Xcel Energy Inc. Governance, Compensation and Nominating
Douglas W. Leatherdale (Chair)
C. Coney Burgess
A. Barry Hirschfeld.
A. Patricia Sampson
(As amended and
adopted on March 2, 2005)
A. Purpose and Responsibility. The Governance, Compensation and Nominating
Committee (“Committee”) (a) identifies individuals qualified to become
Board members, consistent with criteria approved by the Board of Directors,
(b) recommends candidates to fill Board vacancies and newly-created
director positions, (c) recommends whether incumbent directors should be
nominated for re-election to the Board, (d) develops and recommends
corporate governance principles applicable to the Board and the Company’s
employees and (e) oversees the evaluation of the Board and
The Committee also
shall establish and administer the compensation policies and programs of
the Xcel Energy Companies and the forms and
amount of compensation paid to the members of the Xcel
Energy Board of Directors and to the Xcel Energy
Companies’ executive and senior officers. Among other things, the
Committee shall have direct responsibility to: (1) review and approve
corporate goals and objectives relevant to chief executive officer (CEO)
compensation, evaluate the CEO's performance in light of those goals and
objectives, and, either as a committee or together with the other
independent directors (as directed by the Board), determine and approve the
CEO's compensation level based on this evaluation; (2) make determinations
or recommendations with respect to non-CEO compensation, incentive-compensation
plans and equity-based plans; and (3) produce a compensation committee
report on executive compensation as required by the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
The Committee is granted the authority by the Board of Directors to perform
the specific duties enumerated in this Committee Charter. The
Committee shall be provided adequate resources to discharge its
responsibilities, including without limitation funding, in such amounts as
the Committee deems necessary, to compensate any consultants or advisors
retained by the Committee. The Committee shall receive staff support
from the Human Resources Department and the office of the Corporate
The Committee has sole
authority to retain and terminate compensation consultant(s) including fees
and other retention terms.
The Committee shall
have the sole authority to engage search firms to assist in the
identification of director candidates and the sole authority to set the
fees and the other retention terms of such search firms. The Committee may
also retain independent counsel and other independent advisors to assist it
in carrying out its responsibilities.
The Committee may, it
its discretion, delegate all or a portion of its duties and
responsibilities to a subcommittee.
The Committee shall
hold executive sessions without management as determined by the Committee
C. Membership and Qualification: The size of the Committee shall be
determined by the Board, but it must always have at least three members,
each of whom satisfies the requirements for independence under applicable
law and the listing standards of the New York Stock Exchange, as such
qualifications are interpreted by the Board in its business judgment.
The members must also be “outside directors” for purposes of Section 162(m)
of the Internal Revenue Code and a “non-employee” director for purposes of
qualifications for Committee members include experience in corporate
governance, business management, executive compensation, employee benefits,
human resources and organizational behavior.
The Board selects
Committee members based on recommendations of the Committee. The
Committee selects a Committee Chair from among its members. Each
Committee member will serve at the pleasure of the Board for such term as
the Board may decide or until such Committee member is no longer a Board
D. Specific Duties.
The Committee shall:
1. Review and approve,
at least annually, corporate goals and objectives relevant to the
compensation of its chief executive officer. The Committee will
evaluate the performance of the chief executive officer in the light of
those corporate goals and objectives and set the compensation for the chief
executive officer based on such evaluation and any other factors as it
2. Review and
recommend approval, adoption and amendment of all cash and equity-based
incentive compensation plans in which any executive officer of the Company
participates. Review and recommend approval, adoption and amendment
of all other equity-based plans.
3. Administer the
Company's equity-based incentive compensation plans and other plans adopted
by the Board that contemplate administration by the Committee.
4. Annually review
performance and approve salaries and other forms of compensation, including
perquisites and awards under incentive compensation plans and equity-based
plans, for executive and senior officers and report the results of such
performance and compensation evaluations to the Board.
5. To the extent, and
in the manner, it deems appropriate, link a portion of executive
compensation to the performance of the Company and the Xcel
Energy Companies as measured against specific performance goals established
by the Committee. Review Xcel Energy and
the Xcel Energy Companies’ twelve-month or other
long-term performance. Approve short-term and long-term incentive
6. Review Xcel Energy’s human resources strategy and conduct an
annual review of the process of establishing salaries and wages of the Xcel Energy Companies’ employees.
7. Review the process
of management development and long range planning for the Xcel Energy Companies’ development.
8. Review and make
recommendations regarding fees and other compensation for Directors.
status of Board compensation in relation to other comparable companies and
such other factors the Committee deems appropriate.
9. Review and
recommend appropriate retirement policies and plans for Directors.
individuals believed to be qualified to become Board members and recommend
candidates to the Board to fill new or vacant positions. In
recommending candidates, the Committee may consider such factors as it
deems appropriate, consistent with the factors in the Company's corporate
governance guidelines. These factors may include judgment, skill,
diversity, integrity, experience with businesses and other organizations of
comparable size, the interplay of the candidate's experience with the
experience of other Board members, and the extent to which the candidate
would be a desirable addition to the Board and any committees of the
Board. The Committee shall also review the qualifications of, and
make recommendations to the Board regarding, director nominations submitted
to the Company in accordance with the Company's by-laws or otherwise.
11. The Committee
shall evaluate whether an incumbent director should be nominated for
re-election to the Board upon expiration of such director's term. The
Committee will use the same factors established for new director candidates
to make its evaluation and will also take into account the incumbent
director's performance as a Board member.
12. Recommend Board
members to be appointed to each Board Committee. Recommend Board
members to chair each Board Committee.
independent Directors to be appointed by the Board as rotating Presiding
Independent Directors for Executive Sessions of the Board consistent with
Guidelines on Corporate Governance
14. Prepare, with the
assistance of management, a detailed orientation program for new Directors
and a continuing education program for incumbent Directors.
15. Prepare criteria
for assessing the performance of the Board of Directors, Board committees
(including this Committee) and individual Directors. Annually perform
such assessment and report the results of such assessment to the Board of
16. At least annually,
review and, if appropriate, recommend changes to the Bylaws or the Guidelines
on Corporate Governance to ensure effective corporate governance.
17. Recommend Company
corporate Code of Conduct.
18. Review and
recommend procedures for Board meetings. This review should consider,
among other things, the role of the Chairman, and other Company officers,
and administration of executive sessions.
19. Review proxy
disclosures regarding Directors’ and officers’ compensation and benefits.
stock ownership levels for Directors and officers consistent with the
Guidelines on Corporate Governance.
21. Review Chief
Executive Officer and senior officer severance plan.
22. Review charter
with Board and recommend any changes to the Board.
23. Prepare a
compensation committee report on executive compensation for inclusion in
the Company's proxy statement relating to the Company's annual meeting of
The Committee shall meet as frequently as necessary, but not fewer than
four times per year in order to carry out its responsibilities under this
Charter. The Committee Chair shall, in consultation with the other
members of the Committee and appropriate officers of the Company, establish
the agenda for each Committee meeting. Each Committee member may
submit items to be included on the agenda. Committee members may also
raise subjects that are not on the agenda at any meeting. The
Committee Chair or a majority of the Committee members may call a meeting
of the Committee at any time. A majority of the number of Committee
members selected by the Board shall constitute a quorum for conducting
business at a meeting of the Committee. The act of a majority of
Committee members present at a Committee meeting at which a quorum is in
attendance shall be the act of the Committee, unless a greater number is
required by law, the Company’s certificate of incorporation or its
by-laws. The Committee Chir shall supervise
the conduct of the meetings and shall have other responsibilities, which
the Committee may designate from time to time.
The Committee may
request any officer or employee of the Company, or any representative of
the Company’s advisors, to attend a meeting or to meet with any members or
representatives of the Committee.
F. Supporting Material and Agendas. The Committee Chairman, in consultation
with the other members of the Committee, the Committee secretary and the
Vice President of Human Resources shall develop the meeting agenda.
The agenda and all materials to be reviewed at a Committee meeting shall be
provided to the Committee members prior to the meeting date.