This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider. You should read the entire proxy statement carefully before voting. Page references (“XX”) are supplied to help you find further information in this proxy statement.
Voting Matters (page 10)
|More information||Board recommendation||Broker non-votes||Abstentions||Votes required for approval|
|PROPOSAL 1||Election of directors||Page 11||FOR each nominee||Do not count||Do not count||Majority of votes cast, with a resignation policy|
|PROPOSAL 2||Ratification of Deloitte & Touche LLP as Duke Energy Corporation’s independent registered public accounting firm for 2017||Page 36||FOR||Vote for||Vote against||Majority of shares represented|
|PROPOSAL 3||Advisory vote to approve Duke Energy Corporation’s named executive officer compensation||Page 38||FOR||Do not count||Vote against||Majority of shares represented|
|PROPOSAL 4||Advisory vote on the frequency of the vote on executive compensation||Page 67||FOR AN ADVISORY VOTE EVERY YEAR||Do not count||Do not count||The frequency receiving the greatest number of votes will be approved|
|PROPOSAL 5||Amendment to the Amended and Restated Certificate of Incorporation of Duke Energy Corporation to eliminate supermajority requirements||Page 68||FOR||Vote against||Vote against||80% of the outstanding shares|
|PROPOSAL 6||Shareholder proposal regarding providing an annual report on Duke Energy’s lobbying expenses||Page 69||AGAINST||Do not count||Vote against||Majority of shares represented|
|PROPOSAL 7||Shareholder proposal regarding preparing an assessment of the impacts on Duke Energy’s portfolio of climate change consistent with a two degree scenario||Page 71||AGAINST||Do not count||Vote against||Majority of shares represented|
|PROPOSAL 8||Shareholder proposal regarding providing a report on the public health risks of Duke Energy’s coal use||Page 73||AGAINST||Do not count||Vote against||Majority of shares represented|
2016 Business Highlights
2016 was a pivotal year for Duke Energy. We completed a multi-year transformation of our business portfolio, maintained strong earnings growth in our core businesses and continued to increase our dividend for the benefit of our shareholders. With our transition complete, our strategy for the next decade is clear. We see great opportunities ahead and remain focused on investing in infrastructure our customers value and delivering sustainable growth for our investors. We will do this while building on our foundation of customer satisfaction and stakeholder engagement, all while remaining focused on safety, operational excellence and the environment.
- Safety remains our top priority. We improved on our industry-leading performance from 2015, reducing our total incident case rate and OSHA-reportable employee safety incidents. And in 2016, we had no work-related fatalities.
- We also reduced reportable environmental events by 17% from last year and continued to advance our efforts to permanently close our coal ash basins in ways that protect people and the environment.
- We have completed our multi-year transition to a more stable business mix by focusing on our core regulated and highly-contracted businesses. We expanded our natural gas platform and capabilities by acquiring Piedmont Natural Gas Company, Inc. We also completed the sale of our Latin American generation business, whose earnings introduced volatility to our consolidated results. Today’s Duke Energy, with scale and a portfolio of complementary businesses, is well-positioned to deliver predictable, stable earnings and cash flows to our investors.
- We are making significant investments to strengthen and modernize our energy grid, generate cleaner energy through natural gas and renewables, and by building natural gas infrastructure to support the growing need of this important resource. Reducing our carbon footprint is important to many in our communities, and we remain focused on being a leader with environmental stewardship at the forefront of our plans.
- Our total shareholder return (“TSR”) was 13.5% in 2016, compared to negative 10.8% in 2015. The total shareholder return of the Philadelphia Utility Index (“UTY”) was 17.4% in 2016, compared to negative 6.3% in 2015.
- During 2016, we increased the dividend payment to our shareholders by approximately four percent, reflecting our confidence in the strength of our core businesses. This is the tenth consecutive year of annual dividend growth. It also marked the 90th consecutive year that Duke Energy has paid a quarterly cash dividend on its common stock, a record we expect to continue for shareholders, who rely on a steady and growing dividend.
* Board representation statistics as of March 6, 2017.
Board Nominees (page 11)
Corporate Governance Highlights (page 29)
|✔||Ability for shareholders to nominate directors through proxy access|
|✔||Independent Lead Director with clearly defined role and responsibilities|
|✔||Majority voting for directors with mandatory resignation policy and plurality carve‑out for contested elections|
|✔||Robust shareholder engagement program|
|✔||Annual Board, committee and director assessments|
|✔||Ability for shareholders to take action by less than unanimous written consent|
|✔||Ability for shareholders to call a special shareholder meeting|
|✔||Annual election of directors|
|✔||Independent Board committees|
|✔||No hedging or pledging of Duke Energy securities|
Shareholder Engagement (page 23)
As part of Duke Energy’s commitment to corporate governance, we have instituted an engagement program to discuss and obtain feedback from our shareholders on our corporate governance and executive compensation practices. During the fall of 2016, the Corporation reached out to holders of approximately 33% of our outstanding shares and met with the holders of approximately 20% of our outstanding shares to discuss a variety of topics including executive compensation, sustainability, social and governance issues such as coal ash management, Board structure, Board succession planning and director onboarding. We also discussed the shareholder proposals that were voted on at the 2016 Annual Meeting, including a majority supported shareholder proposal to eliminate supermajority requirements in our Amended and Restated Certificate of Incorporation. As a result of the Corporation’s engagement on this shareholder proposal, the Board is recommending to shareholders at this Annual Meeting that they approve an amendment to the Corporation’s Amended and Restated Certificate of Incorporation to eliminate supermajority requirements. A more complete discussion of our corporate governance engagement program is included on page 23.
Executive Compensation Highlights (page 39)
Principles and Objectives
Our executive compensation program is designed to:
- Link pay to performance
- Attract and retain talented executive officers and key employees
- Emphasize performance-based compensation to motivate executives and key employees
- Reward individual performance
- Encourage longterm commitment to Duke Energy and align the interests of executives with shareholders
We meet these objectives through the appropriate mix of compensation, including:
- Base salary
- Short-term incentives
- Long-term incentives
Key Executive Compensation Features (page 44)
|✔||Significant stock ownership requirements (6x base salary for the Chief Executive Officer)|
|✔||Stock holding policy|
|✔||Incentive compensation tied to a clawback policy|
|✔||Consistent level of severance protection|
|✔||Shareholder approval policy for severance agreements|
|✔||Equity award granting policy|
|✔||Independent compensation consultant|
|✔||Annual tally sheets for executive officers|
|✔||Review and consideration of prior year’s “say-on-pay” vote|
|✔||No tax gross-ups|
|✔||No “single trigger” severance upon a change in control|
|✔||No employment agreements except for our Chief Executive Officer|
|✔||Do not encourage excessive or inappropriate risk-taking|
|✔||No excessive perquisites|