Election of Directors

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Election of Directors

Proposal 1: Election of Directors

The Board of Directors

The Board of Directors of Duke Energy has nominated the following 12 candidates to serve on the Board. We have a declassified Board of Directors, which means all of the directors are voted on every year at the Annual Meeting of Shareholders.

If any director is unable to stand for election, the Board of Directors may reduce the number of directors or designate a substitute. In that case, shares represented by proxies may be voted for a substitute director. We do not expect that any nominee will be unavailable or unable to serve. The Corporate Governance Committee, comprised of only independent directors, has recommended the following current directors as nominees for director and the Board of Directors has approved their nomination for election. Four of our directors, Mr. DeLoach, Mr. Hance, Dr. Meserve and Dr. Rhodes, will be retiring at our 2016 Annual Meeting of Shareholders in accordance with our Principles for Corporate Governance. Therefore, they are not nominated for re‑election.

BoardNominees

Board Nominees

  • Michael J. Angelakis

  • Michael G. Browning

  • Daniel R. DiMicco

  • John H. Forsgren

  • Lynn J. Good

  • Ann Maynard Gray

  • John T. Herron

  • James B. Hyler, Jr.

  • William E. Kennard

  • E. Marie McKee

  • Charles W. Moorman IV

  • Carlos A. Saladrigas

  • William E. Webster, Jr.

View by Qualification:

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  • Leadership

    • Michael G. Browning
    • Daniel R. DiMicco
    • John H. Forsgren
    • Lynn J. Good
    • Ann Maynard Gray
    • John T. Herron
    • James B. Hyler, Jr.
    • William E. Kennard
    • E. Marie McKee
    • Carlos A. Saladrigas
    • Michael J. Angelakis
    • Charles W. Moorman IV
  • Finance

    • Michael G. Browning
    • John H. Forsgren
    • Lynn J. Good
    • Ann Maynard Gray
    • James B. Hyler, Jr.
    • William E. Kennard
    • Carlos A. Saladrigas
    • Michael J. Angelakis
    • Charles W. Moorman IV
    • E. Marie McKee
  • Regulatory/Government

    • Daniel R. DiMicco
    • John H. Forsgren
    • Ann Maynard Gray
    • James B. Hyler, Jr.
    • William E. Kennard
    • Carlos A. Saladrigas
    • John T. Herron
  • Legal

    • William E. Kennard
  • Industry

    • John H. Forsgren
    • Lynn J. Good
    • John T. Herron
  • Environmental

    • Daniel R. DiMicco
    • Charles W. Moorman IV
  • Risk Management

    • John H. Forsgren
    • Ann Maynard Gray
    • John T. Herron
    • James B. Hyler, Jr.
    • William E. Kennard
    • E. Marie McKee
    • Michael J. Angelakis
    • Charles W. Moorman IV
    • Lynn J. Good
  1. Gender
  2. More Diversity

View by years of Tenure:

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  • 0-2

  • 3-5

  • 6-10

  • 11-15

  • 15+

View by Independence:

Independent ()
Non-Independent ()

View by Committee:

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  • Audit


    Number of meetings: 9
    Chair: Carlos A. Saladrigas

    Audit Committee Financial Experts

    - Carlos A. Saladrigas

    - Michael J. Angelakis

    • Carlos A. Saladrigas
    • Michael G. Browning
    • James B. Hyler, Jr.
    • E. Marie McKee
    • Michael J. Angelakis
  • Compensation


    Number of meetings: 8
    Chair: E. Marie McKee

    • E. Marie McKee
    • Ann Maynard Gray
    • Carlos A. Saladrigas
  • Corporate Governance


    Number of meetings: 7
    Chair: Ann Maynard Gray

    • Ann Maynard Gray
    • Michael G. Browning
    • Daniel R. DiMicco
    • William E. Kennard
    • E. Marie McKee
  • Finance and Risk Management


    Number of meetings: 5
    Chair:

    • Michael G. Browning
    • John H. Forsgren
    • Ann Maynard Gray
    • James B. Hyler, Jr.
    • William E. Kennard
    • Michael J. Angelakis
  • Nuclear Oversight


    Number of meetings: 6
    Chair:

    • Daniel R. DiMicco
    • John H. Forsgren
    • John T. Herron
    • Charles W. Moorman IV
    • William E. Webster, Jr.
  • Regulatory Policy and Operations


    Number of meetings: 8
    Chair: James B. Hyler, Jr.

    • James B. Hyler, Jr.
    • John T. Herron
    • William E. Kennard
    • Carlos A. Saladrigas
    • William E. Webster, Jr.

View by Age:

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  • 0-45

  • 45-54

  • 55-64

  • 65-74

  • 75+

View by Leadership:

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  • Chairman, President and Chief Executive Officer


    Lynn J. Good
    • Lynn J. Good
  • Independent Lead Director


    Michael G. Browning
    • Michael G. Browning
Close

Michael J. Angelakis

Chairman and Chief Executive Officer, Atairos Management, L.P.


Age: 51
Director since: 2015
Independent: Yes
Board Committees:
Other Public Boards: Hewlett Packard Enterprise Co.
Qualifications:

Skills and Qualifications: 

  • Mr. Angelakis’ qualifications for election include his management and financial expertise as well as his risk management experience obtained as a senior executive at a large company.

Mr. Angelakis was Senior Advisor to the Executive Committee at Comcast Corporation from July 1, 2015, until December 31, 2015, and served as Vice Chairman and Chief Financial Officer at Comcast Corporation from March 28, 2007, until August 31, 2015.

 

Michael G. Browning

Chairman, Browning Consolidated, LLC


Age: 69
Director since: 2006
Independent: Yes
Board Committees:
Other Public Boards:
Qualifications:

Skills and Qualifications: 

  • Mr. Browning’s qualifications for election include his management experience and his knowledge and understanding of Duke Energy’s Midwest service territory. Mr. Browning’s financial and investment expertise adds a valuable perspective to the Board and its committees.

Mr. Browning has been Chairman of Browning Consolidated, LLC (and its predecessor), a real estate development firm, since 1981 and served as President from 1981 until 2013. He also serves as owner, general partner or managing member of various real estate entities. Mr. Browning is a former director of Standard Management Corporation, Conseco, Inc. and Indiana Financial Corporation. Mr. Browning has served as Independent Lead Director since January 1, 2016.

Daniel R. DiMicco

Chairman Emeritus, Retired President and Chief Executive Officer, Nucor Corporation


Age: 65
Director since: 2007
Independent: Yes
Board Committees:
Other Public Boards:
Qualifications:

Skills and Qualifications: 

  • Mr. DiMicco’s qualifications for election include his management experience, including Chief Executive Officer of a Fortune 500 company and successfully operating a company serving many constituencies. In addition, Mr. DiMicco’s experience as Chief Executive Officer of a large industrial corporation provides a valuable perspective on Duke Energy’s industrial customer class as well as extensive knowledge of the environmental regulations in Duke Energy’s Carolinas and Midwest territories.

Mr. DiMicco has served as Chairman Emeritus of Nucor Corporation, a steel company, since December 2013. Mr. DiMicco served as Executive Chairman of Nucor Corporation from January 2013 until December 2013, and as Chairman from May 2006 until December 2012. He served as Chief Executive Officer from September 2000 until December 2012 and President from September 2000 until December 2010. Mr. DiMicco was a member of the Nucor Board of Directors from 2000 until 2013. Mr. DiMicco is a former chair of the American Iron and Steel Institute.

John H. Forsgren

Retired Vice Chairman, Executive Vice President and Chief Financial Officer, Northeast Utilities


Age: 69
Director since: 2009
Independent: Yes
Board Committees:
Other Public Boards: The Phoenix Companies, Inc.
Qualifications:

Skills and Qualifications: 

  • As a former Vice Chairman and Chief Financial Officer of a large utility company, Mr. Forsgren’s qualifications for election include financial and risk management expertise as well as extensive knowledge of the energy industry, the regulatory environment within the industry and insight on renewable energy.

Mr. Forsgren has been Chairman of The Phoenix Companies, Inc. since 2013 and was Vice Chairman, Executive Vice President and Chief Financial Officer of Northeast Utilities from 1996 until his retirement in 2004. He is a former director of CuraGen Corporation and Neon Communications Group, Inc.

 

Lynn J. Good

Chairman, President and Chief Executive Officer


Age: 56
Director since: 2013
Independent: No
Board Committees:
Other Public Boards: The Boeing Company
Qualifications:

Skills and Qualifications: 

  • Ms. Good is our Chief Executive Officer and was previously our Chief Financial Officer. Her knowledge of the affairs of Duke Energy and its business and her experience in the energy industry provide valuable resources for the Board.

Ms. Good has served as Chairman, President and Chief Executive Officer of Duke Energy since January 1, 2016, and was Vice Chairman, President and Chief Executive Officer of Duke Energy since July 2013. She served as Executive Vice President and Chief Financial Officer of Duke Energy from July 2009 until June 2013. She is a former director of Hubbell Incorporated.

 

Ann Maynard Gray

Retired Vice President, ABC, Inc. and President, Diversified Publishing Group, ABC, Inc.


Age: 70
Director since: 1997
Independent: Yes
Board Committees:
Other Public Boards: The Phoenix Companies, Inc.
Qualifications:

Skills and Qualifications: 

  • Ms. Gray’s qualifications for election include her business experience, both from a management perspective and as a result of her experience as a director at several public companies. Ms. Gray’s public company experience has also given her in‑depth knowledge of governance principles, which she utilizes on a variety of matters, including, among other things, succession planning, executive compensation and corporate governance.

Ms. Gray was President of Diversified Publishing Group of ABC, Inc., a television, radio and publishing company, from 1991 until 1997 and was a Corporate Vice President of ABC, Inc. and its predecessors from 1979 until 1998. Ms. Gray is a former director of Elan Corporation, plc and former trustee of JPMorgan Funds. Ms. Gray served as Chairman of the Board of Duke Energy from December 31, 2013, until December 31, 2015.

John T. Herron

Retired President, Chief Executive Officer and Chief Nuclear Officer, Entergy Nuclear


Age: 62
Director since: 2013
Independent: Yes
Board Committees:
Other Public Boards:
Qualifications:

Skills and Qualifications: 

  • Mr. Herron’s qualifications for election include his knowledge and extensive insight gained as a senior executive in the utility industry, including his three decades of experience in nuclear energy. During Mr. Herron’s career, he has gained significant regulatory and risk management expertise, which is an asset to the Board and its committees.

Mr. Herron was President, Chief Executive Officer and Chief Nuclear Officer of Entergy Nuclear from 2009 until his retirement in 2013. Mr. Herron joined Entergy Nuclear in 2001 and held a variety of positions. He began his career in nuclear operations in 1979 and has held positions at a number of nuclear stations across the country. Mr. Herron is a director of Ontario Power Generation and also has served on the Institute of Nuclear Power Operations’ board of directors.

James B. Hyler, Jr.

Consultant, Investors Management Corporation


Age: 68
Director since: 2012
Independent: Yes
Board Committees:
Other Public Boards:
Qualifications:

Skills and Qualifications: 

  • Mr. Hyler’s qualifications for election include his understanding of Duke Energy’s North Carolina service territory and his knowledge and expertise in financial services, corporate finance and risk management.

Mr. Hyler is Consultant of Investors Management Corporation, a firm which invests in and acquires companies in various industries, since January 2016. He served as Managing Director of Morehead Capital Management, LLC from December 2011 until December 2015. He retired as Vice Chairman and Chief Operating Officer of First Citizens Bank in 2008, having served in these positions from 1994 until 2008. Mr. Hyler was President of First Citizens Bank from 1988 until 1994 and was Chief Financial Officer of First Citizens Bank from 1980 until 1988. Prior to joining First Citizens Bank, Mr. Hyler was an auditor with Ernst & Young for 10 years. Mr. Hyler served as a director of First Citizens BancShares from 1988 until 2008.

William E. Kennard

Non-Executive Chairman, Velocitas Partners, LLC


Age: 59
Director since: 2014
Independent: Yes
Board Committees:
Other Public Boards: AT&T Inc.; Ford Motor Company; MetLife, Inc.
Qualifications:

Skills and Qualifications: 

  • Mr. Kennard’s qualifications for election include his considerable experience and knowledge of the regulatory arena, as well as his financial knowledge, legal knowledge and international perspective. As former Chairman of the Federal Communications Commission, Mr. Kennard also has a great deal of expertise in technology, which is extremely valuable to the Board and its committees.

Mr. Kennard is Non‑Executive Chairman of Velocitas Partners, LLC, an asset management and advisory firm, since November 2014, as well as a member of the Operating Executive Committee of Staple Street Capital, a private equity firm. Prior to joining Velocitas Partners, LLC, Mr. Kennard served as Senior Advisor at Grain Management from October 2013 until November 2014; U.S. Ambassador to the European Union from 2009 until August 2013; Managing Director of The Carlyle Group from 2001 until 2009; and Chairman of the Federal Communications Commission from 1997 until 2001.

 

E. Marie McKee

Retired Senior Vice President, Corning Incorporated


Age: 65
Director since: 2012
Independent: Yes
Board Committees:
Other Public Boards:
Qualifications:

Skills and Qualifications: 

  • Ms. McKee’s qualifications for election include her experience in human resources, which provides her with a thorough knowledge of employment and compensation practices. Her prior experience as a senior executive of Corning Incorporated has also given her excellent operating skills and an understanding of financial matters.

Ms. McKee is a retired Senior Vice President of Corning Incorporated, a manufacturer of components for high‑technology systems for consumer electronics, mobile emissions controls, telecommunications and life sciences. Ms. McKee has over 35 years of experience at Corning, where she held a variety of management positions with increasing levels of responsibility, including Senior Vice President of Human Resources from 1996 until 2010; President of Steuben Glass from 1998 until 2008; and President of The Corning Museum of Glass and The Corning Foundation from 1998 until 2014.

 

Charles W. Moorman IV

Retired Chairman and Chief Executive Officer, Norfolk Southern


Age: 63
Director since: 2016
Independent: Yes
Board Committees:
Other Public Boards: Chevron Corporation
Qualifications:

Skills and Qualifications: 

  • Mr. Moorman’s qualifications for election include experience in business, finance, technology, strategy, risk management and safety and environmental issues as a result of his career at a large public company in the freight and transportation industry.

Mr. Moorman is the Retired Chairman and Chief Executive Officer of Norfolk Southern Corporation, a freight transportation company, and was Special Advisor to the Chief Executive Officer of Norfolk Southern from October 1, 2015, until December 31, 2015. Prior to his retirement, he served as Chairman of the Board at Norfolk Southern from 2006 until 2015 and as Chief Executive Officer from 2005 until 2015.

 

Carlos A. Saladrigas

Chairman, Regis HR Group, and Chairman, Concordia Healthcare Holdings, LLC


Age: 67
Director since: 2012
Independent: Yes
Board Committees:
Other Public Boards: Advance Auto Parts, Inc.
Qualifications:

Skills and Qualifications: 

  • Mr. Saladrigas’ qualifications for election include his extensive expertise in health care, human resources, financial services and accounting arenas, as well as his understanding of Duke Energy’s Florida service territory.

Mr. Saladrigas is Chairman of Regis HR Group, which offers a full suite of outsourced human resources services to small and mid‑sized businesses. He has served in this position since July 2008. Mr. Saladrigas also serves as Chairman of Concordia Healthcare Holdings, LLC, which specializes in managed behavioral health, since January 2011. He served as Vice Chairman, from 2007 until 2008, and Chairman, from 2002 until 2007, of Premier American Bank in Miami, Florida. Mr. Saladrigas served as Chief Executive Officer of ADP Total Source (previously the Vincam Group, Inc.) from 1984 until 2002.

 

William E. Webster, Jr.

Retired Executive Vice President, Institute of Nuclear Power Operations


Age: 63
Director since: 2016
Independent: Yes
Board Committees:
Other Public Boards:
Qualifications:

Skills and Qualifications: 

  • Mr. Webster’s qualifications for Duke Energy election include his extensive knowledge gained during his thirty years in the nuclear industry which has given him regulatory expertise as well as a unique insight into best practices in engineering and risk management which is an asset to the Board and its committees.

Mr. Webster was the Executive Vice President of Industry Strategy for the Institute of Nuclear Power Operations (“INPO”), a non-profit organization that promotes the highest levels of safety and reliability in the operation of commercial nuclear power plants, until his retirement in June 2016. Mr. Webster has 34 years of experience at INPO, where he held a variety of management positions including in the Industry Evaluations, Plant Support, Engineering Support and Plant Analysis and Emergency Preparedness divisions prior to his retirement.

Majority Voting for the Election of Directors

Under the Corporation’s By‑Laws, in an uncontested election at which a quorum is present, a director‑nominee will be elected if the number of votes cast “FOR” the nominee’s election exceeds the number of votes cast as “WITHHOLD” from that nominee’s election. Abstentions and broker non‑votes do not count. In addition, the Corporation has a resignation policy in its Principles for Corporate Governance which requires an incumbent Director who has more votes cast as “WITHHOLD” from that nominee’s re‑election than votes cast “FOR” his or her re‑election to tender his or her letter of resignation for consideration by the Corporate Governance Committee of the Corporation’s Board of Directors.

In contested elections, Directors will continue to be elected by plurality vote. For purposes of the By‑Laws, a “contested election” is an election in which the number of nominees for director is greater than the number of directors to be elected.

The Board of Directors Recommends a Vote “FOR” Each Nominee.

Information on the Board of Directors

Our Board Leadership

Prior to January 1, 2016, our Board of Directors was structured with an independent Chairman, Ann Maynard Gray, and a separate Vice Chairman, Lynn J. Good, who was also our President and Chief Executive Officer. In December 2015, in recognition of Ms. Good’s leadership since her appointment as Chief Executive Officer in 2013 and her expertise with regard to the Corporation, the Board of Directors elected Ms. Good as Chairman, effective January 1, 2016. The Board believes that combining the Chairman and Chief Executive Officer roles fosters clear accountability, effective decision‑making and execution of corporate strategy.

The Board regularly evaluates the leadership structure of the Corporation and may consider alternative approaches, as appropriate, over time. Though the Board is currently structured with a combined Chairman and Chief Executive Officer, the Board believes that the Corporation and its shareholders are best served by the Board retaining discretion to determine the appropriate leadership structure based on what it believes is best for the Corporation at a particular point in time, including whether the same individual should serve as both Chairman and Chief Executive Officer, or whether the roles should be separate.

Independent Lead Director

In conjunction with Ms. Good’s election as Chairman, Michael G. Browning was elected as the new Independent Lead Director. In connection with Mr. Browning’s appointment as Independent Lead Director, the Board amended the Corporation’s Principles for Corporate Governance to clarify the duties and responsibilities of the Independent Lead Director. These responsibilities, which meet the latest corporate governance standards set by the National Association of Corporate Directors, include, among other things:

  • leading, in conjunction with the Corporate Governance Committee, the process for the review of the Chief Executive Officer;
  • presiding at the executive sessions of the independent members of the Board;
  • assisting the Chairman and the Chief Executive Officer in setting, reviewing and approving agendas and schedules of Board meetings;
  • calling meetings of the independent members of the Board when necessary and appropriate;
  • developing topics for discussion during executive sessions of the Board;
  • consulting with the Corporate Governance Committee on the Board’s annual self‑assessment;
  • assisting the Chairman and the Chief Executive Officer to promote the efficient and effective performance and functioning of the Board; and
  • being available for consultation and direct communication with the Corporation’s major shareholders.

A complete list of the responsibilities of our Independent Lead Director are included in our Principles for Corporate Governance, a copy of which is posted on our website at www.duke‑energy.com/corporate‑governance/principles.asp.

Director Attendance

The Board of Directors of Duke Energy met 14 times during 2015 and has met once so far in 2016. The overall attendance percentage for our directors was approximately 98 percent in 2015, and no director attended less than 89 percent of the total of the Board of Directors’ meetings and the meetings of the committees upon which he or she served in 2015. Directors are encouraged to attend the Annual Meeting of Shareholders. All members of the Board of Directors attended Duke Energy’s last Annual Meeting of Shareholders on May 7, 2015.

Independence of Directors

The Board of Directors has determined that none of the directors, other than Ms. Good, has a material relationship with Duke Energy or its subsidiaries, and all are, therefore, independent under the listing standards of the NYSE and the rules and regulations of the SEC.

In making the determination regarding each director’s independence, the Board of Directors considered all transactions and the materiality of any relationship with Duke Energy and its subsidiaries in light of all facts and circumstances.

The Board of Directors may determine a director to be independent if the Board of Directors has affirmatively determined that the director has no material relationship with Duke Energy or its subsidiaries (references in this proxy statement to Duke Energy’s subsidiaries shall mean its consolidated subsidiaries), either directly or as a shareholder, director, officer or employee of an organization that has a relationship with Duke Energy or its subsidiaries. Independence determinations are generally made on an annual basis at the time the Board of Directors approves director nominees for inclusion in the proxy statement and, if a director joins the Board of Directors in the interim, at such time.

The Board of Directors also considers its Standards for Assessing Director Independence, which set forth certain relationships between Duke Energy and directors and their immediate family members, or affiliated entities, that the Board of Directors, in its judgment, has deemed to be immaterial for purposes of assessing a director’s independence. Duke Energy’s Standards for Assessing Director Independence are linked on our website at www.duke‑energy.com/corporate‑governance/board‑of‑directors/independence.asp. In the event a director has a relationship with Duke Energy that is not addressed in the Standards for Assessing Director Independence, the Corporate Governance Committee, which is composed entirely of independent members of the Board, reviews the relationship and makes a recommendation to the independent members of the Board who determine whether such relationship is material.

Board and Committee Assessments

Each year the Board, with the assistance of the Corporate Governance Committee, conducts an assessment of the Board of Directors, each of its committees and the directors. The assessment process is facilitated by an independent adviser, which allows directors to provide anonymous feedback and promotes candidness among the directors. The results of the feedback are presented to the Board and committees and discussed. This annual review and discussion provides continuous improvement in the overall effectiveness of the directors, committees and Board.

Board Oversight of Risk

The Corporation faces a myriad of risks, including operational, financial, strategic and reputational risks that affect every segment of its business. The Board of Directors is actively involved in the oversight of these risks in several ways. This oversight is conducted primarily through the Finance and Risk Management Committee of the Board but also through the other committees of the Board, as appropriate. The Finance and Risk Management Committee reviews the Corporation’s enterprise risk program with management, including the Chief Risk Officer. The enterprise risk program includes the identification of a broad range of risks that affect the Corporation, their probabilities and severity and incorporates a review of the Corporation’s approach to managing and prioritizing those risks, based on input from the officers responsible for the management of those risks.

Each committee of the Board is responsible for the oversight of certain areas of risk that pertain to that committee’s area of focus. Throughout the year, each committee chair reports to the full Board regarding the committee’s considerations and actions relating to the risks within its area of focus.

RiskMgmtOversight

Shareholder Engagement

We conduct extensive governance reviews and investor outreach so that management and the Board understand and consider the issues that matter most to our shareholders and address them effectively. In 2015, we reached out to holders of approximately 33 percent of Duke Energy’s outstanding shares throughout the year.

At the Corporation’s 2015 Annual Meeting, a shareholder proposal was voted on that requested that the Corporation allow shareholders the right to nominate directors on the Corporation’s proxy materials, known as proxy access. The proxy access proposal received the vote of a majority of the shares represented at the 2015 Annual Meeting. During the fall 2015 corporate governance engagement program, the Corporation reached out to holders of approximately 33 percent of Duke Energy’s outstanding shares of common stock, and met with holders of approximately 25 percent of Duke Energy’s outstanding shares of common stock, including the proponent of the proxy access proposal, and discussed the proxy access proposal as well as some of the detailed provisions that were not contemplated by the proposal to determine what type of provisions would be in the best interest of the Corporation and its shareholders. After considering the feedback it received from shareholders on these provisions, and after discussions with the proponent of the proxy access proposal about what provisions were responsive to the concerns which prompted the proponent to submit the proposal, the Board of Directors amended the Corporation’s By‑Laws in January 2016 to provide for a proxy access right which allows a group of up to 20 shareholders holding three percent of the Corporation’s outstanding stock continuously for three years to include director nominees in the Corporation’s proxy statement.

In addition to our discussions with shareholders about proxy access during the 2015 corporate governance engagement program, the Corporation also continued its discussions with shareholders about executive compensation and important environmental, social and governance issues such as the Board’s approach to risk management, its oversight of coal ash management and other environmental concerns, the skills of our directors, and Board succession planning.

Our Year‑Round Approach to Shareholder Engagement

ShareholderEngagement

Board of Directors Committees

The Board of Directors has the six standing, permanent committees described below:

Audit Committee

Nine meetings held in 2015

saladrigasresize
Carlos A. Saladrigas
Committee Members
Carlos A. Saladrigas, Chairperson, Financial Expert
Michael J. Angelakis, Financial Expert
Michael G. Browning
James H. Hance, Jr., Financial Expert (Retiring - 2016)
James B. Hyler, Jr.
E. Marie McKee
  • The Audit Committee considers risks and matters related to financial reporting, internal controls, compliance and legal matters. As part of those responsibilities, the Audit Committee selects and retains an independent registered public accounting firm to conduct audits of the accounts of Duke Energy and its subsidiaries. It also reviews with the independent registered public accounting firm the scope and results of their audits, as well as the accounting procedures, internal controls, and accounting and financial reporting policies and practices of Duke Energy and its subsidiaries, and makes reports and recommendations to the Board of Directors as it deems appropriate. The Audit Committee is responsible for approving all audit and permissible non‑audit services provided to Duke Energy by its independent registered public accounting firm. Pursuant to this responsibility, the Audit Committee adopted the policy on Engaging the Independent Auditor for Services, which provides that the Audit Committee will establish detailed services and related fee levels that may be provided by the independent registered public accounting firm and will review such policy annually. See page 34 for additional information on the Audit Committee’s pre‑approval policy.
  • The Board of Directors has determined that Mr. Angelakis, Mr. Hance and Mr. Saladrigas are “audit committee financial experts” as such term is defined in Item 407(d)(5)(ii) of Regulation S‑K. See pages 13 and 18 for a description of Mr. Angelakis’ and Mr. Saladrigas’ business experience. Mr. Hance will be retiring at the 2016 Annual Meeting of Shareholders.
  • Each of the members has been determined to be “independent” within the meaning of the NYSE’s listing standards, Rule 10A‑3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Corporation’s Standards for Assessing Director Independence. In addition, each of the members meets the financial literacy requirements for audit committee membership under the NYSE’s rules and the rules and regulations of the SEC.

Compensation Committee

Eight meetings held in 2015

mckeeresize
E. Marie McKee
Committee Members
E. Marie McKee, Chairperson
Ann Maynard Gray
James H. Hance, Jr. (Retiring - 2016)
Carlos A. Saladrigas
  • The Compensation Committee establishes and reviews the overall compensation philosophy of the Corporation, confirms that our policies and philosophy do not encourage excess or inappropriate risk‑taking by our employees, reviews and approves the salaries and other compensation of certain employees, including all executive officers of Duke Energy, reviews and approves compensatory agreements with executive officers, approves equity grants and reviews the effectiveness of, and approves changes to, compensation programs. The Compensation Committee also makes recommendations to the Board of Directors on compensation for independent directors.
  • Management’s role in the compensation‑setting process is to recommend compensation programs and assemble information as required by the committee. When establishing the compensation program for our named executive officers, the committee considers input and recommendations from management, including Ms. Good, who attends the Compensation Committee meetings.
  • The Compensation Committee has engaged Frederic W. Cook & Company, Inc. as its independent compensation consultant. The compensation consultant generally attends each Committee meeting and provides advice to the committee at the meetings, including reviewing and commenting on market compensation data used to establish the compensation of the executive officers and directors. The consultant has been instructed that it shall provide completely independent advice to the Committee and is not permitted to provide any services to Duke Energy other than at the direction of the Compensation Committee.
  • Each of the members of the Compensation Committee has been determined to be “independent” within the meaning of the NYSE’s listing standards, Rule 10C‑1(b) of the Exchange Act, and the Corporation’s Standards for Assessing Director Independence; to be “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”); and, to be “non‑employee directors” within the meaning of Rule 16b‑3 of the Exchange Act.

Corporate Governance Committee

Seven meetings held in 2015

grayresize
Ann Maynard Gray
Committee Members
Ann Maynard Gray, Chairperson
Michael G. Browning
Harris E. DeLoach, Jr. (Retiring - 2016)
Daniel R. DiMicco
William E. Kennard
E. Marie McKee
  • The Corporate Governance Committee considers risks and matters related to corporate governance and formulates and periodically revises governance principles. It recommends the size and composition of the Board of Directors and its committees and recommends potential successors to the Chief Executive Officer. The Corporate Governance Committee also recommends to the Board of Directors the slate of nominees, including any nominees recommended by shareholders, for director for each year’s annual meeting of shareholders and, when vacancies occur, names of individuals who would make suitable directors of Duke Energy. This committee may engage an external search firm or a third party to identify or evaluate or to assist in identifying or evaluating a potential nominee. The Committee also performs an annual evaluation of the performance of the Chief Executive Officer with input from the full Board of Directors. The Corporate Governance Committee also assists the Board in its annual determination of director independence and review of any related person transactions as well as its annual assessment of the Board of Directors and each of its committees. The Committee is also responsible for the oversight of the Corporation’s policies and practices with respect to its political activities and community affairs.
  • Each of the members of the Corporate Governance Committee has been determined to be “independent” within the meaning of the NYSE’s listing standards and the Corporation’s Standards for Assessing Director Independence.

Finance and Risk Management Committee

Five meetings held in 2015

hanceresize
James H. Hance, Jr. (Retiring - 2016)

Committee Members
James H. Hance, Jr., Chairperson (Retiring - 2016)
Michael J. Angelakis
Michael G. Browning
John H. Forsgren
Ann Maynard Gray
James B. Hyler, Jr.
William E. Kennard
  • The Finance and Risk Management Committee is primarily responsible for the oversight of financial risk and enterprise risk at the Corporation. This oversight function includes reviews of Duke Energy’s financial and fiscal affairs and recommendations to the Board of Directors regarding dividends, financing and fiscal policies, and significant transactions. It reviews the financial exposure of Duke Energy, as well as mitigation strategies, reviews Duke Energy’s enterprise risk exposures and provides oversight for the process to assess and manage enterprise risk, and reviews the financial impacts of major projects as well as capital expenditures.

Nuclear Oversight Committee

Six meetings held in 2015

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James T. Rhodes (Retiring - 2016)

Committee Members
James T. Rhodes, Chairperson (Retiring - 2016)
Harris E. DeLoach, Jr. (Retiring - 2016)
Daniel R. DiMicco
John H. Forsgren
John T. Herron
Richard A. Meserve (Retiring - 2016)
Charles W. Moorman IV
  • The Nuclear Oversight Committee provides oversight of the nuclear safety, operational and financial performance as well as operational risks, long‑term plans and strategies of Duke Energy’s nuclear power program. The oversight role is one of review, observation and comment and in no way alters management’s authority, responsibility or accountability. At least annually, the Nuclear Oversight Committee visits each of Duke Energy’s operating nuclear power stations and reviews the station’s nuclear safety, operational and financial performance.

Regulatory Policy and Operations Committee

Eight meetings held in 2015

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James B. Hyler, Jr.

Committee Members
James B. Hyler, Jr., Chair
John T. Herron
William E. Kennard
Richard A. Meserve (Retiring - 2016)
James T. Rhodes (Retiring - 2016)
Carlos A. Saladrigas
  • The Regulatory Policy and Operations Committee provides oversight of Duke Energy’s regulatory and legislative strategy impacting utility operations in each jurisdiction. The Committee also has oversight over environmental, health and safety matters and the risks related to such matters, including our ash management strategy, as well as the public policies and practices of Duke Energy. This includes reviewing Duke Energy’s regulatory approach to strategic initiatives, the operational performance of Duke Energy’s utilities with regard to energy supply, delivery, fuel procurement and transportation and making visits to Duke Energy’s generation facilities. The Regulatory Policy and Operations Committee is also responsible for the oversight of Duke Energy’s environmental, health and safety goals and policies.

Each committee operates under a written charter adopted by the Board of Directors. The charters are posted on our website at www.duke-energy.com/corporate-governance/board-committee-charters.asp.

BOARD OF DIRECTORS COMMITTEE MEMBERSHIP ROSTER (AS OF MARCH 24, 2016)

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C  Committee Chair
(1) Retiring at the 2016 Annual Meeting of Shareholders.

Report of the Corporate Governance Committee

The following is the report of the Corporate Governance Committee with respect to its philosophy, responsibilities and initiatives.

Philosophy and Responsibilities

We believe that sound corporate governance has three components: (i) Board of Directors’ independence, (ii) processes and practices that foster solid decision‑making by both management and the Board of Directors, and (iii) balancing the interests of all of our stakeholders – our investors, customers, employees, the communities we serve and the environment. The Corporate Governance Committee’s charter is available on our website at www.duke‑energy.com/corporate‑governance/board‑committee‑charters/corporate‑governance.asp and is summarized below. Additional information about the Corporate Governance Committee and its members is detailed on page 24 of the proxy statement.

Membership.  The Committee must be comprised of three or more members, all of whom must qualify as independent directors under the listing standards of the NYSE and other applicable rules and regulations.

Responsibilities.  The Committee’s responsibilities include, among other things (i) implementing policies regarding corporate governance matters, (ii) assessing the Board of Directors’ membership needs and recommending nominees, (iii) recommending to the Board of Directors those directors to be selected for membership on, or removal from, the various Board of Directors’ committees and those directors to be designated as chairs of Board of Directors’ committees, (iv) sponsoring and overseeing annual performance evaluations for the various Board of Directors’ committees, including the Corporate Governance Committee, the Board of Directors and the Chief Executive Officer, (v) overseeing the Corporation’s political expenditures and activities pursuant to the Political Activity Policy, and (vi) reviewing the Corporation’s charitable contributions and community service policies and practices. The Committee may also conduct or authorize investigations into or studies of matters within the scope of the Committee’s duties and responsibilities, and may retain, at the Corporation’s expense, and in the Committee’s sole discretion, consultants to assist in such work as the Committee deems necessary.

Governance Policies

All of our Board of Directors committee charters, as well as our Principles for Corporate Governance, Code of Business Ethics for Employees and Code of Business Conduct & Ethics for Directors, are available on our website at www.duke‑energy.com/investors/corporate‑governance.asp. Any amendments to or waivers from our Code of Business Ethics for Employees with respect to executive officers or Code of Business Conduct & Ethics for Directors must be approved by the Board and will be posted on our website. During 2015, our Board of Directors held five executive sessions with independent directors only.

Board Composition

Director Qualifications.  We look for the following characteristics in any candidate for nomination to our Board of Directors:

  • fundamental qualities of intelligence, perceptiveness, good judgment, maturity, high ethics and standards, integrity and fairness;
  • a genuine interest in Duke Energy and a recognition that, as a member of the Board of Directors, one is accountable to the shareholders of Duke Energy, not to any particular interest group;
  • a background that includes broad business experience or demonstrates an understanding of business and financial affairs and the complexities of a large, multifaceted, global business organization;
  • diversity among the existing Board members, including racial and ethnic background, gender, experiences, skills and qualifications;
  • present or former chief executive officer, chief operating officer, or substantially equivalent level executive officer of a highly complex organization such as a corporation, university or major unit of government, or a professional who regularly advises such organizations;
  • no conflict of interest or legal impediment which would interfere with the duty of loyalty owed to Duke Energy and its shareholders;
  • the ability and willingness to spend the time required to function effectively as a director;
  • compatibility and ability to work well with other directors and executives in a team effort with a view to a long‑term relationship with Duke Energy as a director;
  • independent opinions and willingness to state them in a constructive manner; and
  • willingness to become a shareholder of Duke Energy (within a reasonable time of election to the Board of Directors).

Director Candidate Recommendations.  The Committee may engage a third party from time to time to assist it in identifying and evaluating director‑nominee candidates, in addition to current members of the Board of Directors standing for re‑election. The Committee will provide the third party, based on the profile described above, the characteristics, skills and experiences that may complement those of our existing members. The third party will then provide recommendations for nominees with such attributes. The Committee considers nominees recommended by shareholders on a similar basis, taking into account, among other things, the profile criteria described above and the nominee’s experiences and skills. In addition, the Committee considers the shareholder‑nominee’s independence with respect to both the Corporation and the recommending shareholder. All of the nominees on the proxy card are current members of our Board of Directors and were recommended by the Committee.

Shareholders interested in submitting nominees as candidates for election as directors must provide timely written notice to the Corporate Governance Committee, c/o Ms. Julia S. Janson, Executive Vice President, Chief Legal Officer and Corporate Secretary, Duke Energy Corporation, DEC 48H, P.O. Box 1414, Charlotte, NC 28201‑1414. The notice must set forth, as to each person whom the shareholder proposes to nominate for election as director:

  • the name and address of the recommending shareholder(s), and the class and number of shares of capital stock of Duke Energy that are beneficially owned by the recommending shareholder(s);
  • a representation that the recommending shareholder(s) is a holder of record of capital stock of Duke Energy entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person(s) specified in the notice;
  • the name, age, business address and principal occupation and employment of the recommended nominee;
  • any information relevant to a determination of whether the recommended nominee meets the criteria for Board of Directors membership established by the Board of Directors and/or the Corporate Governance Committee;
  • any information regarding the recommended nominee relevant to a determination of whether the recommended nominee would be considered independent under the applicable NYSE rules and SEC rules and regulations;
  • a description of any business or personal relationship between the recommended nominee and the recommending shareholder(s), including all arrangements or understandings between the recommended nominee and the recommending shareholder(s) and any other person(s) (naming such person(s)) pursuant to which the nomination is to be made by the recommending shareholder(s);
  • a statement, signed by the recommended nominee, (i) verifying the accuracy of the biographical and other information about the nominee that is submitted with the recommendation, (ii) affirming the recommended nominee’s willingness to be a director, and (iii) consenting to serve as a director if so elected;
  • if the recommending shareholder(s) has beneficially owned more than five percent of Duke Energy’s capital stock for at least one year as of the date the recommendation is made, evidence of such beneficial ownership as specified in the rules and regulations of the SEC;
  • if the recommending shareholder(s) intends to solicit proxies in support of such recommended nominee, a representation to that effect; and
  • all other information relating to the recommended nominee that is required to be disclosed in solicitations for proxies in an election of directors pursuant to Regulation 14A under the Exchange Act, including, without limitation, information regarding (i) the recommended nominee’s business experience, (ii) the class and number of shares of capital stock of Duke Energy, if any, that are beneficially owned by the recommended nominee, and (iii) material relationships or transactions, if any, between the recommended nominee and Duke Energy’s management.

Director Candidate Nominations through Proxy Access.  In response to shareholder feedback during the Corporation’s 2015 corporate governance engagement program, which is discussed in more detail on page 21, the Board of Directors amended the Corporation’s By‑Laws in January 2016 to provide for proxy access. In order to nominate a director pursuant to the Corporation’s proxy access provision, shareholders who meet the eligibility and other requirements set forth in Section 3.04 of the Corporation’s By‑Laws must send a notice to the Corporate Governance Committee, c/o Ms. Julia S. Janson, Executive Vice President, Chief Legal Officer and Corporate Secretary, Duke Energy Corporation, DEC 48H, P.O. Box 1414, Charlotte, NC 28201‑1414. The notice must provide the information set forth above, as well as the other detailed requirements set forth in Section 3.04 of the Corporation’s By‑Laws, which can be located on our website at www.duke-energy.com/pdfs/By-Laws.pdf.

New Directors since the 2015 Annual Meeting

Following the 2015 Annual Meeting, the Corporate Governance Committee sought to recruit additional Board members whose qualifications align with the needs of the Board in light of the major risks and issues facing the Corporation as well as its long‑term strategy. After working with an independent search firm, the Corporate Governance Committee recommended in September 2015 that Mr. Michael J. Angelakis be appointed to the Board and, in February 2016, recommended that Mr. Charles W. Moorman IV be appointed to the Board. Mr. Angelakis’ appointment was effective October 1, 2015. Mr. Angelakis brings management, financial expertise and risk management experience obtained as a senior executive at a large company in the telecommunications industry. Mr. Moorman’s appointment was effective March 1, 2016. Mr. Moorman brings significant management, finance, risk management and environmental expertise to the Corporation as a result of his 38‑year career in management at a large railroad company.

Communications with Directors

Interested parties can communicate with any of our directors by writing to our Corporate Secretary at the following address:

Corporate Secretary
Ms. Julia S. Janson
Executive Vice President, Chief Legal Officer and Corporate Secretary
Duke Energy Corporation
DEC 48H
P.O. Box 1414
Charlotte, NC 28201‑1414

Interested parties can communicate with our Independent Lead Director by writing to the following address:

Independent Lead Director
c/o Ms. Julia S. Janson
Executive Vice President, Chief Legal Officer and Corporate Secretary
Duke Energy Corporation
DEC 48H
P.O. Box 1414
Charlotte, NC 28201‑1414

Our Corporate Secretary will distribute communications to the Board of Directors, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communication. In that regard, the Duke Energy Board of Directors has requested that certain items that are unrelated to the duties and responsibilities of the Board of Directors be excluded, such as: spam; junk mail and mass mailings; service complaints; resumes and other forms of job inquiries; surveys; and business solicitations or advertisements. In addition, material that is unduly hostile, threatening, obscene or similarly unsuitable will be excluded. However, any communication that is so excluded remains available to any director upon request.

Corporate Governance Committee

Ann Maynard Gray (Chairperson)
Michael G. Browning
Harris E. DeLoach, Jr.
Daniel R. DiMicco
William E. Kennard
E. Marie McKee

Director Compensation

Annual Retainer and Fees.  Effective May 7, 2015, the retainer and meeting fees paid to our independent directors consisted of:

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* The Annual Lead Director Retainer, which was not paid during 2015, was reduced from $75,000 to $40,000 effective January 1, 2016.

This compensation program is the same as in effect at the end of 2014, except for the following adjustments that became effective May 7, 2015:

  • The Annual Board of Directors Retainer (Cash) was increased from $75,000 to $90,000
  • The Finance and Risk Management Committee Meeting Fee was increased from $2,000 to $3,000
  •  The Regulatory Policy and Operations Committee Meeting Fee was increased from $2,000 to $3,500

Annual Stock Retainer for 2015.  In 2015, each eligible director received the portion of his or her annual retainer that was payable in stock in the form of fully-vested shares.

Deferral Plans and Stock Purchases.  Directors may elect to receive all or a portion of their annual compensation, consisting of retainers and attendance fees, on a current basis, or defer such compensation under the Duke Energy Corporation Directors’ Savings Plan (the “Directors’ Savings Plan”). Deferred amounts are credited to an unfunded account, the balance of which is adjusted for the performance of phantom investment options, including the Duke Energy common stock fund, as elected by the director, and generally are paid when the director terminates his or her service from the Board of Directors.

Charitable Giving Program.  The Duke Energy Foundation, independent of Duke Energy, maintains the Duke Energy Foundation Matching Gifts Program under which directors are eligible to request matching contributions of up to $5,000 per director per calendar year to qualifying institutions. Duke Energy also maintains a Directors’ Charitable Giving Program. Eligibility for this program has been frozen and Ms. Gray is the only current director who is eligible. Under this program, Duke Energy will make, upon the director’s death, donations of up to $1,000,000 to charitable organizations selected by the director. Ms. Gray may request that donations be made under this program during her lifetime, in which case the maximum donation will be reduced on an actuarially determined net present value basis. In 2015, no donations were made on behalf of Ms. Gray. In addition, Duke Energy made a $1,000 donation to the American Red Cross – Greater Carolinas Chapter in December 2015 on behalf of each of the independent directors who were actively serving at that time.

Expense Reimbursement and Insurance.  Duke Energy provides travel insurance to directors and reimburses directors for expenses reasonably incurred in connection with attendance and participation at Board of Directors and committee meetings and special functions.

Stock Ownership Guidelines.  Outside directors are subject to stock ownership guidelines, which establish a target level of ownership of Duke Energy common stock (or common stock equivalents). Currently, each independent director is required to own shares with a value equal to at least five times the annual Board of Directors cash retainer (i.e., an ownership level of $450,000) or retain 50 percent of his or her vested annual equity retainer. All independent directors were in compliance with the guidelines as of December 31, 2015.

The following table describes the compensation earned during 2015 by each individual who served as an independent director during 2015. Because Mr. Moorman joined the Board of Directors on March 1, 2016, he did not receive any compensation in 2015 and is not listed below.

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(1) Effective May 6, 2015, Mr. Bernhardt and Mr. Reinsch retired from the Board of Directors of Duke Energy.
(2) Mr. Angelakis, Mr. Bernhardt, Mr. Browning, Mr. DeLoach, Mr. DiMicco, Mr. Hyler, Dr. Meserve, Mr. Saladrigas and Dr. Rhodes elected to defer $22,250; $52,874; $165,225; $167,225; $153,725; $46,306; $145,350; $198,225 and $88,863, respectively, of their 2015 cash compensation under the Directors’ Savings Plan.
(3) This column reflects the grant date fair value of the stock awards granted to each eligible director during 2015. The grant date fair value was determined in accordance with the accounting guidance for stock‑based compensation. See Note 20 of the Consolidated Financial Statements contained in our Annual Report on Form 10‑K for the year ended December 31, 2015 (“Form 10‑K”) for an explanation of the assumptions made in valuing these awards. In February 2015, Dr. Meserve received a pro‑rated portion of the 2014‑15 annual stock retainer, amounting to 361 shares of Duke Energy common stock, upon joining the Board of Directors. In May 2015, each sitting director on the Duke Energy Board received their annual stock retainer in the form of 1,627 shares of Duke Energy common stock. Mr. Browning, Mr. DeLoach, Mr. DiMicco, Mr. Forsgren, Ms. Gray, Mr. Hyler, Mr. Kennard, Dr. Rhodes and Mr. Saladrigas elected to defer their 2015‑16 stock retainer of Duke Energy shares under the Directors’ Savings Plan. In addition, Mr. Angelakis received a pro‑rated portion of the 2015‑16 annual stock retainer, amounting to 1,054 shares of Duke Energy common stock, upon joining the Board of Directors on October 1, 2015.
(4)Reflects above‑market interest earned on a grandfathered investment fund previously provided under a predecessor plan to the Directors’ Savings Plan. Participants can no longer defer compensation into the grandfathered investment fund but continue to be credited with interest at the fixed rate on amounts previously deferred into such fund.
(5) As described in the following table, All Other Compensation for 2015 includes a business travel accident insurance premium that was pro‑rated among the directors based on their service on the Board of Directors during 2015, contributions made in the director’s name to charitable organizations and a gift for directors who retired in 2015.

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