to that, Mr. Lewis served as PG&E's senior vice President of Electric Operations and vice president of Electric Distribution. Before joining PG&E in 2018, Mr. Lewis held a number of senior executive positions at Duke Energy, including senior vice president and chief distribution officer from 2016 to 2018, with responsibility for distribution operations across six states, and senior vice president and chief transmission officer from 2015 to 2016. Before the Duke Energy and Progress Energy merger in 2012, he was a senior vice president of energy delivery for Progress Energy Florida, where he was responsible for hurricane preparedness and grid hardening initiatives. Mr. Lewis’s qualifications to serve on our Board include his executive leadership experience and in-depth knowledge of utility operations, including electric transmission and distribution, wildfire prevention and response, disaster preparedness, grid resiliency, large capital projects and risk management and safety programs. | ||||||||||||||
| Michael Millegan INDEPENDENT DIRECTOR SINCE 2019 COMMITTEES Audit and Risk; Finance | EDUCATION BA, MBA, Angelo State University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Axis Capital Holdings, Wireless Telecom Group, Inc., Virginia Mason Foundation, Network Wireless Solutions Strategic advisor and investor, Windpact, Inc., Vettd, Inc. SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Board Member, CoreSite Realty Corp. TOP SKILLS Consumer Products/Customer Expectations Regional Business and Community Ties Technology, Cybersecurity, Information Security | ||||||||||||
BACKGROUND AND QUALIFICATIONS Mr. Millegan is the Founder and CEO of Millegan Advisory Group 3 LLC where he advises early-stage companies on strategy that drives technology innovation and shareholder value since 2018. Previously, he held a variety of executive leadership and management positions within Verizon, where he led large-scale and scope business units. As president of Verizon Global Wholesale Group, he was responsible for $11 billion in sales revenue, 13,000 employees and $1 billion in annual capital spending. Mr. Millegan’s qualifications to serve on our Board include his experience overseeing significant business units within a large corporate group, his experience in various executive and management roles, and his background in operations in a regulated industry, global sales and marketing, digital media platforms, network infrastructure deployment, cloud computing, cybersecurity,and supply chain management and communications infrastructure. | ||||||||||||||
20 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
| Lee Pelton, PhD INDEPENDENT DIRECTOR SINCE 2006 COMMITTEES Chair, Nominating, Governance and Sustainability; Audit and Risk | EDUCATION BA, English/Psychology, Wichita State University PhD, English, Harvard University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board and executive committee, Boston Chamber of Commerce Chair, Boston Racial Equity Fund Chair Emeritus, Boston Arts Academy Foundation, Trustee, Barr Foundation Boston Municipal Research Bureau SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Chair, American Council on Education Board member, National Association of Independent Colleges and Universities, Association of American Colleges and Universities, Museum of African American History in Boston, Harvard University Board of Overseers TOP SKILLS Corporate Governance Environmental and Sustainability Government, Regulatory, Public Policy | ||||||||||||
BACKGROUND AND QUALIFICATIONS Dr. Pelton is President and CEO of The Boston Foundation, a philanthropic organization with over $1 billion in assets. Before joining The Boston Foundation, he served as president of Emerson College from 2011 to May 2021. Prior to that, Dr. Pelton served as President of Willamette University from 1999 to 2011, dean and professor of English Literature at Dartmouth College from 1991 to 1998 and dean of students and later dean of Colgate University from 1986 to 1991. In 2020, he was recognized by the Boston Chamber of Commerce as a 2020 Distinguished Bostonian and included in the Boston Business Journal's 50 Most Powerful Leaders in Boston list. Dr. Pelton’s qualifications to serve on our Board include his executive leadership at academic institutions, his civic leadership, 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 professional background and accomplishments. | ||||||||||||||
| Patricia Salas Pineda INDEPENDENT DIRECTOR SINCE 2022 COMMITTEES Compensation, Culture and Talent; Finance | EDUCATION BA, Government, Mills College JD, University of California at Berkeley SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Levi Strauss & Co., Omnicom Group, Frontier Group Holdings, Earthjustice SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS California Air Resources Board The Congressional Hispanic Caucus Institute TOP SKILLS Consumer Products/ Customer Government, Regulatory, Public Policy Human Capital Management | ||||||||||||
BACKGROUND AND QUALIFICATIONS Ms. Pineda has held diverse leadership roles in human resources, marketing, legal, communications, philanthropy, and stakeholder relations. Prior to her retirement, Ms. Pineda was the Group Vice President, Hispanic Business Strategy Group at Toyota Motor North America, Inc. Before that, Ms. Pineda was the Group Vice President, national Philanthropy and also Group Vice President Corporate Communications/ Administration and General Counsel. Ms. Pineda began her career at New United Motor Manufacturing Inc., where she held leadership positions in Human Resources, Legal, Government and Environmental Affairs. Ms. Pineda is the founder and Chair emeritus of the Latino Corporate Directors Association. | ||||||||||||||
21 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
| Maria Pope President and Chief Executive Officer, Portland General Electric Company DIRECTOR SINCE 2018 | EDUCATION BA, College of Arts and Sciences, Georgetown University MBA, Stanford Graduate School of Business SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board member, Columbia Banking System Vice chair, Electric Power Research Institute Executive committee, Edison Electric Institute (EEI) and Oregon Business Council Board member, Secretary of Energy Advisory Board, Federal Reserve Bank of San Francisco Portland Branch SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS Chair, OHSU Governing Board, Canadian Council of Forest Industries, Oregon Symphony TOP SKILLS Environmental and Sustainability Finance and Accounting Utility Operations | ||||||||||||
BACKGROUND AND QUALIFICATIONS Ms. Pope is President and CEO of Portland General Electric Company. She was appointed President on October 1, 2017 and Chief Executive Officer on January 1, 2018. She served from 2013 to 2017 as senior vice president of Power Supply, Operations and Resource Strategy, overseeing PGE's generation plants, energy supply portfolio, and long-term resource strategy. Ms. Pope joined PGE in 2009 as senior vice president of finance, Chief Financial Officer and treasurer. She served on PGE's Board of Directors from 2006 to 2008. Prior to joining PGE, she served as Chief Financial Officer for Mentor Graphics Corporation and held senior operating and finance positions within the forest products and consumer products industries. She began her career in banking with Morgan Stanley. Ms. Pope’s qualifications to serve on our Board include her current role as President and CEO, her extensive knowledge of the Company and the utility industry, her experience as Chief Financial Officer of three publicly traded companies, her diverse leadership experience in business and financial roles, and her corporate and civic board experience. | ||||||||||||||
22 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
| James Torgerson INDEPENDENT DIRECTOR SINCE 2021 COMMITTEES Chair, Compensation, Culture and Talent; Nominating Governance and Sustainability | EDUCATION BBA, Accounting, Cleveland State University SELECTED DIRECTORSHIPS AND MEMBERSHIPS Board of trustees, Yale-New Haven Hospital, Yale-New Haven Health System SELECTED FORMER DIRECTORSHIPS, MEMBERSHIPS AND POSITIONS CEO, AVANGRID, Inc., UIL Holdings Corporation Executive committee, Edison Electric Institute (EEI) Co-Chair, EEI Committee on Reliability, Security and Business Continuity Chair, American Gas Association Board member, Archaea Energy, Inc. TOP SKILLS Environmental and Sustainability Human Capital Management and Culture Utility Operations | ||||||||||||
BACKGROUND AND QUALIFICATIONS Mr. Torgerson served as CEO of AVANGRID, Inc., an energy company with approximately $30 billion in assets and operations in 24 states from 2015 until his retirement in 2020. Previously, he was president and CEO of UIL Holdings Corporation from 2006 to 2015, when it merged with Iberdrola USA to form AVANGRID. During his time at UIL Holdings, he oversaw its expansion from a regional electric utility to a diversified energy delivery company and one of the largest generators of wind electricity in the U.S., serving natural gas and electric utility customers across multiple states. Before joining UIL Holdings, he was president, CEO and director of the Midwest Independent Transmission System Operator, Inc. from 2000 to 2006. He also previously served as chief financial officer for several natural gas and electric utilities including Puget Sound Energy and Washington Energy Company. Before transitioning to the utility industry, he served as vice president of development for Diamond Shamrock Corporation, where he also held various finance and strategic planning positions. Mr. Torgerson’s qualifications to serve on our Board include his executive leadership experience and extensive knowledge of the utility industry, including clean energy development, finance and accounting, energy markets, regulation, risk management and strategic planning. | ||||||||||||||
23 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
ROLE OF THE BOARD OF DIRECTORS
Our Board is elected by our shareholders to oversee management in its operation of PGE. In exercising its fiduciary duties, the Board’s goal is to build long-term value for our shareholders and to ensure the vitality of PGE for our customers, employees and the other individuals and organizations who depend on us.
Key responsibilities of our Board include:
•Establishing a corporate governance framework;
•Overseeing and advising management on Company strategy;
•Overseeing the Company's risk management programs;
•Overseeing the Company's ESG programs;
•Overseeing the Company's human capital management and corporate culture; and
•Conducting Board and executive succession planning.
In the pages that follow we provide information about how our Board fulfills these responsibilities, as well as other important policies and practices of our Board.
DIRECTOR INDEPENDENCE
The NYSE listing standards require a majority of our directors and each member of our Audit and Risk Committee, Compensation, Culture and Talent Committee, and Nominating, Governance and Sustainability Committee to be independent. Our Corporate Governance Guidelines require at least 75% of our directors to be independent under NYSE independence standards. For a director to be considered independent, the Board must affirmatively determine that the director does not have any direct or indirect material relationship with PGE, including any of the relationships specifically prohibited by the NYSE independence standards.
In addition to the NYSE listing standards, to assist us in determining the independence of Board members and candidates, the Board has adopted Director Independence Standards, which identify types of relationships that could exist between PGE and a director that would prevent the director from being independent. Our Director Independence Standards are contained in our Corporate Governance Guidelines, published on our website at https://investors. portlandgeneral.com/corporate-governance.
During its annual review of director independence in 2022, the Board considered whether there were any transactions or relationships between PGE 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) and 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.
As a result of this review, the Board affirmatively determined that other than Ms. Pope, all current members of the Board and its standing committees are independent under NYSE listing standards and our Director Independence Standards.
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GOVERNANCE STRUCTURE AND PROCESSES
Board Leadership Structure
Our Board believes that PGE is best served by maintaining the flexibility to determine its leadership structure based on our evolving needs. Our Corporate Governance Guidelines call for the appointment of a Board Chair and require the appointment of a Lead Independent Director if the Board Chair is not independent. The duties of our Board Chair include:
•Presiding over and managing meetings of the Board;
•Serving as the principal liaison between management and other non-management directors;
•Working closely with the Committees in fulfilling their charter obligations, including risk oversight, the annual Board evaluation and annual CEO performance review;
•With the Nominating, Governance and Sustainability Committee, overseeing the composition of the Board;
•Advising senior management on strategy and significant matters as appropriate; and
•Representing the Board at PGE's Annual Meeting of shareholders, and in communications with shareholders and other stakeholders.
We currently separate the roles of CEO and Board Chair. Jim Torgerson, our incoming Board Chair, is independent as defined in the NYSE listing standards and our own Director Independence Standards, which are described in our Corporate Governance Guidelines.
Our Board periodically reviews our leadership structure to determine whether it continues to serve the interests of the Company. We believe our current leadership structure promotes strong independent Board oversight and management accountability and allows our CEO to focus her time and efforts on establishing our strategic direction and managing the affairs of the Company.
BOARD REFRESHMENT
Under our director retirement and tenure policy, which is contained in our Corporate Governance Guidelines, candidates will not be nominated for election after age 75, and candidates elected after July 25, 2018 will not be nominated to serve on the Board for more than 12 years, unless the Board determines that such director’s continued service would be in the best interests of PGE. Our retirement policy is anchored on the need for Board refreshment and balanced tenure at the Board. We have an active board refreshment program with 6 new directors since 2019 and an average tenure of 6.3 years.
The Nominating, Governance and Sustainability Committee recommends director candidates to the Board. The Nominating, Governance and Sustainability Committee carries out this responsibility through a year-round process described below:
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| 1 | à | 2 | à | 3 | à | 4 | ||||||||||||||
| Evaluation of Board Composition | Candidate Recruitment | Candidate Evaluation | Recommendation to Board | |||||||||||||||||
| The Nominating, Governance and Sustainability Committee evaluates the Board's membership needs. | If the Nominating, Governance and Sustainability Committee determines that there is a need for new candidates, individuals are identified through a variety of methods, including shareholder recommendations. | Candidates are evaluated on whether they exhibit core attributes that our Nominating, Governance and Sustainability Committee looks for in all candidates, as well as Board membership needs. | The Nominating, Governance and Sustainability Committee recommends selected candidates to the Board for nomination or appointment to the Board. | |||||||||||||||||
Evaluation of Board Composition. Each year the Nominating, Governance and Sustainability Committee evaluates the size and composition of the Board to assess whether they are appropriately considering our evolving needs. In making this evaluation, the Nominating, Governance and Sustainability Committee considers PGE's strategic direction, current director qualifications, experience, and diversity, the results of Board and committee self-assessments, and legal and regulatory requirements. The Nominating, Governance and Sustainability Committee also considers whether there may be a need to fill a future Board vacancy considering our director retirement and tenure policy or anticipated dates of retirement. If the Nominating, Governance and Sustainability Committee identifies a need to fill a future Board vacancy or add to the mix of skills and qualifications represented on the Board, the Nominating, Governance and Sustainability Committee oversees the director recruitment process.
Candidate Recruitment. The Nominating, Governance and Sustainability Committee identifies new Board candidates through a variety of methods, including the use of third-party search firms, suggestions from current directors, shareholders, or employees, and self-nominations. Our newest director, Patricia Salas Pineda, was recommended by a board advisory firm prior to her nomination and election to the Board of Directors.
The Nominating, Governance and Sustainability Committee considers candidates recommended by shareholders. The recommendation and information about the recommended candidate should be sent to the Chair of the Nominating, Governance and Sustainability Committee, in care of our Corporate Secretary, at Portland General Electric Company, 121 SW Salmon Street, 1WTC1301, Portland, Oregon 97204.
The Nominating, Governance and Sustainability Committee will use the same process to evaluate a candidate regardless of the source of the recommendation.
Candidate Evaluation. In evaluating director candidates, the Nominating, Governance and Sustainability Committee seeks to identify individuals who, at a minimum, have the following characteristics:
•A reputation for honesty, ethical conduct and sound business judgment
•Demonstration of significant accomplishments in their field
•Experience and skills in the utility industry or other areas important to the strategic direction and operation of PGE
•Availability and willingness to be diligent in fulfilling the responsibilities of Board membership and
•Freedom from conflicts of interest
In addition to evaluating a candidate’s individual qualifications, the Board and the Nominating, Governance and Sustainability Committee consider how a candidate would contribute to the overall mix of experience, qualifications, skills and other attributes represented on our Board. We believe it is important that the Board exhibit diversity across a
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variety of parameters, including age, gender, and race, and we actively seek out diverse candidates. The Board has, therefore, not felt the need to adopt a formal Board diversity policy.
Recommendation to the Board of Directors. Each year in advance of our Annual Meeting of shareholders, the Nominating, Governance and Sustainability Committee recommends a group of nominees to be presented to the shareholders for election to the Board. As appropriate, the Nominating, Governance and Sustainability Committee also recommends candidates for appointment to the Board between annual meetings. Directors who are appointed by the Board between annual meetings stand for election at the next Annual Meeting of shareholders.
Committee Membership Rotation: The Nominating, Governance and Sustainability Committee periodically considers rotating board committee membership with a view to balancing the benefits of continuity and specialized knowledge with the benefits of diversity of experience and viewpoints. Typically, rotation decisions are made in connection with re-nomination decisions and becomes effective upon re-election of directors by our shareholders. If re-elected, consistent with the committee membership rotation considerations in our Corporate Governance Guidelines, the Board has approved the following committee assignment rotations: Mr. Lewis will move from the Audit and Risk Committee to the Compensation, Culture and Talent Committee; Dr. Jackson will move from the Finance Committee to the Nominating, Governance and Sustainability Committee, Mr. Torgerson will leave the Compensation, Culture and Talent Committee, and Ms. Pineda will become the Chair of the Compensation, Culture and Talent Committee.
BOARD AND COMMITTEE SELF-EVALUATION PROCESS
Each year the Board conducts evaluates its performance and effectiveness as well as that of its committees. The Chair of the Nominating, Governance and Sustainability Committee leads the Board’s assessment process, which requires each director to complete a written evaluation of the performance of the Board and each committees on which the director serves. These evaluations are anonymous, except to the extent a director elects otherwise. In addition to the written evaluations, the Chair of the Nominating, Governance and Sustainability Committee meets individually with each director for an open discussion about Board and Committee performance. The results of our directors’ feedback are summarized and provided to all Board members. The Chair of the Nominating, Governance and Sustainability Committee leads a discussion regarding the results with the committee members as well as the entire Board annually. In addition, the Nominating, Governance and Sustainability Committee conducts a formal mid-year evaluation of the effectiveness of implemented changes or adjustments to help ensure accountability for improvements.
The Board and Committee Self-Evaluation questionnaire and interview are comprehensive, and include questions about Board culture, meeting agendas, and interactions with management. The assessment includes questions designed to assess director preparedness for meetings as well as potential gaps in the skills on the Board. The Board uses this feedback as part of the refreshment process. Periodically, the Board engages an outside party to review Board practices, processes and culture. The last such engagement was in 2021.
COMMITMENT FROM OUR BOARD
The Board recognizes that its members benefit from service on the boards of other companies and it encourages such service. The Board also believes, however, that it is critical that directors dedicate sufficient time to their service on PGE’s Board. In 2022, the Board updated the Corporate Governance Guidelines to set a limit of four additional public company boards for Directors. Directors must notify the Chair of the Nominating, Governance and Sustainability Committee and the Corporate Secretary before accepting an invitation to serve on the board of any other company or becoming an officer of a company. The Chair of the Nominating, Governance and Sustainability Committee reviews and determines whether the position would affect the director's ability to serve on the Board, and in making this determination, the Chair of the Nominating, Governance and Sustainability Committee considers the time commitment and any conflict or interlocking director or officer restrictions that may apply. Further, the Nominating, Governance and Sustainability Committee considers the number of boards a director is on in considering whether to re-nominate a director for election to the Board.
Directors are expected to attend all Board meetings and meetings of committees on which they serve, as well as the Company's Annual Meeting of shareholders. While the Board understands that circumstances may arise from time to time that prevent a director from attending a meeting, directors are expected to make these meetings a priority. During
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2022, each director attended at least 75% of the meetings of the Board and meetings held by all committees on which the director served, with one exception. Ms. Pineda was appointed to the Board of Directors, and to the Compensation, Culture and Talent Committee and the Finance Committee of the Board of Directors, effective October 1, 2022. Because she was appointed late in the year and had a pre-existing conflict for one of the meeting days, she did not meet the 75% threshold. Excluding that exception, the directors nominees collectively attended 98.83% of all Board and Board committee meetings. All of the directors who were on the Board also attended the Company's 2022 annual meeting of Shareholders. There were nine meetings of the Board of Directors in 2022.
Under our Corporate Governance Guidelines, the non-management directors must meet in executive session without management at least quarterly. The Chair of the Board presides over executive sessions of the non-management directors. If the the non-management directors include directors who are not independent under the NYSE listing standards, our Corporate Governance Guidelines require the independent directors to meet separately in executive session at least once a year. There were eight executive sessions of the non-management directors in 2022. Throughout 2022, all of our non-management directors were independent under the NYSE listing standards and our Standards for Determination of Director Independence. Accordingly, the eight meetings of our non-management directors in 2022 also constituted meetings of our independent directors.
Director Resignation Policy
We have adopted a director resignation policy, which is contained in our Corporate Governance Guidelines. Under the policy, any incumbent director who fails to receive a majority vote in an uncontested election is expected to tender a resignation within five days following the certification of election results. The Nominating, Governance and Sustainability Committee will consider the offer of resignation and, within 45 days following the date of the election of directors, recommend to the Board whether to accept or reject the offer of resignation. The Nominating, Governance and Sustainability Committee will base its decision on factors the committee deems relevant, including the stated reason or reasons why shareholders voted against the director’s reelection and whether the director’s resignation from the Board would be in the best interests of PGE and its shareholders. The Board will act on the Nominating, Governance and Sustainability Committee's recommendation within 90 days after the date of the shareholders’ meeting at which the election of directors occurred. A director who is required to tender a resignation may not participate in the deliberations or decision regarding the offer of resignation. Within four business days after the Board’s decision with respect to an offer of resignation, the Company will publicly disclose the Board’s decision and, if applicable, reasons for rejecting the offer of resignation, in a Form 8-K filed with the SEC.
Stock Ownership Guidelines for Directors
Our Corporate Governance Guidelines require each non-employee director to own shares of PGE common stock with a value equal to at least five times the value of the annual base cash retainer fee for non-employee directors. 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 page 67 of this Proxy Statement.
Director Orientation and Continuing Education
New directors receive information about our business, strategy and management team to familiarize them with PGE before their first Board meeting. We also arrange a series of orientation meetings between each new director and senior leaders throughout the company to help new directors understand the operations of the business and their specific Board and committee duties.
We typically provide continuing education to directors annually on specific topics that relate to our strategic priorities. These sessions are typically led by management. Directors are encouraged to visit our facilities. Directors may also attend external education programs and are reimbursed for the cost of those programs.
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RELATED PARTY TRANSACTIONS
Our Board recognizes that transactions between PGE and certain individuals and entities, including our directors and officers, may raise questions as to whether those transactions are consistent with the best interests of PGE and its shareholders. Accordingly, the Board has adopted a written Related Person Transactions Policy, which addresses our policies regarding the review, approval, or ratification of certain transactions between PGE and certain “related persons,” including our directors, executive officers, director nominees, and owners of more than 5% of any class of our voting securities. Under the policy, transactions between PGE and a related person involving more than $120,000 in which the related person has a direct or indirect material interest are not permitted unless the Nominating, Governance and Sustainability Committee determines that the transaction is not inconsistent with the best interests of PGE and its shareholders. Before entering into such a transaction with PGE, the related person or the business unit leader responsible for the potential transaction is required to provide notice to the General Counsel of the facts and circumstances of the proposed transaction. Certain types of transactions—including executive and director compensation that is required to be disclosed under SEC disclosure rules and the provision of tariff-based utility service—are exempt from the policy.
Our Related Person Transactions Policy supplements and does not supersede other policies that apply to transactions with related persons, such as our Code of Business Ethics and Conduct. Under our Code of Business Ethics and Conduct, our directors, officers, and employees must report any violation of the code or any situation or matters that may be considered to be unethical or a conflict of interest. Any conflict of interest under the code involving a director, an executive officer, or our Controller is reviewed by the Audit and Risk Committee. Only the Audit and Risk Committee may waive such a conflict, which will be promptly disclosed to our shareholders as required by law.
COMMUNICATIONS WITH THE BOARD
The Board and the Audit and Risk Committee have approved a process for handling communications to the Board and its committees. Shareholders and other interested parties may submit written communications to the Board (including the Chair), a Board committee, or the non-management directors as a group. Communications may include the reporting of concerns related to governance, corporate conduct, business ethics, financial practices, legal issues and accounting or audit matters. Communications should be in writing and addressed to the Board, or any individual director or group or committee of directors by either name or title, and should be sent in care of:
Portland General Electric Company
Attention: Corporate Secretary
121 SW Salmon Street, 1WTC1301
Portland, Oregon 97204
All appropriate communications received from shareholders and other interested parties will be forwarded to the Board, or the specified director, Board committee or group of directors, as appropriate.
A full description of our process for handling communications with the Board is published on our website at https://investors.portlandgeneral.com/corporate-governance and is 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.
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BOARD COMMITTEES
The Board has established four standing committees: the Audit and Risk Committee, the Nominating, Governance and Sustainability Committee, the Compensation, Culture and Talent Committee, and the Finance Committee. Each standing committee has a Board-approved charter, which is reviewed annually by the respective committee and by our Nominating, Governance and Sustainability Committee. The Board may also establish temporary committees as needed to address specific issues that arise from time to time.
Each year our Nominating, Governance and Sustainability Committee reviews the composition and mandates of our standing committees to ensure that they continue to support the effective execution of the Board's responsibilities. The Board approves committee and chair assignments at least annually.
Each Board committee may retain and compensate consultants or other advisors as necessary for it to carry out its duties. To the extent permitted by law and the NYSE listing standards, Board committees may form subcommittees and delegate authority to the subcommittees, or to a committee chair individually.
Below are brief descriptions of each standing Board committee. For more detailed descriptions, please refer to the committee charters available on our website at https://investors.portlandgeneral.com/corporate-governance.
Audit and Risk Committee | ||||||||||||||
Committee Composition Chair: Kathryn Jackson Other Members: Mark Ganz Michael Lewis Michael Millegan Lee Pelton Meetings in 2022: 6 Independence/Qualifications: •All members are independent within the meaning of the NYSE listing standards, SEC standards and the Company's Director Independence Standards. •All members are “financially literate” within the meaning of the NYSE listing standards. •Mr. Ganz is an “audit committee financial expert” within the meaning of applicable SEC rules. | Key Responsibilities •Assists the Board in its oversight of our financial statements, independent auditors’ qualifications, independence and performance, and internal controls over financial reporting •Appoints and oversees the work of our registered public accounting firm •Reviews the annual audited financial statements and quarterly financial information with management and the independent registered public accounting firm •Pre-approves all audit, audit-related, tax and other services, if any, provided by the registered independent public accounting firm •Appoints and oversees the work of PGE's Director of Internal Audit Services and approves our annual internal audit plan and budget •Approves the Audit and Risk Committee Report for inclusion in our proxy statement •Oversees the development and implementation of our ethics and compliance programs •Assists the Board with the oversight of our enterprise risk management program •The Audit and Risk Committee's role in risk oversight and ESG are described above under Board Oversight of Risk and Board Oversight of ESG | |||||||||||||
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Compensation, Culture and Talent Committee | ||||||||||||||
Committee Composition Chair: James Torgerson Other Members: Rodney Brown Mark Ganz Marie Oh Huber Patricia Salas Pineda Meetings in 2022: 5 Independence/Qualifications: •All members are independent within the meaning of the NYSE listing standards and the Company's Director Independence Standards. | Key Responsibilities •Evaluates the performance of the CEO and determines her compensation together with the independent directors •Approves the compensation of the executive officers other than the CEO •Reviews PGE's non-management director compensation program and recommends appropriate levels of compensation for non-employee directors •Advises on human capital management matters, including talent management strategies, programs and initiatives, including DEI programs and results, workforce health and safety and any required human capital disclosures including the DEI commitments •Reviews the Compensation Discussion and Analysis contained in our proxy statement and approves the Compensation, Culture and Talent Committee Report for inclusion in the proxy statement •Together with the other independent directors, oversees our incentive compensation clawback policy and recovery of performance-based compensation awards •Reviews succession plans and diversity pipeline for executive roles •Oversees our culture metrics and employee engagement •Reviews and approves severance or termination payment arrangements for executive officers •The Compensation, Culture and Talent Committee's role in ESG is described above under Board Oversight of ESG | |||||||||||||
COMPENSATION, CULTURE AND TALENT COMMITTEE INTERLOCKS
All directors who served as a member of the Compensation, Culture and Talent Committee during 2022 were independent directors and no member was an employee or former employee of PGE or any of its subsidiaries. During 2022, 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, Culture and Talent Committee or Board or had any relationship with PGE requiring disclosure under SEC regulations.
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Finance Committee | ||||||||||||||
Committee Composition Chair: Michael Lewis Other Members: Rodney Brown Dawn Farrell Kathryn Jackson Michael Millegan Patricia Salas Pineda Meetings in 2022: 4 Independence/Qualifications: •All members are independent within the meaning of the NYSE listing standards and the Company's Director Independence Standards. | Key Responsibilities •Reviews and recommends to the Board annual financing plans and capital and operating budgets •Reviews and approves or recommends to the Board certain costs for projects, initiatives, transactions and other activities within PGE's ordinary business •Reviews our capital and debt structure, approves or recommends to the Board the issuance of debt, and recommends to the Board the issuance of equity •Reviews and recommends to the Board dividends, dividend payout goals and objectives •Reviews earnings forecasts •Assists the Board in overseeing the management of results associated with PGE’s power operations, capital projects, finance activities, credit and liquidity •Reviews and recommends to the Board investment policies and guidelines •Oversees the management of benefit plan assets •The Finance Committee's role in risk oversight and ESG is described above in Board Oversight of Risk and Board Oversight of ESG | |||||||||||||
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Nominating, Governance and Sustainability Committee | ||||||||||||||
Committee Composition Chair: Lee Pelton Other Members: Jack Davis Dawn Farrell Marie Oh Huber James Torgerson Meetings in 2022: 4 Independence/Qualifications: •All members are independent within the meaning of the NYSE listing standards and the Company's Director Independence Standards. | Key Responsibilities •Reviews the size of the Board and recommends to the Board any appropriate changes •Identifies and recommends to the Board individuals qualified to serve as directors and on committees of the Board •Takes a leadership role in shaping our corporate governance, including the policies and practices described in our Corporate Governance Guidelines •Reviews succession plans for the CEO, either as a committee or together with the full Board •Oversees the self-assessment of the Board and its committees •Reviews any company transactions involving directors, nominees, executive officers and other “related persons” in accordance with the Company’s Related Person Transaction Policy •Provides strategic oversight on the (i) formulation of sustainability and ESG strategy and policies, including our engagement with stakeholders, and its ESG report and (ii) issues related to board leadership, ethics, and integrity •Reviews and reports to the Board on environmental, climate change, sustainability, social and other related ESG matters affecting PGE •Reviews and approves our Political Engagement Policy and reviews our strategic priorities on political and policy lobbying, political contributions and charitable contribution programs •The Nominating, Governance and Sustainability Committee's role in risk oversight and ESG is described below in Board Oversight of Risk and Board Oversight of ESG | |||||||||||||
BOARD OVERSIGHT
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BOARD OVERSIGHT OF STRATEGY FOR CLEAN ENERGY FUTURE | ||||||||||||||
| Strategic Goals | ||||||||||||||
| | | ||||||||||||
| Decarbonize Power | Electrify the Economy | Advance our Performance | ||||||||||||
| Reduce greenhouse gas emissions associated with electricity served to retail customers by at least 80% by 2030 and 100% by 2040. | Increase beneficial electricity use to capture the benefits of new technologies while building an increasingly clean, flexible and reliable grid. | Improve efficiency, safety, and system and equipment reliability while maintaining affordable energy service and growing earnings per share 5% to 7%. | ||||||||||||
| How we will achieve our goals | ||||||||||||||
| Ensure resource adequacy as we decarbonize | Scale customer solutions that deliver value | Drive enterprise operational excellence and innovation | ||||||||||||
One of the Board's primary functions is to assist management with the development of our long-term business strategy.
Our Board conducts annual offsite Board sessions focused solely on PGE's strategy. During these sessions, the Board and management discuss the competitive landscape in our industry, emerging technologies, significant business risks and opportunities, and PGE's strategic priorities. These sessions have generally included presentations provided by outside experts and business leaders on matters of strategic significance to us. Directors with expertise in a specific strategic area also confer with management outside of Board meetings.
Throughout the year, our management team regularly reports to the Board on the execution of our long-term strategic plans, the status of important projects and initiatives, and the key opportunities and risks facing PGE. For more information on our long-term strategy, see page 4 of this Proxy Statement and our 2022 Annual Report.
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RISK MANAGEMENT
The Board and its committees have broad responsibility for the oversight of significant strategic, operational, financial, reputational and ESG risk, and actively review our enterprise risk management program and monitor strategic and emerging risks.
The Board is responsible for assessing whether management has put in place effective systems to identify, evaluate, and manage the material risks facing PGE. The Board satisfies its oversight function through regular reporting from management on areas of material risk, including strategic, operational, cybersecurity, environmental, financial, legal and regulatory risks. In addition, management reports each quarter to the Audit and Risk Committee on the activities and findings of our risk management program. At least annually, the Board and the Finance Committee also review corporate goals and approve capital budgets to ensure they are aligned with PGE's strategy.
While the full Board has ultimate responsibility for oversight of risk management, particularly with regard to strategic risks, each of the standing committees of the Board has been assigned a role in assisting the Board with its oversight responsibilities. Key risk areas overseen by the Board's committees are shown below:
| Committee | Risk Oversight Responsibilities | |||||||
| Audit and Risk | •Oversees the activities of the Executive Risk Committee (described below) •Assists the Board in providing oversight of our Enterprise Risk Management Program including review of risks, mitigations and metrics •Oversees key risks, including: ◦Financial reporting and internal controls including the internal controls related to ESG disclosures and metrics ◦Financial risk exposure and mitigations ◦Litigation and compliance risks ◦Cybersecurity and information technology risks ◦Physical security risks | |||||||
Compensation Culture and Talent | •Assesses and monitors the risks in our compensation plans and programs. The Compensation, Culture and Talent Committee's risk assessment processes are discussed under Other Compensation Policies and Practices - Risk Management on page 66. •Oversees key risks, including: ◦Talent acquisition, people management and retention ◦Workforce health and safety ◦Company-wide succession planning ◦Human capital management disclosures | |||||||
| Finance | •Oversees and monitors potential financial and liquidity risks to PGE •Oversees key risks, including: ◦Liquidity ◦Capital markets, including volatility and access to the market ◦Capital projects ◦Insurance | |||||||
| Nominating, Governance and Sustainability | •Assesses risks associated with our governance and sustainability initiatives and goals •Oversees key risks, including: ◦Board composition and refreshment, including directors skills and qualifications ◦ESG strategy and policies, environmental issues, climate change, sustainability and social issues ◦Political engagement and contributions, and charitable contributions | |||||||
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Management is responsible for day-to-day identification and management of risk. To ensure consistency and comprehensiveness in its approach, we have established an Executive Risk Committee to oversee our risk management programs. One core function of the Executive Risk Committee is to sponsor an annual enterprise-wide risk assessment, the results of which are used to inform our goals and priorities for the next year. We have also established standing executive committees with responsibility for managing risks over defined areas and reporting as appropriate to the Executive Risk Committee or the Audit and Risk Committee. These include our Integrated Security, Operations, People, and Strategy Executive Committees.
Selected Area of Risk Oversight
| Cybersecurity | We have identified cybersecurity as a key enterprise risk. The Board has assigned primary responsibility for cybersecurity oversight to the Audit and Risk Committee, which received quarterly cybersecurity updates as well as an annual deep dive in 2022 that focused on cybersecurity threats, defenses, and data analytics that impact our most critical assets as well as cybersecurity risks in the key risk reports discussed above. In addition to the deep dive, in 2022, management and the Board participated in a half-day simulated cybersecurity exercise facilitated by a third party, designed to test procedures and communication in the event of a cyber-attack. The Board has established a Cyber Incident Response Committee, which functions as a standby committee authorized to act on behalf of the Board in the event of a significant cybersecurity incident. This Cyber Incident Response Committee is composed of all the members of the Audit and Risk Committee and the Chair of the Board. The Chair of the Board serves as the Chair of that committee. Management established an integrated security steering committee comprised of a multidisciplinary management team to provide governance and integrated strategic direction for the identification, protection and detection of cybersecurity and physical risks. This committee reports to the Integrated Security Executive Committee and the Executive Risk Committee. We identify and manage information security risk using the National Institute of Standard and Technology Cybersecurity Framework (NIST), work closely with public and private sources for intelligence and monitoring, and periodically subject our program to external audit and review. All employees are required to take annual cybersecurity awareness training. We conduct monthly phishing campaigns in which employees are expected to report suspicious emails. If employees click on the training phishing email, they are provided immediate feedback on how to avoid phishing, in addition to being required to complete additional training. Quarterly security awareness is provided to all employees and focuses on cyber and physical security best practices. In 2022, we are not aware of any material breaches due to cybersecurity threats. | |||||||||||||
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Environmental, Social and Governance
The Board and its committees oversee safety, climate change, diversity, equity and inclusion (DEI) and other ESG risks and opportunities as an integral part of their oversight of our strategy. ESG issues are core to our strategy and therefore incorporated into topics reviewed at each Board meeting. Responsibility for ESG performance is integrated with the policies and principles that govern PGE.
The Board regularly reviews and monitors risks arising from climate change related events that impact our business, such as ice storms and wildfires and oversees the mitigation efforts for such events. The Board oversees the impact of legislation and regulation on our clean and renewable energy and transportation electrification strategy and monitors progress towards alignment with local, state and federal goals. In addition, the Board approves capital budgets that reflect allocation decisions towards system-wide resilience and customer facing-programs, as well as financing arrangements that have key ESG metrics to determine success. The Board also reviews community engagement and DEI initiatives to ensure that they advance our strategic goals.
Key risk areas overseen by the Board and the committees are shown below:
Sustainability and ESG Governance Framework
Management is responsible for day-to-day management of identifying and achieving sustainability and ESG related goals. To ensure consistency and comprehensiveness in its approach, we have established a Sustainability and Environmental, Social and Governance Steering Committee to oversee the execution of the strategies designed to achieve the goals. This committee reports to the Strategy Executive Steering Committee. Each business area is responsible for certain aspects of ESG and sustainability, and uses effective performance management techniques to align employees around the successful execution of our efforts to achieve our goals.
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Selected Area of ESG Oversight
| Diversity, Equity and Inclusion | The Board’s commitment to review and guide management on our corporate culture and DEI initiatives is also reflected in our Corporate Governance Guidelines. The Board reviews the Company’s DEI progress semi-annually, and monitors our commitments, metrics and trends related to workforce representation, pay equity, advancement opportunities and culture/employee sentiment. The Board will continue to monitor our DEI commitments to enhance transparency and accountability. | |||||||||||||
| Political Engagement and Disclosure | Political developments can have a significant impact on the Company and our stakeholders. Therefore, we participate in the political process through regular engagement with public officials and policy makers, and by making contributions to candidates, parties and political action committees from across the political spectrum that support policies that help advance our business strategy, including clean and renewable energy and efficient electrification. We will only make political contributions that comply with the law and adhere to our Political Engagement Policy. All contributions are approved by the most senior officer responsible for government affairs or the President and CEO. Exceptions to the Political Engagement Policy must be approved by the Vice-President of Public Affairs and the General Counsel. Management publishes an annual report disclosing contributions from corporate funds to campaign committees, political action committees and ballot measure committees. The Nominating, Governance and Sustainability Committee reviews the annual report and the Political Engagement Policy annually and receives a report on any significant exceptions or waivers to the Political Engagement Policy. The Nominating, Governance and Sustainability Committee also annually reviews with management the strategic priorities for PGE’s political and policy lobbying and political contributions. Additional information about our political contributions policies, including the annual report of political contributions, can be found on our website at https://investors.portlandgeneral.com/corporate-governance | |||||||||||||
Ethics and Compliance
To establish the foundation of our ethics and compliance culture, the Board has adopted a Code of Business Ethics and Conduct, which all directors, officers, and employees are expected to adhere to and affirm. The code covers all areas of workplace conduct, including conflicts of interest, unfair or unethical use of corporate opportunities, protection of confidential information, and legal and regulatory compliance. In addition, our CEO, CFO, and Controller must abide by the Code of Ethics for Chief Executive and Senior Financial Officers. Employees are expected to report any violation of our ethics codes and may do so using a variety of methods, including an anonymous third-party hotline. In addition, the Audit and Risk Committee has also adopted procedures for receiving and addressing complaints regarding accounting, internal accounting controls, or auditing matters. The Audit and Risk Committee receives quarterly reports from our Ethics and Governance and Compliance departments on key compliance metrics and employee conduct matters.
Find Our Ethics Codes Online The Code of Business Ethics and Conduct and the Code of Ethics for Chief Executive and Senior Financial Officers are available on our website at https://investors.portlandgeneral.com/corporate-governance 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 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. | ||
38 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
SENIOR MANAGEMENT SUCCESSION PLANNING
Our Board understands that our people and our culture are vital to our continued success. We seek to attract and retain a talented, motivated, and diverse workforce and to maintain a culture that reflects our core values, our drive for performance, and our commitment to acting with the highest levels of honesty, integrity, and compliance.
Senior Management Succession
The Board believes CEO succession planning is one of its most important responsibilities. In accordance with our Corporate Governance Guidelines, the Board oversees CEO and senior management succession planning and talent development with the assistance of the Nominating, Governance and Sustainability Committee and the Compensation Culture and Talent Committee to ensure there is a pool of internal candidates who can assume executive officer positions.
At least annually, the Board reviews succession plans for senior management, which includes a review of the qualifications and development plans of potential internal candidates and diversity of the succession pipeline. Directors also regularly have an opportunity to meet and engage with potential internal senior management successors at Board, and committee meetings and during operational visits. In addition, the Compensation, Culture and Talent Committee regularly conducts in-depth reviews of development plans for promising management talent. The Board also maintains an emergency succession plan for the CEO, which is reviewed annually.
Human Capital Management
The Compensation, Culture and Talent Committee has primary responsibility for overseeing our human capital management programs. In addition to providing input on leadership succession planning and talent development, the Compensation, Culture and Talent Committee regularly engages with management on a broad range of human capital management topics, including health and safety, diversity and inclusion, pay equity, strategic workforce planning, employee engagement, employee well-being programs, and performance management.
DIRECTOR COMPENSATION
We offer non-management directors both cash and equity compensation. Cash compensation is provided in the form of annual cash retainers for Board and committee service. Equity is provided in the form of an annual grant of restricted stock units with time-based vesting conditions (RSUs). Ms. Pope is not paid any additional compensation for her services as a director. Our 2022 director compensation arrangements are described below.
| Annual Cash Retainer and Equity Awards | Amount ($) | |||||||
| Annual Cash Retainer for Board Service | 70,000 | |||||||
| Annual Cash Retainer for Board Chair | 125,000 | |||||||
Annual Cash Retainer for Audit and Risk Committee Chair(1) | 20,000 | |||||||
| Annual Cash Retainer for Other Active Standing Committee Chairs | 15,000 | |||||||
| Annual Cash Retainer for Committee Service (per committee) | 20,000 | |||||||
| Grant-Date Value of Annual RSU Award | 130,000 | |||||||
1.Annual cash retainer for audit and risk committee chair of $20,000 was effective July 1, 2022; prior to that, this fee was $15,000.
39 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
Quarterly Cash Retainer
Directors' cash retainers for Board and committee service are paid quarterly in arrears. We also reimburse certain expenses related to Board service, including expenses related to attendance at Board and committee meetings. Directors are not paid meeting fees.
Annual Equity Awards
Under our 2022 equity compensation arrangements, each non-management director receives an annual grant of a number of RSUs determined by dividing $130,000 by the closing price of PGE's common stock on the grant date, rounding to the nearest whole share. Each award is fully vested when granted. Directors who join the Board during the year are awarded a pro rata portion of the annual award, based on the number of calendar months during which the director served on the Board that year.
Director Deferred Compensation Plan
Non-management directors first appointed or elected to the Board before April 23, 2019 are eligible to participate in our 2006 Outside Directors' Deferred Compensation Plan. The plan allows participants to defer the payment of Board retainers as well as any other form of cash compensation they may receive from PGE. 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 annual yield on Moody’s Average Corporate Bond Index. Directors may elect to receive payments, which commence 65 days after the end of the month in which the participant separates from board service, under the plan in a lump sum or in monthly installments for a period of up to 180 months. Death benefits, which consists of the balance of the participant’s account including interest, are payable to the beneficiary commencing 65 days after the end of the month in which the participant dies in the same form as elected for payments at separation from service. These benefits are unfunded and depend on the continued solvency of PGE. The following directors/retired directors participate in our 2006 Outside Directors' Deferred Compensation Plan: Rodney Brown, Jack Davis, Kirby Dyess, and Michael Millegan.
Determination of Director Compensation
The compensation of our non-management directors is determined by the Board of Directors upon a recommendation from the Compensation, Culture and Talent Committee. The Compensation, Culture and Talent Committee makes its recommendation after receiving input from its independent compensation consultant and management. The Compensation, Culture and Talent Committee retained FW Cook to evaluate and make recommendations regarding director compensation for 2022. FW Cook's evaluation included identifying industry trends and market data for directors' compensation, reviewing and identifying peer group companies, and evaluating director compensation data for these companies. Management's input focuses on compliance, legal and administrative matters.
In October 2021, the Compensation, Culture and Talent Committee recommended and the Board agreed to adjustments to non-management director compensation to bring them into reasonable alignment with the market and to increase service vesting requirements. In July 2022, based on recommendations from FW Cook, the Compensation, Culture and Talent Committee recommended and the Board agreed to increase the annual cash retainer for the Audit and Risk Committee Chair to acknowledge additional workload in that area.
40 | Portland General Electric | 2023 Proxy Statement | ||||
| Item 1: Election of Directors | |||||
2022 Director Compensation Table
The table below shows the compensation earned by each individual who served as a director during the year ended December 31, 2022, with the exception of Ms. Pope, whose compensation is described in the Summary Compensation Table and related tables and disclosure beginning on page 70.
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||||||||
| Rodney Brown | 110,000 | 129,982 | 239,982 | |||||||||||
| Jack Davis | 215,000 | 129,982 | 344,982 | |||||||||||
Kirby Dyess(4) | 55,000 | — | 55,000 | |||||||||||
Dawn Farrell(5) | 110,000 | 194,960 | 304,960 | |||||||||||
| Mark Ganz | 110,000 | 129,982 | 239,982 | |||||||||||
| Marie Oh Huber | 110,000 | 129,982 | 239,982 | |||||||||||
| Kathryn Jackson | 127,500 | 129,982 | 257,482 | |||||||||||
| Michael Lewis | 125,000 | 129,982 | 254,982 | |||||||||||
| Michael Millegan | 110,000 | 129,982 | 239,982 | |||||||||||
Neil Nelson(4) | 55,000 | — | 55,000 | |||||||||||
| Lee Pelton | 125,000 | 129,982 | 254,982 | |||||||||||
Patricia Pineda(6) | 27,500 | 97,481 | 124,981 | |||||||||||
| James Torgerson | 125,000 | 129,982 | 254,982 | |||||||||||
1.Amounts in this column include all fees earned for Board and committee service, regardless of whether such amounts were deferred under our 2006 Outside Directors' Deferred Compensation Plan.
2.Amounts in this column represent the aggregate grant date fair value of RSU awards made in 2022, computed in accordance with FASB ASC Topic 718, Compensation - Stock Compensation, without considering estimated forfeitures, based on the NYSE closing price of our common stock on the grant dated July 21, 2022.
3.No other compensation was paid in 2022.
4.Ms. Dyess and Mr. Nelson served as directors until their retirement from the Board on April 22, 2022.
5.Ms. Farrell joined the Board on January 1, 2022. She received an award of RSUs with a grant date value of $64,978 with respect to her service through July of 2022 which vested on January 19, 2022, in addition to the annual grant of RSUs made to the non-management directors in July of 2022.
6.Ms. Pineda joined the Board on October 1, 2022. She received an award of RSUs with a grant date value of $97,481 with respect to her service from October 1, 2022 through July of 2023, which vested on October 1, 2022.
41 | Portland General Electric | 2023 Proxy Statement | ||||
Item 2: Advisory Vote on Executive Compensation Our executive compensation programs are designed to attract and retain highly qualified executive officers and to provide them with incentives to advance the interests of our stakeholders, which include our shareholders, our customers, our employees and the communities we serve. Our programs are described in accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables, and the accompanying narrative discussion. We are asking our shareholders to indicate their support for the compensation of our named executive officers 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: | ||||||||||||||
What are you voting on? We are asking shareholders to approve, on an advisory basis, the compensation paid for 2022 to the executive officers named in the Summary Compensation Table. | ||||||||||||||
"FOR" 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. | ||||||||||||||
“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 2022 Summary Compensation Table and the other related tables and disclosure in the Proxy Statement for the Company’s 2023 Annual Meeting of shareholders.” | ||||||||||||||
Approval of this proposal will require that the number of votes cast in favor of this proposal exceeds the number of votes cast against this proposal. As an advisory vote, this proposal is not binding on PGE or the Compensation, Culture and Talent Committee. However, the Compensation, Culture and Talent Committee and the Board value the opinions expressed by shareholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions regarding named executive officers. It is expected that the next say-on-pay vote will occur at the 2024 annual meeting of shareholders. | ||||||||||||||
42 | Portland General Electric | 2023 Proxy Statement | ||||
Compensation, Culture and Talent Committee Report
The Compensation, Culture and Talent Committee has reviewed and discussed with management the following Compensation Discussion and Analysis and has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
MEMBERS OF THE COMPENSATION, CULTURE AND TALENT COMMITTEE
•James Torgerson (Chair)
•Rodney Brown
•Mark Ganz
•Marie Oh Huber
•Patricia Salas Pineda
43 | Portland General Electric | 2023 Proxy Statement | ||||
Compensation Discussion and Analysis
The 2022 compensation of our named executive officers appropriately reflects their significant contributions to the Company's strong progress towards long-term growth in 2022, while navigating historic power market volatility and executing well in the face of severe weather. The Compensation Discussion and Analysis explains the guiding principles and practices upon which our compensation program is based, the elements of our executive compensation program, and the compensation paid to our named executive officers.
| MS. POPE is President, Chief Executive Officer and a member of the Board of Directors of PGE. She was appointed President on October 1, 2017 and Chief Executive Officer on January 1, 2018. She served from 2013 to 2017 as senior vice president of Power Supply, Operations and Resource Strategy, overseeing PGE’s generation plants, energy supply portfolio, and long-term resource strategy. Ms. Pope joined PGE in 2009 as Senior Vice President of Finance, Chief Financial Officer and Treasurer. She served on PGE’s Board of Directors from 2006 to 2008. Prior to joining PGE, she served as Chief Financial Officer for Mentor Graphics Corporation and held senior operating and finance positions within the forest products and consumer products industries. She began her career in banking with Morgan Stanley. EDUCATION BA, College of Arts and Sciences, Georgetown University MBA, Stanford Graduate School of Business For more information, see Ms. Pope’s bio in Our Board of Directors page 21. | |||||||
Maria Pope President and CEO | ||||||||
44 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
 | MR. AJELLO has served as the Chief Financial Officer and Senior Vice President of Finance and Treasurer at PGE since January 1, 2021 and also became the Corporate Compliance Officer in 2022. He joined PGE in November 2020 as a senior advisor prior to his transition to the CFO role, bringing an extensive background in both energy and finance, including serving as executive vice president and CFO for Hawaiian Electric Industries (HEI) from 2009 to 2017, where he helped lead its clean energy transformation. In 2020, he became an independent director of HEI’s Hawaiian Electric Company, where he serves on the Audit Committee and from 2017 was an independent director of HEI’s American Savings Bank and a member of its Risk Committee and member of HEI’s compensation committee. He also currently serves on the Board of Dimension Renewable Energy, a developer, owner and operator of community solar solutions. Prior to joining HEI, Mr. Ajello served as senior vice president of Business Development at Reliant Energy and spent 15 years as managing director of the Energy and Natural Resources Group of UBS Warburg/UBS Securities. He has also chaired the U.S. Department of Energy’s Environmental Management Advisory Board. EDUCATION BA, State University of New York Oneonta MPA, Syracuse University Graduate, Advanced Management Program of the European Institute of Business Administration (INSEAD) | |||||||
James Ajello Senior Vice President, Finance, Chief Financial Officer, Treasurer and Corporate Compliance Officer | ||||||||
 | MS. ESPINOSA is responsible for all of PGE’s legal affairs, and coordinates the Company's ethics and governance activities. She joined PGE in 2021 as Deputy General Counsel and Corporate Secretary. Ms. Espinosa has over 18 years of legal and risk management experience in the utility and energy industries with a focus on board governance and power operations structuring and origination. Before joining PGE, she held leadership positions with Sempra Energy and General Electric. Ms. Espinosa is on the boards of the Portland Business Alliance and the PGE Foundation. Ms. Espinosa has served on the boards of Big Brothers Big Sisters and the Corporate Director Forum. EDUCATION Law, Universidad de Los Andes (Bogotá, Colombia) JD, magna cum laude, Southern Methodist University, Dedman School of Law LLM, Southern Methodist University Dedman School of Law. Ms. Espinosa is admitted to the Texas State, New York State and Oregon State Bar. | |||||||
Angelica Espinosa Vice President, General Counsel | ||||||||
45 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
 | MR. BEKKEDAHL oversees PGE operational areas and is responsible for advancing PGE’s integrated smart grid strategy since 2019. Mr. Bekkedahl joined PGE in 2014 and until 2019 served as Vice President of Transmission & Distribution, bringing more than three decades of leadership experience in the energy industry. Before joining PGE, he was Senior Vice President for transmission services at the Bonneville Power Administration and held leadership positions at Clark Public Utilities, PacifiCorp and Montana Power Company. Mr. Bekkedahl serves on the Electric Power Research Institute (EPRI), Research Advisory Committee, the Stanford University Bits and Watts Advisory Council, the University of Akron Energy Advisory Committee, and the All Hands Raised board for Portland Public Schools Foundation. EDUCATION BS, Electrical Engineering, Montana State University | |||||||
Larry Bekkedahl Senior Vice President, Advanced Energy Delivery | ||||||||
 | MR. KOCHAVATR is responsible for customer solutions, supply chain and information systems at PGE. He joined the Company in 2018. Before joining PGE, Mr. Kochavatr was Senior Vice President and CIO at SUEZ Water Technologies & Solutions. Prior to that, he held several CIO and global leadership roles during his 16 years at General Electric (GE) across the Energy, Aviation, Oil & Gas and Capital divisions, focused on building and integrating technologies to grow large-scale infrastructure businesses. Mr. Kochavatr began his career in early stage, venture capital funded technology start-up companies. He currently serves as Chair Emeritus of the Technology Association of Oregon and has served on the board of Pearl S Buck International. EDUCATION BA, University of California, Los Angeles MBA, University of Chicago, Booth School of Business | |||||||
John Kochavatr Vice President Customer & Digital Solutions and Chief Information Officer | ||||||||
46 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
| COMPENSATION DISCUSSION AND ANALYSIS TABLE OF CONTENTS | |||||||||||
| Setting Executive Compensation | 47 | ||||||||||
PGE VS. 2022 PEER GROUP | 50 | ||||||||||
2022 Executive Compensation | 51 | ||||||||||
| COMPENSATION ELEMENTS | 51 | ||||||||||
| PERFORMANCE -CONDITIONED COMPENSATION | 51 | ||||||||||
| BASE SALARIES | 52 | ||||||||||
| ANNUAL CASH INCENTIVE AWARDS | 52 | ||||||||||
2022 ACI PROGRAM TARGET AWARDS | 53 | ||||||||||
2022 ACI PROGRAM RATIONALE FOR SELECTION OF PERFORMANCE METRICS | 54 | ||||||||||
2022 ACI PROGRAM GOAL WEIGHTINGS | 56 | ||||||||||
2022 ACI PROGRAM PERFORMANCE RESULTS | 56 | ||||||||||
| NAMED EXECUTIVE OFFICER ANNUAL INCENTIVE AWARD PAYOUTS | 58 | ||||||||||
| LONG-TERM INCENTIVE AWARDS | 59 | ||||||||||
| CALCULATION OF TOTAL LTI AWARD OPPORTUNITY | 59 | ||||||||||
2022 PSU AWARDS | 60 | ||||||||||
| RATIONALE FOR LTI AWARDS DESIGN | 60 | ||||||||||
2022 PSU AWARD METRICS AND PAYOUT CALCULATION | 61 | ||||||||||
2022 RSU AWARDS | 61 | ||||||||||
| OTHER TERMS OF THE PSU AND RSU AWARDS | 61 | ||||||||||
2022 PSU AWARD PAYOUT | 62 | ||||||||||
| BENEFITS PLANS | 64 | ||||||||||
| Other Compensation Policies and Practices | 66 | ||||||||||
| RISK MANAGEMENT | 66 | ||||||||||
| ANNUAL INDEPENDENT COMPENSATION RISK ASSESSMENT | 66 | ||||||||||
| ANTI-HEDGING AND PLEDGING POLICY | 67 | ||||||||||
| STOCK OWNERSHIP POLICY | 67 | ||||||||||
| EQUITY GRANT PRACTICES | 68 | ||||||||||
| INCENTIVE COMPENSATION CLAWBACK AND CANCELLATION POLICY | 68 | ||||||||||
| IMPACTS OF REGULATORY REQUIREMENTS | 69 | ||||||||||
47 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
SETTING EXECUTIVE COMPENSATION
The Role of the Compensation, Culture and Talent Committee. The Compensation, Culture and Talent Committee, consisting entirely of independent directors, establishes our compensation philosophy and practices and develops, reviews and approves the compensation of the Company’s executive officers.
The Compensation, Culture and Talent Committee’s executive compensation determinations are the result of the Compensation, Culture and Talent Committee’s business judgment, which is informed by the experience of its members and input provided by its independent compensation consultant, our CEO (other than with respect to her own compensation), other members of management, and shareholders.
Each year, the Compensation, Culture and Talent Committee conducts an evaluation of the Company's executive compensation program to determine any appropriate changes. In making this determination, the Compensation, Culture and Talent Committee may consult with its independent compensation consultant and management, as described below; however, the Compensation, Culture and Talent Committee makes final decisions regarding the compensation paid to our named executive officers based on its own judgment.
In determining whether to make changes to our executive compensation program, the Compensation, Culture and Talent Committee may consider a number of factors, including, but not limited to, the size, scope, and performance of our business, evolving compensation trends, financial goals, shareholders’ interests and peer comparisons as described below.
Key Actions of Compensation, Culture and Talent Committee | Annual review of executive officers' performance | |||||||||||||
| Establishes base salaries, annual cash awards and equity awards for all executive officers other than the CEO, unless approved by the independent directors acting as a committee | ||||||||||||||
| Recommends base salary, annual cash awards and equity awards for the CEO | ||||||||||||||
Key Actions of Independent Directors | Annual review of CEO performance | |||||||||||||
| Considers recommendations of the Compensation, Culture and Talent Committee and approves base salary, annual cash awards and equity awards for the CEO | ||||||||||||||
The Role of the Compensation Consultant. The Compensation, Culture and Talent Committee selects and retains the services of its own independent compensation consultant and annually reviews the performance of the consultant. As part of the review process, the Compensation, Culture and Talent Committee considers the independence of the consultant in accordance with SEC and NYSE rules.
During 2022, the Compensation, Culture and Talent Committee’s independent compensation consultant, FW Cook, provided no services to the Company other than services for the Compensation, Culture and Talent Committee, and worked with Company’s management, as directed by the Compensation, Culture and Talent Committee, only on matters for which the committee is responsible.
At the Compensation, Culture and Talent Committee’s request, FW Cook regularly attends committee meetings. FW Cook also communicates with the Compensation, Culture and Talent Committee or the Chair of the Compensation, Culture and Talent Committee outside committee meetings regarding matters related to the committee’s responsibilities. FW Cook prepares a comprehensive compensation risk assessment study to evaluate whether the Company's compensation programs are likely to create a material risk for the Company.
In 2022, the Compensation, Culture and Talent Committee generally sought input from FW Cook on a range of external market factors related to the Company's compensation programs, CEO pay, environmental, social, and governance performance metrics and other evolving compensation trends, including legislative developments and best practices, appropriate market reference points, and market compensation data. FW Cook reported on and provided market
48 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
compensation data and trends regarding director compensation programs and general observations about management’s recommendations regarding the amount and form of compensation for our named executive officers.
Key Actions of Independent Consultant | Advises the Compensation, Culture and Talent Committee on compensation plan design | |||||||||||||
| Advises the Compensation, Culture and Talent Committee on appropriate compensation levels, trends and legislative developments | ||||||||||||||
| Performs annual compensation risk assessment for consideration by the Compensation, Culture and Talent Committee | ||||||||||||||
In addition, management has engaged its own compensation consultant, Willis Towers Watson, to assist with a variety of design compensation matters, including compensation benchmarking and the development of recommendations on compensation program design.
The Role of the Chief Executive Officer. At the Compensation, Culture and Talent Committee's request, Ms. Pope provides input regarding the performance and compensation of the other named executive officers. The Compensation, Culture and Talent Committee considers Ms. Pope’s evaluation and her direct knowledge of each named executive officer’s performance and contributions when making compensation decisions. Ms. Pope is not present during the Compensation, Culture and Talent Committee's voting or deliberations regarding her own compensation.
Key actions of CEO | Provides input on executive officers' performance | |||||||||||||
| Makes recommendations on compensation plan design | ||||||||||||||
| Provides information about Company's performance relative to incentive plan goals | ||||||||||||||
The Role of Shareholders. Shareholders are provided the opportunity to cast an annual advisory vote on the compensation of our named executive officers and have indicated their strong support for the compensation of our named executive officers in each of the past five years. Most recently, 98% of votes cast on the say-on-pay proposal at the 2022 annual meeting voted in favor of our executive compensation program. We have ongoing discussions with many of our shareholders regarding various corporate governance topics, including environmental, social, and governance, executive compensation, and related trends. In addition, in 2022, we conducted a proactive outreach program with the governance teams of our largest shareholders. The Compensation, Culture and Talent Committee considers these discussions while reviewing our executive compensation program and will continue to consider shareholder feedback and the results of say-on-pay votes when making future compensation decisions.
The Role of Market Data and Peer Companies. The Compensation, Culture and Talent Committee considers compensation market comparisons to ensure the competitiveness of the Company's executives’ pay. The Compensation, Culture and Talent Committee views the labor market for our most senior positions as a nationwide, broad cross-section of companies in various industries, and recognizes that this labor market varies by position. The use of both general industry and utility benchmarking data reflects the competitive labor market from which we recruit executives. For the 2022 executive compensation program, the Compensation, Culture and Talent Committee evaluated pay by reference to the 50th percentile of the relevant market, reviewing data in total and by comparison (base salaries, incentive awards and equity awards). Positions relative to the 50th percentile may vary based on factors such as time in position, experience, qualifications, performance, and considerations of internal equity.
Actual compensation for named executives may be higher or lower than target compensation, as it reflects actual performance and payouts under our performance-based annual incentive award and our long-term equity based incentive awards.
When benchmarking executive pay, the Compensation, Culture and Talent Committee relies on benchmarking surveys, as well as publicly available information regarding the pay practices of a group of utility industry peer companies
49 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
selected by our Compensation, Culture and Talent Committee each year. We use general industry survey data as appropriate to reflect the realities of the competitive marketplace for the Company’s talent needs. The Compensation, Culture and Talent Committee reviews and approves peer group composition each year. With the assistance of FW Cook, the Compensation, Culture and Talent Committee identified groups of companies to serve as market reference points for compensation comparison purposes for 2022. The table below shows the most relevant benchmarking survey data for each of our named executive officers:
| Named Executive Officer | Title | Utility Industry(1) | General Industry(1) | ||||||||
| Maria Pope | President & CEO | ✓ | |||||||||
| James Ajello | SVP, Finance, CFO, Treasurer & Corporate Compliance Officer | ✓ | ✓ | ||||||||
| Angelica Espinosa | VP, General Counsel | ✓ | ✓ | ||||||||
| Larry Bekkedahl | SVP, Advanced Energy Delivery | ✓ | |||||||||
| John Kochavatr | VP, Information Technology & Chief Information Officer | ✓ | |||||||||
(1) Data sources included WTW 2021 Energy Services Executive Compensation Survey – U.S.
| Our Practice | Beginning in 2022, in keeping with our guiding principles of reasonable competitive pay, with the assistance of FW Cook, salaries for certain positions including named executive officers in the chief financial officer and chief legal officer positions were benchmarked at a market reference point that weights equally the Utility Industry and General Industry benchmarking survey data. | ||||
A peer group for 2022 compensation decisions was developed for reference consisting of companies that represent the best match with the Company based on the following criteria:
•Vertically Integrated Utility. Our peer companies should be vertically integrated utilities, with a business mix focused on either 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.
•Comparable Size. Our peer companies should be within a reasonable range relative to key financial measures, including revenue, market capitalization, and enterprise value.
•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 prudently incurred 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. The growth opportunities of our peer companies should be based primarily on regulated activities.
50 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
In the case of Northwest Natural Gas Company, we also considered geographic proximity, to the extent it could result in the Company’s serving as a potential competitor for executive talent.
For 2022 the Compensation, Culture and Talent Committee selected the following companies to serve as our compensation peer group:
2022 Peer Group | |||||||||||||||||||||||||||||||||||
| ALLETE, INC. | Black Hills Corporation | NiSource, Inc. | Pinnacle West Capital Corporation | ||||||||||||||||||||||||||||||||
| Alliant Energy Corporation | Evergy, Inc. | Northwest Natural Gas Company | PNM Resources, Inc. | ||||||||||||||||||||||||||||||||
| Avista Corporation | Hawaiian Electric | NorthWestern Corporation | Puget Energy, Inc. | ||||||||||||||||||||||||||||||||
| IDACORP, Inc. | OGE Energy Corp. | ||||||||||||||||||||||||||||||||||
Based on data compiled by Willis Towers Watson at the time of our 2022 peer group review, PGE was positioned near the median of the peer group in terms of revenue and market capitalization:
PGE VS. 2022 PEER GROUP
| Revenue | PGE 50th Percentile | |||||||||||||||||||
| 0 | 25 | 50 | 75 | 100 | ||||||||||||||||
| Market Capitalization | PGE 51st Percentile | |||||||||||||||||||
| 0 | 25 | 50 | 75 | 100 | ||||||||||||||||
The Role of Internal Equity. The Compensation, Culture and Talent Committee uses internal pay equity principles to determine the compensation for positions that are unique or difficult to benchmark against market and peer data. Internal equity is also considered in establishing compensation for positions considered to be equivalent in responsibilities and importance, especially where precise external data is not available.
51 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
2022 EXECUTIVE COMPENSATION
Compensation Elements
The three components of the total direct compensation delivered in our program are: 1) Base Salary; 2) Annual Cash Incentive Awards; and 3) Long-Term Equity-Based Incentives. The following table describes the principal elements of our 2022 compensation program.
| Element | Form | Key Objective and Characteristics | ||||||||||||||||||||||||
| Fixed | Base Salaries | Cash | Establish a market-competitive pay foundation that reflects each officer's experience, skills and performance and is intended to attract and retain executives | |||||||||||||||||||||||
| Performance Conditioned and Variable | Annual Cash Incentive Awards | Cash | Focus executive's attention on achievement of relatively short-term financial, operating and strategic goals that we believe will increase long-term shareholder value and benefit our customers | |||||||||||||||||||||||
Based on Earnings Per Share (weighted at 40%), Operational Measures (weighted at 25%), Strategic Initiatives (weighted at 25%) and Culture (weighted at 10%). | ||||||||||||||||||||||||||
| Long-Term Equity-Based Incentive Awards | Equity | Directly aligns executives' pay with long-term value provided to shareholders, and benefits customers by enhancing executives' focus on the Company's long-term goals | ||||||||||||||||||||||||
| Performance-Based Restricted Stock Units (weighted at 70% collectively) ROE/Allowed ROE EPS Growth Clean Energy TSR (used as a multiplier) | ||||||||||||||||||||||||||
| Service Base Restricted Stock Units (weighted at 30% collectively). Vest ratably over three years | ||||||||||||||||||||||||||
Performance-Conditioned Compensation
A significant portion of our executives' total direct compensation is tied to Company performance. The following charts show that incentive compensation represented 83% of the 2022 target total direct compensation for our CEO and 67% of the 2022 target total direct compensation for our other named executive officers.
2022 Target Direct Compensation for Chief Executive Officer | |||||||||||
| 17% | 19% | 45% | 19% | ||||||||
| 64% PERFORMANCE-CONDITIONED | |||||||||||
n Base Salary n Annual Cash Incentive n PSUs n RSUs | |||||||||||
52 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
2022 Target Direct Compensation for Other Named Executive Officers | |||||||||||
| 33% | 21% | 29% | 17% | ||||||||
| 50% PERFORMANCE-CONDITIONED | |||||||||||
n Base Salary n Annual Cash Incentive n PSUs n RSUs | |||||||||||
Base Salaries
When setting annual base salaries of our named executive officers, the Compensation, Culture and Talent Committee considers market data provided by its independent compensation consultant, internal pay equity, the Company's financial results and size relative to peer companies.
The independent members of our Board approved our CEO’s 2022 base salary after receiving a recommendation from the Compensation, Culture and Talent Committee. This determination was based on a comprehensive review of Ms. Pope's performance for 2021.
The Compensation, Culture and Talent Committee considered the recommendations of our CEO and market data before setting the 2022 salaries of our other named executive officers. Base salary recommendations are based on a variety of considerations, including market competitiveness, individual performance and qualifications, internal pay equity and retention risk.
The table below shows the base salaries of our named executive officers for 2021 and 2022.
2021 Salary ($) | 2022 Salary ($) | Annual Increase | |||||||||
| Maria Pope | 970,000 | 1,000,000 | 3% | ||||||||
| James Ajello | 550,000 | 650,100 | 18% | ||||||||
| Angelica Espinosa | 350,000 | 424,900 | 21% | ||||||||
| Larry Bekkedahl | 406,613 | 450,121 | 11% | ||||||||
| John Kochavatr | 374,850 | 430,000 | 15% | ||||||||
Annual Cash Incentive Awards
OVERVIEW
Our Annual Cash Incentive Plan (ACI Plan) is a variable, at-risk component of our named executive officer's compensation and is aligned with the Company's financial, operational and strategic imperative goals, as established each year by the Compensation, Culture and Talent Committee.
The annual cash incentive program provides payout opportunities based on the achievement of predetermined financial, operating and strategic goals that require our named executive officers to meet high standards of performance.
For 2022, the Compensation, Culture and Talent Committee selected key quantitative financial and operating performance metrics as part of the 2022 ACI Plan: EPS, Customer Satisfaction, Electric Service Power Quality and System Reliability, and Generation Plant Availability. In addition, the Compensation Culture and Talent Committee selected three equally weighted strategic imperative goals: Increase Operational Efficiency; Deliver Clean, Integrated Customer Solutions; and Public Support and Policy. The Compensation Culture and Talent Committee included two Culture goals:
53 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
Employee Engagement and Diversity, which was divided into Leadership Diversity and Supplier Diversity. For each category the Compensation, Culture and Talent Committee assigned a target score and potential score range reflecting the relative weight given the goal category. Specific quantitative scores were set for goals that comprised most of the target score.
The formula for calculating awards under our 2022 ACI Program is shown below:
| AWARD EARNED | = | TARGET AWARD | X | FINANCIAL PERFORMANCE % X 40% | + | OPERATING PERFORMANCE % X 25% | + | STRATEGIC IMPERATIVE PERFORMANCE % X 25% | + | CULTURE X 10% | ||||||||||||||||||||||||||||
Under the formula above, award payouts are determined by multiplying each officer’s target award by a “performance percentage” based on the achievement of financial, operating, strategic imperative and culture goals during the year.
Unless the threshold goal is achieved for a performance measure, there is no payout for that performance measure. The Compensation, Culture and Talent Committee may, in its judgment, exclude the impact of unusual, non-recurring events that occur during the year. When setting the goals for 2022, the Compensation, Culture and Talent Committee considered many factors, including the alignment between appropriate payout opportunities and strong financial results at threshold, target, and maximum performance goal levels.
Each of the performance percentages can range from 0% to 200%, with financial performance weighted 40%, operating performance weighted 25%, strategic initiatives weighted 25% and culture weighted 10%. This results in a maximum ACI award opportunity equal to 200% of the target award.
Vesting of an award generally requires continued employment until the date that payment is made under the award, but if an officer’s employment is terminated before that date due to retirement, death, or disability, the officer is entitled to a portion of the award, prorated based on the number of days served during the award year.
Looking Forward. à à à à à à à à In 2023, we will be replacing EPS with Net Income as the primary measure of our financial performance in our Annual Cash Incentive Plan. EPS growth will continue to be measured for our Long Term Incentive Plan. The use of Net Income is consistent with our peers, and maintains the focus on current year financial goals for the broader employee base. | ||||||||
2022 ACI Program Target Awards
Target awards for the named executive officers were established by multiplying their base salary paid in 2022 by an award multiple established by the Compensation, Culture and Talent Committee. The target awards of each of our named executive officers were close to the market median for their positions. (See page 48 for a discussion of how we evaluated the market-competitiveness of our executives’ compensation.)
54 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
| Name | Target Award ($)* | Target Award as % of 2022 Base Salary* Paid | ||||||
| Maria Pope | 1,147,346 | 115% | ||||||
| James Ajello | 449,680 | 70% | ||||||
| Angelica Espinosa | 251,483 | 60% | ||||||
| Larry Bekkedahl | 268,064 | 60% | ||||||
| John Kochavatr | 255,455 | 60% | ||||||
* Includes the value of paid time off taken during the year and PTO transferred to the 2005 Management Deferred Compensation Plan (MDCP).
2022 ACI Program Rationale for Selection of Performance Metrics
| Metric | Measurement | Why We Use this Metric | |||||||||||||||
| Financial | EPS | Measured by the Company’s net income for the year divided by average shares outstanding during the year. | EPS is a driver of shareholder value creation in the regulated utility industry. | ||||||||||||||
| Operating | Customer Satisfaction | Average of the Company’s residential, general business and key customer satisfaction scores on three independent utility industry surveys, where satisfaction is defined as a rating of 9 or higher on a 10-point scale. These ratings are weighted according to the Company’s annual revenues from each customer group. Customer satisfaction goals are updated annually based on estimated ratings needed to achieve 50th, 65th and 90th percentile rankings of the surveyed companies. | Customer satisfaction is a measure of our ability to run our business in a way that meets the needs of our customers. | ||||||||||||||
Electric Service Power Quality and System Reliability | SAIDI (a standard industry measure for outage duration), which is equal to the total number of minutes an average customer experiences service interruption during the year. | Delivering reliable electric service is our Company’s core business. Outage duration is a fundamental measure of service reliability that our customers care about. | |||||||||||||||
Generation Plant Availability | Amount of time that a generating plant is able to produce electricity during the year (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 year. To set the maximum, target and threshold performance levels for this goal, we established individual plant goals, which were then weighted to produce overall performance targets. | Our ability to achieve our financial objectives and serve our customers depends in part on our generation plants’ delivery of reliable and affordable power. | |||||||||||||||
55 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
| Strategic | Increase operational efficiency | Measured by progress in the following areas: •Improve safety •Increase productivity •Digital simplification •Improve grid reliability and resilience •Improve generation reliability •Enterprise resource planning system replacement | Our Company operates in an increasingly competitive business environment and we need to continue to earn our customers' business. | ||||||||||||||
Deliver clean, integrated solutions | Measured by progress in the following areas: •Clean energy solutions •Energy management and flexible load •Transportation electrification •Individual digital experiences | Building an integrated grid promotes reliability and enables the visible and interoperable connection of customer technologies, a key component of our decarbonization and electrification strategies. | |||||||||||||||
Increase Structural Parity | Measured by policy and regulatory outcomes in the following areas: •Resource adequacy •Decarbonization implementation •Retain and grow customers •Fair cost and risk allocation •Federal funding for infrastructure and climate | Executing on our strategic direction requires a policy framework that supports system reliability and fair allocation of costs to all customers. | |||||||||||||||
| Culture | Employee Engagement | Measured by the results from the following two questions in the employee satisfaction survey: •How happy are you working at PGE? •I would recommend PGE as a great place to work | PGE is focused on ensuring employees are engaged in a meaningful way in order to achieve our goals and deliver results. | ||||||||||||||
Leadership Diversity | Measured by the total percent of leaders who identify as female and the percent of leaders who identify as black, indigenous and people of color | PGE values gender, racial and ethnic diversity and believes a diverse employee population will achieve better performance. DEI is part of the fabric of how we operate and serve our communities. | |||||||||||||||
Supplier Diversity | Measured by the total percentage of spend with diverse suppliers over total addressable procurement spend | PGE is committed to increased external outreach as part of our belief in diversity. | |||||||||||||||
56 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
2022 ACI Program Goal Weightings
The weightings assigned to the 2022 ACI Program goals for each of the named executive officers are shown below.
40% | 25% | 8.3% | 8.3% | 8.3% | 5% | 2.5% | 2.5% | ||||||||||||||||
n EPS | n Strategic Initiatives | n Electric Service Power Quality | n Generation Availability | ||||||||
n Customer Satisfaction | n Employee Engagement | n Leadership Diversity | n Supplier Diversity | ||||||||
2022 ACI Program Performance Results
In February 2023, our Compensation, Culture and Talent Committee met to review the following performance results for the awards:
 |  | |||||||
| Financial Performance. | Operating Performance. | |||||||
Our 2022 EPS was $2.60, or 92% of target which resulted in a performance percentage of 73% for the named executive officers. | Operating performance resulted in a performance percentage of 86% for the named executive officers. Customer Satisfaction, Distribution Reliability performance with respect to SAIDI, and Generation Plant Availability were below target level. | |||||||
 |  | |||||||
| Progress on Strategic Initiatives. | Culture. | |||||||
Results for our strategic goals were close to or above target, resulting in an overall performance percentage of 108%. Highlights of our progress toward our 2022 strategic goals are included below. | Employee Engagement and leadership diversity were close to target and supplier diversity was just below threshold, resulting in an overall performance percentage of 98%. | |||||||
57 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
| Below are highlights of our progress toward our 2022 strategic goals. | ||||||||||||||
Increase Operational Efficiency | Deliver Clean, Integrated Customer Solutions | Increase Structural Parity "public support and policy" | ||||||||||||
•Overall safety incidents (recordables and injuries) decreased by 9%. •Invested over $800 million in capital, including accruals, for system hardening and resiliency infrastructure, designed for transmission, distribution and grid modernization. •Outstanding third quarter performance by thermal fleet, increased plant reliability during capacity constraints resulting in plant availability of 95.7% for that quarter. •Submitted approximately $478 million in Department of Energy federal grant applications to maximize allocation of available climate and infrastructure funding on behalf of customers. •Achieved a reduction of 1.3 million customer outage minutes during a year of record-breaking heat and peak winter usage. •Advanced our Virtual Power Plant and lowered costs by successfully scheduling available demand response into the CAISO Energy Imbalance Market. •Top quartile system reliability according to Edison Electric Institute (EEI). | •Served 39% of customer load from specified non-emitting energy sources. •Acquired 311 megawatts of energy from the Clearwater Wind project, a 775-megawatt wind site in Montana being developed by NextEra Energy Resources, LLC. •Issued $460 million of debt and executed a $499 million equity forward sale agreement to improve balance sheet metrics, fund system improvements, and accelerate clean energy investment. •Continued position as no. #1 ranked renewable power program in the United States with more than 233,000 customers participating. •Launched an income-qualified customer program that provides a 15-25% discount on energy use. •Deployed a public, web-based, interactive tool that helps people understand the costs and savings of electric vehicles. | •Settled PGE's first FERC Transmission Rate Case since 2001, with a settled revenue requirement of $81 million, representing 89% of filed value. •Oregon Public Utilities Commission General Rate Case order received with prices effective May 9th. •Key leadership in formation and launch of Western Power Pool regional resource adequacy program, preliminary commitment to a 2025 binding season. •Integrated into the Western Energy Imbalance Market (EIM) to enhance reliability and optimize resources. •Filed Distribution System Plan Part Two with Oregon Public Utilities Commission, including accelerated deployment of Distributed Energy Resources. | ||||||||||||
58 | Portland General Electric | 2023 Proxy Statement | ||||
| Compensation Discussion and Analysis | |||||
| Performance Levels | |||||||||||||||||||||||
| Metrics | Threshold 50% Payout | Target 100% Payout | Maximum 200% Payout | Actual | Calculated Performance % | ||||||||||||||||||
| Financial Goal | 72.91% | ||||||||||||||||||||||
| EPS | $2.41 | $2.83 | $3.25 | $2.60 | |||||||||||||||||||
| Operating Goals | 85.87% | ||||||||||||||||||||||
| Generation Plant Availability | 83.94% | 87.07% | 89.43% | 86.27% | |||||||||||||||||||
| Customer Satisfaction | 51.00% | 58.00% | 64.00% | 56.19% | |||||||||||||||||||
| Electric Service Power Quality and System Reliability | 134.00 | 108.00 | 89.00 | 116.68 | |||||||||||||||||||
Strategic Initiatives(1) | 2.16 | 108.00% | |||||||||||||||||||||
| Increase Operational Efficiency | "1" rating | "2" rating | "4" rating | 2.25 | |||||||||||||||||||
| Deliver Clean, Integrated Solutions | "1" rating | "2" rating | "4" rating | 1.83 | |||||||||||||||||||
| Public Support and Policy | "1" rating | "2" rating | "4" rating | 2.40 | |||||||||||||||||||
| Culture | 97.69% | ||||||||||||||||||||||
| Employee Engagement | 70 | 75 | 80 | 73.00 | |||||||||||||||||||
| Leadership Diversity Women | 30% | 34% | 39% | 33.24% | |||||||||||||||||||
| Leadership Diversity BIPOC | 19% | 23% | 25% | 25.89% | |||||||||||||||||||
| Supplier Diversity | 12% | 15% | 16% | 14.13% | |||||||||||||||||||
1.Based on a qualitative assessment of progress on the specific projects identified for each Strategic Initiative. Performance results for each project were rated by the Compensation, Culture and Talent Committee on a 0 to 4 scale. These results were averaged, with each project weighted equally, to yield an overall score between 0 and 4 for each Strategic Initiative. Scores for the Strategic Initiatives were then averaged to yield an overall performance percentage for the Strategic Initiatives. A minimum rating of “1” was required to earn a 50% payout and a score of “4” would have yielded a payout of 200%.
In light of these performance results, the Compensation, Culture and Talent Committee approved payouts for named executive officer ACI Program participants that were 87% of their target awards.
The table below shows the ACI award payouts for our 2022 named executive officers.
Named Executive Officer Annual Incentive Award Payouts
| Name | Financial Performance % | Operating Performance % | Strategic Imperative Performance % | Culture Performance % | Award Payout ($) | Award Payout (% of Target) | ||||||||||||||
| Maria Pope | 72.91% | 85.87% | 108.00% | 97.69% | 1,002,781 | 87.40% | ||||||||||||||
| James Ajello | 72.91% | 85.87% | 108.00% | 97.69% | 393,021 | 87.40% | ||||||||||||||
| Angelica Espinosa | 72.91% | 85.87% | 108.00% | 97.69% | 219,797 | 87.40% | ||||||||||||||
| Larry Bekkedahl | 72.91% | 85.87% | 108.00% | 97.69% | 234,289 | 87.40% | ||||||||||||||
| John Kochavatr | 72.91% | 85.87% | 108.00% | 97.69% | 223,268 | 87.40% | ||||||||||||||
59 | Portland General Electric | 2023 Proxy Statement | ||||
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| Our Practice | Beginning in 2022, a culture metric based on our Guiding Behaviors was incorporated into our annual cash incentive plan. This change was intended to further motivate our executive team to meet high standards driven by our values in addition to strong financial, operations and strategic goals. The metric focuses on workforce engagement and diversity. | ||||
Long-Term Incentive Awards
OVERVIEW
We grant equity-based long-term incentive (LTI) awards to our executives and other key employees pursuant to our Stock Incentive Plan. The equity component of our named executive officers' compensation emphasizes long-term shareholder value creation through performance-based restricted stock unit (PSU) and time-based restricted stock unit (RSU) awards.
PSU awards are a substantial, at-risk component of our named executive officers' compensation tied to the Company's long-term performance. RSU awards align the interests of executive officers with the interests of our shareholders by promoting stability and retention of a high-performing executive team over the long term.
In 2022 we allocated 70% of our officers’ total LTI award opportunities to PSU and 30% to RSU.
Our 2022 LTI Award program is consistent with our compensation guiding principles | Compensation Guiding Principle | PSUs | RSUs | ||||||||
| Retention | ✓ | ✓ | |||||||||
| Incentives to achieve specific Company objectives | ✓ | ||||||||||
| Alignment with shareholders | ✓ | ✓ | |||||||||
| Market-competitive pay | ✓ | ✓ | |||||||||
CALCULATION OF TOTAL LTI AWARD OPPORTUNITY
The aggregate number of PSUs and RSUs we granted to our named executive officers was the product of their 2022 base salary and an award multiple, divided by the closing price of the Company’s common stock on the grant date: