The following information is to provide background information regarding the 2012 leadership compensation as discussed in Nova Scotia Power’s 2012 Annual Information Form.
Compensation for senior leaders is competitive and based on measurable performance
- The Management Resources, Compensation and Corporate Responsibility Committee (MRCCR) of Nova Scotia Power’s Board of Directors, in coordination with the Management Resources and Compensation Committee (MRCC)of Emera Inc.’s Board of Directors, establishes the policy and structure for compensation paid to business leaders in the company. Compensation for Nova Scotia Power leaders is linked to Board-approved goals and targets.
- The MRCCR hires independent advisors (Towers Watson and Mercer) to compile market information on senior management compensation related to base salary, and short-term and long-term incentives. These reviews are done annually and include benchmarking against peers in the energy industry including: BC Hydro, ENMAX Corporation, Fortis Alberta and BC, and Manitoba Hydro.
- Short-and long-term incentives are intended to link a portion of an employee’s compensation to the achievement of predetermined levels of performance in support of corporate and business unit objectives. The objectives are set out in a “scorecard” and for NSP. The objectives include: continued safety improvements (7.5%), development of people (7.5%), reliability and reputation with customers (30%), asset management (15%), and financial performance (40%).
- On recommendation of the MRCCR, the Emera MRCC determined that Rob Bennett (CEO) and Robin McAdam (EVP Strategic Business & Customer Services) of NSPI achieved an aggregate of 90% of target on all the objectives measured in the NSPI scorecard for 2012.
- Objectives of the 2012 Emera scorecard include: Financial performance (90%) and maintaining and enhancing employee commitment and wellness (10%). The MRCC determined that the CFO (Judy Steele and Scott Balfour pro-rated as per months in that position), the CLO and CHRO achieved 115% of target performance.
Compensation for senior leaders is a reflection of Nova Scotia Power’s performance
Compensation for senior leaders is a key element in attracting and retaining top talent
- We know executive compensation at Nova Scotia Power is a sensitive topic for some our customers, but the pay is competitive based on what other CEOs with similar responsibilities earn elsewhere… The CEO of NSP oversees a complex business with $4 billion in assets and 1,800 employees. NSP is a 24 hour a day, 7 day a week essential service business in a dangerous industry that requires a precise focus on safety performance.
- Nova Scotia Power’s focus on reliability investments resulted in a significant improvement in frequency of power interruptions for customers in 2012, with further reliability investments planned over the next few years.
- NSP continued to make progress towards the province’s legislated renewable energy standards which require 25% of NSP generation to come from renewable sources by 2015 and 40% by 2020. NSP finished 2012 with 18% of its electricity coming from renewable sources and an “equivalency” agreement between Nova Scotia and the Government of Canada was achieved in terms of greenhouse gas reductions that the company must meet by 2030.
- NSP partnered to develop a new 102 megawatt wind project called South Canoe, completed construction of the 60 megawatt Port Hawkesbury biomass plant and a new energy-efficient waste heat recovery unit at Tuffs Cove Generation Station. All three of these projects are designed to bring new, clean energy to customers at the lowest cost.
- The compensation package for Nova Scotia Power leaders is structured to facilitate recruitment, development and retention of the best people. Leadership responsibility includes increasing shareholder value and meeting customer expectations.
Nova Scotia Power compensation is reviewed by the Nova Scotia Utility and Review Board
- Compensation for Nova Scotia Power leaders is reviewed by the Utility and Review Board annually.
- For Rob Bennett and Robin McAdam only, base salaries for 2012 are recovered in Nova Scotia Power rates approved by the Nova Scotia Utility and Review Board. Performance incentives are 100% paid for by Emera shareholders.
- No portion of salary or incentives for Scott Balfour, Judy Steele, Bruce Marchand and Barbara Meens Thistle are recovered in Nova Scotia Power rates.
- In 2012 the Government of Nova Scotia passed legislation to remove incentive payments from rate base going forward and cap executive salary amounts than can be charged to ratepayers at 110% of the salary of a senior deputy minister for the President and CEO, and 100% of the pay of the salary of a senior deputy minister for other members of the NS Power executive. This change takes effect in 2013.