DEF 14A 1 def14a2020.htm DEF 14A Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.    )
 
 
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Soliciting Material Pursuant to §240.14a-12
DTE Energy Company
(Name of Registrant as Specified In Its Charter)
 
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LETTER TO SHAREHOLDERS
Dear Fellow Shareholders,
 
We invite you to attend our company’s annual meeting of shareholders, which will be held on Thursday, May 7 in New York City. Please see page 68 for details on attending.

Thanks to the drive and dedicated service of our 10,000 employees, 2019 was a successful year for DTE Energy.

One of our priorities is to transform our culture of service, and we are making great progress in bringing service excellence to life for each other, our customers, our communities and our shareholders. The more we focus on improving how we work together, the more positive we feel about coming to work every day—and that energy and excitement will drive service excellence externally for our customers and for our company’s long-term success.

Service excellence starts with our own people, and our 2019 engagement surveys gave us the highest scores in our history—in the top 3% of companies worldwide. Enterprise-wide, we are making good progress on diversity and inclusion, both in our hiring at a senior level and in building a stronger culture throughout the organization. We also made Indeed’s list of Top Employers in 2019 and were named one of Forbes’ Best Employers in Michigan.

Climate change is one of the defining public policy issues of our time, and we are committed to doing as much as we can, as fast as we can, to reduce our carbon footprint. In 2019, we announced a goal to achieve net zero carbon emissions in the electric company by 2050, gained momentum with our voluntary renewables program and opened our first renewable natural gas facility at a dairy farm in Wisconsin.

Being a force for growth and prosperity in the communities where we live and serve is a cornerstone of our service mindset, and we remain committed to serving people who need us the most—from working on energy assistance programs that ensure the delivery of warmth and comfort to their homes, to supporting job training and opportunities for people with barriers like poverty, a challenging background or a disability. Our new partnership with the Michigan Department of Corrections to open the first-of-its-kind program to train inmates eligible for parole to be tree trimmers has been heralded by the industry for its innovation. It is just one of the many ways we live our values every day.

Our focus on these priorities and robust growth opportunities across all our business lines has driven our long track record of financial success. We continue to deliver total shareholder returns higher than the utility average, and 2019 was the 11th consecutive year our operating earnings per share results exceeded our original guidance midpoint. Going forward, we will continue to target 5 - 7% EPS growth. We are confident that DTE is positioned for continued success in the years to come.
shawsignature3.jpg
 
norciasignature.jpg
 
Ruth G. Shaw
 
Gerardo Norcia
 
Lead Independent Director
 
President and Chief Executive Officer
 





DTE Energy Company
 
 
dteimage2019a12.jpg
One Energy Plaza
 
 
Detroit, Michigan 48226
 
 

2020 Notice of Annual Meeting of Shareholders and Proxy Statement
Meeting Date:
Time:
Location:
Thursday, May 7, 2020
8:00 a.m. (EDT)
Four Seasons Hotel
 
 
57 East 57th Street
 
 
New York, NY 10022
We invite you to attend the annual meeting of DTE Energy Company.
Agenda:
1.
Elect twelve directors;
2.
Ratify the appointment of PricewaterhouseCoopers LLP by the Audit Committee of the Board of Directors as our independent registered public accounting firm for the year 2020;
3.
Provide an advisory vote to approve executive compensation;
4.
Vote on a shareholder proposal, if properly presented, to make additional disclosure of political contributions; and
5.
Consider any other business that may properly come before the meeting.
Only shareholders of record at the close of business on March 10, 2020, the record date for this meeting, or their representatives authorized by proxy may attend or vote at the meeting.
This 2020 Notice of Annual Meeting, as well as the accompanying proxy statement and proxy card, will be first sent or given to our shareholders on or about March 24, 2020.
This year we have conserved resources and reduced costs by mailing a meeting notice to many of our registered and beneficial shareholders containing instructions on how to access our proxy statement and annual report on Form 10-K and vote online or how to request a paper copy. Shareholders who receive that meeting notice will not receive a paper copy of the proxy statement and annual report on Form 10-K or a proxy card unless they request one.
Every vote is important. You may vote your shares (1) by telephone, (2) via the Internet, (3) if you received a paper copy, by completing and mailing the enclosed proxy card in the return envelope or (4) in person at the annual meeting. Specific instructions for voting by telephone or via the Internet are attached to the proxy card or to the meeting notice that you received if you did not receive a paper copy. If you attend the meeting and vote at it, your vote at the meeting will replace any earlier vote by telephone, Internet or proxy. If you wish to attend the annual meeting in person, you must register in advance. Please vote your proxy, then follow the instructions on page 68 to pre-register.
By Order of the Board of Directors
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Lisa A. Muschong
Vice President, Corporate Secretary & Chief of Staff March 12, 2020
  
 

Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders to Be Held on May 7, 2020:
The proxy statement and annual report are available to security holders free of charge at
proxydocs.com/dte






TABLE OF CONTENTS
 









PROXY STATEMENT SUMMARY
DTE Energy Aspiration and System of Priorities

At DTE Energy Company (“DTE Energy,” the “Company,” “we,” “us” or “our”), we aspire to be the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve. This aspiration drives everything we do and has led us to develop a system of corporate priorities that guide our daily, monthly and annual plans which help us to achieve this aspiration. Our Board of Directors (the “Board”) evaluates our Company’s and executives’ performance based upon goals that align with this system of priorities, and we will refer to this system of priorities as we discuss DTE Energy’s performance and our compensation programs throughout this proxy statement.
prioroities3a02.jpg

Becoming the best-operated energy company means having great corporate governance, competitive compensation and excellent shareholder relations.
Governance Highlights
The Board is committed to creating long-term value for our shareholders while operating in an ethical, legal, environmentally sensitive and socially responsible manner. The Board follows sound governance practices, some of which are highlighted below. For more detail, see the “Corporate Governance” section of this proxy statement.
Ten of twelve director nominees, 83%, are independent; our Executive Chairman and our President & Chief Executive Officer ("CEO") are the only management directors.
All Board committees are composed exclusively of independent directors.
We have implemented a proxy access provision, which makes it possible for a group of shareholders meeting certain criteria to nominate and include in the Company’s proxy materials a candidate for the Board.

 
DTE ENERGY 2020 PROXY STATEMENT      1



We have a Lead Independent Director, elected by the independent members of the Board. The Lead Independent Director maintains final approval authority over Board agendas, meeting materials and schedules. The Lead Independent Director is also available for consultation and direct communication with large shareholders.
Independent directors met in executive sessions chaired by the Lead Independent Director at six of the eight 2019 Board meetings.
All of our directors are elected annually.
We have a majority vote requirement for uncontested director elections.
The Board and its committees conduct annual self-assessments. In addition, each independent director who has served for one year or more undergoes an annual peer review.
Our executive officers and directors are all subject to robust stock ownership requirements.
We have instituted anti-hedging policies applicable to all Company directors, officers and employees.
Our Board’s Mission and Governance Guidelines recommend that the Board consider diversity of characteristics including experience, gender, race, ethnicity and age when evaluating nominees for the Board.
We limit our directors who are employed by public companies to a total of not more than two public company boards and all other directors to a total of not more than four public company boards.
Performance Highlights
The Company continued to deliver on its objectives to provide strong earnings per share and dividend growth in 2019, while maintaining a strong balance sheet, employee engagement and improving customer service. Some highlights of the Company’s 2019 performance include:

Increased our dividend payment to $3.85 per share in 2019, representing a 7% increase over the dividend in 2018.
Provided our shareholders with a five-year total shareholder return of 177% (indexed with 2014 as the base year = 100%).
Delivered cash from operations of $2.6 billion in 2019.
Achieved 6.5% compound operating earnings per share growth during the five years ending in 2019 (see discussion below ).
DTE Energy management believes that operating earnings provide a more meaningful representation of the Company's earnings from ongoing operations and uses operating earnings as the primary performance measurement internally and externally. Operating earnings can be reconciled to our reported earnings as set forth in the following table:     
 
2019

2014

Reported Earnings per Share
$
6.31

$
5.10

MPSC approval of deferral for new customer billing system
(0.06
)
 
MPSC disallowance of power plant capital expenses
0.05

 
Transaction-related costs from midstream acquisition
0.07

 
Impairment of equity method investment
0.03

0.03

Certain mark-to-market transactions
(0.10
)
(0.57
)
New York State tax law change
 
0.04

Operating Earnings per Share
$
6.30

$
4.60

Executive Compensation Highlights
Our executive compensation programs are designed to be competitive with our peers, have a meaningful performance component linked to the achievement of short-term and long-term goals that align with our shareholders’ long-term interests and encourage executives to have an ownership interest in the Company. Our President and CEO’s total compensation shows strong pay-for-performance alignment with growth in long-term shareholder value creation. Our CEO’s compensation growth trend is consistent with the growth in value of a $100 investment in DTE Energy Company stock made in 2014.

2      DTE ENERGY 2020 PROXY STATEMENT

 



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2017
2018
2019
CEO Total Compensation ($000s)
15,836
10,987
8,228
Total Shareholder Return (Indexed, Base Period 2014=100)
139.96
145.83
176.98
The Company’s compensation programs are also designed to clearly align performance objectives for our Named Executive Officers with the interests of shareholders and with our system of priorities. Our performance measures are designed to help move our Company toward achieving these priorities. For more details, see our priorities alignment chart in the Compensation Discussion and Analysis Summary on page 33.
Other highlights from our compensation program include:
 
Our CEO received 59% of his 2019 total compensation in contingent, performance-based incentives. For our other Named Executive Officers, the average percentage of contingent, performance-based compensation was 48%. See more details on page 34.
Our short-term and long-term performance metrics all tie directly to our system of priorities (see above). These are the same metrics that management uses to assess the Company’s progress toward our aspiration of becoming the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve.
Our long-term plan awards include a mix of restricted stock and performance shares designed in part to encourage executive stock ownership. The Board’s Organization and Compensation Committee has not issued stock options since 2010.
Our equity compensation plan forbids buyouts of “underwater” stock options. The Company has never bought or repriced “underwater” stock options.
Our equity compensation plan requires a minimum one-year vesting period for equity awards. The Company’s typical practice is to require a three-year vesting period for equity awards and the Company has never issued equity awards with less than a one-year vesting period.
Our Board has adopted a “clawback” policy that provides that, in the event of an accounting restatement due to material noncompliance with federal securities laws, the Company may recover excess performance-based compensation awarded to current or former officers during the three-year period preceding the restatement.
Our executive Change-In-Control Severance Agreements do not include excise tax gross-ups.
We have eliminated the automatic vesting of equity issued under our Long-Term Incentive Plan upon a change in control of the Company, unless an acquiring or surviving entity fails to replace or affirm the existing equity awards with awards by the surviving company.


 
DTE ENERGY 2020 PROXY STATEMENT      3



Shareholder Engagement
We have continued our shareholder engagement activities this year and, as a result of those discussions, we’ve learned a lot about what is important to our shareholders. The shareholder engagement team consists of members from the Corporate Secretary's office, the General Counsel organization, Investor Relations, Environmental Management, and Corporate Communications. Shareholder engagement is a year-round process for us.
Every spring we reach out to large shareholders to discuss issues related to proxy season and the proposals to be presented at our annual meeting. In the fall we conduct another round of conversations to discuss general governance issues and trends. We also discuss pressing matters on an ad hoc basis.
proxyshareholdergraphic06.jpg
Our shareholder engagement activities help us identify governance and compensation policies and practices that are most important to our shareholders.
The shareholder engagement team reports directly to the Corporate Governance Committee and other committees as needed, conveying the feedback received from shareholders and proposing implementation of best practices.
The committees and the full Board of Directors deliberate over proposed governance changes, adopt best practices and provide guidance to the shareholder engagement team in their communications with shareholders.
In 2019, the Company held discussions with shareholders who collectively own or exercise voting control over 43% of the Company’s outstanding shares. In addition, the Company routinely contacts shareholders who have submitted proposals for inclusion in our annual proxy statement in an effort to understand their concerns and to address, where possible, the issues behind their proposals. We will continue to look for opportunities to provide more information about the Company’s approach on topics of interest to shareholders, and to stimulate more conversations with shareholders.

Items for Shareholder Vote at this Meeting
At the 2020 Annual Meeting shareholders will vote on the following proposals:
Proposal 1: Elect twelve members of the Board of Directors for one year terms ending in 2021;
Proposal 2: Ratify the appointment of PricewaterhouseCoopers LLP as our independent auditors;
Proposal 3: Provide a nonbinding vote to approve the Company’s executive compensation; and
Proposal 4: Vote on a shareholder proposal to make additional disclosure of political contributions.
Shareholders may vote on any other matter that properly comes before the meeting.



4      DTE ENERGY 2020 PROXY STATEMENT

 



Proposal No. 1 — Election of Directors
The Board of Directors has nominated twelve directors for election at the 2020 annual shareholder meeting. Directors are elected to serve annual terms which expire when their successors are elected at the next year’s annual shareholder meeting. All of the nominees are currently directors of the Company. W. Frank Fountain, Jr., who has served as a director since 2007, will retire from the Board effective May 7, 2020, having reached our mandatory retirement age of 75.
Proxies cannot be voted for more than twelve persons at this meeting. If any nominee becomes unable or unwilling to serve at the time of the meeting, the persons named in the enclosed proxy card have discretionary authority to vote for a substitute nominee or nominees. It is anticipated that all nominees will be available for election.

The biography of each of the nominees below contains information regarding the person’s service as a director, business experience and director positions held currently or at any time during at least the last five years. The age provided for each director is as of March 12, 2020. In addition to the information presented below regarding each person’s experience, qualifications, attributes and skills that caused our Corporate Governance Committee and Board to determine that the person should serve as a director, the Board believes that all of the Company’s directors have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen, strategic insight, an ability to exercise sound judgment and a commitment to service and community involvement. Finally, we value their significant experience on other public company boards of directors and board committees and the diversity that they bring to our Board. The following graphs display information about the skills and experience our Board members bring to their service:
proxyskillsmatrixforproxy202.jpg

 
DTE ENERGY 2020 PROXY STATEMENT      5



The Board's demographic makeup is set forth below:

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The biographies below disclose the committees on which each director serves. The following abbreviations are used to denote each committee: Corp Gov=Corporate Governance; O&C=Organization and Compensation; Nuc Rev=Nuclear Review; and PPRC=Public Policy & Responsibility.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR ELECTION AT THIS MEETING.


6      DTE ENERGY 2020 PROXY STATEMENT

 



 
 
 
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Gerard M. Anderson
 
 
David A. Brandon
 
Executive Chairman, DTE Energy Company
 
 
Non-Executive Chairman, Domino's Pizza, Inc.
 
(2019-present)
 
 
(2011-present)
 
 
 
 
 
 
 
Not Independent
 
 
Independent
DTE Committees:
 
Age: 61
 
 
Age: 67
O&C (Chair)
 
Director since: 2009
 
 
Director since: 2010
Finance
 
 
 
 
 
PPRC
 
 
 
 
 
 
Previous Experience
 
 
Previous Experience
 
DTE Energy Company—Chairman (2011-2019); CEO
 
 
Toys "R" Us, Inc.—Chairman and CEO (2015-2018)*
 
 
(2010-2019); President (2004-2013); COO (2005-
 
 
University of Michigan—Athletic Director (2010-2014)
 
 
2010); Executive VP (1997-2004)
 
 
Domino's Pizza, Inc.—Special Advisor (2010-2011)
 
McKinsey & Co.—Senior Consultant (1988-1993)
 
 
 
Chairman and CEO (1999-2010)
 
 
 
 
 
 
 
Other Public Boards
 
 
Other Public Boards
 
The Andersons, Inc. (2008-present)
 
 
Domino's Pizza, Inc. (1999-present)
 
 
 
 
 
Herman Miller, Inc. (2011-present)
 
Qualifications
 
 
Kaydon Corporation (2004-2013)
 
Energy Industry Experience
 
 
 
 
 
 
DTE Energy CEO for nine years and COO for five
 
 
Qualifications
 
 
years
 
 
CEO Experience
 
Growth and Value Creation
 
 
 
Service as chief executive of large public companies
 
 
Extensive experience in strategic planning and
 
 
Customer Service and Satisfaction
 
 
corporate business development
 
 
 
Extensive experience in marketing and sales
 
Operations and Continuous Improvement
 
 
Financial Planning and Review
 
 
Broad experience managing capital-intensive
 
 
 
Strong skill sets in corporate finance and strategic
 
 
industries
 
 
 
planning
 
 
 
 
 
 
 
Executive Compensation
 
 
 
 
 
 
 
 
Experience in executive compensation and
 
 
 
 
 
 
 
 
organizational best practices
 
 
 
 
 
 
 
*In September 2017, Toys "R" Us, Inc. filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

 
DTE ENERGY 2020 PROXY STATEMENT      7



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Charles G. McClure, Jr.
 
 
Gail J. McGovern
 
Managing Partner, Michigan Capital Advisors
 
 
President and CEO, American Red Cross
 
(a private equity firm)(2014-present)
 
 
(2008-present)
 
 
 
 
 
 
 
 
Independent
DTE Committees:
 
 
Independent
DTE Committees:
 
Age: 66
Audit
 
 
Age: 68
O&C
 
Director since: 2012
Corp Gov (Chair)
 
 
Director since: 2003
Finance
 
 
 
Nuc Rev
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previous Experience
 
 
Previous Experience
 
Meritor, Inc.—Chairman of the Board, CEO and
 
 
Harvard Business School—Professor (2002–2008)
 
 
 President (2004–2013)
 
 
Fidelity Personal Investments (a unit of Fidelity
 
Federal-Mogul Corporation—CEO (2003–2004),
 
 
 
Investments—President (1998–2002)
 
 
President and COO (2001–2003)
 
 
 
 
 
Detroit Diesel Corporation—President and CEO
 
 
Other Public Boards
 
 
(1997-2000)
 
 
PayPal Holdings, Inc. (2015–present)
 
 
 
 
 
eBay Inc. (2015)
 
Other Public Boards
 
 
 
 
Crane Co. (2017–present)
 
 
Qualifications
 
3D Systems Inc. (2017–present)
 
 
CEO Experience
 
Remy International, Inc. (2015)
 
 
 
Top executive of major non-profit organization
 
Meritor, Inc. (2004–2013)
 
 
Customer Service and Satisfaction
 
 
 
 
 
 
Extensive executive experience in marketing, sales
 
Qualifications
 
 
 
and customer relations
 
CEO Experience
 
 
Growth and Value Creation
 
 
CEO, president and director of several major
 
 
 
Experience in strategic planning and corporate
 
 
domestic and international corporations
 
 
 
finance
 
Operations and Continuous Improvement
 
 
 
 
 
 
Broad knowledge of business and industry
 
 
 
 
 
Employee Engagement, Safety and Talent
 
 
 
 
 
 
Extensive proven leadership skills and service on
 
 
 
 
 
 
boards of industry organizations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8      DTE ENERGY 2020 PROXY STATEMENT

 



a2020murray.jpg
 
a2020norcia.jpg
 
Mark A. Murray
 
 
Gerardo Norcia
 
Vice Chairman, Meijer, Inc.
 
 
CEO (2019-present) and President (2016-
 
(2013-present)
 
 
present), DTE Energy Company
 
 
 
 
 
 
 
 
Independent
DTE Committees:
 
 
Not Independent
 
 
Age: 65
Nuc Rev (Chair)
 
 
Age: 57
 
 
 
Director since: 2009
PPRC
 
 
Director since: 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previous Experience
 
 
Previous Experience
 
Meijer, Inc.—President (2006–2013), Co-CEO
 
 
DTE Electric—President and COO (2013-2016)
 
 
(2013–2016)
 
 
DTE Gas—President and COO (2007-2013)
 
Grand Valley State University—President (2001–2006)
 
 
DTE Gas Storage and Pipelines—President and COO
 
State of Michigan—Treasurer (1999–2001)
 
 
 
(2002-2007)
 
Michigan State University—VP of Finance and
 
 
 
 
 
Administration (1998–1999)
 
 
Qualifications
 
 
 
 
 
Energy Industry Experience
 
Other Public Boards
 
 
 
More than 30 years of leadership in business development, engineering and operations
 
Universal Forest Products, Inc. (2004–2016)
 
 
 
development, engineering and operations
 
Fidelity Fixed Income and Asset Allocation
 
 
Operations and Continuous Improvement
 
 
(2016–present)
 
 
 
Extensive experience in customer relations, strategic
 
 
 
 
 
 
planning and operational efficiency
 
Qualifications
 
 
Employee Engagement, Safety and Talent
 
CEO Experience
 
 
 
Broad experience with human capital management
 
 
President and Co-CEO of a major Michigan-based
 
 
 
and safety leadership
 
 
corporation
 
 
 
 
 
Financial Planning and Review
 
 
 
 
 
 
Strategic planning, corporate development and
 
 
 
 
 
 
finance experience
 
 
 
 
 
Government, Regulatory and Community
 
 
 
 
 
 
University president and state government official
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
DTE ENERGY 2020 PROXY STATEMENT      9



a2020shaw.jpg
 
a2020skaggs.jpg
 
Ruth G. Shaw
 
 
Robert C. Skaggs, Jr.
 
Retired Group Executive, Public Policy and
 
 
Retired Chairman and CEO, Columbia Pipeline
 
President, Duke Nuclear, Duke Energy
 
 
Group, Inc.
 
(2003-2009)
 
 
(2015-2016)
 
 
 
 
 
 
 
 
Independent
DTE Committees:
 
 
Independent
DTE Committees:
 
Age: 72
Corp Gov
 
 
Age: 65
Finance
 
Director since: 2008
Nuc Rev
 
 
Director since: 2017
Nuc Rev
 
 
O&C
 
 
 
O&C
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previous Experience
 
 
Previous Experience
 
Duke Energy—Executive Advisor (2007–2009)
 
 
NiSource, Inc.—President (2004–2015) and CEO
 
Duke Nuclear—Group Executive for Public Policy
 
 
 
(2005–2015)
 
 
and President (2006–2007)
 
 
 
 
Duke Power Company—President and CEO (2003–2006)
 
 
Other Public Boards
 
 
 
 
Team, Inc. (2019-present)
 
Other Public Boards
 
 
Cloud Peak Energy, Inc. (2015–2019)
 
Dow, Inc. (2005–present)
 
 
Columbia Pipeline Group, Inc. (2014–2015)
 
SPX Corporation (2015–present)
 
 
NiSource, Inc. (2005–2015)
 
 
 
 
 
 
Qualifications
 
 
Qualifications
 
Energy Industry Experience
 
 
CEO Experience
 
 
Extensive experience in the nuclear and energy
 
 
 
Extensive executive leadership experience in the
 
 
industries
 
 
 
utility sector
 
Corporate Governance
 
 
Energy Industry Experience
 
 
Service on corporate boards and industry
 
 
 
Broad experience in natural gas and electric
 
 
associations and organizations
 
 
 
generation, transmission, storage and distribution
 
Government, Regulatory and Community
 
 
Government, Regulatory and Community
 
 
Broad knowledge of regulatory matters, public
 
 
 
Experience developing regulatory strategies and leading external relations
 
 
policy and corporate communications
 
 
 
leading external relations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

10      DTE ENERGY 2020 PROXY STATEMENT

 



a2020thomas.jpg
 
a2020torgowa01.jpg
 
David A. Thomas
 
 
Gary H. Torgow
 
President, Morehouse College
 
 
Executive Chairman, TCF Financial Corporation
 
(2018-present)
 
 
(2019-present)
 
 
 
 
 
 
 
 
Independent
DTE Committees:
 
 
Independent
 
 
Age: 63
Finance
 
 
Age: 63
 
 
 
Director since: 2013
PPRC
 
 
Director since: 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previous Experience
 
 
Previous Experience
 
Harvard Business School—H. Naylor Fitzhugh
 
 
Chemical Financial Corporation—Chairman
 
 
Professor of Business Administration (2016–2017,
 
 
 
(2016-2019)
 
 
1990–2011)
 
 
Talmer Bancorp, Inc.—Chairman (2009-2016)
 
Georgetown University McDonough School of
 
 
 
 
 
 
 
 
Business—Dean and William R. Berkeley Professor of
 
 
Other Public Boards
 
 
Business Administration (2011-2016)
 
 
TCF Financial Corporation (2019-present)
 
Wharton School of Finance—Assistant Professor of
 
 
Chemical Financial Corporation (2016-2019)
 
 
Management (1986–1990)
 
 
Talmer Bancorp, Inc. (2009-2016)
 
 
 
 
 
 
 
 
 
 
 
Qualifications
 
 
Qualifications
 
Employee Engagement, Safety and Talent
 
 
Leadership Experience
 
 
Leadership and research in corporate inclusion and
 
 
 
Chairman and executive experience in publicly
 
 
diversity
 
 
 
held companies
 
Corporate Governance
 
 
Financial Planning and Review
 
 
Service on various civic and educational boards,
 
 
 
Financial accounting for complex organizations
 
 
advisor to other corporate boards
 
 
 
and publicly-held companies
 
Executive Experience as senior level higher education
 
 
Growth and Value Creation
 
 
administrator
 
 
 
Strong skill sets in corporate finance, community
 
 
Expertise in executive development and strategic
 
 
 
relations, strategic planning and corporate/business
 
 
human resource management
 
 
 
development
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
DTE ENERGY 2020 PROXY STATEMENT      11



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a2020williams.jpg
 
James H. Vandenberghe
 
 
Valerie M. Williams
 
Retired Vice chairman and former Director,
 
 
Retired Southwest Assurance Managing
 
Lear Corporation (1998-2008)
 
 
Partner, Ernst & Young LLP (2009-2016)
 
 
 
 
 
 
 
 
Independent
DTE Committees:
 
 
Independent
DTE Committees:
 
Age: 70
Audit
 
 
Age: 63
Audit (Chair)
 
Director since: 2006
Corp Gov
 
 
Director since: 2018
Corp Gov
 
 
Finance (Chair)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Previous Experience
 
 
Previous Experience
 
Lear Corporation—President and COO (1997–1998),
 
 
Ernst & Young, LLP—Southwest AABS Managing
 
 
CFO (1988–1997, 2006–2007)
 
 
 
Partner (2006–2009)
 
 
 
 
 
 
 
Ernst & Young, LLP—National Office Professional
 
Other Public Boards
 
 
 
Practice Partner (2005)
 
Lear Corporation (1995–2008)
 
 
 
 
 
 
Federal-Mogul Corporation (2008–2013)
 
 
Other Public Boards
 
 
 
 
 
 
Omnicom Group Inc. (2016-present)
 
Qualifications
 
 
WPX Energy, Inc. (2018-present)
 
Growth and Value Creation
 
 
 
 
 
 
 
Extensive experience in strategic planning and
 
 
Qualifications
 
 
managing capital-intensive industries
 
 
Financial Planning and Review
 
Financial Planning and Review
 
 
 
Significant financial reporting expertise for complex
 
 
Broad experience with public and financial
 
 
 
organizations
 
 
accounting for complex organizations
 
 
Corporate Governance
 
 
 
 
 
 
Leadership experience in audit practice and risk
 
 
 
 
 
 
management
 
 
 
 
 
Growth and Value Creation
 
 
 
 
 
 
Experience in oversight of operations and strategy
 
 
 
 
 
 
development
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

12      DTE ENERGY 2020 PROXY STATEMENT

 



Corporate Governance
Governance Guidelines
At DTE Energy, we are committed to operating in an ethical, legal, environmentally sensitive and socially responsible manner, while creating long-term value for our shareholders. The foundation of our governance practices begins at the top, with the DTE Energy Board of Directors Mission and Guidelines (“Governance Guidelines”). The Governance Guidelines set forth the practices the Board follows with respect to Board composition and selection, Board meetings, the performance evaluation and succession planning for DTE Energy’s Chief Executive Officer, Board committees, Board compensation and communicating with the Board, among other things. The Governance Guidelines are also intended to align the interests of directors and management with those of our shareholders. The following is a summary of the Governance Guidelines, along with other governance practices at DTE Energy.
Election of Directors and Vacancies
The Company has a declassified board of directors. Directors are elected annually for terms which expire upon election of their successor at the next year’s annual shareholder meeting.
If a vacancy on the Board occurs between annual shareholder meetings, the vacancy may be filled by a majority vote of the directors then in office. The new director’s term will expire upon election of their successor at the next year’s annual shareholder meeting.
Under the Governance Guidelines, the Corporate Governance Committee periodically assesses the skills, characteristics and composition of the Board, along with the need for expertise and other relevant factors as it deems appropriate. In light of these assessments, and in light of the standards set forth in the Governance Guidelines, the Corporate Governance Committee may seek candidates with specific qualifications and candidates who satisfy other requirements set by the Board. We believe our Board should be comprised of directors who have had high-level executive experience, have been directors on other boards and have been tested through economic downturns and crises. Industry experience, regional relationships and broad diversity of experience and backgrounds are also factors in Board nominee selection. The Board’s Governance Guidelines confirm that we believe it is desirable for Board members to possess diverse characteristics of gender, race, ethnicity and age, and we consider these factors in Board evaluation and in the identification of candidates for Board membership. We believe this type of composition enables the Board to oversee the management of the business and affairs of the Company effectively. Information about the skills, experiences and qualifications of our directors is included in their biographies beginning on page 7.
The Corporate Governance Committee considers candidates who have been properly nominated by shareholders, as well as candidates who have been identified by Board members and Company personnel. In addition, the Corporate Governance Committee may use a search firm to assist in the search for candidates and nominees and to evaluate the nominees’ skills against the Board’s criteria. Based on its review of all candidates, the Corporate Governance Committee recommends a slate of director nominees for election at the annual meeting of shareholders. The slate of nominees may include both incumbent and new nominees.

Potential candidates are reviewed and evaluated by the Corporate Governance Committee, and selected candidates go on to be interviewed by one or more Corporate Governance Committee members. An invitation to join the Board is extended by the Board itself, through the Chairman and the Chair of the Corporate Governance Committee.

During 2019, the Corporate Governance Committee screened director candidates and recommended to the Board that Gary Torgow be elected as a director. Mr. Torgow was recommended as a potential candidate by Board members and Company personnel. Mr. Torgow was elected by the Board to serve for a term effective June 20, 2019 and expiring at the 2020 annual meeting. In conjunction with his appointment as President and Chief Executive Officer, Gerardo Norcia was also elected by the Board to serve for a term effective June 23, 2019 and expiring at the 2020 annual meeting.
Under our Bylaws, a group of up to 20 shareholders owning 3% or more of the Company’s outstanding common stock continuously for at least three (3) years may nominate and include in the Company’s proxy materials a candidate for the Board of Directors (a Shareholder Nominee), provided that the shareholder(s) and the nominee satisfy the requirements

 
DTE ENERGY 2020 PROXY STATEMENT      13



specified in the Bylaws. The total number of Shareholder Nominees that the Company must include in the Company’s proxy materials in a given year shall not exceed 20% of the number of directors in office at the time of the nomination.
Composition of the Board
Our Governance Guidelines and our Bylaws state that the exact size of the Board will be determined by resolution of the Board from time to time. Our Board currently has thirteen members. As noted on page 5, W. Frank Fountain, Jr.'s retirement will be effective as of May 7, 2020, at which time the size of the Board will be reduced to twelve.
Director Independence and Categorical Standards
As a matter of policy and in accordance with New York Stock Exchange (“NYSE”) listing standards, we believe that the Board should consist of a majority of independent directors. The Board must affirmatively determine that a director has no material relationship with the Company, either directly or indirectly, or as a partner, shareholder or officer of an organization that has a relationship with the Company. The Board has established the following categorical standards for director independence, which are more stringent than the NYSE independence standards for former Company executives:
A director for whom any of the following is true will not be considered independent:
 
A director who is currently, or has been at any time in the past, an employee of the Company or a subsidiary.
A director whose immediate family member is, or has been within the last three years, an executive officer of the Company.
A director who has received, or whose immediate family member has received, more than $120,000 in direct compensation from the Company during any twelve-month period within the last three years, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
A director who is, or whose immediate family member is, a current partner of a firm that is the Company’s internal or external auditor; the director is a current employee of such a firm; the immediate family member is a current employee of such a firm and personally works on the Company’s audit; or the director or immediate family member was, within the last three years, a partner or employee of such a firm and personally worked on the Company’s audit within that time.
A director who is employed, or whose immediate family member is employed, or has been employed within the last three years, as an executive officer of another company where any of the Company’s present executives at the same time serves or served on that company’s compensation committee.
A director who is a current employee, or whose immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues is not independent until three years after the company falls below such threshold.
Contributions by the Company to a tax-exempt organization will not be considered to be a material relationship that would impair a director’s independence if a director serves as an executive officer of a tax-exempt organization and, within the preceding three years, contributions in any single fiscal year were less than $1 million or 2% of such tax-exempt organization’s consolidated gross revenues (whichever is greater).
Applying these standards and considering all relevant facts and circumstances, the Board has affirmatively determined that all of our director nominees other than Gerard M. Anderson and Gerardo Norcia qualify as independent and have no material relationship with the Company. The independent directors are David A. Brandon, Charles G. McClure, Jr., Gail J. McGovern, Mark A. Murray, Ruth G. Shaw, Robert C. Skaggs, Jr., David A. Thomas, Gary Torgow, James H. Vandenberghe, and Valerie M. Williams. Mr. Anderson and Mr. Norcia are not independent directors and may be deemed to be affiliates of the Company under the categorical standards. Mr. Anderson is not considered independent due to his current employment as Executive Chairman, and Mr. Norcia is not considered independent due to his current employment as President and Chief Executive Officer. There were no material relationships that the Board considered when determining the independence of the directors other than Mr. Anderson and Mr. Norcia.

14      DTE ENERGY 2020 PROXY STATEMENT

 



Assessment of Board and Committee Performance
The Board evaluates its performance annually. In addition, each Board committee performs an annual self-assessment to determine its effectiveness. Each Board member also performs an intensive annual peer review of the other directors who have served one year or more. The results of the Board and committee self-assessments are discussed with the Board and each committee, respectively. The results of the individual peer review are reviewed by the Chair of the Corporate Governance Committee and discussed with the Corporate Governance Committee. The Chair of the Corporate Governance Committee discusses the results of the peer review with individual directors, as directed by the Corporate Governance Committee.
Terms of Office
The Board has not established term limits for directors. We assure the independence and ongoing effectiveness of each independent director through the individualized peer assessment process described above, in which each Board member annually undergoes a rigorous evaluation by the other members. In addition, the Corporate Governance Committee of the Board has established policies that independent directors should not stand for election after attaining the age of 75, unless the Board waives this provision when circumstances exist which make it prudent to continue the service of the particular independent director. Directors who are retired CEOs of the Company or its subsidiaries shall not stand for election after attaining the age of 70. Except for the CEO, who may continue to serve as a director after retirement for so long as he is serving as Chairman, any other employees who are also directors will not stand for re-election after retiring from employment with the Company.
Election of the Executive Chairman; Lead Independent Director
Our Bylaws currently provide that the Chairman shall preside at all meetings of the Board, and that the Chairman can be either an independent or non-independent member of the Board. Our Bylaws also provide that the Chairman may simultaneously serve as the CEO of the Company, and that the independent members of the Board may elect an independent director as Lead Independent Director, which has been our practice since 2004.
The Board believes it is in the best interests of the Company and shareholders for the Board to have flexibility in determining whether to separate or combine the roles of Chairman and Chief Executive Officer based on the Company’s circumstances. The Board has strong governance structures and processes in place to ensure the independence of the Board, eliminate conflicts of interest and prevent dominance of the Board by senior management. The Governance Guidelines and various committee charters provide for independent discussion among directors and for independent evaluation of, and communication with, many members of senior management.
The Board members have considerable experience and knowledge regarding the challenges and opportunities facing the Company and shareholders. The Board believes, therefore, that it is prudent for Mr. Anderson, who previously served as the Company's Chief Executive Officer, to serve as Executive Chairman at this time. The Board believes that Mr. Anderson is well qualified through his experience and expertise to be the person who generally sets the agenda for (subject to the approval of the Lead Independent Director) and leads Board discussions of strategic issues for the Company.
With the Executive Chairman position held by Mr. Anderson, the Board continues to believe a good governance practice is to elect a Lead Independent Director from the independent directors. On May 9, 2019, the Board unanimously elected Ruth G. Shaw to serve as Lead Independent Director. The Lead Independent Director has such responsibilities as required under the NYSE listing standards, as well as such other responsibilities as determined by the Board. The Lead Independent Director serves in that capacity until replaced. There is no defined term of office, and the assignment does not rotate among the directors. The Lead Independent Director’s duties include:
 
Calling regularly scheduled executive sessions; presiding at Board executive sessions of non-management directors or independent directors; and providing feedback regarding such sessions, as appropriate, to the Executive Chairman and to the CEO;
Serving as the liaison between the Executive Chairman and the CEO and the independent directors;
Approving the general scope and type of information to be presented at Board meetings;
Reviewing shareholder communications addressed to the Board or to the Lead Independent Director;

 
DTE ENERGY 2020 PROXY STATEMENT      15



Making himself or herself available if requested by major shareholders, for direct consultation and communication with shareholders;
Organizing Board meetings in the absence of the Executive Chairman and presiding at any session of the Board where the Executive Chairman is not present;
Designating one or more directors as alternate members of any committee to replace an absent or disqualified member at any committee meeting, provided that, in the event an alternate member is designated for the Audit, Corporate Governance or Organization and Compensation Committee, the designate meets the Company’s categorical standards for director independence and SEC and NYSE requirements;
Consulting with the Executive Chairman in the selection of topics to be discussed when developing the annual Board calendar;
Retaining independent advisors in consultation with the Board, on behalf of the Board as the Board determines to be necessary or appropriate;
Participating in the Organization and Compensation Committee’s annual review and approval of the CEO’s corporate goals and objectives and evaluation of the CEO’s performance;
Approving Board meeting agendas after consulting with the Executive Chairman and the Corporate Secretary; and
Collaborating with the Executive Chairman and the Corporate Secretary on scheduling Board and committee meetings and approving the schedule of Board and Committee meetings.
Board Meetings and Attendance
The Board met eight times in 2019. All of the incumbent directors attended at least 90% of the Board meetings and the meetings of the committees on which they served, eleven of whom had a 100% attendance record. The Board does not have a policy with regard to directors’ attendance at the annual meeting of shareholders. At the 2019 annual meeting, all eleven directors standing for election were in attendance.
Executive Sessions
It is the Board’s practice that the independent directors meet in executive session at most regular Board meetings and meet in executive session at other times whenever they believe it appropriate. The independent directors met in executive sessions (sessions without the Executive Chairman, the President and CEO, or any representatives of management present) at six of the eight Board meetings in 2019. The independent directors meet in executive session on an annual basis to review the Organization and Compensation Committee’s performance review of the CEO. The Lead Independent Director chairs the executive sessions of the independent directors.
Codes of Business Conduct and Ethics
The DTE Energy Board of Directors Code of Business Conduct and Ethics, the Officer Code of Business Conduct and Ethics and the DTE Energy Way are the standards of behavior for Company directors, officers and employees. Any waiver of, or amendments to, the Board of Directors Code of Business Conduct and Ethics and the Officer Code of Business Conduct and Ethics as it pertains to the CEO, the Chief Financial Officer, senior financial officers and other Executive Officers, as defined in the “Security Ownership of Directors and Officers” section on page 26, will be disclosed promptly by posting such waivers or amendments on the Company website, dteenergy.com. There were no waivers or amendments during 2019.

16      DTE ENERGY 2020 PROXY STATEMENT

 



Communications with the Board
The Company has established several methods for shareholders or other non-affiliated persons to communicate their concerns to the directors. Concerns regarding auditing, accounting practices, internal controls, or other business ethics issues may be submitted to the Audit Committee through its reporting channel:
By telephone:
By Internet:
By mail:
877-406-9448
ethicsinaction.dteenergy.com
For auditing, accounting, or internal control matters:
For business ethics issues:
 
 
DTE Energy Company
DTE Energy Company
 
 
Audit Committee
Ethics and Employee Issues
 
 
One Energy Plaza
One Energy Plaza
 
 
Room 2431 WCB
Room 2188 WCB
 
 
Detroit, Michigan 48226-1279
Detroit, Michigan 48226-1279
Any other concern may be submitted to the Corporate Secretary by mail for prompt delivery to the Lead Independent Director at:
Lead Independent Director
c/o Corporate Secretary
DTE Energy Company
One Energy Plaza
Room 2386 WCB
Detroit, Michigan 48226-1279
Periodically, we revise our governance information in response to changing regulatory requirements and evolving corporate governance developments. Current copies of the Governance Guidelines, committee charters, categorical standards of director independence and the codes of ethics referred to above are available on our website at dteenergy.com/governance. A copy of any or all of these documents and a copy of the Company’s Annual Report on Form 10-K may be requested, free of charge, by mailing a request to the Corporate Secretary, DTE Energy Company, One Energy Plaza, Room 2386 WCB, Detroit, Michigan 48226-1279.
The information on the Company’s website is not, and shall not be deemed to be, a part of this proxy statement or incorporated into any other filings the Company makes with the SEC.

Committees of the Board of Directors
The Board has standing committees for Audit, Corporate Governance, Finance, Nuclear Review, Organization and Compensation, and Public Policy and Responsibility. The Board committees act in an advisory capacity to the full Board, except that the Organization and Compensation Committee has direct responsibility for the CEO’s goals, performance and compensation along with compensation of other executives, and the Audit Committee has direct responsibility for appointing, replacing, compensating and overseeing the independent registered public accounting firm. Each committee has adopted a charter that clearly establishes the committee’s respective roles and responsibilities. In addition, each committee has authority to retain independent outside professional advisors or experts as it deems advisable or necessary, including the sole authority to retain and terminate any such advisors, to carry out its duties. The Board has determined that each member of the Audit, Corporate Governance, and Organization and Compensation Committees is independent under our categorical standards and that each member is free of any relationship that would interfere with his or her individual exercise of independent judgment. The Board has determined that each member of the Audit Committee meets the independence requirements under the SEC rules and NYSE listing standards applicable to audit committee members. The Board has also determined that each member of the Organization and Compensation Committee meets the independence requirements under the SEC rules and NYSE listing standards applicable to compensation committee members.

 
DTE ENERGY 2020 PROXY STATEMENT      17



The following is a summary of the terms of each committee’s charter and the responsibilities of its members:
Audit Committee (Six meetings in 2019)
 
Assists the Board in its oversight of the quality and integrity of our accounting, auditing and financial reporting practices and the independence of the independent registered public accounting firm.
Reviews scope of the annual audit and the annual audit report of the independent registered public accounting firm.
Reviews financial reports, internal controls and financial and accounting risk exposures.
Discusses with management (a) earnings press releases and (b) material financial information and earnings guidance.
Reviews the policies, programs, performance and activities relating to the Company’s compliance and ethics programs.
Reviews accounting policies and system of internal controls.
Assumes responsibility for the appointment, replacement, compensation and oversight of the independent registered public accounting firm.
Reviews and pre-approves permitted non-audit functions performed by the independent registered public accounting firm.
Reviews the scope of work performed by the internal audit staff.
Reviews legal or regulatory requirements or proposals that may affect the committee’s duties or obligations.
Retains independent outside professional advisors, as needed.
The Board has determined that each member of the Audit Committee is financially literate and independent. The Board has reviewed the qualifications and experience of each of the Audit Committee members and determined that Ms. Williams and Mr. Vandenberghe qualify as “audit committee financial experts” as that term has been defined by the SEC.
Corporate Governance Committee (Four meetings in 2019)
 
Considers the organizational structure of the Board.
Identifies and reports to the Board risks associated with the Company’s governance practices and the interaction of the Company’s governance with enterprise risk management.
Recommends the nominees for directors to the Board.
Reviews recommended compensation arrangements for the Board, director and officer indemnification and insurance for the Board.
Reviews recommendations for director nominations received from shareholders.
Reviews shareholder proposals and makes recommendations to the Board regarding the Company’s response.
Reviews best practices in corporate governance and recommends corporate and Board policies/practices, as appropriate.
Retains independent outside professional advisors, as needed.
Finance Committee (Seven meetings in 2019)
 
Reviews matters related to capital structure.
Reviews major financing plans.
Recommends dividend policy to the Board.
Reviews financial planning policies and investment strategy.
Reviews certain capital expenditures.
Reviews insurance and business risk management.
Receives reports on the strategy, investment policies, adequacy of funding and performance of post-retirement obligations.
Reviews certain potential mergers, acquisitions and divestitures.
Reviews investor relations activities.
Retains independent outside professional advisors, as needed.

18      DTE ENERGY 2020 PROXY STATEMENT

 



Nuclear Review Committee (Seven meetings in 2019)
 
Provides non-management oversight and review of the Company’s nuclear power program.
Reviews the financial, operational, business and safety plans and performance at the Company’s nuclear facilities.
Reviews the policies, procedures and practices related to health and safety, potential risks, resources and compliance at the Company’s nuclear facilities.
Reviews the operating performance and key performance indicators and trends for the Company’s nuclear facilities.
Reviews non-financial audit findings related to the Company’s nuclear facilities or personnel.
Reviews the impact of changes in regulation on the Company’s nuclear facilities.
Retains independent outside professional advisors, as needed.

Organization and Compensation Committee (Five meetings in 2019)
 
Reviews the CEO’s performance and approves the CEO’s compensation.
Approves the compensation of certain other executives.
Administers the executive incentive plans and oversees the Company’s overall executive compensation and benefit plan philosophy, structure and practices, and the risks involved in executive compensation plans.
Reviews and approves executive employment agreements, severance agreements and change-in-control agreements, along with any amendments to those agreements.
Assesses and discusses with the Board the relationship between the inherent risk in executive compensation plans, executive compensation arrangements and executive performance goals and payouts, and how the level of risk corresponds to the Company’s business strategies.
Reviews the Compensation Discussion and Analysis disclosure and recommends inclusion in the Company’s annual report or proxy statement.
Reviews the Company’s policies and programs promoting diversity and inclusion among the Company’s employees and officers.
Recommends to the full Board the officers to be elected by the Board.
Reviews succession and talent planning.
Evaluates the independence of the independent compensation consultant at least annually.
Reviews and discusses with management any transactions with the independent compensation consultant or its affiliates.
Retains independent outside professional advisors, as needed.
Public Policy and Responsibility Committee (Five meetings in 2019)
 
Reviews and advises the Board on current and emerging social, economic, political and environmental issues.
Reviews management’s response to risk exposures related to regulatory, social, economic, political, reputational and environmental issues and advises the Board on management’s procedures for assessing, monitoring, controlling and reporting on such exposures.
Reviews the Company's programs and strategies related to environmental sustainability.
Reviews the Company’s policies on social responsibilities.
Reviews the Company’s policies and programs promoting diversity and inclusion among the Company’s suppliers.
Reviews the Company’s regulatory strategies and activities (including rate case strategies, rate competitiveness and environmental regulations) as well as its state and federal legislative and political activities and strategies.
Reviews reports from management regarding policies and safety issues related to customers and the general public.
Retains independent outside professional advisors, as needed.

 
DTE ENERGY 2020 PROXY STATEMENT      19



Board of Directors Risk Oversight Functions
The Board receives, reviews and assesses reports from the Board committees and from management relating to enterprise-level risks. Each Board committee is responsible for overseeing and considering risk issues relating to their respective committee and reporting their assessments to the full Board at each regularly scheduled Board meeting. When granting authority to management, approving strategies and receiving management reports, the Board and committees consider, among other things, the risks we face.
Each Board committee reviews management’s assessment of risk for that committee’s respective area of responsibility. As part of its oversight function, the Board discusses any risk conflicts that may arise between the committees or assigns to a committee risk issues that may arise which do not fall within a specific committee’s responsibilities.
Board Committee
 
Areas of Risk Oversight
Audit Committee
 
Overall review of risk issues, policies and controls associated with our overall financial reporting and disclosure process and legal compliance, and review policies on risk control assessment and accounting risk exposure, as well as cybersecurity risk.
Finance Committee
 
Review of financial, capital, credit and insurance risk.
Organization and Compensation Committee
 
Assess and discuss with the Board the relationship between the inherent risks in executive compensation plans, executive compensation arrangements and executive performance goals and payouts, and how the level of risk corresponds to the Company’s business strategies.
Corporate Governance Committee
 
Review risks associated with the Company’s governance practices and the interaction of the Company’s governance with enterprise risk-level management.
Nuclear Review Committee
 
Review risks relating to the operation of our nuclear power facilities.
Public Policy and Responsibility Committee
 
Review risks associated with regulatory, social responsibility, political activity, economic conditions, reputation, safety and the environment.
All Board committees meet periodically with members of senior management to discuss the relevant risks and challenges facing the Company. In addition to its regularly scheduled Committee meetings, the Audit Committee meets with the Chief Financial Officer, the General Auditor and the independent registered public accounting firm in executive sessions at least semi-annually, and meets with the Chief Legal Officer and the Chief Compliance Officer at least annually in separate executive sessions. The Company’s General Auditor attends all Audit Committee meetings. The Treasurer and Chief Risk Officer meets annually with either the Audit Committee or the full Board to update the members on the Company’s enterprise-level risk management. The General Auditor and the Treasurer and Chief Risk Officer also periodically meet with the other Board committees and the full Board as may be required.
The Company also utilizes an internal Risk Management Committee, chaired by the CEO and comprised of the Chief Financial Officer, Chief Administrative Officer, Chief Legal Officer, Treasurer and Chief Risk Officer, General Auditor and other senior officers. Among other things, the internal Risk Management Committee directs the development and maintenance of comprehensive risk management policies and procedures, and sets, reviews and monitors risk limits on a regular basis for enterprise-level risks, counter-party credit and commodity-based exposures.
The Board believes that the committee structure of risk oversight is in the best interests of the Company and its shareholders. Each committee member has expertise on risks relative to the nature of the committee on which he or she sits. With each committee reporting on risk issues at full Board meetings, the entire Board is in a position to assess the overall risk implications, to evaluate how they may affect the Company and to provide oversight on appropriate actions for management to take.
With regard to risk and compensation programs and policies, the Company’s Energy Trading segment has compensation programs and policies that are structured differently from those in other units within the Company. These compensation programs and policies are designed to discourage excessive risk taking by the Energy Trading employees and are subject to specific written policies and procedures administered by members of the Company’s senior management. The Company has determined that the Energy Trading compensation programs and policies do not create risks that are reasonably likely to have a material adverse effect on the Company.

20      DTE ENERGY 2020 PROXY STATEMENT

 



Board of Directors Compensation

Elements of Director Compensation
Employee directors receive no payment for service as directors. The goal of our compensation policies for non-employee directors is to tie their compensation to your interests as shareholders. Accordingly, approximately 50% of a director’s annual compensation is in the form of equity-based compensation, including phantom shares of our common stock. Generally, the compensation program for non-employee directors is reviewed on an annual basis by the Corporate Governance Committee and the Board. This review includes a review of a comparative peer group of companies that is identical to the peer group used to review executive compensation (See “Executive Compensation—Compensation Discussion and Analysis” beginning on page 32). Based on its December 2019 review, the Board voted to increase director compensation effective January 1, 2020, as further described below.
Cash Compensation
 
 
Cash retainer
 
$120,000 annually
Lead Independent Director retainer
 
$30,000 annually
Committee chair retainer
 
$20,000 annually for Audit, Nuclear Review, and Organization and Compensation Committee Chairs; $15,000 annually for Corporate Governance, Finance, and Public Policy and Responsibility Committee Chairs
New Member Orientation/Mentor Program
 
$1,250 and $750 quarterly for the New Member and Mentor, respectively, for the duration of the orientation
Equity Compensation
 
 
Upon first election to the Board
 
1,000 shares of restricted DTE Energy common stock, subject to a 3-year vesting period
Annual equity compensation
 
A variable number of phantom shares of DTE Energy common stock valued at $145,000 annually, with the actual number of phantom shares to be granted each year determined based on the closing price of the Company’s common stock on the first business day of each calendar year(1)
(1)
Phantom shares of DTE Energy common stock are credited to each non-employee director’s account in January of each year. Phantom share accounts are also credited with dividend equivalents which are reinvested into additional phantom shares. For phantom shares granted after 2004, payment of the cash value is made three years after the date of grant unless otherwise deferred by voluntary election of the director. For phantom shares granted before 2005, payment of the cash value occurs only after the date a director terminates his or her service on the Board.

Payment of Non-Employee Director Fees and Expenses
Retainers for non-employee directors are either (i) payable in cash or (ii) at the election of the director, deferred into an account pursuant to the DTE Energy Company Plan for Deferring the Payment of Directors’ Fees. Non-employee directors may defer up to 100% of their annual retainer into an unfunded deferred compensation plan. Deferred fees may accrue for future payment, with interest accrued monthly at the 5-year U.S. Treasury Bond rate as of the last business day of each month or, at the election of the director, they may be invested in phantom shares of our common stock with all dividend equivalents reinvested.
In addition to the retainers, non-employee directors are reimbursed for their travel expenses incurred in attending Board and committee meetings, along with fees and expenses incurred when attending director education seminars or special meetings requested by management. Non-employee directors of the Company, along with full-time active employees and retirees, are also eligible to participate in the DTE Energy matching gift program, whereby the DTE Energy Foundation matches certain charitable contributions.
Director Life Insurance
The Company provides each non-employee director with group term life insurance in the amount of $20,000 and travel accident insurance in the amount of $100,000.

 
DTE ENERGY 2020 PROXY STATEMENT      21



Director Stock Ownership
We have established stock ownership guidelines for non-employee directors to more closely tie their interests to those of shareholders. Under these guidelines, the Board requires that each director own shares of the Company’s common stock beginning no later than 30 days after election to the Board. In addition, directors are required to own, within five years after initial election to the Board, shares of Company stock having a value equal to two times the sum of a director’s annual cash retainer plus the value of a director’s annual phantom stock compensation. Based on the 2020 director compensation program, a director with five years of service will be required to hold a minimum of $530,000 in stock under these guidelines. This ownership requirement is greater than four times the amount of a director’s cash retainer under the 2020 compensation program. Common stock, time-based restricted stock and phantom shares held by a director are counted toward fulfillment of this ownership requirement. As of December 31, 2019, all directors met the initial common stock ownership requirement and all those directors who have served as a director for at least five years after their initial election fulfilled the five-year requirement.

22      DTE ENERGY 2020 PROXY STATEMENT

 



2019 Director Compensation Table
The following table details the compensation earned in 2019 by each of the non-employee directors:
Name
 
Fees Earned or Paid in Cash ($)(1)
 
Stock Awards ($)(2)
 
All Other Compensation ($)(3)
 
Total ($)
 David A. Brandon
 
135,000

 
130,000

 
5,305

 
270,305

 W. Frank Fountain, Jr. (retiring)
 
135,000

 
130,000

 
494

 
265,494

 Charles G. McClure, Jr.
 
129,685

 
130,000

 
305

 
259,990

 Gail J. McGovern
 
120,000

 
130,000

 
6,305

 
256,305

 Mark A. Murray
 
135,000

 
130,000

 
6,305

 
271,305

 James B. Nicholson (retired)
 
51,350

 
130,000

 
5,165

 
186,515

 Ruth G. Shaw 
 
144,465

 
130,000

 
5,494

 
279,959

 Robert C. Skaggs, Jr.
 
120,000

 
130,000

 
5,494

 
255,494

 David A. Thomas
 
120,000

 
130,000

 
5,158

 
255,158

 Gary Torgow
 
62,500

 
131,180

 
79

 
193,759

 James H. Vandenberghe
 
136,500

 
130,000

 
5,494

 
271,994

 Valerie M. Williams
 
145,000

 
130,000

 
158

 
275,158


(1)    The following table provides a detailed breakdown of the fees earned or paid in cash:
    
 
 
Fees Earned or Paid in Cash
Name
 
Board     
Retainer ($)     
 
Lead Independent Director/Committee Chair Retainers ($)
 
New Member Orientation/Mentor Program Fees ($)
 
Total ($)

 David A. Brandon
 
120,000

 
15,000

 

 
135,000

 W. Frank Fountain, Jr.
 
120,000

 
15,000

 

 
135,000

 Charles G. McClure, Jr. 
 
120,000

 
9,685

 

 
129,685

 Gail J. McGovern 
 
120,000

 

 

 
120,000

 Mark A. Murray 
 
120,000

 
15,000

 

 
135,000

 James B. Nicholson
 
42,500

 
8,850

 

 
51,350

 Ruth G. Shaw 
 
120,000

 
21,465

 
3,000

 
144,465

Robert C. Skaggs, Jr.
 
120,000

 

 

 
120,000

 David A. Thomas 
 
120,000

 

 

 
120,000

 Gary Torgow
 
60,000

 

 
2,500

 
62,500

 James H. Vandenberghe 
 
120,000

 
15,000

 
1,500

 
136,500

 Valerie M. Williams
 
120,000

 
20,000

 
5,000

 
145,000


Messrs. Brandon, Torgow, and Vandenberghe elected to defer 100% and Mr. Nicholson elected to defer 50% of the fees detailed above into the DTE Energy Company Plan for Deferring the Payment of Directors’ Fees.

(2)
These amounts represent the dollar amounts of compensation cost for 2019 in accordance with ASC Topic 718 and, as such, include costs recognized in the financial statements with respect to phantom shares and shares of restricted stock granted. Because the phantom shares are 100% vested (with a mandatory three-year deferral) on the grant date, the ASC Topic 718 expense equals the grant date fair value as of January 2, 2019. The grant date fair value of $107.89 was the closing price of the Company stock on January 2, 2019. For all of the non-employee directors except Mr. Torgow, this amount is $130,000 in phantom shares of DTE Energy stock granted on January 2, 2019, subject to a three-year payment deferral. Based on the grant date fair value of $107.89, this equated to a grant of 1,205 phantom shares. For Mr. Torgow, this amount is the value of 1,000 shares of restricted stock granted on June 20, 2019. For this award, the grant date fair value of $131.18 was the closing price on June 20, 2019.

 
DTE ENERGY 2020 PROXY STATEMENT      23



Outstanding equity awards as of December 31, 2019 are as follows: 
    
Name
 
Phantom Shares in Equity Plan
 
Phantom Shares in Deferred Fee Plan
 
Restricted Stock
David A. Brandon
 
3,945

 
6,820

 

W. Frank Fountain, Jr.
 
25,368

 
13,890

 
— 

Charles G. McClure, Jr.
 
3,945

 
628

 
 

Gail J. McGovern
 
33,325

 
 

 
 

Mark A. Murray
 
3,945

 
628

 
 

James B. Nicholson
 
9,014

 
6,471

 
 

Ruth G. Shaw
 
3,945

 
 

 
 

Robert C. Skaggs, Jr.
 
2,500

 

 
1,000

David A. Thomas
 
3,945

 
 

 

Gary Torgow
 

 
240

 
1,000

James H. Vandenberghe
 
3,945

 
6,744

 
 

Valerie M. Williams
 
1,232

 

 
1,000


(3)
This amount is the total of the premiums paid for the group-term life insurance provided to the non-employee directors by the Company and all contributions made by the DTE Energy Foundation under the Company matching program.


Information on Company Executive Officers
Under our Bylaws, the officers of DTE Energy are elected annually by the Board of Directors, each to serve until his/her successor is elected and qualified, or until his/her resignation or removal. The current executive officers of the Company elected by the Board are as follows:
Name
 
Age(1)
 
Present Position
 
Present
Position
Held Since
Gerard M. Anderson
 
61
 
Executive Chairman
 
7/1/2019
(2)
JoAnn Chavez
 
55
 
Senior Vice President and Chief Legal Officer
 
10/28/2019
(2)
Trevor F. Lauer
 
55
 
President and Chief Operating Officer, DTE Electric Company
 
4/4/2016
(2)
David E. Meador
 
62
 
Vice Chairman and Chief Administrative Officer
 
1/1/2014
 
Lisa A. Muschong
 
50
 
Vice President, Corporate Secretary and Chief of Staff
 
11/2/2015
(2)
Gerardo Norcia
 
57
 
President and Chief Executive Officer
 
7/1/2019
(2)
Peter B. Oleksiak
 
53
 
Senior Vice President and Chief Financial Officer
 
1/1/2014
 
Matthew Paul
 
50
 
President and Chief Operating Officer, DTE Gas Company
 
4/1/2019
(2)
Mark C. Rolling
 
52
 
Vice President, Controller and Chief Accounting Officer
 
3/4/2019
(2)
David Slater
 
54
 
President and Chief Operating Officer, DTE Gas Storage and Pipelines
 
10/2/2014
(2)
Mark W. Stiers
 
57
 
President and Chief Operating Officer, DTE Power & Industrial and Energy Trading
 
4/1/2019
(2)
 
(1)
As of March 12, 2020.
(2)
These executive officers have held various other positions at DTE Energy for five or more years.

24      DTE ENERGY 2020 PROXY STATEMENT

 



Compensation Committee Interlocks and Insider Participation
During 2019, the Organization and Compensation Committee consisted of Dr. Shaw, Messrs. Brandon, Nicholson (through May 2019) and Skaggs (beginning May 2019) and Ms. McGovern. No member of the Organization and Compensation Committee serves as an officer or employee of the Company or any of its subsidiaries nor has any member of the Organization and Compensation Committee formerly served as an officer of the Company or any of its subsidiaries. During 2019, none of the executive officers of the Company served on the board of directors or on the compensation committee of any other entity, any of whose executive officers served either on the Board or on the Organization and Compensation Committee of the Company.

Indemnification and Liability
Pursuant to Article VI of our Articles of Incorporation, to the fullest extent permitted by law, no director of the Company shall be personally liable to the Company or its shareholders for any acts or omissions in the performance of his/her duties.
Article VII of our Articles of Incorporation provides that each person who is or was or had agreed to become a director or officer, or each person who is or was serving or who had agreed to serve at the request of the Board as an employee or agent of the Company, or as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise (including heirs, executors, administrators or estate of such person), shall be indemnified by the Company to the fullest extent permitted by law. We have entered into indemnification agreements with each of our directors and executive officers. These agreements require the Company to indemnify such individuals for certain liabilities to which they may become subject as a result of their affiliation with the Company.
The Company, the directors and officers in their capacities as such are insured against liability for alleged wrongful acts (to the extent defined) under thirteen insurance policies providing aggregate coverage in the amount of $255 million.

 
DTE ENERGY 2020 PROXY STATEMENT      25



Security Ownership of Directors and Officers

The following table sets forth information as of December 31, 2019, with respect to beneficial ownership of common stock, phantom stock, performance shares and options exercisable within 60 days for (i) each of our directors and nominees for director, (ii) our Executive Chairman (who served as Chief Executive Officer until July 1, 2019), President and Chief Executive Officer, Senior Vice President and Chief Financial Officer and the three other highest paid executive officers (together, the “Named Executive Officers”), and (iii) all executive officers and directors as a group. Executive officers for this purpose are those individuals defined as executive officers under Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless otherwise indicated, each of the named individuals has sole voting and/or investment power over the shares identified. To our knowledge, no member of our management team or director was a beneficial owner of one percent or more of the outstanding shares of common stock as of December 31, 2019.
Amount and Nature of Beneficial Ownership as of December 31, 2019
Name of Beneficial Owners
 
Common Stock(1)
 
 
Phantom Stock(2)
 
 
Other Shares That May Be Acquired(3)
Gerard M. Anderson
 
570,775

 
 
13,824

 
 
159,871

David A. Brandon
 
1,000

 
 
10,765

 
 

W. Frank Fountain, Jr.
 
1,000

 
 
39,258

 
 

Charles G. McClure, Jr.
 
1,000

 
 
4,573

 
 

Gail J. McGovern
 

 
 
33,325

 
 

Mark A. Murray
 
1,000

 
 
4,573

 
 

Gerardo Norcia
 
160,792

 
 
1,372

 
 
66,390

Ruth G. Shaw
 
5,500

 
 
3,945

 
 

Robert C. Skaggs, Jr.
 
1,000

 
 
2,500

 
 

David A. Thomas
 
1,673

 
 
3,945

 
 

Gary Torgow
 
2,537

 
 
240

 
 

James H. Vandenberghe
 
2,000

 
 
10,689

 
 

Valerie M. Williams
 
1,000

 
 
1,232

 
 

Trevor F. Lauer
 
22,290

 
 
1,341

 
 
23,440

David E. Meador
 
169,366

 
 

 
 
36,145

Peter B. Oleksiak
 
42,964

 
 

 
 
32,988

Bruce D. Peterson
 
47,031

 
 

 
 
21,994

Directors and Executive Officers as a group — 23 persons
 
1,096,578

 
 
133,154

 
 
388,345

 
(1)
Includes directly held common stock, restricted stock and shares held pursuant to the DTE Energy Company Savings and Stock Ownership Plan (tax-qualified 401(k) plan).

(2)
Shares of phantom stock are acquired as follows: (a) by non-employee directors (i) as compensation under the DTE Energy Company Deferred Stock Compensation Plan for Non-Employee Directors and (ii) through participation in the DTE Energy Company Plan for Deferring the Payment of Directors’ Fees and (b) by executive officers pursuant to the (i) DTE Energy Company Supplemental Savings Plan and (ii) DTE Energy Company Executive Supplemental Retirement Plan. Shares of phantom stock may be paid out in either cash or stock.


26      DTE ENERGY 2020 PROXY STATEMENT

 



(3)
Represents performance shares under the Long-Term Incentive Plan (as described beginning on page 43) that entitle the executive officers to receive shares or cash equivalents (or a combination thereof) in the future if certain performance measures are met. The number of performance shares reflected in the table assumes that target levels of performance are achieved and includes an increase from the original grant amount, assuming full dividend reinvestment at the fair market value on each dividend payment date. Performance shares are not currently outstanding shares of our common stock and are subject to forfeiture if the performance measures are not achieved over a designated period of time. Executive officers do not have voting or investment power over the performance shares until performance measures are achieved. See the discussion in “Long-Term Incentives - Performance Shares Granted in 2019” beginning on page 43.
Prohibition on Pledging and Hedging Company Securities
The Company maintains policies which expressly prohibit hedging Company securities by all employees, executive officers and directors of the Company and its subsidiaries. For purposes of these policies, hedging includes purchases and sales of derivatives or any monetization transaction involving DTE securities that has the effect of limiting or eliminating the full risks of ownership of DTE securities. Our directors and officers are also prohibited from pledging their shares of Company stock as collateral for any loan or indebtedness. This prohibition includes, but is not limited to, holding such shares in a margin account.

Security Ownership of Certain Beneficial Owners
The following table sets forth information regarding the only persons or groups known to the Company to be beneficial owners of more than 5% of our outstanding common stock.
Title of Class
 
Name and Address of Beneficial Owner
 
Amount and Nature of Beneficial Ownership
 
 
Percent    
of Class    
Common Stock
 
The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, Pennsylvania 19355
 
22,653,743

(1)
 
11.8
%
Common Stock
 
Capital World Investors
333 South Hope Street
Los Angeles, California 90071
 
20,745,058

(2)
 
10.7
%
Common Stock
 
BlackRock, Inc.
55 East 52nd Street
New York, New York 10055
 
16,845,703

(3)
 
8.8
%
Common Stock
 
State Street Corporation
One Lincoln Street
Boston, Massachusetts 02111
 
10,193,303

(4)
 
5.3
%

(1)
Based on information contained in Schedule 13G/A filed on February 12, 2020. The Vanguard Group, Inc. has sole voting power with respect to 278,503 shares, sole dispositive power with respect to 22,316,358 shares, shared dispositive power with respect to 337,385 shares and is deemed to beneficially own 22,653,743 shares.

(2)
Based on information contained in Schedule 13G filed on February 14, 2020. Capital World Investors has sole dispositive power with respect to 20,745,058 shares, sole voting power with respect to 20,745,058 shares, and is deemed to beneficially own 20,745,058 shares.

(3)
Based on information contained in Schedule 13G/A filed on February 10, 2020. BlackRock Inc. has sole dispositive power with respect to 16,845,703 shares, sole voting power with respect to 14,727,798 shares, and is deemed to beneficially own 16,845,703 shares.

(4)
Based on information contained in Schedule 13G filed on February 14, 2020. State Street Corporation has shared voting power with respect to 9,285,389 shares, shared dispositive power with respect to 10,160,610 shares, and is deemed to beneficially own 10,193,303 shares.


 
DTE ENERGY 2020 PROXY STATEMENT      27



Certain Relationships and Related Transactions
Related-person transactions have the potential to create actual or perceived conflicts of interest. The Company has policies in place to address related-party transactions. In addition, our Corporate Governance Committee and Audit Committee review potential dealings or transactions with related parties. In conducting such reviews, the committees consider various factors they deem appropriate, which may include (i) the identity of the related party and his or her relationship to the Company, (ii) the nature and size of the transaction, including whether it involved the provision of goods or services to the Company that are unavailable from unrelated third parties and whether the transaction is on terms that are comparable to the terms available from unrelated third parties, (iii) the nature and size of the related party’s interest in the transaction, (iv) the benefits to the Company of the transaction and (v) whether the transaction could involve an apparent or actual conflict of interest with the Company.
In general, employees and directors may not be involved in a business transaction where there is a conflict of interest with the Company. The DTE Energy Way requires non-officer employees to report conflicts of interest or potential conflicts of interest to their respective superiors; the Officer Code of Conduct and Ethics requires officers to report conflicts of interest or potential conflicts of interest to the Company’s General Counsel or to the Company’s Board of Directors; and the Board of Directors Code of Business Conduct and Ethics requires directors to disclose conflicts of interest or potential conflicts of interest to the Company’s Corporate Governance Committee or the Chairman of the Board. For directors and officers, any waivers of the Company’s conflict of interest policy must be approved by the Board or a Board committee, as required under the Officer Code of Conduct and Ethics or Board of Directors Code of Business Conduct and Ethics, disclosed to shareholders and posted to our website at dteenergy.com/ethics.

Proposal No. 2 — Ratification of Appointment of Independent Registered Public Accounting Firm
Subject to ratification by the shareholders, the Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal year ending December 31, 2020 and to perform other audit-related services. Following the Audit Committee’s appointment, the Board voted unanimously to recommend that our shareholders vote to ratify the Audit Committee’s selection of PwC as our independent auditors for 2020.
The reports of PwC on the consolidated financial statements of DTE Energy for the year ended December 31, 2019 and for the year ended December 31, 2018 did not contain adverse opinions or a disclaimer of opinions and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the Company’s two most recent fiscal years ended December 31, 2019 and 2018 and from January 1, 2020 through February 5, 2020, there were no disagreements with PwC on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to PwC’s satisfaction, would have caused PwC to make reference to the subject matter of such disagreements in connection with its reports on the Company’s consolidated financial statements for such years.
During the Company’s two most recent fiscal years ended December 31, 2019 and 2018 and from January 1, 2020 through February 5, 2020, there were no “reportable events” as defined under Item 304(a)(1)(v) of Regulation S-K.
Representatives of PwC will be present at the annual meeting and will be afforded an opportunity to make a statement, if they desire, and to respond to appropriate questions from shareholders.




28      DTE ENERGY 2020 PROXY STATEMENT

 



Fees to the Independent Registered Public Accounting Firm
The following table presents fees for professional services rendered by PwC for the audit of the Company’s consolidated annual financial statements for the years ended December 31, 2019 and December 31, 2018, and fees billed for other services rendered by PwC during those periods.
 
2019
 
2018
Audit fees(1)
$
7,027,031

 
$
7,173,518

Audit-related fees(2)
220,735

 
587,507

Tax fees(3)
294,747

 
217,836

All other fees(4)
588,389

 
2,117,297

Total
$
8,130,902

 
$
10,096,158

 
(1)
Represents fees for professional services performed by PwC for the audits of the Company’s consolidated annual financial statements included in the Company’s Form 10-K, review and audit of the Company’s internal control over financial reporting, the review of consolidated financial statements included in the Company’s Form 10-Q filings, and services that are normally provided in connection with regulatory filings or engagements. Audit fees are presented on an Audit Year basis in accordance with SEC guidelines and include an estimate of fees incurred for the most recent Audit Year.
(2)
Represents the aggregate fees billed for audit-related services and various attest services.
(3)
Represents fees billed for tax services, including tax reviews and planning.
(4)
Represents consulting services for the purpose of providing advice and recommendations.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm
Consistent with SEC policies regarding the independence of the registered public accounting firm, the Audit Committee is responsible for appointing, approving professional service fees of, and overseeing the work of the independent registered public accounting firm. The Audit Committee has established a policy regarding pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm.
Prior to engaging the independent registered public accounting firm to perform specific services, the Audit Committee pre-approves these services by category of service. The Audit Committee may delegate to the Chair of the Audit Committee, or to one or more other designated members of the Audit Committee, the authority to grant pre-approvals of all permitted services or classes of these permitted services to be provided by the independent registered public accounting firm up to, but not exceeding, a pre-defined limit. The decisions of the designated member to pre-approve a permitted service are reported to the Audit Committee at each scheduled meeting. At least quarterly, the Audit Committee reviews:
 
A report summarizing the services, or groupings of related services, including fees, provided by the independent registered public accounting firm.
A listing of new services requiring pre-approval, if any.
As appropriate, an updated projection for the current fiscal year, presented in a manner consistent with the proxy disclosure requirements, of the estimated annual fees to be paid to the independent registered public accounting firm.
All audit, audit-related, tax and other services performed by PwC were pre-approved by the Audit Committee in accordance with the regulations of the SEC. The Audit Committee considered and determined that the provision of the non-audit services by PwC during 2019 was compatible with maintaining independence of the registered public accounting firm.
Report of the Audit Committee
The purpose of the Audit Committee is to assist the Board’s oversight of the integrity of the Company’s consolidated financial statements, the Company’s compliance with legal and regulatory requirements, the Company’s independent registered public accounting firm’s qualifications and independence and the performance of the Company’s internal audit

 
DTE ENERGY 2020 PROXY STATEMENT      29



function. All members of the Audit Committee meet the criteria for independence as defined in our categorical standards and the audit committee independence requirements under the SEC rules. The Audit Committee Charter also complies with requirements of the NYSE.
Management is responsible for the financial reporting process, including the system of internal controls, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management is also responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. The independent registered public accounting firm is responsible for auditing these consolidated financial statements and expressing an opinion as to their conformity with GAAP. The independent registered public accounting firm is also responsible for expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee’s responsibility is to monitor and review these processes, acting in an oversight capacity, and the Audit Committee does not certify the consolidated financial statements or internal control over financial reporting or guarantee the independent registered public accounting firm’s reports. The Audit Committee relies, without independent verification, on the information provided to it including representations made by management and the reports of the independent registered public accounting firm.
The Audit Committee discussed with PwC the matters required to be discussed by audit standards, SEC regulations and NYSE requirements. Disclosures were received from PwC regarding its independence as required by applicable requirements of the Public Company Accounting Oversight Board and discussed with them. The Audit Committee has considered whether the services provided by PwC other than those services relating to audit services are compatible with maintaining PwC’s independence. The Audit Committee has concluded that such services have not impaired PwC’s independence. The Audit Committee reviewed and discussed the audited consolidated financial statements for the year ended December 31, 2019 with management and PwC. Based on the review and discussions noted above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2019. The Audit Committee reviewed and discussed Management’s Report on Internal Control over Financial Reporting as of December 31, 2019 with management and PwC. Based on the review and discussions noted above, the Audit Committee recommended to the Board that Management’s Report on Internal Control over Financial Reporting as of December 31, 2019 be included in the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2019.
Audit Committee
Valerie M. Williams, Chair
W. Frank Fountain, Jr.
Charles G. McClure, Jr.
James H. Vandenberghe
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

Proposal No. 3 — Advisory Proposal — Nonbinding Vote to Approve Executive Compensation
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires the Company to provide shareholders with an opportunity to vote to approve, on an advisory basis, the compensation of our Named Executive Officers as described in the “Compensation Discussion and Analysis” (“CD&A”) section of this proxy statement and in the tabular and narrative disclosure regarding Named Executive Officer compensation, all contained under the heading “Executive Compensation” in this proxy statement.
The Company’s executive compensation program is designed to include elements of cash and equity-based compensation to motivate and reward executives who achieve short-term and long-term corporate and financial objectives leading to the success of the Company. We emphasize competitive, performance-based compensation to attract and retain talented executives and align the interests of our executives with those of our shareholders. At each of the 2019 and 2018 annual

30      DTE ENERGY 2020 PROXY STATEMENT

 



meetings, 94.8% and 94.6%, respectively, of voting shareholders approved the compensation of the Named Executive Officers.
Shareholders have in the past approved the incentive plans that we use to motivate and reward our executives, including the Annual Incentive Plan and the Long-Term Incentive Plan. In addition, the Company has enhanced our disclosures related to executive compensation to provide more detail to our shareholders about our compensation programs, including expanded disclosures relating to the plans in this proxy statement.
Our executive compensation programs have been important in driving the Company’s success in achieving its corporate and financial objectives by tying executive compensation to achieving very specific goals in each of our key priority areas. Progress against these objectives is necessary for the Company to achieve its ultimate goal of becoming the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve. We explain each of our performance targets and measures in detail in our CD&A, but a few examples of Company success in areas related to our targets and measures include the following:

Achieved 6.5% compound operating earnings per share growth during the five years ending 2019 (see discussion of operating earnings on page 2).
Increased our dividend payment to $3.85 per share in 2019, representing a 7% increase over the dividend in 2018.
Provided our shareholders with a five-year total shareholder return of 177% (indexed with 2014 as the base year = 100%).
Delivered cash from operations of $2.6 billion in 2019.

The Organization and Compensation Committee (“O&C Committee”) employs the highest standards of corporate governance when implementing and reviewing our executive compensation programs. The O&C Committee ensures independence of committee members and compensation consultants, avoids conflicts of interest and has enhanced shareholder disclosure in accordance with SEC and NYSE requirements.
For these reasons, the Board recommends that shareholders vote in favor of the following resolution:
“RESOLVED, that the shareholders approve, on an advisory basis, the overall executive compensation paid to the Named Executive Officers of the Company, as described in the Compensation Discussion and Analysis and the tabular and narrative disclosure regarding Named Executive Officer compensation contained in this proxy statement.”
Because this vote is advisory, it will not be binding upon the Company or the Board. The O&C Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL
TO APPROVE EXECUTIVE COMPENSATION.


 
DTE ENERGY 2020 PROXY STATEMENT      31



EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Summary
The Company believes in executive compensation that is competitive with our peers, has a meaningful performance component and has equity-based elements to encourage executives to maintain an appropriate ownership interest in the Company. Our performance-based compensation programs result in a majority of the compensation of our Named Executive Officers (as identified below) being linked to the achievement of a combination of short-term and long-term Company and personal goals and shareholder value creation.
The following elements comprise the total compensation awarded to our Named Executive Officers (“NEOs”):
Elements of Compensation
 
How this Element Serves the Company’s Objectives
Base Salary
 
Provides a stable, fixed source of income that reflects an executive’s job responsibilities, experience, value to the Company and demonstrated performance.

We target median base salaries for our peer group, taking into account differences in company size within the peer group.
Annual Incentive Awards
 
Intended to compensate individuals yearly based on the achievement of specific near-term, annual goals, which are established at the beginning of each year and approved by the O&C Committee.

The Board and management have identified several priority areas that management and the Board discuss regularly when reviewing Company performance. Our performance measures for annual incentive awards are the measurements that the Board uses to track progress in these key priority areas. Achievement of these performance objectives is a critical measure of the Company’s progress towards its goal of becoming the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve. 
Long-term Incentive Awards
 
Used to align executive actions with long-term management and shareholder objectives, providing rewards consistent with the creation of shareholder value.

Our plan is designed to help retain executives over time and ensure they have a strong sense of ownership in the Company.

Pay for Performance Alignment
The Company’s compensation programs are designed to clearly align performance objectives for our Named Executive Officers with the interests of shareholders and with management’s system of priorities. (See image of system of priorities on page 1.) Our Company’s aspiration is to be the best-operated energy company in North America and a force for growth and prosperity in the communities where we live and serve. We follow a system of priorities to achieve this objective, and our performance measures are designed to help move our Company towards achieving these priorities. The following table demonstrates how our annual and long-term performance measures map to our system of priorities.

32      DTE ENERGY 2020 PROXY STATEMENT

 



Our System of Priorities
 
Related Annual or Long-Term Performance Metrics
Highly Engaged Employees
 
 
DTE Energy Employee Engagement - Gallup
DTE Energy OSHA Recordable Incident Rate
DTE Energy OSHA Days Away, Restricted and Transfer Rate National Safety Council Barometer Survey

Top-Decile Customer Satisfaction
 
Customer Satisfaction Index
Customer Satisfaction Improvement Program Index
MPSC Customer Complaints
Distinctive Continuous Improvement Capability
 
Customer Satisfaction Improvement Program Index
Utility Operating Excellence Index
Strong Political & Regulatory Context
 
Customer Satisfaction Improvement Program Index
Utility Operating Excellence Index
MPSC Customer Complaints
Clear Growth & Value Creation Strategy
 
DTE Energy Total Shareholder Return vs Peer Group
Superior & Sustainable Financial Performance
 
 
DTE Energy Cash Flow
DTE Energy Operating Earnings Per Share
DTE Energy Ratio of Funds From Operations to Debt
 


What We Do and What We Don’t Do
Our compensation programs are competitive and well-governed. We adopt best practices that make sense for our company and industry and avoid pay practices that are inconsistent with our pay-for-performance structure.

What we do:
We use multiple performance measures in our short-term and long-term plans that link compensation to our corporate objectives to be the best operated energy company in North America and to maximize shareholder value
We make the majority of compensation for Named Executive Officers “at risk” to further tie compensation to performance and shareholder interests
Our O&C Committee is comprised of all independent directors and our compensation consultant is independent 
We adopted a clawback mechanism to allow the Company to recover incentive compensation in the event of a material financial restatement
We require executives and directors to meet robust stock ownership requirements 
We review and update our peer groups and benchmarking on a regular basis to make sure our compensation remains competitive and near the median of the peer group
We engage with shareholders to seek input about our compensation practices and policies

What we don’t do:
No single-trigger change-in-control payments
No excessive perquisites
No tax gross-ups on change-in-control agreements
No guaranteed bonuses
No pledging, hedging or short sales of Company securities for officers or directors
No stock option grants since 2010
No repricing of existing stock options
No “excessive” golden parachute payments in any of our change-in-control arrangements

 
DTE ENERGY 2020 PROXY STATEMENT      33



CEO Total Actual Compensation for 2019: Fixed vs. At-Risk
Our pay mix puts a high weight on performance-based compensation. This means that the majority of compensation is variable and will go up or down based on company performance. For 2019, 59% of our President and Chief Executive Officer’s compensation was performance-based or “at risk.”
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Overview
Your understanding of our executive compensation program is important to us. The goal of this Compensation Discussion and Analysis is to explain:
 
Our compensation philosophy and objectives for executives of the Company, including our Named Executive Officers;
The roles of our O&C Committee and management in the executive compensation process;
The key components of the executive compensation program; and
The decisions we make in the compensation process that align with our philosophy and objectives.
Throughout this proxy statement, the term “Named Executive Officers” means: (1) the Executive Chairman of the Board, Gerard M. Anderson; (2) the President and Chief Executive Officer, Gerardo Norcia; (3) the Senior Vice President and Chief Financial Officer, Peter B. Oleksiak; (4) the President and Chief Operating Officer—DTE Electric, Trevor F. Lauer; (5) the Vice Chairman and Chief Administrative Officer, David E. Meador; and (6) the Senior Vice President and General Counsel, Bruce D. Peterson. Mr. Peterson retired effective January 3, 2020. In addition, the term “executive” includes the Named Executive Officers, other key employees of the Company as designated by management from time to time and Executive Officers as defined by the Exchange Act.
Philosophy and Objectives

Our executive compensation philosophy is to motivate and reward executives who achieve short-term and long-term corporate and financial objectives leading to the success of the Company. We will continue to emphasize performance-based compensation for results that are consistent with shareholder and customer interests. The main objectives underlying this philosophy are:

Compensation must be competitive in order to attract and retain talented executives — data from peer group companies are taken into consideration when analyzing our compensation practices and levels;

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Compensation should have a meaningful performance component — a portion of an executive’s total compensation opportunity is linked to predefined short-term and long-term corporate and financial objectives along with an executive’s individual performance; and
Compensation must include equity-based elements to encourage executives to have an ownership interest in the Company.
Role of the Organization and Compensation Committee
The Board has a long-standing process for determining executive compensation that is performance-based, objective and transparent. The process is designed to serve the purpose of recruiting, retaining and motivating executives for the benefit of shareholders and customers. The Board delegates to the O&C Committee the responsibility to determine and approve the CEO’s compensation, and to approve the compensation of certain other executives. The O&C Committee makes all decisions regarding compensation for the Named Executive Officers. Although the responsibilities have been delegated, the entire Board maintains oversight and receives direct reports after each O&C Committee meeting.
The O&C Committee is composed entirely of independent directors, none of whom derives a personal benefit from the compensation decisions the O&C Committee makes. Generally, the O&C Committee is responsible for our executive compensation programs throughout the enterprise (including subsidiaries). The O&C Committee responsibilities are more fully detailed in its charter, which is available at dteenergy.com/governance. The O&C Committee continually monitors the executive compensation program and adopts changes to reflect the dynamic marketplace in which we compete for talent. To the extent necessary, the O&C Committee also works with other Board committees to review or approve reports, awards and other matters relating to compensation. For example, the Finance Committee reviews the financial components of performance measures and metrics, the Corporate Governance Committee assists in the review of this Compensation Discussion and Analysis and the Audit Committee reviews the internal controls over the data reported herein.
The O&C Committee uses information from several external sources to monitor and achieve an executive compensation program that supports our business goals and attracts executives whose performance will be measured against those goals. Independent outside consultants and external information enable the O&C Committee to maintain impartial decision-making regarding performance and pay. The O&C Committee annually reviews each component of the Named Executive Officers’ compensation and is advised directly by the outside compensation consulting firm, discussed in further detail below, in connection with such review. Based on input from its consultant and from management and based on a review of competitive data from peer group companies (as discussed below), the O&C Committee believes that the current structure is appropriately balanced and competitive to accomplish the important tasks of recruiting, retaining and motivating talented executives in the energy industry in which we compete.
The O&C Committee also reviews and considers the results from the most recent shareholder advisory vote on executive compensation. At the 2019 and 2018 annual meetings, 94.8% and 94.6%, respectively, of voting shareholders approved the compensation of the Named Executive Officers. As part of our shareholder engagement program, we seek feedback from shareholders about our compensation practices.
Independent Review of Compensation Program
The O&C Committee directly employs an outside consulting firm, Meridian Compensation Partners LLC ("Meridian"), to advise the O&C Committee on various executive compensation matters, including current compensation trends, and provide objective recommendations as to the design of our executive compensation program. Meridian reports directly to the O&C Committee. Use of an outside consultant is an important component of the compensation setting process, as it enables the O&C Committee to make informed decisions based on market data and practices.
The representative from Meridian, who is considered a leading professional in the compensation field, attends O&C Committee meetings, meets with Committee members in executive session, consults with the members as required and provides input with regard to the CEO’s compensation and performance.

 
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Meridian has served as the O&C Committee’s outside consultant since June 2018. The O&C Committee has determined Meridian to be an independent consultant. Meridian has no affiliations with any of the Named Executive Officers or members of the Board other than in its role as an outside consultant. The lead consultant and partner in charge for Meridian, who provided executive compensation consulting services to the O&C Committee, did not provide any other services to the Company.
 
Management’s Role
Our management works closely with the O&C Committee in the executive compensation process. Excluding the Executive Chairman and President and CEO’s compensation, management’s responsibilities include:
 
Recommending performance measures and metrics that are formulated based on our corporate strategy and priorities;
Reporting executive performance evaluations;
Recommending base salary levels and other compensation, including equity awards; and
Recommending appointment of executives.
The Executive Chairman and President and CEO’s compensation is determined solely by the O&C Committee, which bases its decisions on performance and market studies along with participation and recommendations from its independent outside consultant.
Compensation and Peer Group Assessment

Each component of executive compensation (see “Key Components of Executive Compensation” below) is compared, measured and evaluated against a peer group of companies. The O&C Committee approves the peer group and periodically reviews and updates the companies included in that group.

The most recent peer group was approved by the O&C Committee in June 2018. That peer group, which is applicable for 2019, consists of the companies listed below. Most of these companies, along with DTE Energy, participate in the same independent compensation surveys. The surveys provide data needed for accurate compensation comparisons. The peer group consists primarily of utilities (including utility holding companies), broad-based energy companies, and significant non-energy companies selected on the basis of revenues, financial strength, geographic location and availability of compensation information. The O&C Committee reviews the peer group data when making compensation decisions relating to the Named Executive Officers and the Company’s mix of compensation components.

Management also retains an external consulting firm to conduct a market study covering compensation practices for similar positions in the peer group. The most recent market study was completed in August 2019 by Aon, whose comprehensive database included all of our desired utility/energy peer companies and also included data for most of our utility/energy-related executive positions.

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Alliant
Cummins Inc.
Ameren Corporation
Illinois Tool Works
American Electric Power Company, Inc.
Kellogg Company
Avangrid Inc.
Masco Corporation
CenterPoint Energy
Navistar International Corporation
CMS Energy Corporation
Owens Corning
Consolidated Edison
Parker Hannifin Corporation
Duke Energy Corporation
The Sherwin-Williams Company
Edison International
Whirlpool Corporation
Entergy Corporation
 
 
FirstEnergy Corp.
 
 
NiSource, Inc.
 
 
PG&E Corporation
 
 
Public Service Enterprise Group
 
 
Sempra Energy
 
 
Southern Company
 
 
WEC Energy Group, Inc.
 
 
Xcel Energy, Inc.
 
 
Key Components of Executive Compensation
The key components of the compensation program include the following:

Base Salary
Annual and Long-Term Incentives
Retirement and Other Benefits
Post-Termination Agreements (Severance and Change-In-Control)

While the programs and pay levels reflect differences in job responsibilities, the structure of the compensation and benefits program is applied consistently to our Named Executive Officers, including the CEO. Differences in compensation between the CEO and the other Named Executive Officers are due, in part, to an analysis of peer group benchmark data, as well as differences in the responsibilities of each Named Executive Officer. We review each element of total compensation, both individually and on a combined basis, for each Named Executive Officer and make adjustments as appropriate based on these comparisons. The following is a more detailed discussion of the components of the Company’s executive compensation program:
Base Salary
The objective of base salary is to provide a stable, fixed source of income that reflects an executive’s job responsibilities, experience, value to the Company, and demonstrated performance. When setting individual base salary levels, we consider several factors, including (i) the market reference point for the executive’s position, (ii) the responsibilities of the executive’s position, (iii) the experience and performance of the executive, and (iv) retention issues. Market reference points target the median for most positions, adjusted to take into account differences in company size within the peer group. In addition, we establish midpoints for each executive group level for determining base salary for those executives whose jobs cannot be easily matched in the marketplace. These midpoints are consistent with the market reference points for other executives in the same executive group. We review these midpoints annually to ensure they are consistent with the market and make salary adjustments, when appropriate.

 
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We have two primary types of incentives that reward executives for performance. The incentives are designed to tie compensation to performance and encourage executives to align their interests with those of the shareholders and customers of the Company. Our annual incentives allow us to reward executives with annual cash bonuses for performance against pre-established objectives based on work performed in the prior year. Our long-term incentives allow us to grant executives long-term equity incentives to encourage continued employment with DTE Energy, to accomplish pre-defined long-term performance objectives and to create shareholder alignment.
We believe the current mix among base salary, annual incentives, and long-term incentives is appropriately set to provide market-competitive compensation when Company performance warrants. The mix is more heavily weighted toward incentive compensation at higher executive levels within DTE Energy. The interplay between the annual incentives and the long-term incentives provides a balance to motivate executives to achieve our business goals and objectives and to properly reward executives for the achievement of such goals and objectives.
The Board has implemented a “clawback” policy enabling the Company to recover some or all of the performance-based compensation awarded to current or former executives. Under the policy, if the Company is required to prepare an accounting restatement due to material noncompliance with federal securities laws, and the O&C Committee determines it appropriate, the Company may recover from any current or former executive any previously awarded performance-based compensation the executive received (including awards under the Annual Incentive Plan and the Long-Term Incentive Plan) in excess of performance-based compensation that would have been awarded under the restatement. This "clawback" would apply to performance-based compensation during the three-year period preceding the date on which the Company is required to prepare an accounting restatement, in accordance with applicable law and regulations.
Annual Incentives
The objective of the annual incentives is to compensate individuals yearly based on the achievement of specific annual goals and tie compensation to near-term performance. Annual incentive awards are paid to our executives under the DTE Energy Annual Incentive Plan (“Annual Incentive Plan”). The O&C Committee sets individual performance measures, metrics and targets for the Named Executive Officers for each year using the measure, metrics, targets and procedures described below, and the Named Executive Officer’s performance against those measures, metrics and targets is considered when the O&C Committee determines the officer’s annual incentive award under the Annual Incentive Plan for that year.
Under the terms of the Annual Incentive Plan, participating executives and other select employees may receive annual cash awards based on performance compared against pre-established Company and business unit objectives. Objectives that management proposes are reviewed and approved or revised by the O&C Committee, with financial goal recommendations reviewed by the Board’s Finance Committee, usually within the first 90 days of the performance period. The objectives include performance measures in several categories that are critical to our success. When setting these objectives, management and the O&C Committee determine the elements of our business that require the focused attention of the executives. The weights, which can change from year to year, are determined based on the Company’s key priorities and areas of focus for the upcoming year. The final awards, if any, are paid after the O&C Committee approves the final results of each objective.
The amount of an executive’s Annual Incentive Plan award is determined as follows:
 
The executive’s most recent year-end base salary is multiplied by an Annual Incentive Plan target percentage to arrive at the target award.
The overall performance payout percentage, which can range from 0% to 175%, is determined based on final results compared to threshold, target and maximum levels for each objective.
The target award is then multiplied by the performance payout percentage to arrive at the pre-adjusted calculated award.
The pre-adjusted calculated award is then adjusted by an individual performance modifier (assessment of an individual executive’s achievements for the year), which can range from 0% to 150%, to arrive at the final award.

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Each objective has a threshold, target and maximum level. The Company or relevant business unit must attain a minimum level of achievement for an objective before any compensation is payable with respect to that objective. The minimum established level of each objective will result in a payout of 25% of target and the maximum established for each level (or better) will result in a payment of 175% of target.
The operating earnings per share and cash flow measures were chosen as indicators of the Company’s financial strength. The customer satisfaction, employee engagement and safety performance and effectiveness measures were selected to make the Company more responsive to our customers’ needs and to make the Company a safer and better place to work. For Messrs. Anderson, Norcia, Oleksiak, Meador and Peterson, the Utility Operating Excellence measures were chosen as representative of (a) electric generation and distribution reliability and (b) gas system reliability, gas system availability and the pace of gas system improvements. For Mr. Lauer, the DTE Electric Operating Excellence measures were chosen as representative of electric generation and distribution reliability.
For 2019, the performance objectives and the related weightings, thresholds, targets, maximums and results for calculating the Named Executive Officers’ pre-adjusted annual incentive award amounts were as follows.
For Messrs. Anderson, Norcia, Oleksiak, Meador and Peterson: