DEF 14A 1 edison3183471-def14a.htm DEFINITIVE PROXY STATEMENT

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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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[X]   Definitive Proxy Statement
[   ]   Definitive Additional Materials
[   ]   Soliciting Material Pursuant to §240.14a-12

  Edison International  
  (Name of Registrant as Specified In Its Charter)  
 
       
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 

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Mailing address of the executive offices:
2244 Walnut Grove Avenue
Rosemead, California 91770

LETTER TO OUR SHAREHOLDERS

March 17, 2017

Dear Fellow Shareholder:

We are pleased to invite you to attend the Edison International and Southern California Edison Company Annual Meeting of Shareholders to be held on Thursday, April 27, 2017, at 9:00 a.m., Pacific Time, at the Hilton Los Angeles/San Gabriel Hotel, 225 West Valley Blvd., San Gabriel, California 91776.

Proxy Highlights

The Proxy Statement includes information about our corporate governance and executive compensation program. In particular, we would like to direct your attention to the following matters discussed in the Proxy Statement:

The key qualifications, experience and diversity of our director nominees (pages 1–7);

Our key corporate governance attributes (page 2);

Our leadership transition and separation of the Chair and Chief Executive Officer roles (pages 2 and 9);

Our Board oversight of cybersecurity and environmental and social issues (page 10); and

Our engagement with major shareholders on our corporate governance, executive compensation and business strategy (pages 2 and 27).

Your Vote is Important

The proxy materials are being mailed or provided to you via the Internet beginning on March 17, 2017. We hope that you will participate in the Annual Meeting by attending and/or voting. You may vote your proxy via the Internet, by telephone, or by mail. Please follow the instructions on the Notice of Internet Availability of proxy materials or Proxy Card that you received in the mail.

If you receive more than one copy of the Notice or more than one Proxy Card, it means your shares are held in more than one account. You should vote the shares in all of your accounts. Please note that to vote your shares by Internet or telephone you will need the control number on your Notice or Proxy Card.

Your vote is very important to us and to our business. If you vote by Internet or telephone, please cast your vote by the April 26 deadline (April 25 for shares held in the Edison 401(k) Savings Plan).

Thank you very much for your continued interest in our business.

Sincerely,

William P. Sullivan                 Pedro J. Pizarro
Chair of the Board President and Chief Executive Officer
Edison International Edison International

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NOTICE OF 2017 ANNUAL MEETING OF
SHAREHOLDERS

Meeting Information
Date:       Thursday, April 27, 2017
Time: 9:00 a.m., Pacific Time
Location: Hilton Los Angeles/San Gabriel
Hotel 225 West Valley Blvd.
San Gabriel, California 91776

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on April 27, 2017:

The Proxy Statement and Annual Report are available at www.edison.com/annualmeeting.

Directions to the Annual Meeting and information on how to vote your proxy are included in the Proxy Statement.

  Items To Be Voted On By Edison
International (“EIX”)
Shareholders
By Southern California
Edison Company
(“SCE”) Shareholders
Board
Recommendation
    1        Election of Directors       9 Nominees       10 Nominees          
Vanessa C.L. Chang   For  
Louis Hernandez, Jr. For
    James T. Morris   For
Kevin M. Payne For
Pedro J. Pizarro For
Linda G. Stuntz For
William P. Sullivan For
Ellen O. Tauscher   For
Peter J. Taylor For
Brett White For
2 Ratification of the Appointment of the Independent Registered Public
Accounting Firm
For
3 Advisory Vote to Approve the Company’s Executive Compensation For
4 Advisory Vote on the Frequency of Say-on-Pay Votes 1 Year
5 Shareholder Proposal Regarding Shareholder Proxy Access Reform Against

EIX and SCE shareholders may also vote on any other matters properly brought before the meeting.

RECORD DATE
Only shareholders at the close of business on March 3, 2017 are entitled to receive notice of and to vote at the Annual Meeting.

SOLICITATION OF PROXIES
The EIX and SCE Boards of Directors are soliciting proxies from you for use at the Annual Meeting, or at any adjournment or postponement of the meeting. Proxies allow designated individuals to vote on your behalf at the Annual Meeting.

Dated: March 17, 2017
For the Boards of Directors,


Barbara E. Mathews
Vice President, Associate General Counsel,
Chief Governance Officer and Corporate Secretary
Edison International
Southern California Edison Company

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TABLE OF CONTENTS

LETTER TO OUR SHAREHOLDERS       i
 
NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS ii
 
PROXY SUMMARY 1
 
ITEM 1: ELECTION OF DIRECTORS 3
      Our Corporate Governance 8
Certain Relationships and Related Transactions 11
Board Committees 12
Director Compensation 14
Our Stock Ownership 17
 
ITEM 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 19
Independent Auditor Fees 20
Audit Committee Report 21
 
ITEM 3: ADVISORY VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION 22
 
ITEM 4: ADVISORY VOTE ON THE FREQUENCY OF SAY-ON-PAY VOTES 23
 
COMPENSATION DISCUSSION AND ANALYSIS 24
Compensation Summary 24
What We Pay and Why: Elements of Total Direct Compensation 27
How We Make Compensation Decisions 34
Post-Employment and Other Benefits 36
Other Compensation Policies and Guidelines 36
Compensation Committee Report 37
Compensation Committee Interlocks and Insider Participation 37
 
EXECUTIVE COMPENSATION 38
Summary Compensation Tables 38
Grants of Plan-Based Awards 41
Outstanding Equity Awards at Fiscal Year-End 45
Option Exercises and Stock Vested 48
Pension Benefits 49
Non-Qualified Deferred Compensation 52
Potential Payments Upon Termination or Change in Control 54
 
ITEM 5: SHAREHOLDER PROPOSAL REGARDING SHAREHOLDER PROXY ACCESS REFORM 59
Proposal 5 – Shareholder Proxy Access Reform 59
EIX Board Recommendation “Against” Item 5 59
 
MEETING AND VOTING INFORMATION 61
 
TERMS USED IN THIS PROXY STATEMENT 64



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PROXY SUMMARY

The information below is presented to assist shareholders in reviewing the proposals to be voted on at the Annual Meeting. For more complete information about these topics, please review the Company’s complete Proxy Statement and Annual Report.

Our Business, Strategy, and Financial Highlights

EIX’s core business is conducted by its subsidiary SCE, a rate-regulated electric utility that supplies electric energy to approximately 15 million people in a 50,000 square-mile area of southern California. Our mission is to safely provide customers reliable, affordable and clean electricity. Our strategy has three key elements:

Invest in our infrastructure to maintain a safe and reliable transmission and distribution network.

Modernize the electric grid to enable increased penetration of distributed energy resources to support California’s climate change and greenhouse gas reduction objectives and empower our customers to make new energy technology choices.

Promote operational and service excellence to enhance performance in the areas of safety, reliability, customer satisfaction, and cost.

This strategy is intended to provide a foundation for long-term sustainable growth and shareholder value.

Significant results for EIX include:

2016 consolidated core earnings of $3.97 per share exceeded our goal of $3.91 per share;

One-year (2016) total shareholder return (“TSR”) of 24.9% exceeded the Philadelphia Utility Index, which had a TSR of 17.4%;

Three-year (2014-2016) TSR of 68.6% exceeded the Philadelphia Utility Index TSR of 41.9%;

Five-year (2012-2016) TSR of 99.8% exceeded the Philadelphia Utility Index TSR of 56.6%; and

Annual dividend rate has grown from $1.30 per share in 2012 to $2.17 per share in 2017.

Our Director Nominees

Our director nominees reflect the diversity of ethnicity, gender, skills, background and qualifications valued by our Board. The range of tenure on our Board brings a variety of perspectives to strategic, financial and operational deliberations.

  Name     Director
Since
    Industry
Experience
    Ethnicity/
Gender
    Independent     Committee
Memberships
    Other
Public Co.
Boards
    Mandatory
Retirement
Date
 
Vanessa C.L. Chang 2007 Accounting/   Asian/   Yes Audit 3 2025
Real Estate Female Compensation
Louis Hernandez, Jr.   2016 Multimedia/ Hispanic/ Yes Audit 1 2038
Technology Male FOSO
James T. Morris   2016   Insurance   White/ Yes Audit 1 2032
  Male Compensation
Kevin M. Payne 2016   Electric Utilities White/ No None 0 N/A
(SCE Nominee Only) Male
Pedro J. Pizarro 2014 Electric Utilities Hispanic/ No None 0 N/A
Male
Linda G. Stuntz 2014 Law White/ Yes FOSO 1 2027
Female Governance
William P. Sullivan 2015 Information White/ Yes FOSO 1 2022
(EIX Chair) Technology/ Male Governance
Biotechnology
Ellen O. Tauscher 2013 Government/ White/ Yes Audit 2 2024
Finance Female FOSO
Peter J. Taylor 2011 Finance African Yes Audit 0 2031
American/ Compensation
Male
Brett White 2007 Commercial White/ Yes Compensation 0 2032
Real Estate Male Governance

Audit = Audit Committee
Compensation = Compensation and Executive Personnel Committee
FOSO = Finance, Operations and Safety Oversight Committee
Governance = Nominating/Corporate Governance Committee


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Our Corporate Governance Attributes
   Board Characteristics       Average Age of EIX Director Nominees       59   
Average Tenure of EIX Director Nominees (Number of Years) 4
  Percentage of EIX Director Nominees Who Are Independent 89%
Percentage of EIX Director Nominees Who Are Female 33%
Percentage of EIX Director Nominees From Diverse Ethnic Backgrounds 44%
Board Oversight Independent Chair of the EIX Board
Independent Directors Meet Regularly Without Management Present
Key Board Committees Composed Solely of Independent Directors
Board Oversight of Key Enterprise Risks, Including Cybersecurity
Board Oversight of Political Contributions
Annual Board and Committee Evaluations
Executive Compensation Majority of Executive Compensation “At Risk” and Aligned with Shareholder Interests
Quantitative Targets for Most Annual Incentive Plan Goals
Incentive Compensation Clawback Policy
Anti-Hedging and Anti-Pledging Policies
Stock Ownership Guidelines for Directors and Executive Officers
Stock Holding Requirements for Executive Officers
Shareholder Rights Annual Election of Directors
Majority Voting for Directors in Uncontested Elections
Threshold for Shareholders to Call Special Meetings 10%
Shareholder Ability to Act By Written Consent
Annual Advisory Vote on Executive Compensation
Proxy Access for Director Elections
2016 Meetings Number of Board Meetings 11
Number of Independent Director Executive Sessions 6
Percentage of EIX Director Nominees Who Attended >75% of Board and Committee Meetings 100%
Percentage of EIX Director Nominees Who Attended the Annual Meeting 89%
Percentage of EIX Shareholder Votes Cast in Favor of Executive Compensation 96%

Our Leadership Transition

Theodore F. Craver, Jr. retired at age 65 from his position as EIX Chairman and Chief Executive Officer (“CEO”), effective September 30, 2016. In anticipation of Mr. Craver’s retirement, the Board established a special committee on Board leadership and regularly discussed succession planning at Board meetings. During the succession planning process, the EIX Board determined that separating the roles of the chair and CEO upon Mr. Craver’s retirement would be in the best interests of our shareholders.

Effective upon Mr. Craver’s retirement, the Board appointed independent director William P. Sullivan as the non-executive Chair of the EIX Board and elected Pedro J. Pizarro to succeed Mr. Craver as EIX CEO. To facilitate this leadership transition, effective June 1, 2016, the Board elected Mr. Pizarro as EIX President and Kevin M. Payne as SCE CEO, succeeding Mr. Pizarro.

Our Shareholder Engagement

We seek and value input from our shareholders. In 2016, we engaged with our major institutional shareholders to discuss the Company’s corporate governance, executive compensation, and business strategy. In particular, we sought feedback from shareholders regarding our proxy access framework and sustainability disclosure. Management shared the feedback received from these discussions with the Board and relevant Board committees.


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ITEM 1: ELECTION OF DIRECTORS


Nine directors have been nominated for election to the EIX Board and ten directors have been nominated for election to the SCE Board, each to hold office until the next Annual Meeting. The director nominees of EIX and SCE are the same, except that Mr. Payne is a nominee for the SCE Board only. Directors Jagjeet S. Bindra, who decided not to stand for re-election, and Richard T. Schlosberg III, who reached the mandatory retirement age of 72, will leave the Board effective as of the date of the Annual Meeting.

A biography of each nominee describing his or her age as of this Proxy Statement, current Board committee service, business experience during the past five years and other relevant business experience is presented below. The biography includes the experience, qualifications, attributes, and skills that led the Board to conclude that the nominee should serve as a director. While each nominee’s entire range of experience and skills is important, particular experience that contributes to the diversity and effectiveness of the Board is identified below.

    Vanessa C.L. Chang        
            
  Biographical Information

Ms. Chang has been a director of EL & EL Investments, a private real estate investment business, since 1999. She previously served as chief executive officer and president of ResolveItNow.com, an online dispute resolution service, senior vice president of Secured Capital Corporation, a real estate investment bank, and a partner of the accounting firm KPMG Peat Marwick LLP. Ms. Chang is a director of Sykes Enterprises, Incorporated and Transocean Ltd., and a director or trustee of 17 funds advised by the Capital Group and its subsidiaries, of which seven are members of the American Funds family and ten are members of Capital Group’s Private Client Services. She is a graduate of the University of British Columbia and a Certified Public Accountant (inactive).

Specific Qualifications and Experience Relevant to the Company

Ms. Chang brings to the Board experience in accounting and financial reporting and oversight matters. This experience is valuable in her role as a financial expert on the Audit Committee. Ms. Chang spent most of her career in the Southern California area and brings knowledge of the community served by SCE. She also brings experience as a director of public, private, and non-profit organizations, and securities regulation and corporate governance knowledge.

 
Age 64
Director Since 2007

Board Committees
Audit
Compensation

Other Public
Company Boards
American Funds Family
Sykes Enterprises,
Incorporated
Transocean Ltd.
       

    Louis Hernandez, Jr.        
              
 
Age 50
Director Since 2016

Board Committees
Audit
FOSO

Other Public
Company Boards
Avid Technology, Inc.
Biographical Information

Mr. Hernandez has been the chairman and chief executive officer of Avid Technology, Inc., a digital media company that provides audio and video technology, since 2013, and also served as its president from 2013 to 2016. He has been a director of Avid Technology, Inc. since 2008. From 1999 to 2013, Mr. Hernandez served as chairman and chief executive officer of Open Solutions, Inc., a technology provider for the financial services marketplace. He previously also served in various executive roles at RoweCom Inc. and U.S. Medical Instruments, Inc. and as a director of HSBC North America Holdings Inc. and several of its affiliates. Mr. Hernandez is a graduate of San Diego State University, where he also received his MBA degree.

Specific Qualifications and Experience Relevant to the Company

Mr. Hernandez brings to the Board public company chief executive leadership experience in the multimedia software industry and technology sector. He also brings entrepreneurial, marketing, and product development experience, which is particularly relevant to the Company’s new business development activities. Mr. Hernandez’s experience in the technology sector is valuable in addressing the challenges of the changing electric industry.

   
         

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ITEM 1: ELECTION OF DIRECTORS

    James T. Morris        
              
 
Age 57
Director Since 2016

Board Committees
Audit
Compensation

Other Public
Company Boards
Pacific Mutual Fund Complex
Biographical Information

Mr. Morris is the chairman, president and chief executive officer of Pacific Life Insurance Company, and its parent companies Pacific Mutual Holding Company and Pacific LifeCorp. He has served as chief executive officer since 2007 and chairman since 2008, and served as president from 2007 to 2012 and again beginning in 2016. Mr. Morris has served in a variety of management positions since joining Pacific Life in 1982, including chief operating officer from 2006 to 2007, executive vice president and chief insurance officer, life insurance and annuities and mutual funds divisions, from 2005 to 2006, executive vice president, life insurance division, from 2002 to 2005, and senior vice president, individual insurance, from 1996 to 2002. In addition, he has been chairman of the board and trustee of the Pacific Select Fund and the Pacific Funds Series Trust, members of the same mutual fund complex, since 2007. Mr. Morris serves as a director of the American Council of Life Insurers, where he previously served as its chairman from 2012 to 2013. He is a graduate of the University of California at Los Angeles and serves as a member of the Board of Visitors of the UCLA Anderson School of Management.

Specific Qualifications and Experience Relevant to the Company

Mr. Morris brings to the Board business and chief executive leadership experience in an industry which, like the electric utility industry, is highly regulated. He also brings strategic perspective, product development, marketing and financial analysis experience to the Board.

   
         

    Kevin M. Payne        
              
 
Age 56
SCE Director Since 2016

Other Public
Company Boards
None

Biographical Information

Mr. Payne has been the CEO of SCE since June 2016. Prior to his current role, he served as senior vice president of Customer Service for SCE from 2014 to June 2016. Mr. Payne has held various leadership positions, including Vice President of Engineering and Technical Services from 2011 to 2014, Vice President of Client Services Planning and Controls from 2010 to 2011, Vice President of Information Technology and Business Integration from 2009 to 2010, and Vice President of Enterprise Resource Planning from 2008 to 2009. Prior to that he was a Director in the Renewable and Alternative Power and Major Customer Technical Support departments. Mr. Payne began his career with SCE in 1986 in the Engineering and Construction department managing power plant retrofit and other engineering projects. He has a degree in mechanical engineering from the University of California, Berkeley, and is a registered professional engineer.

Specific Qualifications and Experience Relevant to the Company

Mr. Payne brings to the SCE Board in-depth knowledge of the Company’s business, experienced leadership, and an engineering background. He also brings senior executive, operations and strategic planning experience developed during his 30 years of service with SCE.

   
         

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ITEM 1: ELECTION OF DIRECTORS

    Pedro J. Pizarro        
            
 
Age 51
EIX Director Since 2016
SCE Director Since 2014

Other Public
Company Boards
None
Biographical Information

Mr. Pizarro has been the President and CEO of EIX since October 2016. Prior to that, he served as President of EIX from June 2016 to September 2016 and President of SCE from October 2014 to May 2016. Mr. Pizarro has held a wide range of executive positions at the EIX companies since joining EIX in 1999. From 2011 through March 2014, he served as President of EME, an indirect subsidiary of EIX that filed for bankruptcy in 2012. Prior to that, Mr. Pizarro served as Executive Vice President of SCE from 2008 to 2011, responsible for SCE’s transmission and distribution system, procurement of conventional and renewable power, and gas-fired and hydroelectric power production facilities. He also previously served as Vice President and Senior Vice President of Power Procurement, and Vice President of Strategy and Business Development, among other executive roles. Prior to his work at the EIX companies, Mr. Pizarro was a senior engagement manager with McKinsey & Company, providing management consulting services to energy, technology, engineering services, and banking clients. He is a director of the Edison Electric Institute and the Electric Power Research Institute, and is a member of the Board of Governors of Argonne National Laboratory. Mr. Pizarro is a graduate of Harvard University and earned a Ph.D. in chemistry from the California Institute of Technology.

Specific Qualifications and Experience Relevant to the Company

Mr. Pizarro brings to the Board in-depth knowledge of the Company’s business, experienced leadership, and operations and strategic planning experience and background. His leadership and experience dealing with difficult challenges during the EME bankruptcy adds value to the Board. He also brings experience as a director of various non-profit organizations.

 
       

    Linda G. Stuntz        
            
 
Age 62
Director Since 2014
Board Committees
FOSO
Governance

Other Public
Company Boards
Royal Dutch Shell plc
Biographical Information

Ms. Stuntz has been a partner of the law firm of Stuntz, Davis & Staffier, P.C. since 1995, and served as a partner of the law firm of Van Ness Feldman LLP from 1993 to 1995. Her practice includes energy and environmental regulation. Ms. Stuntz previously served as Deputy Secretary of, and held senior policy positions in, the U.S. Department of Energy from 1989 to 1993, and served as associate minority counsel and minority counsel to the Energy and Commerce Committee of the U.S. House of Representatives from 1981 to 1987. She is a director of Royal Dutch Shell plc, and previously served as a director of Raytheon Company, Schlumberger, Ltd. and American Electric Power Company. Ms. Stuntz also served on the U.S. Secretary of Energy Advisory Board. She is a graduate of Wittenberg University and received her law degree from Harvard University.

Specific Qualifications and Experience Relevant to the Company

Ms. Stuntz brings to the Board utility and environmental law and public policy experience, which is particularly relevant to the Company’s business. Her experience as a director of other public companies, including in the energy and electric utilities industries, also brings value to the Board.

 
       

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ITEM 1: ELECTION OF DIRECTORS

    William P. Sullivan        
            
 
Age 67
Director Since 2015
Chair of the EIX Board
Board Committees
FOSO
Governance

Other Public
Company Boards
Maxim Integrated
Biographical Information

Mr. Sullivan served as chief executive officer of Agilent Technologies, a global provider of scientific instruments, software, services and consumables in life sciences, diagnostics and applied chemical markets, from 2005 to 2015. In addition, he was Agilent’s president from 2005 to 2012 and 2013 to 2014. Prior to that, Mr. Sullivan was executive vice president and chief operating officer of Agilent from 2002 to 2005. He had been senior vice president and general manager of Agilent’s Semiconductor Products Group from 1999 to 2002. Before 1999, Mr. Sullivan served in various management roles, including in manufacturing and product development, at Hewlett-Packard Company. He serves as a director of Maxim Integrated and previously served as a director of Agilent Technologies, Avnet, Inc. and URS Corporation. Mr. Sullivan is a graduate of the University of California, Davis.

Specific Qualifications and Experience Relevant to the Company

Mr. Sullivan brings to the Board experience as president and chief executive officer of a large public company. He also brings significant operational experience, including leadership of successful company transformation. This experience, particularly in the technology sector and in product and business development, is very valuable to the Board in the changing electric industry.

 
       

    Ellen O. Tauscher        
            
 
Age 65
Director Since 2013
Board Committees
Audit
FOSO

Other Public
Company Boards
eHealth Inc.
SeaWorld Entertainment, Inc.
Biographical Information

Ms. Tauscher has been a strategic advisor with the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC since 2012. Ms. Tauscher served as Under Secretary of State for Arms Control and International Security from 2009 to 2012. Prior to joining the State Department, she served from 1997 to 2009 as a member of the U.S. House of Representatives from California’s 10th Congressional District. While a member of Congress, Ms. Tauscher served on the House Armed Services Committee, the House Transportation and Infrastructure Committee and as Chairman of the House Armed Services Subcommittee on Strategic Forces. Prior to serving in Congress, she worked in investment banking and the financial industry in various roles for Bache Halsey Stuart Shields, Bear Stearns & Co., and Drexel Burnham Lambert, and as an officer of the American Stock Exchange. Ms. Tauscher is a director of eHealth, Inc. and SeaWorld Entertainment, Inc., and previously served as a director of Invacare Corporation. She also served on the U.S. Secretary of Energy Advisory Board. Ms. Tauscher is a graduate of Seton Hall University.

Specific Qualifications and Experience Relevant to the Company

Ms. Tauscher brings to the Board extensive government affairs and public policy experience, which is particularly relevant to the Company’s business and valuable in assessing the Company’s strategy. She also brings business and financial acumen. Her experience in national security and in the State Department and in Congress is particularly valuable in the oversight of cybersecurity risk and her role as the Board’s liaison to the Company’s cybersecurity oversight group (see page 10).

 
       

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ITEM 1: ELECTION OF DIRECTORS

    Peter J. Taylor        
            
 
Age 58
Director Since 2011
Board Committees
Audit (Chair)
Compensation

Other Public
Company Boards
None
Biographical Information

Mr. Taylor has been the president of ECMC Foundation, a nonprofit corporation dedicated to educational attainment for low-income students, since May 2014. Prior to that he served as executive vice president and chief financial officer of the University of California from 2009 to 2014 and managing director of public finance at Lehman Brothers and Barclays Capital from 2002 to 2009. Mr. Taylor is a director of Pacific Mutual Holding Company and the Kaiser Family Foundation, and a member of the Board of Trustees of California State University and the J. Paul Getty Trust. Previously, he was chair of the UCLA African American Admissions Task Force and a commissioner on the California Performance Review Commission. Mr. Taylor is a graduate of the University of California Los Angeles and holds a Master’s degree in public policy analysis from Claremont Graduate University.

Specific Qualifications and Experience Relevant to the Company

Mr. Taylor brings to the Board finance and public policy experience, which is particularly relevant to the Company’s infrastructure investment strategy and highly regulated business. He also brings experience in risk management, accounting and financial reporting, which is valuable in his role as a financial expert and Chair of the Audit Committee.

 
       

    Brett White        
            
 
Age 57
Director Since 2007
Board Committees
Compensation (Chair)
Governance

Other Public
Company Boards
None
Biographical Information

Mr. White has been chairman and chief executive officer of Cushman & Wakefield (formerly DTZ), a commercial real estate services company, since September 2015. He served as executive chairman of DTZ from March 2015 to September 2015. Mr. White previously served as a senior advisor to TPG Capital, a private equity firm, from July 2014 to December 2014 and as a managing partner at Blum Capital, a private equity firm, from January 2013 to December 2013. Prior to that, he served as chief executive officer of CBRE Group, Inc., a commercial real estate services firm, from 2005 to 2012, president of CBRE Group from 2001 to 2010 and, prior to that, as chairman of the Americas of CB Richard Ellis Services, Inc. Mr. White previously served as a director of Ares Commercial Real Estate Corporation, CBRE Group, Inc. and Realogy Holdings Corporation. He is a graduate of the University of California, Santa Barbara.

Specific Qualifications and Experience Relevant to the Company

Mr. White brings to the Board the experience, strategic perspective, critical judgment and analytical skills of a chief executive officer of a global company. His real estate services industry experience is particularly relevant to the Company’s infrastructure investment strategy. He also brings the perspective of a business headquartered and doing business in the local markets served by SCE developed from his years of service at CBRE Group. This experience is valuable in Mr. White’s role as the Company’s Compensation Committee Chair.

 
       

The Board recommends you vote “FOR” the EIX and SCE director nominees, as applicable.

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ITEM 1: ELECTION OF DIRECTORS

Our Corporate Governance

How are potential director nominees identified and selected by the Board to become nominees?

The Governance Committee, comprised solely of independent directors under New York Stock Exchange LLC (“NYSE”) rules and our Corporate Governance Guidelines, recommends director candidates to the Board.

The Committee will consider candidates recommended by shareholders if they are submitted in writing to the Corporate Secretary and include all of the information required by Article II, Section 4 of our Bylaws plus a written description with any supporting materials of:

Any direct or indirect business relationships or transactions within the last three years between EIX and its subsidiaries and senior management, on the one hand, and the candidate and his or her affiliates and immediate family members, on the other hand; and
The qualifications, qualities, and skills of the candidate that the shareholder deems appropriate to submit to the Committee to assist in its consideration of the candidate.

The Committee also considers candidates recommended by our directors, senior management, and director search firms retained by the Committee. Mr. Hernandez, who was elected to the Board in August 2016 and is a first-time nominee for election by the shareholders at the Annual Meeting, was recommended by the Committee’s director search firm. The search firm supports the process of identifying director candidates, coordinating the interview process and conducting reference checks. There are no differences in the manner in which the Committee evaluates a candidate based on the source of the recommendation.

If, based on an evaluation of the candidate’s qualifications, qualities and skills, the Committee determines to continue its consideration of a candidate, Committee members and other directors as determined by the Committee interview the candidate. The Committee conducts any further research on the candidate it deems appropriate. The Committee then determines whether to recommend that the candidate be nominated as a director. The Board considers the recommendation and determines whether to nominate the candidate for election.

What information does the Governance Committee consider when recommending a director nominee?

For the Committee to recommend a director nominee, the candidate must at a minimum possess the qualifications, qualities and skills in our Corporate Governance Guidelines, including:

A reputation for integrity, honesty and adherence to high ethical standards;
Experience in a generally recognized position of leadership; and
The demonstrated business acumen, experience and ability to exercise sound judgment in matters that relate to the current and long-term objectives of the Company.

The Committee also considers other factors and information, including the Board’s current need for additional members, the candidate’s potential for increasing the Board’s range of experience, skills and diversity, the candidate’s independence, and skills and experience relevant to our business strategy.

In nominating candidates for re-election to the Board, the Committee also considers the nature and time invested in a director’s service on other boards, the director’s Board, Board committee and annual meeting attendance, and the vote received at the prior annual meeting.

How does the Governance Committee consider diversity in identifying director candidates?

Our Corporate Governance Guidelines state the Board’s policy that the value of diversity on the Board should be considered. The Committee considers ethnic and gender diversity, and diversity of skills, backgrounds and qualifications represented on the Board, in recommending nominees for election. The Committee has instructed its director search firm to identify candidates reflecting ethnic and gender diversity.

The Committee evaluates its effectiveness in achieving diversity on the Board through its annual review of Board composition, which identifies ethnicity, gender and industry experience prior to recommending nominees for election.

How does the Board determine which directors are independent?

Our Corporate Governance Guidelines require that the Board be comprised of at least a majority of independent directors and that the Audit, Compensation, and Governance Committees be comprised entirely of independent directors. The Company uses the NYSE listing standards to determine independence.

Directors serving on the Audit and the Compensation Committees must meet additional independence criteria prescribed by the NYSE listing standards and the charters of those Committees. Director Chang serves on the audit committees of the American Funds family, Sykes Enterprises, Incorporated and Transocean Ltd. The Board has determined Ms. Chang’s simultaneous service on the audit committees of three other public companies does not impair her ability to effectively serve on our Audit Committee.

The Board has determined that the relationships described in Section B of Exhibit A-1 to our Corporate Governance Guidelines, which are on our website at www.edison.com/corpgov, are not material for purposes of determining directors’ independence to serve on the Board. The Board does not consider these relationships in making independence determinations to serve on the Board.

For relationships not prohibited by NYSE rules and not covered under the categories of immaterial relationships in our Guidelines, the determination of whether a relationship is material or not, and therefore whether a director is independent to serve on the Board or not, is made in good faith by the directors. The director whose relationship is under consideration abstains from the vote regarding his or her independence.

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Which directors has the Board determined are independent to serve on the Board?

The Board has determined that all directors other than Messrs. Pizarro and Payne are independent to serve on the Board.

The Board reviews the independence of our directors to serve on the Board or an independent Board committee at least annually, and periodically as needed. On a monthly basis, the Company also monitors director relationships and transactions that might disqualify them as independent. In February 2017, prior to recommending director nominees for election, the Board confirmed that the independent directors had no relationships or transactions that disqualified them as independent to serve on the Board.

Who is the Chair of the Board and what are the Chair’s duties and responsibilities?

Mr. Sullivan has served as the independent Chair of the EIX Board since September 30, 2016. Prior to this time, Mr. Craver served as EIX Chairman and CEO and Mr. White served as the Company’s Lead Director. Effective upon Mr. Craver’s retirement on September 30, 2016, the EIX Board separated the roles of Chair and CEO by amending the EIX Bylaws and Corporate Governance Guidelines and appointing Mr. Sullivan as independent Chair of the EIX Board and Mr. Pizarro as EIX CEO. The Company no longer has a Lead Director.

As independent Chair, Mr. Sullivan’s duties include:

Chair the Board meetings and Annual Meetings;
With the CEO, create the agenda for the Board meetings;
With the Governance Committee, oversee the annual evaluations of the Board;
Be the principal liaison in synthesizing and communicating to the CEO key issues from the executive sessions of the independent directors; and
With the Compensation Committee Chair, conduct the annual CEO performance review after review with the independent directors.

The SCE Bylaws provide that the CEO of SCE has the duties of the Chair unless a separate Chair of the SCE Board is appointed. Since June 1, 2016, Mr. Payne has served as SCE CEO and has had the duties of the Chair of the SCE Board. SCE does not have a Lead Director.

Why does the Board believe its Board leadership structure is appropriate?

The EIX Board believes separating the Chair and CEO positions is the most appropriate leadership structure for EIX at this time, by allowing Mr. Pizarro to focus on the day-to-day management of the business and on executing our strategic priorities, while allowing Mr. Sullivan to focus on leading the Board, providing advice and counsel to Mr. Pizarro, and facilitating the Board’s independent oversight of management.

The SCE Board has determined that the current leadership structure is appropriate for SCE as a subsidiary of EIX. All directors of SCE are independent, except for Messrs. Payne and Pizarro, and the key Board committees are composed entirely of independent directors.

What is the Board’s role in CEO succession planning?

The Board believes CEO succession planning is one of its most important responsibilities. Our Corporate Governance Guidelines provide that the Board will annually review and evaluate succession planning and management development for the Company’s senior officers, including the CEO.

At least annually, the Board meets in executive session with the EIX CEO to discuss talent and succession planning. The discussion includes CEO succession in the ordinary course, CEO succession if an emergency occurs, and succession for other key senior management positions. The frequency of the Board’s CEO succession planning discussions depends in part on the period until the CEO’s expected retirement.

In the succession planning process, internal CEO succession candidates are identified and evaluated based on criteria considered predictive of success at the CEO level, considering the Company’s business strategy. The Board uses a common talent assessment format for each individual. The assessment includes a development plan for each individual.

Our Corporate Governance Guidelines provide that the Board will have opportunities to become acquainted with the senior officers of the Company and others who may have the potential to handle significant management positions. This is carried out through opportunities for officers to make presentations to the Board and Board committees, director education sessions, other business interactions, and social events intended for this purpose.

What is the Board’s role in risk oversight?

Our Corporate Governance Guidelines provide that one of the Board’s primary functions is to review the Company’s enterprise risk management process and monitor strategic and emerging risks. The Board reviews key enterprise risks identified by management, such as financial, reputational, safety, physical and cyber security, and compliance risks, and monitors key risks through reports and discussions regarding key risk areas at Board meetings. The Board also focuses on specific strategic and emerging risks in periodic strategy reviews. The Board annually reviews corporate goals and approves capital budgets. Board committees have responsibility for risk oversight in specific areas as follows:

The Audit Committee is responsible for oversight of (i) risk assessment and risk management policies, (ii) major financial risk exposures, and (iii) the steps management has taken to monitor and control these exposures. The Committee reviews the Company’s risk management processes and key enterprise risks, reviews the EIX risk management committee charter, receives regular reports on litigation, internal audits and compliance, receives “deep dive” reports on specific risk topics at meetings, and receives semi-annual reports of the Company’s political contributions. The Committee also annually reviews and approves the internal audit plan. The EIX Vice President of Enterprise Risk Management regularly attends Committee meetings and reports on risk issues.

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The Compensation Committee assesses and monitors risks in the Company’s compensation program. The Committee’s risk assessment process and factors considered in assessing risk are discussed under “How We Make Compensation Decisions - Risk Considerations” in the Compensation Discussion and Analysis below.

The FOSO Committee is responsible for oversight of risks in the Company’s capital investment activities and operations. The Committee regularly monitors the level of capital spending relative to approved capital budgets and must approve significant capital spending variances and projects not included in approved capital budgets. The Committee also monitors safety and operational performance metrics, significant developments related to safety, physical and cyber security, reliability and affordability, and the availability of resources in these areas. The Committee receives “deep dive” reports on key topics related to its responsibilities.

The Governance Committee advises the Board regarding Board size and composition, Board committee composition and responsibilities, selection of the independent Chair of the EIX Board, and corporate governance practices that help position the Board to effectively carry out its risk oversight responsibility.

The Board believes its leadership structure supports the Board’s risk oversight function. Independent directors chair the Board committees responsible for risk oversight, the Company has an independent Chair of the EIX Board who facilitates communication between management and directors, and all directors are involved in the review of key enterprise risks.

What is the Board’s role in cybersecurity oversight?

The Company has identified cybersecurity as a key enterprise risk. Cyber risks are included in the key risk reports to the Audit Committee discussed above. In addition, the Board has assigned primary responsibility for cybersecurity oversight to the FOSO Committee, which receives cybersecurity updates with each meeting that focus on the Company’s most critical assets, cybersecurity drills, exercises, mitigation of cyber risks, and assessments by third-party experts. In 2016, the Board also received a report with a similar focus on reducing the Company’s cybersecurity risks.

The Company has established a cybersecurity oversight group comprised of a multidisciplinary senior management team to provide governance and strategic direction for the identification, protection and detection of cybersecurity risks to the Company. Director Tauscher serves as the Board liaison to the oversight group and regularly attends meetings. Other Board members attend at least one meeting annually.

What is the Board’s role in oversight of environmental and social issues?

Environmental and social policies have a significant impact on the Company’s business and strategy. As a result, the Board is regularly engaged in oversight of environmental and social issues related to the Company’s operations, including:

Environmental legislation and regulation related to renewable energy, distributed generation, energy efficiency and climate change;
Strategic decisions and opportunities related to public policy focus on sustainability;
Employee and supplier diversity; and
Employee, contractor and public safety.

The Board oversees environmental and social issues that impact the Company’s business, regulatory requirements, and reputation. Risks associated with environmental and social issues are identified in key risk reports to the Audit Committee. The Audit Committee also oversees the Company’s political and charitable contributions.

How do the Board and Board committees evaluate their performance?

The Board and Board committees complete an annual self-evaluation questionnaire and discuss the results of their evaluation in executive session during the applicable Board or committee meeting. Directors have the opportunity to provide feedback on the performance of other directors during this process. The Governance Committee oversees the annual evaluation of the Board and Board committees and periodically reviews the effectiveness of the process.

How many times did the Board meet in 2016?

The Board met eleven times in 2016. Each director attended 75% or more of all Board and Board committee meetings he or she was eligible to attend. The Board held six executive sessions of the independent directors.

Does the Company have a policy on attendance of Director nominees at Annual Meetings?

Director nominees are expected to attend Annual Meetings. All of the EIX and SCE directors except Mr. Taylor attended the 2016 Annual Meeting.

Are directors required to hold EIX Common Stock?

Within five years from their initial election to the Board, directors must own an aggregate number of shares of EIX Common Stock or derivative securities convertible into EIX Common Stock, excluding stock options, having a value equivalent to five times the annual Board retainer. All deferred stock units held by a director count toward this ownership requirement. All directors comply with this stock ownership requirement.

Has EIX adopted proxy access for director elections?

In 2015, the EIX Board adopted proxy access for director elections at annual meetings. The EIX Bylaws provide that the Company will include in its Proxy Statement up to two nominees (or nominees for up to 20% of the EIX Board, whichever is greater) submitted by a shareholder or group of up to 20 shareholders owning at least 3% of EIX common stock continuously for at least three years, if the shareholder group and nominee satisfy the requirements in Article II, Section 13 of the EIX Bylaws, which are available at www.edison.com/corpgov. The EIX Board made this decision after careful consideration of feedback received from our engagement with shareholders regarding proxy access.

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Does EIX have a policy on shareholder rights plans?

The EIX Board has a policy to seek prior shareholder approval of the adoption of any shareholder rights plan unless, due to time constraints or other reasons consistent with the EIX Board’s fiduciary duties, a committee consisting solely of independent directors determines that it would be in the best interests of EIX shareholders to adopt the plan prior to shareholder approval. Any rights plan adopted by the EIX Board without prior shareholder approval will automatically terminate one year after adoption of the plan unless the plan is approved by EIX shareholders prior to such termination.

Is SCE subject to the same corporate governance stock exchange rules as EIX?

EIX is subject to NYSE rules and SCE is subject to NYSE MKT LLC rules, which exempt SCE from designated corporate governance rules for Board and Board committee composition, including director independence, the director nominations process, and the process to determine executive compensation.

SCE is exempt from these rules because (i) it is a “controlled company” with over 50% of the voting power held by its parent company, EIX, and (ii) it has listed only preferred stock on the exchange. However, SCE closely follows the EIX corporate governance practices required under the NYSE rules.

How may I communicate with the Board?

Shareholders and other interested parties may communicate with the Board or individual directors by following the procedures on our website at www.edison.com/corpgov.

Where can I find the Company’s corporate governance documents?

The EIX Bylaws, Corporate Governance Guidelines, and Board committee charters, the Ethics and Compliance Code for Directors applicable to all directors of EIX and SCE, and the Employee Code of Conduct applicable to all EIX and SCE officers and employees, are on our website at www.edison.com/corpgov.

The SCE Bylaws, Corporate Governance Guidelines and Board committee charters are on our website at www.sce.com/corpgov.

Certain Relationships and Related Transactions

The Governance Committee reviews at least annually, and periodically as needed, any transaction in the prior calendar year or any proposed transaction between the EIX companies and a related person in which the amount involved exceeds $120,000 and the related person has a material interest. A related person is a director, a director nominee, an executive officer, or a greater than 5% beneficial owner of any class of voting securities of EIX or SCE, and their immediate family members. This policy is stated in writing in the Committee’s charter.

The Committee’s regular procedure is to obtain from management annually, and periodically as needed, a list of the transactions with related persons described above, and to review these transactions at a meeting held before recommending director nominations to the Board. The list is based on information from questionnaires completed by our directors, director nominees, and executive officers, together with information obtained from our accounts payable and receivable records, and is reviewed by legal counsel. The Committee’s procedure is evidenced in the minutes and records for the Committee meeting at which the review occurred.

Director Linda Stuntz is an equity partner at the law firm of Stuntz, Davis & Staffier, P.C. (“SD&S”), which paid the Company approximately $201,777 in 2016 to sublease office space in Washington, D.C. The Company’s sublease of office space to SD&S began before Ms. Stuntz joined the Board.

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Board Committees

The current membership and key responsibilities of our Audit, Compensation, Governance, and FOSO Committees are below. The duties and powers of each Committee are further described in its charter. The Board occasionally creates special Board committees to focus on certain topics.

    AUDIT COMMITTEE       
       
 


Committee Members:    

Peter J. Taylor, (Chair)
     - Financial Expert
Vanessa C.L. Chang
     - Financial Expert
Louis Hernandez, Jr.
     - Financial Expert
James T. Morris
Ellen O. Tauscher

Meetings in 2016: 6


Key Responsibilities:
Appoint, compensate and oversee the Company’s independent registered public accounting firm (the “Independent Auditor”), including:
- the qualifications, performance and independence of the Independent Auditor;
- the scope and plans for the annual audit; and
- the scope and extent of all audit and non-audit services to be performed by the Independent Auditor.
Review the Company’s financial statements and financial reporting processes, including internal controls over financing reporting.
Oversee the Company’s internal audit function, including the General Auditor’s performance, the internal audit plan, budget, resources and staffing.
Oversee the Company’s ethics and compliance program, including the Chief Ethics and Compliance Officer’s performance, helpline calls and investigations, and the employee code of conduct.
Discuss the Company’s policies and guidelines with respect to major financial and key enterprise risk exposures, risk assessment and management, and the steps taken to monitor and control these risks.
Establish and maintain procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters.
Review the Company’s political contribution policies and expenditures and approve contributions that exceed $1 million.
 
       

    COMPENSATION AND EXECUTIVE PERSONNEL COMMITTEE      
       
 


Committee Members:    

Brett White (Chair)
Vanessa C.L. Chang
James T. Morris
Richard T. Schlosberg, III
Peter J. Taylor

Meetings in 2016: 3


Key Responsibilities:
Review the performance and set the compensation of designated elected officers, including the executive officers.
Review director compensation for consideration and action by the Board.
Approve the design of executive compensation programs, plans and arrangements.
Approve stock ownership guidelines for officers and recommend director stock ownership guidelines to the Board.
Review and assess whether any risks arising from compensation policies and practices are reasonably likely to have a material adverse effect on the Company.
 
       

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    NOMINATING/CORPORATE GOVERNANCE COMMITTEE      
       
 


Committee Members:    

Richard T. Schlosberg, III
     (Chair)
Jagjeet S. Bindra
Linda G. Stuntz
William P. Sullivan
Brett White

Meetings in 2016: 6


Key Responsibilities:
Identify and recommend director candidates.
Periodically review Board size and composition.
Make recommendations to the Board regarding Board committee and committee chair assignments and the EIX independent Board Chair appointment.
Review related party transactions.
Periodically review and recommend updates to the Corporate Governance Guidelines and Board committee charters.
Advise the Board with respect to corporate governance matters.
Oversee the annual evaluation of the Board and Board committees.
Review the orientation program for new directors and continuing education activities for all directors.
 
       

    FINANCE, OPERATIONS AND SAFETY OVERSIGHT COMMITTEE      
       
 


Committee Members:    

Jagjeet S. Bindra (Chair)
Louis Hernandez, Jr.
Linda G. Stuntz
William P. Sullivan
Ellen O. Tauscher

Meetings in 2016: 4


Key Responsibilities:
Review and monitor capital spending and investments in subsidiaries compared to the annual budget approved by the Board, and receive post-completion reports from management on all major capital projects.
Monitor operational and service excellence performance metrics.
Monitor significant developments relating to safety, reliability and affordability, specifically including cybersecurity, business resiliency and emergency response, and the availability of appropriate resources to achieve objectives in these areas.
Annually review the sources and uses of funds and the trust investments of the Company.
Authorize financing, redemption and repurchase transactions.
 
       

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Director Compensation

The following table presents information regarding the compensation paid for 2016 to our non-employee directors. The compensation paid to any director who is also an employee of EIX or SCE is presented in the EIX and SCE Summary Compensation Tables and the related explanatory tables.

Director Compensation Table – Fiscal Year 2016

Name       Fees
Earned or
Paid in Cash
($)
      Stock
Awards(1)(2)
($)
      Option
Awards(3)
($)
      Non-Equity
Incentive Plan
Compensation
($)
      Change in
Pension Value and
Non-Qualified
Deferred
Compensation
Earnings(4)
($)
      All Other
Compensation(5)
($)
      Total
($)
(a) (b) (c) (d) (e) (f) (g) (h)
Jagjeet S. Bindra $125,125 $135,032 $10,000 $270,157
Vanessa C.L. Chang $124,000 $135,032 $24,331 $10,000 $293,363
Louis Hernandez, Jr. $55,000 $67,537 $250 $122,787
James T. Morris $82,500 $135,032 $718 $218,250
Richard T. Schlosberg, III $123,125 $135,032 $43,993 $10,000 $312,150
Linda G. Stuntz $110,000 $135,032 $2,152 $10,000 $257,184
William P. Sullivan $127,625 $150,666 $278,291
Ellen O. Tauscher $116,000 $135,032 $1,102 $252,133
Peter J. Taylor $131,000 $135,032 $10,000 $276,032
Brett White $144,375 $135,032 $22,606 $10,000 $312,013
(1) The amounts reported for stock awards reflect the aggregate grant date fair value of those awards computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to calculate the amounts reported, see Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of EIX’s 2016 Annual Report.
(2) Each non-employee director, other than Mr. Hernandez, was granted a total of 1,926 shares of EIX Common Stock or fully-vested deferred stock units on April 28, 2016, and each share or unit had a value of $70.11 on the grant date. Mr. Hernandez was granted 917 fully-vested deferred stock units on August 25, 2016 in connection with his initial election to the Board, and each unit had a value of $73.65 on the grant date. Mr. Sullivan was granted an additional 219 shares of EIX Common Stock on October 3, 2016 in connection with his appointment as Chair of the EIX Board, and each share had a value of $71.39 on the grant date. None of the non-employee directors had unvested deferred stock units as of December 31, 2016.
(3) We have not granted stock options to our non-employee directors since 2009. The number of outstanding EIX stock options from grants in prior years held by each non-employee director as of December 31, 2016 was as follows: Ms. Chang and Mr. White 7,500 each.The other non-employee directors do not have any EIX stock options outstanding.
(4) Amounts reported consist of interest on deferred compensation account balances considered under SEC rules to be at above-market rates.
(5) EIX has a matching gift program that provides assistance to qualified public and private schools by matching dollar-for-dollar gifts of at least $25 up to a prescribed maximum amount per calendar year for the Company’s employees and EIX and SCE directors. The amounts in this column reflect matching gifts made by EIX pursuant to this program in 2016. EIX matches aggregate director contributions of up to $10,000 per calendar year to qualified schools. Under the Director Matching Gift Program, matching amounts for non-cash gifts are determined based on the value of the gift on the date given by the director. For purposes of determining the date on which a gift of publicly-traded stock is given, the date is based on the date stock ownership transfers to the qualified school.

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Annual Retainer and Meeting Fees

Compensation for non-employee directors during 2016 included an annual retainer, fees for attending certain meetings, and an annual equity award. Directors were offered the opportunity to receive all of their compensation on a deferred basis under the EIX Director Deferred Compensation Plan. The following table sets forth the cash retainers and meeting fees paid to directors in 2016:

Type of Fee        Jan. to
Sept. 2016
       Oct. to
Dec. 2016
Board Retainer Per Quarter $27,500 $27,500
Additional Board Retainer Per Quarter to:
     ●     Audit Committee Chair   $5,000 $5,000
     ●     Compensation Committee Chair $3,750   $4,375
     ●     Other Committee Chairs $3,125 $3,750
     ●     Lead Director $6,250 N/A
     ●     Chair of the EIX Board N/A $15,625
Fee Per Meeting:(1)
     ●     Shareholder/Board/Committee N/A N/A
     ●     Other Business Meeting $2,000 $2,000
(1) Directors are not paid meeting fees for attending shareholder, Board or Board committee meetings. They are paid a $2,000 fee for attending any other business meeting on behalf of the Company as a director, for example, cybersecurity oversight group meetings (see page 10). No director received more than $6,000 in meeting fees in 2016. Directors only receive one meeting fee for any concurrent meetings attended by the director.

All directors are also reimbursed for out-of-pocket expenses for serving as directors and are eligible to participate in the Director Matching Gift Program described in footnote (5) to the Director Compensation Table above.

Annual Equity Awards

Upon initial election or re-election to the Board, non-employee directors are granted an annual equity award of EIX Common Stock or deferred stock units (as explained below) with an aggregate grant date value of $135,000. Upon initial appointment or re-appointment of a non-employee director as Chair of the EIX Board, the director is granted an additional annual equity award of EIX Common Stock or deferred stock units with an aggregate grant date value of $62,500. If the grant date of an award for an initial election to the Board or initial appointment as Chair of the EIX Board occurs after the date of EIX’s Annual Meeting for that year, then the grant date value of the award is prorated by multiplying it by the following percentage: 75% if the grant date is in the second quarter of the year; 50% if the grant date is in the third quarter of the year; 25% if the grant date is in the fourth quarter of the year.

The number of shares or units granted is determined by dividing the grant date value of the equity award ($135,000, $62,500, or a prorated portion thereof, as described above) by the closing price of EIX Common Stock on the grant date and rounding up to the next whole share. Each award is fully vested when granted.

The annual equity award for an initial election to the Board is made in the form of deferred stock units. For re-election awards and the additional equity award for appointment or re-appointment as Chair of the EIX Board, directors have the opportunity to elect in advance to receive such awards entirely in EIX Common Stock, entirely in deferred stock units, or in any combination of the two. A deferred stock unit is a contractual right to receive one share of EIX Common Stock. Deferred stock units are credited to the director’s account under the EIX Director Deferred Compensation Plan described below. Deferred stock units cannot be voted or sold. They accrue dividend equivalents on the ex-dividend date, if and when dividends are declared on EIX Common Stock. The accrued dividend equivalents are converted to additional deferred stock units.

Each director’s equity award in 2016 was granted under the EIX 2007 Performance Incentive Plan. Directors serving on both Company Boards receive only one award per year for election to the Boards. In April 2016, EIX shareholders approved amendments to the EIX 2007 Performance Incentive Plan, including a limit of $500,000 per calendar year on the grant date fair value of awards to each non-employee director. In 2016, each non-employee director received equity awards totaling less than $200,000 in grant date fair value.

EIX Director Deferred Compensation Plan

The EIX Director Deferred Compensation Plan is separated into two plan documents. The grandfathered plan document applies to deferrals earned prior to January 1, 2005, while the 2008 plan document applies to deferrals earned on or after January 1, 2005.

Non-employee directors are eligible to defer up to 100% of their retainers and meeting fees. Any portion of a director’s annual equity award that he or she elects to receive as deferred stock units is automatically deferred. Amounts deferred (other than deferred stock units) accrue interest until paid to the director at a rate equal to the average monthly Moody’s Corporate Bond Yield for Baa Public Utility Bonds over a 60-month period ending September 1 of the prior year.

Payment of Grandfathered Plan Benefits
Amounts deferred under the grandfathered plan document (other than deferred stock units) may be deferred until a specified date, retirement, death or discontinuance of service as a director. At the director’s election, any such compensation deferred until retirement or death may be paid as a lump sum, in monthly installments over 60, 120, or 180 months, or in a combination of a partial lump sum and installments. Any such deferred compensation is paid as a single lump sum or in three annual installments upon any other discontinuance of service as a director. Directors may elect at the time of deferral to receive payment on a fixed date. Deferred amounts may also be paid in connection with a change in control of EIX or SCE in certain circumstances.

Deferred stock units may be deferred until retirement, death or discontinuance of service as a director, and when payable will be distributed in EIX Common Stock. Payment will be made in a lump sum upon the director’s retirement, unless a request to receive distribution in annual installments over 5, 10, or 15 years was previously approved. Discontinuance of service as a director prior to retirement will result in a lump sum payout of deferred stock units. Upon the director’s death, any remaining deferred stock unit balance will be paid to the director’s beneficiary in a lump sum.

Deferred stock units may also be paid in connection with a change in control of EIX or SCE in certain circumstances.

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Payment of 2008 Plan Benefits
Any amounts deferred under the 2008 plan document (including deferred stock units) may be deferred until a specified date no later than the date the director turns age 75, retirement, death, disability or other separation from service. Directors have sub-accounts for each annual deferral for which the following forms of payment may be elected:

Single lump-sum;
Two to fifteen annual installments;
Monthly installments for 60 to 180 months; or

Any combination of the above.

Payments triggered by retirement, death, disability or other separation from service may begin upon the applicable triggering event or a specified number of months and/or years following the applicable triggering event. However, payments may not begin later than the director’s 75th birthday unless the director is still on the Board. Payments are subject to certain administrative earliest payment date rules, and may be delayed or accelerated under the 2008 plan document if permitted or required under Section 409A of the Internal Revenue Code.

If a director who was eligible to participate in the plan by December 31, 2008 dies within ten years of his or her initial eligibility to participate in the plan, the director’s remaining deferred compensation account balance will be doubled and paid to his or her beneficiary. However, deferred stock units and any amounts attributable to dividend equivalents previously associated with stock options will not be doubled. All amounts payable are treated as obligations of EIX.

Determination of Director Compensation

The Board makes all decisions regarding director compensation. These decisions are normally made after receiving recommendations from the Compensation Committee. The Compensation Committee makes its recommendations after receiving input from its independent compensation consultant and management. The Compensation Committee retained Pay Governance LLC (“Pay Governance”) to evaluate and make recommendations regarding director compensation for 2016. Pay Governance’s assistance included helping the Compensation Committee identify industry trends and norms for director compensation, reviewing and identifying peer group companies, and evaluating director compensation data for these companies. The changes made to director compensation in 2016, including the additional cash retainer and equity award for the Chair of the EIX Board, were based on analysis and recommendations provided by Pay Governance. Management’s input focuses on legal, compliance, and administrative issues.

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Our Stock Ownership

Directors, Director Nominees and Executive Officers

The following table shows the number of shares of EIX Common Stock beneficially owned as of March 3, 2017, except as otherwise indicated, by each of our directors, director nominees, officers and former officers named in the EIX and SCE Summary Compensation Tables (“NEOs”), and our current directors and executive officers as a group. None of the persons in the table beneficially owns any other equity securities of the Company or its subsidiaries. The table includes shares that the individual has a right to acquire through May 3, 2017.

Name of Beneficial Owner Category       Deferred Stock
Units(1)
      Stock
Options
      Common Stock
Shares(2)
      Total Shares
Beneficially
Owned(3)
      Percent of
Class(4)
Jagjeet S. Bindra       Director 3,581 8,357 11,938 *
Vanessa C.L. Chang Director/Nominee 5,410 7,500 113 13,023 *
Louis Hernandez, Jr. Director/Nominee 930 930 *
James T. Morris Director/Nominee 393 393 *
Kevin M. Payne SCE Director/Nominee 42,918 6,649 49,567 *
EIX/SCE NEO
Pedro J. Pizarro Director/Nominee 134,411 38,734 173,145 *
EIX/SCE NEO
Richard T. Schlosberg, III Director 39,944 5,000 44,944 *
Linda G. Stuntz Director/Nominee 632 1,000 1,632 *
William P. Sullivan Director/Nominee 4,214 4,214 *
Ellen O. Tauscher Director/Nominee 4,581 217 4,798 *
Peter J. Taylor Director/Nominee 1,965 1,965 *
Brett White Director/Nominee 27,034 7,500 34,534 *
Ronald L. Litzinger EIX NEO 624,920 67,190 690,210 *
Adam S. Umanoff EIX NEO 60,790 994 61,784 *
Maria Rigatti EIX/SCE NEO 30,567 14,868 45,435 *
William M. Petmecky, III SCE NEO 8,029 1,781 9,810 *
Ronald O. Nichols SCE NEO 21,048 3,371 24,419 *
Russell C. Swartz SCE NEO 182,236 24,538 206,774 *
Peter T. Dietrich(5) SCE NEO 68,594 16,171 84,765 *
Theodore F. Craver, Jr.(6) EIX NEO 2,448,181 287,168 2,735,349 *
W. James Scilacci(7) EIX NEO 391,306 46,301 437,607 *
EIX Directors and Executive Officers 82,505 1,075,396 169,259 1,327,160 *
as a Group (20 individuals)
SCE Directors and Executive Officers 82,505 505,886 113,671 702,062 *
as a Group (17 individuals)
(1) The reported number consists only of deferred stock units that could be settled in shares of EIX Common Stock within 60 days at the director’s discretion (for example, by retirement). However, all deferred stock units held by a director count toward the stock ownership requirement for directors. In addition to the deferred stock units reported in this table, Messrs. Taylor and Morris hold 12,403 and 1,573 fully-vested deferred stock units, and Mses. Chang, Stuntz and Tauscher hold 21,638, 5,690, and 1,091 fully-vested deferred stock units, respectively. These additional deferred stock units will also be settled in shares of EIX Common Stock, but in accordance with SEC rules are not included in the table because they cannot be settled in shares of EIX Common Stock within 60 days at the director’s discretion.
(2) Except as follows, each individual has sole voting and investment power:
Shared voting and sole investment power: Mr. Payne 2,184; Ms. Rigatti 5,553; Mr. Umanoff 994; Mr. Nichols 1,779; all EIX directors and executive officers as a group 16,022; and all SCE directors and executive officers as a group 9,579.
Shared voting and shared investment power: Mr. Bindra 8,357; Ms. Chang 113; Mr. Litzinger 61,389; Mr. Nichols 295; all EIX directors and executive officers as a group 71,660; and all SCE directors and executive officers as a group 8,765.
(3) Includes shares listed in the three columns to the left.
(4) Each individual beneficially owns less than 1% of the shares of EIX Common Stock.
(5) Mr. Dietrich retired as SCE Senior Vice President effective January 20, 2017. His EIX Common Stock shares are reported as of January 20, 2017.
(6) Mr. Craver retired as EIX Chairman and CEO effective September 30, 2016. His EIX Common Stock shares are reported as of December 28, 2017.
(7) Mr. Scilacci retired as EIX Executive Vice President and Chief Financial Officer effective September 30, 2016. His EIX Common Stock shares are reported as of December 21, 2016.

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ITEM 1: ELECTION OF DIRECTORS

Other Shareholders

The following are the only shareholders known to beneficially own more than 5% of any class of EIX or SCE voting securities as of December 31, 2016, except as otherwise indicated:

Title of Class of Stock         Name and Address of
Beneficial Owner
        Amount and Nature of
Beneficial Ownership
        Percent
of Class
EIX Common Stock The Vanguard Group 25,636,237(1) 7.9%
100 Vanguard Blvd.
Malvern, PA 19355
EIX Common Stock State Street Corporation 25,631,157(2) 7.9%
One Lincoln Street
Boston, MA 02111
EIX Common Stock BlackRock Inc. 23,356,460(3) 7.2%
55 East 52nd Street
New York, NY 10055
EIX Common Stock JPMorgan Chase & Co. 16,898,630(4) 5.1%
270 Park Ave.  
  New York, NY 10017
SCE Common Stock Edison International 434,888,104(5) 100%
2244 Walnut Grove Avenue
Rosemead, CA 91770
(1) This information is based on a Schedule 13G filed with the SEC on February 9, 2017. The Vanguard Group reports it has sole voting power over 549,552 shares, shared voting power over 64,792 shares, sole investment power over 25,063,409 shares, and shared investment power over 572,828 shares.
(2) This information is based on a Schedule 13G filed with the SEC on February 14, 2017. Acting in various fiduciary capacities, State Street reports it has shared voting and investment power over all shares. This includes 8,900,259 shares, or 2.7% of the class, held by State Street as the 401(k) Plan Trustee. 401(k) Plan shares are voted in accordance with instructions given by participants, whether vested or not. 401(k) Plan shares for which instructions are not received will be voted by the 401(k) Plan trustee in the same proportion to the 401(k) Plan shares voted by other 401(k) Plan Shareholders, unless contrary to ERISA.
(3) This information is based on a Schedule 13G filed with the SEC on January 24, 2017. BlackRock Inc. reports it has sole voting power over 20,271,273 shares and sole investment power over all shares.
(4) This information is based on a Schedule 13G filed with the SEC on January 19, 2017. JPMorgan Chase reports it has sole voting power over 15,311,419 shares, shared voting power over 105,858 shares, sole investment power over 16,683,688 shares, and shared investment power over 214,284 shares.
(5) EIX became the holder of all issued and outstanding shares of SCE Common Stock on July 1, 1988, when it became the holding company of SCE. EIX continues to have sole voting and investment power over these shares.

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ITEM 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the Independent Auditor retained to audit the Company’s financial statements. The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) as the Company’s Independent Auditor for calendar year 2017. The Company is asking shareholders to ratify this appointment.

PwC is an international accounting firm which provides leadership in public utility accounting matters. Representatives of PwC are expected to attend the Annual Meeting to respond to appropriate questions and to make a statement if they wish.

PwC has been retained as the Company’s Independent Auditor continuously since 2002. The Audit Committee has adopted restrictions on hiring certain persons formerly associated with PwC into an accounting or financial reporting oversight role to help ensure PwC’s continuing independence.

The Audit Committee meets annually in executive session without PwC present to evaluate the quality of PwC’s audit services and their performance, including PwC’s industry knowledge from an accounting and tax perspective, PwC’s continued independence and professional skepticism, the Committee’s discussions with management about PwC’s performance, and information available from Public Company Accounting Oversight Board (“PCAOB”) inspection reports.

The Audit Committee annually considers whether the Independent Auditor firm should be reappointed for another year. The lead engagement partner is required to rotate off the Company’s audit every five years. The Audit Committee is involved in the selection of the lead engagement partner. In 2015, in connection with the mandated rotation of PwC’s lead engagement partner effective beginning with PwC’s audit of the Company’s 2016 financial statements, the Company interviewed candidates who met professional, industry and personal criteria, and selected finalists. The Audit Committee Chair participated in interviews with the finalists and selected the lead engagement partner, in consultation with the Audit Committee.

The Audit Committee considered several factors when determining whether to reappoint PwC as the Company’s Independent Auditor, including:

The length of time PwC has been engaged;

PwC’s knowledge of the Company and its personnel, processes, accounting systems and risk profile;

The quality of the Audit Committee’s ongoing discussions with PwC, their independence and professional skepticism; and

An assessment of the professional qualifications, utility industry experience and past performance of PwC, its lead engagement partner, and other members of the core engagement team.

The Audit Committee and the Board believe that the continued retention of PwC to serve as the Company’s Independent Auditor is in the best interests of the Company and its investors.

The Company is not required to submit this appointment to a shareholder vote. Ratification would be advisory only. However, if the shareholders of either EIX or SCE do not ratify the appointment, the Audit Committee will investigate the reasons for rejection by the shareholders and will reconsider the appointment.

The Board recommends you vote “FOR” Item 2.

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ITEM 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Independent Auditor Fees

The following table sets forth the aggregate fees billed by PwC to EIX (consolidated total including EIX and its subsidiaries) and SCE, respectively, for the fiscal years ended December 31, 2016 and December 31, 2015:

EIX and Subsidiaries ($000) SCE ($000)
Type of Fee        2016        2015        2016        2015
Audit Fees(1) $6,511 $6,326 $5,632 $5,488
Audit-Related Fees(2) 60 240 60 240
Tax Fees(3) 693 1,402 389 713
All Other Fees(4) 96 1,248 96 1,248
TOTAL $7,360 $9,216 $6,177 $7,689
(1) These represent fees for professional services provided in connection with the audit of the Company’s annual financial statements and internal controls over financial reporting, and reviews of the Company’s quarterly financial statements.
(2) These represent fees for assurance and related services related to the performance of the audit or review of the financial statements and not reported under “Audit Fees” above.
(3) These represent fees for tax-related compliance and other tax-related services to support compliance with federal and state tax reporting and payment requirements, including tax return review and review of tax laws, regulations or cases.
(4) These represent fees for consulting services related to San Onofre Nuclear Generating Station decommissioning and other miscellaneous services.

The Audit Committee annually approves all proposed audit fees in executive session without PwC present, considering several factors, including a breakdown of the services to be provided, proposed staffing and hourly rates, and changes in the Company and industry from the prior year. The audit fees are the culmination of a process which included a comparison of the prior year’s proposed fees to actual fees incurred and fee proposals for known and anticipated 2016 services in the audit, audit-related, tax and other categories. The Audit Committee’s deliberations consider balancing the design of an audit scope that will achieve a high quality audit with driving efficiencies from both the Company and PwC while compensating PwC fairly.

The Audit Committee is required to pre-approve all audit and permitted non-audit services performed by PwC to ensure these services will not impair the firm’s independence.

The Audit Committee has delegated to the Committee Chair the authority to pre-approve services between Committee meetings, provided that any pre-approval decisions are presented to the Committee at its next meeting. PwC must assure that all audit and non-audit services provided to the Company have been approved by the Audit Committee.

During the fiscal year ended December 31, 2016, all services performed by PwC were pre-approved by the Audit Committee, irrespective of whether the services required pre-approval under the Exchange Act.

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ITEM 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audit Committee Report

The Audit Committee is composed of five independent directors and operates under a charter adopted by the Board, which is posted on our website at www.edison.com/corpgov. The Audit Committee complied with the requirements of its charter in 2016.

The Board has determined that each Audit Committee member is independent and financially literate, and that at least one member has accounting or other related financial management expertise, as such qualifications are defined by NYSE rules, our Corporate Governance Guidelines, and/or the Committee charter. The Board has also determined that directors Chang, Hernandez and Taylor each qualify as an “audit committee financial expert” as defined by SEC rules.

The Audit Committee’s key responsibilities are described above under “Board Committees – Audit Committee.” The Audit Committee’s role in risk oversight is described above under “Our Corporate Governance – What is the Board’s role in risk oversight?”

Audit Committee meeting agendas are developed based on input from each Committee member, the Independent Auditor, the General Auditor, and management. In 2016, the Committee requested and received presentations on significant risk issues and a variety of topics, such as:

Power procurement accounting;
New accounting standards related to revenue recognition and lease accounting;
The Company’s privacy compliance program; and
Records management.

Management is responsible for the Company’s internal controls and the financial reporting process, including the integrity and objectivity of the financial statements. The Independent Auditor performs an independent audit of the Company’s financial statements under the standards of the PCAOB and issues a report on the financial statements. The Audit Committee monitors and oversees these processes. The Committee members are not accountants or auditors by profession and therefore have relied on certain representations from management and the Independent Auditor in carrying out their responsibilities.

In discharging our oversight responsibilities in connection with the December 31, 2016 financial statements, the Audit Committee:

Reviewed and discussed the audited financial statements with the Company’s management and the Independent Auditor;
Discussed various matters with the Independent Auditor, including matters required by the PCAOB’s standard “Communications with Audit Committees;” and
Received the written disclosures and PwC’s letter confirming its independence from the Company, and discussed such independence with PwC.

Based upon these reviews and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s 2016 Annual Report to be filed with the SEC.

Peter J. Taylor, Chair
Vanessa C.L. Chang
Louis Hernandez, Jr.
James T. Morris
Ellen O. Tauscher

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ITEM 3: ADVISORY VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION

The advisory vote to approve the Company’s executive compensation, commonly known as “Say-on-Pay,” gives shareholders the opportunity to endorse or not endorse our executive compensation. This advisory vote is required by SEC rules to be provided at least once every three years. However, in 2011, our shareholders voted in favor of holding the advisory vote every year, and the Board determined that it would be held annually. The Company’s Say-on-Pay proposal received support from at least 91% of the votes cast in each of the last six years.

Our executive compensation program is described under “Compensation Discussion and Analysis” below. We encourage you to read it carefully. Our executive compensation program is reviewed and approved by the Compensation Committee. The Board believes our executive compensation structure is competitive, aligns compensation with shareholder value and serves shareholders well.

EIX and SCE request shareholder approval of the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement under the SEC’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables.

The Company values constructive dialogue with shareholders on compensation and other important governance matters. Because your vote is advisory, it will not be binding on the Board or the Company and will not be construed as overruling a decision by the Board or the Company. However, the Compensation Committee will consider the outcome of the vote and any constructive feedback from shareholders when making future executive compensation decisions. See “Compensation Summary – Shareholder Communication and Compensation Program for 2017.”

It is expected that the next Say-on-Pay vote will occur at the 2018 Annual Meeting.

The Board recommends you vote “FOR” Item 3.

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ITEM 4: ADVISORY VOTE ON THE FREQUENCY OF SAY-ON-PAY VOTES

Item 3 above provides our shareholders the opportunity to cast an advisory Say-on-Pay vote to endorse or not endorse the compensation of our named executive officers. In 2011, our shareholders voted in favor of holding the Say-on-Pay vote every year, and the Board determined that it would be held annually. The Board continues to believe that Say-on-Pay votes should be conducted every year so that shareholders may annually express their views on the Company’s executive compensation program.

SEC rules require that at least every six years the Company provide our shareholders the opportunity to cast an advisory vote on how often we should include a Say-on-Pay proposal in our proxy materials for future shareholder meetings at which directors will be elected and for which we must include executive compensation information in the proxy statement for that meeting. Under this Item 4, shareholders are given the choice in the proxy card to vote to have the Say-on-Pay vote every year, every two years or every three years, or abstain from voting. Therefore, shareholders will not be voting to approve or disapprove the Board’s specific recommendation.

Like the Say-on-Pay vote, your vote on this Item 4 is advisory and will not be binding upon the Board or the Company. However, the Board and its Compensation Committee value the opinions expressed by shareholders and will take into account the outcome of the vote when considering the frequency of future Say-on-Pay votes.

The Board recommends you vote to hold the Say-on-Pay vote every year.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) describes the principles of our executive compensation program, how we applied those principles in compensating our named executive officers (“NEOs”) for 2016, and how we use our compensation program to drive performance. We also discuss the roles and responsibilities of our Compensation Committee (the “Committee”) in determining executive compensation. The CD&A is organized as follows:

Compensation Summary
What We Pay and Why: Elements of Total Direct Compensation
How We Make Compensation Decisions
Post-Employment and Other Benefits
Other Compensation Policies and Guidelines

The CD&A contains information relevant to your decision regarding the advisory vote to approve our executive compensation (Item 3 on your Proxy Card). When voting on Item 3, EIX shareholders will vote on EIX executive compensation, while SCE shareholders will vote on SCE executive compensation.

Compensation Summary

Certain key information about our executive compensation program is highlighted in this Compensation Summary.

Executive Compensation Practices

Our executive compensation program is designed with the objective of strongly linking pay with performance. The table below highlights our current compensation practices for NEOs, including practices we believe drive performance and are aligned with good governance principles, and practices we have not implemented because we do not believe they would serve our shareholders’ long-term interests.

What We Do        What We Don’t Do
We tie pay to performance by making the majority of compensation “at risk” and linking it to shareholders’ interests
We do not have any employment contracts
We target a competitive range around the market median for base salary and annual and long-term incentives
We do not provide excise tax gross-ups on change in control payments
We compare executive compensation to a peer group defined by a recognized market index
We do not have individually negotiated change in control agreements
We balance multiple metrics for annual and long-term incentives
We do not provide perquisites
We have double-trigger change in control provisions for equity award vesting
We do not provide personal use of any corporate aircraft
We seek shareholder feedback on our executive compensation program and share the feedback with the Board and the Committee
We do not reprice or allow the cash buyout of stock options with exercise prices below the current market value of EIX Common Stock
We have stock ownership guidelines, which include holding requirements, and an incentive compensation clawback policy
We do not permit pledging of Company securities by directors or EIX executive officers
Our Committee’s compensation consultant is independent and does not provide any other services to the Company
We do not permit hedging of Company securities by directors or employees

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COMPENSATION DISCUSSION AND ANALYSIS

Leadership Transition

The 2016 compensation of NEOs reported in the tables below reflects compensation changes resulting from our leadership transition during 2016. As discussed above, effective September 30, 2016, Theodore F. Craver, Jr. retired from his position as EIX’s Chairman and CEO, and Pedro J. Pizarro succeeded him as EIX CEO. Effective June 1, 2016, Mr. Pizarro became EIX President, Kevin M. Payne became SCE CEO and Ronald O. Nichols became SCE President.

In addition, effective September 30, 2016, W. James Scilacci retired from his position as EIX Executive Vice President (“EVP”) and Chief Financial Officer (“CFO”), and Maria Rigatti succeeded him. William M. Petmecky, III was promoted effective September 30, 2016 to replace Ms. Rigatti as SCE’s Senior Vice President (“SVP”) and CFO.

The Committee generally targets a competitive range of +/-15% around the market median for base salary and annual and long-term incentives for each NEO position. However, the Committee set compensation for most of the newly promoted NEOs below this range for their new positions, with the opportunity for increases after evaluating their performance in their new positions. More information is under “What We Pay and Why: Elements of Total Direct Compensation” and “How We Make Compensation Decisions: Use of Competitive Data.”

The two charts below in this "Compensation Summary" compare EIX CEO pay to EIX’s performance and to peer group median pay for a five-year period. Since Mr. Craver served as EIX CEO during all but the last three months of this period, his compensation is used for these purposes.

EIX NEOs for 2016

EIX NEOs are identified below. EIX shareholders will vote on EIX executive compensation.

EIX NEOs        Title
Pedro J. Pizarro   EIX CEO effective 9/30/16; EIX President effective 6/1/16; SCE President through 5/31/16
Theodore F. Craver, Jr.   EIX Chairman of the Board and CEO through 9/30/16; also EIX President through 5/31/16
Maria Rigatti   EIX EVP and CFO effective 9/30/16; SCE SVP and CFO through 9/30/16
W. James Scilacci EIX EVP and CFO through 9/30/16
Adam S. Umanoff   EIX EVP and General Counsel
Kevin M. Payne SCE CEO effective 6/1/16; SCE SVP through 5/31/16
Ronald L. Litzinger   Edison Energy Group (“EEG”) President; also EIX EVP through 3/28/16

SCE NEOs for 2016

SCE NEOs are identified below. SCE shareholders will vote on SCE executive compensation.

SCE NEOs        Title
Kevin M. Payne   CEO effective 6/1/16; SVP through 5/31/16
Pedro J. Pizarro President through 5/31/16
William M. Petmecky, III SVP and CFO effective 9/30/16; Vice President and Treasurer through 9/30/16
Maria Rigatti SVP and CFO through 9/30/16
Ronald O. Nichols President effective 6/1/16; SVP through 5/31/16
Russell C. Swartz SVP and General Counsel
Peter T. Dietrich SVP through 1/20/17

Executive Benefit Changes

In the last two years, the Committee has approved changes to various executive benefits after a thorough review of our compensation and benefits program. The key changes are below. More information is under “Potential Payments Upon Termination or Change in Control – Executive Survivor Benefit Plan,” “Other Compensation Policies and Guidelines – Stock Ownership Guidelines,” “Non-Qualified Deferred Compensation – Executive Deferred Compensation Plan” and “Pension Benefits – Executive Retirement Plan.”

Benefit        Change        Effective Date Key Objectives of Changes
Executive Survivor
Benefit Plan
Terminated December 31, 2016
Decrease portion of compensation and benefits package not directly tied to performance
Simplify benefits for new executives
Continue strong compliance with Stock Ownership Guidelines for Officers
Long-Term Incentive
Awards
  Added holding requirements for officers subject to Stock Ownership Guidelines February 22, 2017
Executive Deferred
Compensation Plan
Eliminated matching
contributions
  January 1, 2018
Executive
Retirement Plan
Reduced plan benefit January 1, 2018

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COMPENSATION DISCUSSION AND ANALYSIS

Elements and Objectives of Total Direct Compensation

Element       Form       Key Objective       % of EIX CEO Target Total
Direct Compensation*
Base Salary   Fixed Pay: Cash Establish a pay foundation to attract and retain qualified executives 14%
Annual Incentive
Awards
  Variable Pay: Cash   Focus executives’ attention on specific financial, strategic and operating objectives of the Company that we believe will increase shareholder value and benefit customers   15%
Long-Term
Incentive Awards
Variable Pay: Equity Align executive pay with long-term value provided to shareholders 71%
50% stock options
Link compensation to stock price increase
25% performance shares
Reward relative shareholder return compared to peers and earnings per share compared to pre-established targets
25% restricted stock units
Encourage retention, with value tied to absolute shareholder return
* In this CD&A, the term “target total direct compensation” means the sum of the NEO’s salary, target annual incentive award, and grant date fair value of long-term incentive awards for the particular year. The 2016 target total direct compensation of Messrs. Craver and Pizarro was averaged to calculate the disclosed “% of EIX CEO Target Total Direct Compensation.”

Alignment of EIX CEO Pay with Performance

During the five-year period from 2012 to 2016, EIX’s TSR1 was approximately 100%. Mr. Craver’s total direct compensation changed by less than 10% during the period. “Total direct compensation” or “TDC” means the sum of base salary, the actual annual incentive award paid for the year and the grant date fair value of long-term incentive awards (columns (c), (e), (f) and (g) of the Summary Compensation Table) for the NEO for the year.

The following chart shows the alignment over the past five years between Mr. Craver’s total direct compensation and our indexed TSR, which represents the value of an initial investment of $100 in EIX common stock at the beginning of the five-year period, and assumes that dividends are reinvested on the ex-dividend date. For purposes of comparison, the 2016 CEO TDC in the chart represents Mr. Craver’s pro forma total direct compensation for the full 2016 year, assuming he continued receiving the same salary rate and annual incentive award as a percent of salary for the remainder of the year.

EIX CEO Total Direct Compensation (TDC)
vs. Indexed TSR 2012-2016

(1) In this Proxy Statement, for all purposes other than performance share payouts, TSR is calculated using the difference between (i) the closing stock price for the relevant stock on the last NYSE trading day preceding the first day of the relevant period and (ii) the closing stock price for the relevant stock on the last trading day of the relevant period, and assumes all dividends during the period are reinvested on the ex-dividend date. Under this methodology, EIX’s 2014-2016 TSR was at the 90th percentile of the Philadelphia Utility Index. A different methodology is used to determine performance share payouts: TSR is calculated using the difference between (i) the average closing stock price for the stock for the 20 trading days ending with the last NYSE trading day preceding the first day of the performance period and (ii) the average closing stock price for the stock for the 20 trading days ending with the last trading day of the performance period, and assumes all dividends are reinvested on the ex-dividend date (see “Long-Term Incentive Awards” below). Under this methodology, EIX’s TSR for the 2014-2016 performance period was also at the 90th percentile of the Philadelphia Utility Index.

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COMPENSATION DISCUSSION AND ANALYSIS

Comparison of EIX CEO Pay with Peer Group

The following chart shows Mr. Craver’s total direct compensation for the last five years as reported in the EIX Summary Compensation Table, compared to the median TDC for the chief executive officers of the companies that comprise the Philadelphia Utility Index peer group. The 2016 CEO TDC in the chart represents Mr. Craver’s pro forma total direct compensation for the full 2016 year. (The 2016 Peer Median TDC in the chart is the same as the 2015 Peer Median TDC, since peer group data for 2016 was generally unavailable in time to include in this Proxy Statement.)

Mr. Craver’s total direct compensation was somewhat above the peer group median from 2012 through 2014, due primarily to chief executive officer turnover at peer companies and annual incentive awards for Mr. Craver that were significantly above-target, largely as a result of above-target core earnings.2 Mr. Craver’s 2015 and pro forma 2016 total direct compensation was slightly below the peer group median, largely due to the annual incentive awards at peer companies.

Mr. Pizarro’s total direct compensation in 2016 was significantly below the peer group median for chief executive officers. His compensation before the September 30 effective date of his election as EIX CEO was targeted at the market median for his prior positions (SCE President through May 31 and EIX President from June 1 through September 29). In addition, his annualized compensation after the effective date of his election as EIX CEO was below the peer group median for chief executive officers. For purposes of comparison, the following chart shows Mr. Pizarro’s pro forma total direct compensation for 2016, based on the annualized compensation the Committee approved in connection with the September 30, 2016 effective date of his election as EIX CEO.

EIX CEO vs. Peer Group Median TDC

Shareholder Communication and Compensation Program for 2017

We seek and value input from our shareholders. In 2016, we engaged with our major institutional shareholders to discuss the Company’s corporate governance, executive compensation, and business strategy. Management shared the feedback received from these discussions with the Board and relevant Board committees.

EIX’s Say-on-Pay proposal received support from approximately 96% of the votes cast in 2016. The Committee reviewed the results of the shareholder vote, including feedback from major shareholders. Taking the vote results and shareholder feedback into account, and considering trends in executive compensation and the best interests of shareholders, the Committee approved maintaining our executive compensation program with the following changes for 2017: the previously-approved termination of the Executive Survivor Benefit Plan went into effect; and the Company’s stock ownership guidelines were amended February 22, 2017 to implement holding restrictions for EIX common stock acquired pursuant to long-term incentive awards. More information is under “Potential Payments Upon Termination or Change in Control – Executive Survivor Benefit Plan” and “Other Compensation Policies and Guidelines – Stock Ownership Guidelines.”

What We Pay and Why: Elements of Total Direct Compensation

We generally target a competitive range of +/-15% around the market median for each element of total direct compensation offered under our program: base salaries, annual cash incentives, and long-term equity-based incentives. The reasons for the Committee’s decision to target the competitive range around the median level include:

The policy of the applicable regulatory authorities that SCE should provide market level compensation, and the desire for internal compensation equity between EIX and SCE;
Above-median compensation usually is not needed, except occasionally for recruitment and retention purposes and to reward exceptional performers; and

(2) Core earnings is defined on a consolidated basis for EIX as earnings attributable to EIX shareholders less non-core items. Non-core items include income or loss from discontinued operations, income resulting from allocation of losses to tax equity investor under the HLBV accounting method and income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as: exit activities, including sale of certain assets and other activities that are no longer continuing, write downs, asset impairments and other gains or losses related to certain tax, regulatory or legal settlements or proceedings. For a reconciliation of core earnings to net income determined under GAAP, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Management Overview – Highlights of Operating Results” included as part of the Company’s 2016 Annual Report.

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COMPENSATION DISCUSSION AND ANALYSIS

Below-median compensation would create retention and recruitment difficulties.

A significant portion of our executives’ total direct compensation is tied to company performance. The following charts show that incentive compensation comprised approximately 86% of EIX CEO 2016 target total direct compensation and approximately 70% of EIX’s and SCE’s other NEOs’ 2016 target total direct compensation.

EIX CEO Pay Mix


Other NEO Pay Mix


This pay mix provides an opportunity for NEO compensation to reflect the upside and downside potential of company performance and helps to focus NEOs’ attention on our financial, strategic and operating objectives, and shareholder returns.

Base Salary

For 2016, each NEO’s base salary was evaluated according to his or her position and performance. For each position, a market base salary range was determined. The median of the range was the market median level of base salaries for comparable positions. We do not have employment contracts and our NEOs do not have contractual rights to receive fixed base salaries.

In connection with the leadership transition during 2016, the Committee increased the annual base salary rates of Messrs. Pizarro, Payne, Petmecky, and Nichols and Ms. Rigatti. After their respective final promotions for 2016, these NEOs’ annual base salary rates were approximately 10-40% below the market median for their respective new positions. Each NEO has an opportunity for an increase in his or her annual base salary rate in 2017 after the NEO’s performance in the new position is evaluated.

In addition, in early 2016, the Committee increased the base salary rates of Messrs. Scilacci and Umanoff and set them within 1% of the market median for their respective positions.

Annual Incentive Awards

Executive Incentive Compensation Plan
NEOs are eligible for annual incentive awards under the EIX Executive Incentive Compensation Plan for achieving financial, strategic and operational goals that are established at the beginning of each year. The goals are tied to the key elements of our strategy described on page 1 and specific quantitative targets are set for most of the goals.

The 2016 annual incentive award target value for each NEO was set as a percentage of the NEO’s base salary (the “Annual Incentive Target %”). In connection with the leadership transition during 2016, the Committee increased the Annual Incentive Target % for Messrs. Pizarro, Payne, Petmecky, and Nichols and Ms. Rigatti, and set the respective Annual Incentive Target % within ten percentage points of the market median for the new positions. In addition, in early 2016, the Committee increased the respective Annual Incentive Target % for Messrs. Craver, Scilacci, and Umanoff to bring it closer to or approximately at the market median for their respective positions.

The minimum annual incentive award is $0. The maximum award is 200% of target, which the Committee’s independent compensation consultant, Pay Governance, advised is the most prevalent practice among the peer group companies.

The Committee determines annual incentive awards based on corporate and individual performance. The corporate performance factor is based on performance relative to the goals established at the beginning of the year. For each goal category, the Committee assigned a target score reflecting the relative weight given that goal category and a potential score range. In February 2017, the Committee determined the score achieved for each goal category, depending on the extent to which the goals were unmet, met or exceeded.

Separate goals were established for EIX and SCE. However, as reflected in the 2016 EIX Corporate Performance Scoring Matrix below, many of EIX’s goals related to SCE’s performance. Annual incentive awards for Messrs. Craver, Scilacci, Litzinger, and Umanoff were based on the EIX corporate performance factor. Annual incentive awards for Messrs. Payne, Petmecky, Dietrich, Nichols, and Swartz were based on the SCE corporate performance factor. Mr. Pizarro’s and Ms. Rigatti’s annual incentive awards were based on a blend of the EIX and SCE corporate performance factors, weighted based upon the relative time each respectively served as an EIX officer and as an SCE officer in 2016.

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2016 EIX Corporate Performance Scoring Matrix

Goal
Category
      Key Goals/Performance Contributing to Actual Score       Actual
Score
for
Goal(2)
      Target
Score
for Goal
Category
      Potential
Score
for Goal
Category
      Actual
Score
for Goal
Category(2)
Goal(1)       Performance(1)
Financial
Performance
Core earnings of $1.274 billion
Goal Exceeded: $1.294 billion(3)
66 60 0-120 66
Strategic
Initiatives
Execute SCE goals for affordable customer rates
Goal Exceeded: see SCE matrix below for additional information
6 30 0-60 10
Obtain favorable outcome in SCE’s Distribution Resources Plan (“DRP”) (10-K, pgs. 5-6)
Goal Exceeded: favorable market reaction to DRP; CPUC acknowledged important link between DRP and SCE’s General Rate Case

5

Grow EEG’s distributed energy and commercial and industrial energy services businesses (10-K, pg. 106): contract 150 megawatts (“MW”) and complete construction of 122 MW of distributed solar projects; complete 20 MW of community solar projects and 20 MW of rural cooperative projects; sign 10 new contracts for advisory and integrated solutions
Goal Not Met: new contracts and completed projects below target

2

Grow EEG’s transmission business: complete Grid Assurance investment decision (10-K, pg. 106); submit two transmission bids
Goal Met: completed Grid Assurance investment decision; submitted two transmission bids

2

Evaluate business case for SCE fiber business; prepare for 2017 launch
Goal Met: SCE established business case and began implementing fiber business

2

Propose three new business opportunities; begin implementing one
Goal Met: three new business opportunities evaluated; SCE developed transportation electrification plan (10-K, pg. 6)

2

Evaluate business case for EEG water business; begin operation of one pilot project
Goal Partially Met: business case evaluated; decision made to wind down business

1

Achieve SCE capital spending targets
Goal Not Met: see SCE matrix below for additional information

0

No significant noncompliance events; no worker or public safety issues; defend San Onofre settlement agreement(4)
Goal Not Met: see SCE matrix below for additional information

-10

People and
Culture

Integrate new EEG companies; develop and begin implementing plan for EEG human capital platform; hire and retain key employees
Goal Exceeded: integrated new companies; implemented human capital platform; retained key employees

6

10

0-20

9

Diversify leadership pipeline above 2015 levels: ethnic minorities 25.4% of executives and 39.8% of leadership pool; women 27% of executives and 29.6% of leadership pool
Goal Not Met: increased ethnic minorities to 26.1% of executives and 40.3% of leadership pool; did not increase women in leadership pipeline

3

Total:

100

0-200

85

(1) The parenthetical “10-K” page references in the “Goal” and “Performance” columns refer to pages in the combined Form 10-K filed by EIX and SCE for the fiscal year ended December 31, 2016 (“10-K”). The referenced pages contain additional information about the relevant topics, but do not address annual incentive plan goals or the scoring of the performance for purposes of this matrix.
(2) Score determinations are generally made in the judgment of the Committee after assessing overall performance against goals.
(3) Linear interpolation between the target of $1.274 billion and the maximum score level of $1.474 billion was used to determine the actual score.
(4) When the Committee established this goal, it determined that the Actual Score for the goal would be zero if the goal was met and could be negative if the goal was not met.

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2016 SCE Corporate Performance Scoring Matrix

Goal
Category
      Key Goals/Performance Contributing to Actual Score       Actual
Score
for
Goal(2)
      Target
Score
for Goal
Category
      Potential
Score
for Goal
Category
      Actual
Score
for Goal
Category(2)
Goal(1)       Performance(1)
Financial
Performance
Core earnings of $1.333 billion
Goal Exceeded: $1.376 billion(3)
53 40 0-80 53
Safety
DART (Days Away, Restricted, and Transfer) injury rate ≤0.61
Goal Not Met: 0.80
0 10 0-20 0
No serious injuries to the public from system failures(4)
Goal Met: no serious injuries to the public
0
No worker fatalities(4)
Goal Not Met: four worker fatalities
0

Operational and
Service
Excellence

Affordable customer rates: controllable operations and maintenance (“O&M”) cost per customer ≤$334; system average rate of 14.9-15.3 cents per kilowatt-hour
Goal Exceeded: controllable O&M cost per customer of $329; system average rate of 14.8 cents per kilowatt-hour

6

20

0-40

8

Improve J.D. Power Customer Satisfaction Study scores: business customer rank ≤14; residential customer rank ≤17
Goal Partially Met: business customer rank of 13; residential customer rank of 20

3

Protect critical infrastructure: no significant data breaches, control system compromises or IT infections caused by phishing
Goal Met: no significant data breaches, control system compromises or IT infections caused by phishing

2

Diverse Business Enterprise spend ≥40%
Goal Met: 45%

2

Achieve capital spending targets: $3.321 billion CPUC-jurisdictional; $0.628 billion FERC-jurisdictional
Goal Not Met:
$3.042 billion CPUC-jurisdictional $0.457 billion FERC-jurisdictional

0

Achieve system performance and reliability goals: SAIDI≤95.3; SAIFI≤0.85; MAIFI≤1.24
Goal Not Met:
SAIDI–100.8; SAIFI–0.91; MAIFI–1.31

0

No significant noncompliance events(4)
Goal Not Met: penalty expected for Long Beach service interruptions (10-K, pg. 8)

-5

Strategic
Initiatives

Advance grid modernization efforts: favorable outcome in DRP (10-K, pgs. 5-6); initiate one microgid project; customer commitments for 500 charging stations (10-K pgs. 5-6); progress on energy storage projects (10-K, pgs. 5, 111)
Goal Exceeded: favorable market reaction to DRP; microgrid project initiated; commitments for 686 charging stations; energy storage placed in service (40 MW) and contracted (142 MW)
13

20

0-40

21

Advance key regulatory proceedings: file 2018 General Rate Case (10-K, pg. 7); defend San Onofre settlement agreement (10-K pgs. 7, 94-96)
Goal Partially Met: filed 2018 General Rate Case; adverse impact of CPUC ruling on settlement agreement

8

People and
Culture

Enhance decision-making processes and encourage employee engagement
Goal Met: streamlined decision-making structure; new X-Change program implements employee ideas

5

10

0-20

8

Diversify leadership pipeline above 2015 levels: ethnic minorities 29.5% of executives and 41.4% of leadership pool; women 31.8% of executives and 29.5% of leadership pool
Goal Not Met: increased ethnic minorities to 30% of executives and 42.1% of leadership pool; did not increase women in leadership pipeline

3

Total:

100

0-200

90

(1) The referenced 10-K pages contain additional information about the relevant topics, but do not address annual incentive plan goals or the scoring of the performance for purposes of this matrix. “CPUC” means the California Public Utilities Commission. “FERC” means the Federal Energy Regulatory Commission. “SAIDI” means the System Average Interruption Duration Index. “SAIFI” means the System Average Interruption Frequency Index. “MAIFI” means the Momentary Average Interruption Frequency Index.
(2) Score determinations are generally made in the judgment of the Committee after assessing overall performance against goals.
(3) Linear interpolation between the target of $1.333 billion and the maximum score level of $1.466 billion was used to determine the actual score.
(4) When the Committee established this goal, it determined that the Actual Score for the goal would be zero if the goal was met and could be negative if the goal was not met.

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2016 Annual Incentive Awards
Based on 2016 performance, the corporate performance factors for EIX and SCE were 85% and 90% of target, respectively. These factors were determined by adding the “Actual Scores” in the corporate performance scoring matrices above. Notwithstanding strong financial performance, the corporate performance factors were below target primarily due to below-target performance on safety and operational and service excellence goals. The Committee did not exercise its discretion to increase or decrease the corporate performance factor from the amount determined by application of the scoring matrix.

The Committee determined the annual incentive award for each NEO by multiplying the annual incentive target percentage for the NEO by the EIX or SCE corporate performance factor and an individual performance factor. Individual performance factors were determined by the Committee in its discretion (subject to the limitation described below under “Impact of Other Plans”), based on its assessment of each NEO’s performance and achievements for the year, and relative impact and contribution to corporate performance compared to executives in similar roles. The following table shows the resulting annual incentive awards to our EIX NEOs as a percentage of salary and as a multiple of target:

EIX NEOs(1)         Annual
Incentive
Target as
% of Salary(2)(3)
        Corporate
Performance
Factor(3)(4)
        Individual
Performance
Factor(3)(5)
        Annual
Incentive
Award as
% of Salary(3)(6)
        Annual
Incentive
Award as
Multiple of
Target(3)(6)
Pedro J. Pizarro 94% 0.87 1.00 81% 0.87x
Theodore F. Craver, Jr. 125% 0.85 1.00 106% 0.85x
Maria Rigatti 63% 0.89 1.13 62% 0.99x
W. James Scilacci 75% 0.85 1.00 64% 0.85x
Adam S. Umanoff 75% 0.85 1.07 68% 0.91x
Kevin M. Payne 64% 0.90 1.00 58% 0.90x
Ronald L. Litzinger 70% 0.85 0.75 45% 0.64x
(1) Target and actual annual incentive awards for all EIX and SCE NEOs are shown in the Grants of Plan-Based Awards tables and the Summary Compensation Tables, respectively.
(2) The amounts shown for Messrs. Pizarro and Payne and Ms. Rigatti are the weighted average Annual Incentive Target % for the respective NEO, with the weighting based on the number of workdays in 2016 that the NEO served in each position for which a different Annual Incentive Target % applied. The 2016 Annual Incentive Target % for Mr. Pizarro as SCE President was 75%. It was adjusted to 90% in connection with his promotion to EIX President and adjusted again to 115% in connection with his promotion to EIX CEO. The 2016 Annual Incentive Target %s for Ms. Rigatti as SCE SVP and CFO and for Mr. Payne as SCE SVP were 55% and 50%, respectively, and these percentages were adjusted to 75% and 70%, respectively, in connection with Ms. Rigatti’s promotion to EIX EVP and CFO and Mr. Payne’s promotion to SCE President.
(3) The amounts shown have been rounded to two decimal places or to the nearest whole percentage point for purposes of the table.
(4) The corporate performance factor for all EIX NEOs (other than Messrs. Pizarro and Payne and Ms. Rigatti) was 0.85. The corporate performance factor for all SCE NEOs (other than Mr. Pizarro and Ms. Rigatti, but including Mr. Payne), was 0.90. The corporate performance factors for Mr. Pizarro and Ms. Rigatti were a blend of EIX and SCE factors, weighted based upon the relative time each respectively served as an EIX officer and as an SCE officer in 2016.
(5) In determining Mr. Litzinger’s individual performance factor, the Committee placed particular emphasis on the performance of EEG given his responsibilities as President of that business. In 2016, EEG did not meet or only partially met many of its goals. As a result, the Committee set Mr. Litzinger’s individual performance factor low relative to the other NEOs, despite solid performance by Mr. Litzinger.
(6) The actual annual incentive awards to Messrs. Craver and Scilacci were prorated due to their retirement, based on (i) the ratio of the number of workdays from January 2016 through September 30, 2016, compared to (ii) the total number of workdays in 2016. The amounts reported for Messrs. Craver and Scilacci reflect the actual awards, after proration.

Impact of Other Plans
The EIX Committee adopted the EIX 2016 Executive Annual Incentive Program (“162(m) Program”) so that annual incentive awards under the EIX Executive Incentive Compensation Plan could be designed to qualify as deductible performance-based compensation under Section 162(m) of the Internal Revenue Code (“Section 162(m)”). Under the 162(m) Program, an overall maximum annual incentive award for 2016 was established for each participating officer as a specified percentage of an annual incentive award pool. The aggregate award pool for the participating officers had a maximum value equal to 3% of EIX’s 2016 consolidated earnings from continuing operations (after interest, taxes, depreciation and amortization), subject to adjustment for the effects of any special charges to earnings (the “Section 162(m) Pool”). The following percentages of the pool were allocated to the NEOs to determine maximum annual incentive awards for 2016: Mr. Pizarro, 11%; Mr. Craver, 28%; Ms. Rigatti, 4%; Mr. Scilacci, 10%; Mr. Umanoff, 8%; Mr. Payne, 3%; Mr. Litzinger, 8%; Mr. Nichols, 3%; Mr. Swartz, 4%; and Mr. Dietrich, 5% (each, an “Individual Section 162(m) Cap”). Neither the Section 162(m) Pool nor the Individual Section 162(m) Caps served as a basis for the Committee’s compensation decisions for NEOs. Instead, these caps served to establish a ceiling on annual incentive awards for purposes of tax deductions. For 2016, the total amount awarded under the 162(m) Program was less than the Section 162(m) Pool and the actual annual incentive awarded to each participating NEO was less than his or her Individual Section 162(m) Cap.

Long-Term Incentive Awards

All of our long-term incentives are awarded as equity instruments reflecting, or valued by reference to, EIX Common Stock. They are therefore directly linked to the value provided to EIX shareholders. The equity awards also align executives’ interests with the long-term interests of customers by enhancing executives’ focus on the Company’s long-term goals.

Seventy-five percent (75%) of our long-term equity mix is performance-based: the non-qualified stock options that comprise 50% of each NEO’s long-term incentive award value; and the performance shares that comprise 25% of the award value. We believe stock options are performance-based because

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NEOs will realize value only if the market value of EIX Common Stock appreciates. Long-term incentive awards are made under the EIX 2007 Performance Incentive Plan.

Long-Term Incentive Value
On February 24, 2016, the Committee approved 2016 long-term incentive award target values for the NEOs. Each target value was set as a percentage of base salary (the “Long-Term Incentive Target %”). The Committee also approved the methodology for converting those values into the number of stock options, performance shares, and restricted stock units granted to each NEO on the March 1, 2016 grant date (the “Initial LTI Grants”). On May 25, 2016, the Committee increased the Long-Term Incentive Target % for Messrs. Payne and Nichols in connection with their promotions and approved a second award for each of them that was granted on June 30, 2016. The target value of the June 30 grants was 75% of the difference between (i) the Long-Term Incentive Target % approved on May 25, as applied to the NEO’s increased base salary for the new position, and (ii) the value of the NEO’s Initial LTI Grant. On August 24, 2016, the Committee increased the Long-Term Incentive Target % for Messrs. Pizarro and Petmecky and Ms. Rigatti in connection with their promotions and approved a second award for each of them that was granted on September 30, 2016. The target value of the September 30 grants was 50% of the difference between (i) the Long-Term Incentive Target % approved on August 24, as applied to the NEO’s increased base salary for the new position, and (ii) the value of the NEO’s Initial LTI Grant. The Committee generally applies the following proration for awards granted after the first quarter: 75% if the grant date is in the second quarter of the year; 50% if the grant date is in the third quarter of the year; 25% if the grant date is in the fourth quarter of the year. The grant date value of each award is listed in the “Grants of Plan-Based Awards” tables below.

For 2016, the Committee did not change the Long-Term Incentive Target % for the NEOs who were not promoted during the year. For Messrs. Pizarro, Payne, and Nichols, the Long-Term Incentive Target % approved for their second awards ranged from approximately 15% to 55% below the market median for the new positions, with the opportunity for increases in subsequent year(s) after evaluating their performance in their new positions. For Ms. Rigatti and Mr. Petmecky, the Long-Term Incentive Target % approved for their second awards was within 6% of the market median for the respective new positions. In each case, the Committee decided the Long-Term Incentive Target % was appropriate relative to the market median level for comparable positions, based on the Committee’s overall assessment of each NEO’s experience, time in position, and individual performance, and internal equity and retention concerns.

Stock Options
Each stock option granted may be exercised to purchase one share of EIX Common Stock at an exercise price equal to the closing price of a share of EIX Common Stock on the grant date. Options vest over a four-year period, subject to continued employment, with one-fourth of each award vesting and becoming exercisable at the beginning of each year.

The number of options granted to each NEO was determined by dividing the option award value approved by the Committee for that NEO by the grant date value of an option using a Black-Scholes Merton valuation model based on the same assumptions and principles used to determine the grant date fair value of options generally for purposes of EIX’s financial reporting.

Performance Shares
Performance shares reward performance over three years against pre-established metrics. Each performance share awarded is a contractual right to receive one share of EIX Common Stock or its cash equivalent if performance and continued service vesting requirements are satisfied. The actual payout can range from zero to 200% of target performance shares, and depends on actual performance against pre-established metrics. The performance share awards provide for reinvested dividend equivalents. For each dividend declared for which the ex-dividend date falls within the performance period and after the date of grant, the NEO will be credited with an additional number of target performance shares having a value equal to the dividend that would have been payable on the target performance shares subject to the award. The performance shares credited as dividend equivalents have the same vesting and other terms and conditions as the original performance shares and are forfeited if the underlying shares are not earned.

A conversion formula is used to determine the number of performance shares awarded to each NEO. For the portion of performance shares subject to the TSR metric discussed below, the award value approved by the Committee is divided by the grant date value of the TSR performance shares using a Standard Monte Carlo simulation model based on the same assumptions and principles used to determine the grant date fair value of performance-based awards generally for purposes of EIX’s financial reporting. For the portion of performance shares subject to the earnings per share metric discussed below, the respective award value is converted into a specific number of earnings per share performance shares by dividing the award value by the closing price of a share of EIX Common Stock on the grant date.

Performance shares granted before 2015 generally are paid half in EIX Common Stock and half in cash having a value equal to the EIX Common Stock that otherwise would have been delivered. EIX converts a portion of the awards otherwise payable in stock to cash to satisfy minimum tax withholding or any governmental levies. NEOs may elect to defer payment of the portion of performance shares payable in cash under the Executive Deferred Compensation Plan. Performance shares granted in or after 2015 are payable solely in cash.

Performance Share Awards: TSR Metric

Two metrics are used to measure performance share payouts, with each metric weighted 50%. One of the two performance metrics is based on the percentile ranking of EIX’s TSR for the three-year performance period beginning January 1 in the year of grant compared to the TSR of each company in EIX’s peer group for the same period. The following table provides the percentile ranking and corresponding payout levels:

Payout Levels         TSR Ranking         Payout
Below Threshold <25th Percentile 0
Threshold 25th Percentile 25% of Target
Target 50th Percentile Target
Maximum ≥75th Percentile 200% of Target

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If EIX achieves a TSR ranking between the 25th percentile and the 50th percentile or between the 50th percentile and the 75th percentile, the number of shares paid will be interpolated on a straight-line basis with discrete intervals at every 5th percentile. To determine performance share payouts, TSR is calculated using the difference between (i) the average closing stock price for the stock for the 20 trading days ending with the last NYSE trading day preceding the first day of the performance period and (ii) the average closing stock price for the stock for the 20 trading days ending with the last trading day of the performance period, and assumes all dividends are reinvested on the ex-dividend date.

EIX’s TSR from 2014-2016 ranked in the 90th percentile of the peer group under the methodology used to calculate TSR for performance shares and resulted in a 200% of target payout for the TSR performance shares granted in 2014.

Performance Share Awards: EPS Metric

The second performance metric is based on EIX’s three-year average annual core earnings3 per share (“EPS”), measured against target levels. The Committee establishes the EPS target for each calendar year in February of that year.

The performance multiple for a calendar year is based on EIX’s actual EPS performance for that year as a percentage of the EPS target for that year, in accordance with the following table:

Performance Level       Actual EPS
as % of Target EPS
      EPS Performance
Multiple
Below Threshold <80% 0
Threshold 80% 0.25x
Target 100% 1.0x
Maximum ≥120% 2.0x
(3) Footnote 2 in the “Compensation Summary” provides additional information regarding the determination of core earnings.

If EIX’s EPS for a year as a percentage of target EPS is between 80% and 100% or between 100% and 120%, the EPS performance multiple is interpolated on a straight-line basis, with discrete intervals at every 4th percentage point. The EPS performance multiples achieved for each calendar year in the three-year performance period are averaged, and the resulting average determines the performance share payout as a multiple of target.

In February 2017, the Committee certified the following EPS performance multiples for the three calendar years in the performance period for the 2014 grant:

Year       Actual
EPS
      Target
EPS(1)
      Actual EPS as %
of Target EPS
      EPS
Performance
Multiple
2014 $4.59 $3.70 124% 2.00x
2015 $4.10 $3.92 105% 1.20x
2016 $3.97 $3.91 101% 1.00x
Average of performance multiples
(actual payout):
1.40x
(1) In each case, the Target EPS was set below the prior year’s Actual EPS due to lower projected income tax benefits.

Since the average of the EPS performance multiples for 2014, 2015, and 2016 was 1.4, EPS performance shares granted in 2014 paid out at 140% of target.

Restricted Stock Units
Each restricted stock unit awarded is a contractual right to receive one share of EIX Common Stock after the vesting requirement of three years of continued service is satisfied. The restricted stock units for NEOs provide for reinvested dividend equivalents. For each dividend declared for which the ex-dividend date falls within the vesting period, the NEO will be credited with an additional number of restricted stock units having a value equal to the dividend that would have been payable on the number of restricted stock units subject to the award. The restricted stock units credited as dividend equivalents have the same vesting and other terms and conditions as the original restricted stock units and are forfeited if the underlying units do not vest.

The restricted stock units are paid in EIX Common Stock, except EIX converts awards to cash having a value equal to the stock that otherwise would have been delivered to satisfy minimum tax withholding and governmental levies. The EIX Committee may elect to pay any restricted stock units in cash rather than shares of EIX Common Stock if and to the extent that payment in shares would exceed the applicable share limits of the EIX 2007 Performance Incentive Plan.

The number of restricted stock units granted to each NEO was determined by dividing the award value approved by the Committee for that NEO by the closing price of a share of EIX Common Stock on the grant date. At payout, NEOs realize an increase or decrease in value (compared to the grant date value) commensurate with the increase or decrease in value realized by shareholders from changes in the stock price and dividends over the three-year vesting period.

Acceleration of Long-Term Equity
If an NEO terminates employment after reaching age 65, or age 61 with five years of service, (i) stock options will vest and continue to become exercisable as scheduled, (ii) performance shares will be retained with vesting based on the applicable performance metrics, and (iii) restricted stock units will vest and become payable as scheduled; in each instance, as though the NEO’s employment had continued through the vesting period and subject to a pro-rated reduction if the NEO retires within the year of grant. Messrs. Craver and Scilacci were eligible for these accelerated vesting provisions when they retired. Mr. Swartz would also be eligible if he retires. If an NEO dies or becomes disabled while employed, stock options and restricted stock units will immediately vest and become exercisable and payable, respectively, and performance shares will be retained, with vesting based on the applicable performance metrics.

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How We Make Compensation Decisions

Role of Compensation Committee and Executive Officers

The Committee is responsible for reviewing and determining the compensation paid to executive-level Company officers, including the NEOs. The Committee annually reviews all components of compensation for our CEO and other NEOs, including base salary and annual and long-term incentives. The Committee also reviews significant benefits, including retirement and non-qualified deferred compensation plans.

Each February, the Committee sets the base salary and the target and maximum potential annual and long-term incentive award values for the current year for each officer. At that time, the Committee also determines annual incentive awards for the prior year and performance share payouts for the prior performance period. Base salary changes are generally effective early March of each year.

For the February Committee meeting, the EIX CEO provides recommendations regarding the compensation of NEOs (other than his own compensation). Other NEOs participate in developing and reviewing executive compensation recommendations, but do not participate in recommendations regarding their own compensation.

The Committee evaluates the EIX CEO’s performance relative to goals and determines his compensation in executive session without the EIX CEO present. The Committee Chair reports to the Board in an independent director executive session regarding the compensation determination.

For officers who are not EIX executive officers, the Committee has authorized the EIX CEO and the EIX executive responsible for executive compensation matters to jointly approve special relocation, recruitment and retention awards within limits pre-approved by the Committee. Mid-year compensation determinations for newly hired and promoted officers that are within guidelines previously approved by the Committee do not require additional Committee approval if the individuals are not EIX executive officers.

Tally Sheets
The Committee periodically reviews tally sheets for EIX NEOs. Tally sheets provide the Committee with information about the following components of compensation, including compensation paid over the preceding three calendar years:

Cash compensation (base pay and annual incentives);

Long-term incentive award values (stock options, performance shares and restricted stock units); and

Changes in pension values and non-qualified plan earnings.

The tally sheets also provide the amounts payable in the event of voluntary or involuntary separation from service, death or disability, or a change in control resulting in termination.

The Committee also reviews additional information regarding long-term incentives, including stock program statistics on share usage, analysis of current exercise values of prior option grants, and a summary of current and past performance share results.

Except as otherwise noted, the Committee’s executive compensation determinations are subjective and the result of the Committee’s business judgment, which is informed by the experiences of the Committee members and input from the Committee’s independent compensation consultant.

Role of the Committee’s Independent Compensation Consultant

The Committee retained Pay Governance to assist in evaluating officer compensation for 2016, including the compensation of NEOs; however, the Committee decides our officers’ compensation. This assistance included helping the Committee identify industry trends and norms for executive compensation; reviewing and identifying appropriate peer group companies and pay surveys; and evaluating executive compensation data for these companies.

During 2016, Pay Governance provided the following services:

Provided a presentation on executive compensation trends and competitive evaluation of total direct compensation for executives;

Reviewed Committee agendas and supporting materials before each meeting, and raised questions/issues with management and the Committee Chair, as appropriate;

Reviewed drafts of the CD&A for the Proxy Statement and related compensation tables; and

Provided recommendations on EIX CEO compensation to the Committee at its February meeting, without prior review by the EIX CEO.

In addition, a Pay Governance representative attended Committee meetings and communicated directly with the Committee as needed. Pay Governance did not perform any services for the Company in 2016 unrelated to the Committee’s responsibilities for our compensation programs, and all interactions by the consultants with management were related to their work for the Committee and conducted in accordance with the directions of the Committee or its Chair.

The Committee retains sole authority to hire its compensation consultant, approve its compensation, determine the nature and scope of its services, evaluate its performance, and terminate its engagement. Pursuant to SEC rules, the Committee assessed and determined that no conflict of interest exists with respect to the engagement of Pay Governance as the Committee’s compensation consultant.

Use of Competitive Data

The Committee generally targets a competitive range of +/-15% around the market median for comparable positions for each element of total direct compensation. For 2016, the Committee used peer group data and data from pay surveys by Towers Watson to determine the “market median.”

The Committee used the companies in the Philadelphia Utility Index as the peer group for benchmarking performance and comparing NEO compensation for 2016. The Philadelphia Utility

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Index has been used by the Committee as the basis for the peer group since 2005. Use of an established market index for peer group purposes is consistent with the way investors evaluate performance across companies within an industry.

2016 Peer Group Companies - Philadelphia Utility Index
AES Corporation         Entergy
Ameren Eversource Energy
American Electric Power Exelon
CenterPoint Energy FirstEnergy
Consolidated Edison NextEra Energy
Covanta (replaced by American PG&E Corporation
Water Works during 2016)(1)  
Dominion Resources Public Service Enterprise Group
DTE Energy Southern Company
Duke Energy Xcel Energy
El Paso Electric
(1) The peer group data used to determine the “market median” for 2016 included Covanta (and not American Water Works), since Covanta was in the Philadelphia Utility Index at the time of the February 2016 Committee meeting. In contrast, American Water Works (and not Covanta) was included in the peer group for determining EIX’s TSR ranking for the TSR Performance Shares granted in 2014. The performance period for those Performance Shares ended December 31, 2016 and the terms and conditions of the awards required that the peer group consist of the companies in the Philadelphia Utility Index at the end of the performance period. American Water Works’ TSR was higher than Covanta’s for the 2014-2016 performance period.

EIX is just above the peer group median in revenues and market capitalization. For the four quarters ending September 30, 2016, EIX had revenues of $11.33 billion compared to the peer group median of $11.27 billion (ranking 10th out of the 20 companies in the peer group), based on reported revenues. As of December 31, 2016, EIX’s market capitalization of $23.46 billion was approximately 9% above the peer group median of $21.44 billion (ranking 8th out of 20).

As part of the process of setting 2016 target total direct compensation for NEOs, Pay Governance provided the Committee with benchmarking data from peer group proxy statements. In addition, the Committee received base salary, target annual incentive, and target long-term incentive grant value data from the Towers Watson 2015 Energy Services and the Towers Watson 2015 General Industry pay surveys. The pay survey data included compensation information from utilities, other energy companies, and companies in other industries with comparable revenues, in order to reflect the range of the Company’s competitors for executive talent and provide a robust set of information to make compensation decisions. The pay survey data was presented to the Committee in aggregated form. The Committee does not consider the identities of the individual companies in the survey data to be material for its decision-making process, and the individual companies were not provided to the Committee.

The components of the market data and the relative weighting used to calculate a market median varied for each NEO position, based on the availability of sufficient comparative data for the position, and were reviewed by Pay Governance. Market median levels for 2016 were projected from available data with input from Pay Governance.

The Committee exercises its judgment in setting each executive’s compensation levels within the competitive range described above, and may time to time vary from the competitive range, after taking into account the executive’s experience, time in position, individual performance, internal equity, retention concerns, or other factors it considers relevant under the circumstances.

Risk Considerations

Our executive compensation policy directs that our total compensation structure should not encourage inappropriate or excessive risk-taking. The Committee takes risk into consideration when reviewing and approving executive compensation.

As specified in its charter, and with the assistance of Pay Governance and Company management, the Committee reviewed the Company’s compensation programs for executives and for employees generally and has concluded these programs do not create risks reasonably likely to have a material adverse effect on the Company.

In concluding that the current executive compensation program does not encourage inappropriate or excessive risk-taking, the Committee noted the following characteristics that limit risk:

Annual incentives are balanced with long-term incentives to lessen the risk that short-term objectives might be pursued to the detriment of long-term value creation;

Goals for annual incentive programs are varied (not focused on just one metric), include safety and compliance goals, and are subject to Committee review and discretion as to the ultimate award payment for executives;

Long-term incentive awards are subject to a multi-year vesting schedule;

The ultimate value of equity grants is not solely dependent on stock price due to the use of relative TSR and EPS for performance shares;

Stock ownership guidelines require top officers to own company stock worth two to six times their base salary and include holding requirements;

Executives are prohibited from hedging Company securities and EIX executive officers are prohibited from pledging Company securities;

The Company has an incentive compensation clawback policy that allows the Committee or the Board to recoup incentive compensation overpayments in the event of a restatement of Company financial statements; and

Executive retirement and deferred compensation benefits are unfunded and thus depend in part on the continued solvency of the Company.


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Post-Employment and Other Benefits

Post-Employment Benefits

The NEOs receive retirement benefits under qualified and non-qualified defined-benefit and defined-contribution retirement plans. The SCE Retirement Plan and the 401(k) Plan are both qualified retirement plans in which the NEOs participate on substantially the same terms as other participating employees.

Due to limitations imposed by ERISA and the Internal Revenue Code, the benefits payable to the NEOs under the SCE Retirement Plan and the 401(k) Plan are limited. The Executive Retirement Plan and the Executive Deferred Compensation Plan provide for our NEOs to receive the full amount of benefits that would be paid under the qualified plans but for such limitations, and certain additional benefits. The Committee believes these programs help us to attract and retain qualified executives.

For descriptions of the tax-qualified and non-qualified defined benefit pension plans and the Executive Deferred Compensation Plan, see the narrative to the “Pension Benefits” and “Non-Qualified Deferred Compensation” tables, respectively.

The Company also sponsors survivor and disability benefit plans in which the NEOs were eligible to participate in 2016.

Severance and Change in Control Benefits

Our policy regarding severance protection for NEOs stems from its importance in retaining and recruiting executives. Executives have attractive opportunities with other companies or are recruited from well-compensated positions in other companies. We believe offering one year’s worth of compensation and benefits if any officer is involuntarily severed without cause provides financial security to offset the risk of leaving another company or foregoing an opportunity with another company. Severance benefits are not offered for resignation for “good reason,” except if a change in control occurs.

The current executive compensation plans offer additional benefits if a change in control of EIX occurs. We believe the occurrence, or expected occurrence, of a change-in-control transaction would create uncertainty regarding continued employment for NEOs. This uncertainty would result from the fact that many change-in-control transactions result in significant organizational changes, particularly at the senior executive level.

To encourage the NEOs to remain employed with the Company during a time when their prospects for continued employment following the change in control would be uncertain, and to permit them to remain focused on the Company’s interests, NEOs are provided with enhanced severance benefits if their employment is actually or constructively terminated without cause within a defined period of time around a change in control of EIX.

Constructive termination (or a resignation for “good reason”) would include occurrences such as a material diminution in duties or salary, or a substantial relocation.

Given that none of the NEOs has an employment agreement that provides for fixed positions or duties, or for a fixed base salary or annual incentive award, we believe a constructive termination severance trigger is needed to prevent an acquirer from having an incentive to constructively terminate an NEO’s employment to avoid paying any severance benefits. We do not provide excise tax gross-ups on change-in-control severance benefits for any of our executives. We do not believe NEOs should be entitled to receive their cash severance benefits merely because a change-in-control transaction occurs. Therefore, the payment of cash severance benefits is subject to a double-trigger where an actual or constructive termination of employment must also occur before payment.

However, if a change in control occurs where EIX is not the surviving corporation, and following the transaction, outstanding equity awards would not be continued or assumed, then NEOs and other holders of awards under our equity incentive plan would receive immediate vesting of their outstanding equity awards as described under “Potential Payments Upon Termination or Change in Control.

We believe it is appropriate to fully vest equity awards in change-in-control situations where EIX is not the surviving corporation and the equity awards are not assumed, whether or not employment is terminated, because such a transaction ends the NEOs’ ability to realize any further value with respect to the equity awards.

For detailed information on the estimated potential payments and benefits payable to NEOs if they terminate employment, including following a change in control of the Company, see “Potential Payments Upon Termination or Change in Control.”

Perquisites

In general, we provide no perquisites for our NEOs. From time to time the Company may provide a retirement gift to a retiring executive in recognition of the executive's long and dedicated service. In certain circumstances, the Company pays for or reimburses spousal travel expenses where an executive’s spouse attends a business-related function. Given the nature of these functions and the benefits to the Company, the Company does not consider the payment of spousal travel expenses to be a perquisite. However, under SEC rules, the incremental cost of such travel by an NEO’s spouse is included as All Other Compensation for the NEO for the corresponding year in the Summary Compensation Table below.

Other Compensation Policies and Guidelines

Tax-Deductibility

Section 162(m) disallows a tax deduction by public companies for compensation over $1,000,000 paid to chief executive officers and certain other most highly compensated executive officers unless certain tests are met. While EIX’s first priority is to achieve its executive compensation objectives, it will generally attempt to design and administer its executive compensation program to preserve the deductibility of compensation payments. However, it may grant non-deductible compensation in circumstances it considers appropriate and no guarantees can be made that any compensation intended to constitute

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deductible performance-based compensation within the meaning of Section 162(m) will be deductible.

Under the EIX 2007 Performance Incentive Plan, non-qualified stock options, performance shares and annual incentive awards awarded to EIX NEOs are intended to constitute deductible performance-based compensation within the meaning of Section 162(m). However, restricted stock units are not deductible performance-based compensation within the meaning of Section 162(m). This follows EIX’s philosophy that its goal of preserving the deductibility of compensation is secondary in importance to achievement of its compensation objectives.

Stock Ownership Guidelines

To underscore the importance of linking executive and shareholder interests, the Company has stock ownership guidelines that require SVPs and more senior officers to own EIX Common Stock or equivalents in an amount ranging from two to six times their annual base salary. The stock ownership guidelines for NEOs who were executive officers on December 31, 2016 are as follows:

Mr. Pizarro – six times salary

Ms. Rigatti and Messrs. Umanoff, Payne, and Litzinger – three times salary

Messrs. Petmecky, Nichols, Swartz, and Dietrich – two times salary

The NEOs are expected to achieve their ownership targets within five years from the date they became subject to the guidelines. EIX Common Stock owned outright, shares held in the 401(k) Plan, and vested and unvested restricted stock units which do not depend on performance measures are included in determining compliance with the guidelines. Shares that NEOs may acquire through the exercise or payout of stock options and performance shares are not included in determining compliance until the options or performance shares are exercised, or paid, as the case may be, and the shares are acquired. Based on ownership as of March 3, 2017, all of the NEOs meet their stock ownership requirements under these guidelines.

The guidelines were amended effective February 22, 2017 to provide that an officer subject to the guidelines may not sell EIX Common Stock acquired pursuant to an EIX long-term incentive award (“Acquired Stock”) if the officer does not meet his or her ownership requirement under the guidelines. An officer whose ownership satisfies the guidelines may not sell Acquired Stock to the extent the sale would cause his or her ownership to fall below the applicable guideline level. These transfer limitations do not apply to transfers to satisfy the exercise price of an EIX stock option or to satisfy tax obligations with respect to an EIX long-term incentive award. Exceptions to the guidelines may be approved on a case-by-case basis.

Hedging and Pledging Policy

Under the Company’s Insider Trading Policy, hedging related to Company securities, including EIX shares, is prohibited for all directors and employees, including NEOs. In addition, directors and EIX executive officers may not pledge Company securities as collateral for loans.

Clawback Policy

The Company maintains an incentive compensation clawback policy that allows the Board or the Committee to recoup incentive compensation if the Company restates its financial statements. The policy applies to cash or equity-based incentive compensation to current and former EIX and SCE NEOs and other executive officers that is paid, granted, vested or accrued in any fiscal year within the three-year period preceding the filing of the restatement (but only if the payment, grant, vesting or accrual occurs after December 10, 2014). The policy allows recoupment of the difference between the incentive compensation paid, granted, vested or accrued under the original results and the incentive compensation that would have been paid, granted, vested or accrued under the restated results. The policy can be enforced by reducing or cancelling outstanding and future incentive compensation, and by a claim for repayment.

The SEC and NYSE have been expected to provide rules requiring public companies to adopt clawback policies to recover incentive compensation overpayments from executive officers under certain conditions involving accounting restatements. If and when this guidance is received, the Committee or the Board will review the existing clawback policy and determine whether changes are needed.

Compensation Committee Report

The Committee has reviewed and discussed with management the Compensation Discussion and Analysis section of this Proxy Statement. Based upon this review and the discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis section be included in the Company’s 2016 Annual Report and this Proxy Statement.

Brett White, Chair
Vanessa C.L. Chang
James T. Morris
Richard T. Schlosberg, III
Peter J. Taylor

Compensation Committee Interlocks and Insider Participation

Mr. Morris became a Committee member when the Committees were reappointed on April 28, 2016. The other Committee members whose names appear on the Compensation Committee Report above were Committee members during all of 2016. Under applicable SEC rules, there were no interlocks or insider participation on the Committee.

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EXECUTIVE COMPENSATION


Summary Compensation Tables

The following tables present information regarding compensation of the EIX and SCE NEOs for service during 2016, and for 2015 and/or 2014 for individuals who were also NEOs in those years. The tables were prepared in accordance with SEC requirements. The total compensation presented below does not necessarily reflect the actual total compensation received by our NEOs. The amounts under “Stock Awards” and “Option Awards” do not represent the actual amounts paid to or realized by our NEOs for these awards during 2014-2016, but represent the aggregate grant date fair value of awards granted in those years for financial reporting purposes. Likewise, the amounts under “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” do not reflect amounts paid to or realized by our NEOs during 2014-2016.

EIX Summary Compensation Table – Fiscal Years 2014, 2015 and 2016

Name and Principal
Position

   

Year

   

Salary(1)
($)

   

Bonus
($)

   

Stock
Awards(2)
($)

   

Option
Awards(3)
($)

   

Non-Equity
Incentive Plan
Compensation(4)
($)

   

Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings
(5)
($)

   

All Other
Compensation(6)
($)

   

Total
($)

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Pedro J. Pizarro
EIX CEO effective 9/30/16; EIX
President effective 6/1/16; SCE
President through 5/31/16
2016 836,782 1,553,399 1,553,133 678,402 914,498 75,382 5,611,596
2015 662,931 843,867 843,756 520,931 6,052 45,653 2,923,190
2014 151,724 585,196 585,006 148,690 762,977 7,080 2,240,673
 
Theodore F. Craver, Jr.
EIX Chairman of the Board and
CEO through 9/30/16; also EIX
President through 5/31/16
2016 938,697 2,968,836 2,968,751 997,366 371,205 415,051 8,659,905
2015 1,241,954 2,968,833 2,968,752 1,659,738 2,081,101 194,389 11,114,767
2014 1,200,000 2,700,105 2,700,005 2,759,952 4,708,778 163,843 14,232,683
 
Maria Rigatti
EIX EVP and CFO effective
9/30/16; SCE SVP and
CFO through 9/30/16
2016 392,891 362,080 361,687 244,994 364,218 29,596 1,755,466
2015 315,000 170,178 170,100 209,199 14,867 47,935 927,279
2014 136,379 141,856 141,756 110,263 342,536 29,507 902,297
 
W. James Scilacci
EIX EVP and CFO
through 9/30/16
2016 484,100 682,597 682,508 311,178 803,918 339,740 3,304,041
2015 620,977 656,357 656,253 461,125 974,465 62,594 3,431,771
2014 600,000 585,038 585,002 798,000 2,609,953 53,004 5,230,997
Adam S. Umanoff
EIX EVP and
General Counsel
2016 548,391 589,961 589,876 375,169 241,541 46,535 2,391,473
2015 537,931 631,860 631,804 454,686 110,007 32,400 2,398,688
 
Kevin M. Payne
SCE CEO effective 6/1/16;
SCE SVP through 5/31/16
2016 421,171 323,185 322,942 243,790 470,168 23,028 1,804,284
2015 294,097 122,534 122,434 163,611 105,588 18,299 826,563
2014 274,975 113,742 113,551 199,557 693,339 15,928 1,411,092
Ronald L. Litzinger
EEG President; also EIX
EVP through 3/28/16
2016 600,000 630,031 630,003 267,750 804,297 50,490 2,982,571
2015 600,000 630,049 630,005 483,000 932,224 61,325 3,336,603
2014 597,529 585,038 585,002 798,000 2,465,664 53,241 5,084,474

(1) The Committee increased the annual base salary rates of Messrs. Pizarro and Payne in connection with their promotions effective June 1, 2016 and set them at $800,000 and $500,000, respectively. The Committee increased the annual base salary rates of Mr. Pizarro and Ms. Rigatti in connection with their promotions effective September 30, 2016 and set them at $1,100,000 and $550,000, respectively.
(2) Stock awards consist of performance shares and restricted stock units granted under the 2007 Performance Incentive Plan in the year indicated. The performance share and restricted stock unit amounts shown in the EIX Summary Compensation Table reflect the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718. For performance shares, the value is reported as of the grant date based on the probable outcome of performance conditions, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions and methodologies used to calculate these amounts, see the discussion contained in (i) Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of the Company’s 2016 Annual Report and (ii) similar footnotes to EIX’s Consolidated Financial Statements for prior years when the awards were granted. In accordance with the terms and conditions of the 2016 awards, 1/4 of the awards granted in 2016 to Messrs. Craver and Scilacci terminated for no value in connection with their respective retirements. The amounts shown in the Summary Compensation Table are presented before taking these forfeitures into account.

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The table below shows the maximum value of performance share awards included in the EIX Summary Compensation Table at the grant date assuming that the highest level of performance conditions will be achieved. For the grant date fair value of each award based on the probable outcome of the applicable performance conditions, see the “Grants of Plan-Based Awards” table below. The 2014 performance share awards vested as of December 31, 2016; see the “Option Exercises and Stock Vested” table below for the value realized when they vested. The performance periods for the 2015 and 2016 performance shares have not ended.

     

Name

     

Maximum
Performance Share
Potential as of
Grant Date for 2016
Awards
($)

     

Maximum
Performance Share
Potential as of
Grant Date for 2015
Awards
($)

     

Maximum
Performance Share
Potential as of
Grant Date for 2014
Awards
($)

Pedro J. Pizarro 1,553,513 843,953 456,145
Theodore F. Craver, Jr. 2,968,868 2,968,825 2,700,165
  Maria Rigatti 362,240 170,223 141,900
W. James Scilacci 682,616 656,397 585,058
Adam S. Umanoff 590,040 631,872
Kevin M. Payne 323,286 122,597 94,000
Ronald L. Litzinger 630,052 630,034 585,058
(3) Option awards consist of non-qualified stock options granted under the 2007 Performance Incentive Plan in the year indicated. The option amounts shown in the EIX Summary Compensation Table reflect the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to calculate these amounts, see the discussion of options contained in (i) Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of the Company’s 2016 Annual Report and (ii) similar footnotes to EIX’s Consolidated Financial Statements for prior years when the awards were granted. In accordance with the terms and conditions of the 2016 awards, 1/4 of the awards granted in 2016 to Messrs. Craver and Scilacci terminated for no value in connection with their respective retirements. The amounts shown in the Summary Compensation Table are presented before taking these forfeitures into account.
(4) The annual incentive awards to Messrs. Craver and Scilacci were prorated, based on (i) the ratio of the number of workdays from January 2016 through September 30, 2016, compared to (ii) the total number of workdays in 2016. The reported amounts for Messrs. Craver and Scilacci are presented after proration.
(5) The reported amounts for 2016 include: (i) 2016 interest on deferred compensation account balances considered under SEC rules to be at above-market rates for Mr. Pizarro $7,325; Mr. Craver $371,205; Ms. Rigatti $3,499; Mr. Scilacci $169,443; Mr. Umanoff $14,766; Mr. Payne $21,115; and Mr. Litzinger $88,209; and (ii) the 2016 aggregate change in the actuarial present value of the accumulated benefit under the SCE Retirement Plan and the EIX Executive Retirement Plan for Mr. Pizarro $907,173; Mr. Craver ($52,112); Ms. Rigatti $360,719; Mr. Scilacci $634,475; Mr. Umanoff $226,775; Mr. Payne $449,053; and Mr. Litzinger $716,088. Since Mr. Craver’s pension value decreased, in accordance with SEC rules it is not included in the amount reported for him in column (h) of the EIX Summary Compensation Table.
(6) Amounts reported for 2016 represent Company contributions to the 401(k) Plan and the Executive Deferred Compensation Plan for each NEO other than Messrs. Pizarro, Scilacci, and Craver. For Mr. Pizarro, the amount reported for 2016 includes $65,382 for Company contributions to the 401(k) Plan and the Executive Deferred Compensation Plan and $10,000 in charitable matching gifts under the Director Matching Gift Program described in footnote (5) to the Director Compensation Table above. For Mr. Scilacci, the amount reported for 2016 includes $43,568 for Company contributions to the 401(k) Plan and the Executive Deferred Compensation Plan and $296,172 as payment for accrued and unused vacation in connection with his retirement. For Mr. Craver, the amount reported for 2016 includes $107,485 for Company contributions to the 401(k) Plan and the Executive Deferred Compensation Plan, a $10,000 charitable matching gift under the Director Matching Gift Program described in footnote (5) to the Director Compensation Table above, $6,929 in retirement gifts, $282,452 as payment for accrued and unused vacation in connection with his retirement, and $8,185 in transportation expenses for Mr. Craver’s spouse when she traveled with Mr. Craver and attended business-related functions. EIX does not consider payment of these business-related travel expenses to be a perquisite given the benefits to the Company of her attendance at the functions.

SCE Summary Compensation Table – Fiscal Years 2014, 2015 and 2016

Name and Principal
Position

   

Year

   

Salary(1)
($)

   

Bonus
($)

   

Stock
Awards(2)
($)

   

Option
Awards(3)
($)

   

Non-Equity
Incentive Plan
Compensation
($)

   

Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings
(4)
($)

   

All Other
Compensation(5)
($)

   

Total
($)

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Kevin M. Payne
CEO effective 6/1/16;
SVP through 5/31/16
2016 421,171 323,185 322,942 243,790 470,168 23,028 1,804,284
2015 294,097 122,534 122,434 163,611 105,588 18,299 826,563
2014 274,975 113,742 113,551 199,557 693,339 15,928 1,411,092
Pedro J. Pizarro
President through 5/31/16
2016 836,782 1,553,399 1,553,133 678,402 914,498 75,382 5,611,596
2015 662,931 843,867 843,756 520,931 6,052 45,653 2,923,190
2014 151,724 585,196 585,006 148,690 762,977 7,080 2,240,673
William M. Petmecky, III
SVP and CFO effective
9/30/16; Vice President and
Treasurer through 9/30/16
2016 267,797 122,561 122,341 110,585 216,661 15,900 855,845
 
 

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Name and Principal
Position
    Year     Salary(1)
($)
    Bonus
($)
    Stock
Awards(2)
($)
    Option
Awards(3)
($)
    Non-Equity
Incentive Plan
Compensation
($)
    Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings(4)
($)
    All Other
Compensation(5)
($)
    Total
($)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Maria Rigatti
SVP and CFO through
9/30/16
2016 392,891 362,080   361,687 244,994 364,218 29,596 1,755,466
2015 315,000   170,178 170,100 209,199 14,867 47,935 927,279
2014 136,379 141,856 141,756   110,263 342,536 29,507 902,297
Ronald O. Nichols
President effective 6/1/16;
SVP through 5/31/16
2016 362,759 175,430 175,196 184,345 119,918 41,027 1,058,675
 
 
Russell C. Swartz
SVP and General Counsel
2016 362,000 162,993 162,906 202,485 147,204 22,485 1,060,073
  2015 362,000 163,013 162,903 219,508 60,518 25,517 993,459
2014 362,000 163,011 162,906 320,551 871,160 24,470 1,904,098
Peter T. Dietrich
SVP through 1/20/17
2016 480,000 216,124 216,007 237,600 264,864 36,700 1,451,295
2015 480,000 216,090 216,004 263,340 167,704 116,550 1,459,688
2014 480,000 237,712 237,605 388,080 370,877 116,630 1,830,904

(1) The Committee increased the annual base salary rates of Messrs. Pizarro, Payne, and Nichols in connection with their respective promotions effective June 1, 2016 and set them at $800,000, $500,000, and $400,000, respectively. The Committee increased the annual base salary rates of Messrs. Pizarro and Petmecky and Ms. Rigatti in connection with their respective promotions effective September 30, 2016 and set them at $1,100,000, $300,000, and $550,000, respectively.
(2) Stock awards consist of performance shares and restricted stock units granted under the 2007 Performance Incentive Plan in the year indicated. The performance share and restricted stock unit amounts shown in the SCE Summary Compensation Table reflect the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718. For performance shares, the value is reported as of the grant date based on the probable outcome of performance conditions, consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions and methodologies used to calculate these amounts, see the discussion contained in (i) Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of the Company’s 2016 Annual Report and (ii) similar footnotes to EIX’s Consolidated Financial Statements for prior years when the awards were granted.
The table below shows the maximum value of performance share awards included in the SCE Summary Compensation Table at the grant date assuming that the highest level of performance conditions will be achieved. For the grant date fair value of each award based on the probable outcome of the applicable performance conditions, see the “Grants of Plan-Based Awards” table below. The 2014 performance share awards vested as of December 31, 2016; see the “Option Exercises and Stock Vested” table below for the value realized when they vested. The performance periods for the 2015 and 2016 performance shares have not ended.

     

Name

      

Maximum
Performance Share
Potential as of
Grant Date for 2016
Awards
($)

      

Maximum
Performance Share
Potential as of
Grant Date for 2015
Awards
($)

      

Maximum
Performance Share
Potential as of
Grant Date for 2014
Awards
($)

Kevin M. Payne 323,286 122,597 94,000
Pedro J. Pizarro 1,553,513 843,953 456,145
  William M. Petmecky, III 122,581
Maria Rigatti 362,240 170,223 141,900
Ronald O. Nichols 175,443
Russell C. Swartz 163,066 163,030 163,055
Peter T. Dietrich 216,226 216,169 237,722
(3) Option awards consist of non-qualified stock options granted under the 2007 Performance Incentive Plan in the year indicated. The option amounts shown in the SCE Summary Compensation Table reflect the aggregate grant date fair value of these awards computed in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used to calculate these amounts, see the discussion of options contained in (i) Note 8 (Compensation and Benefit Plans) to EIX’s Consolidated Financial Statements, included as part of the Company’s 2016 Annual Report and (ii) similar footnotes to EIX’s Consolidated Financial Statements for prior years when the awards were granted.
(4) The reported amounts for 2016 include: (i) 2016 interest on deferred compensation account balances considered under SEC rules to be at above-market rates for Mr. Payne $21,115; Mr. Pizarro $7,325; Mr. Petmecky $0; Ms. Rigatti $3,499; Mr. Nichols $2,952; Mr. Swartz $69,494; and Mr. Dietrich $31,915; and (ii) the 2016 aggregate change in the actuarial present value of the accumulated benefit under the SCE Retirement Plan and the EIX Executive Retirement Plan for Mr. Payne $449,053; Mr. Pizarro $907,173; Mr. Petmecky $216,661; Ms. Rigatti $360,719; Mr. Nichols $116,966; Mr. Swartz $77,710; and Mr. Dietrich $232,949.
(5) Amounts reported for 2016 represent Company contributions to the 401(k) Plan and the Executive Deferred Compensation Plan for each NEO other than Messrs. Pizarro and Nichols. For Mr. Pizarro, the amount reported for 2016 includes $65,382 for Company contributions to the 401(k) Plan and the Executive Deferred Compensation Plan and $10,000 in charitable matching gifts under the Director Matching Gift Program described in footnote (5) to the Director Compensation Table above. For Mr. Nichols, the amount reported for 2016 includes $21,027 for Company contributions to the 401(k) Plan and the Executive Deferred Compensation Plan and $20,000 that was paid pursuant to the terms of his employment offer in 2014.

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2017 Proxy Statement




Table of Contents

EXECUTIVE COMPENSATION

Grants of Plan-Based Awards

The following tables present information regarding the incentive plan awards granted to the EIX and SCE NEOs during 2016 under the EIX 2007 Performance Incentive Plan and the potential 2016 target and maximum amount of performance-based annual incentive awards payable under the 162(m) Program or the EIX Executive Incentive Compensation Plan (EICP). See the CD&A above for further information regarding award terms reported in the tables below and for discussions regarding NEO stock ownership guidelines, dividends paid on equity awards, and allocations between short-term and long-term compensation.

EIX Grants of Plan-Based Awards Table – Fiscal Year 2016

 

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(2)

Estimated Future Payouts
Under Equity Incentive
Plan Awards
(3)

  

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)

  

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)

   Exercise
or Base
Price of
Option
Awards
($/Sh)
  

Grant
Date Fair
Value of
Stock
and
Option
Awards
(4)
($)

Name

  

Grant
Date
(1)

  

Date of
Committee
Action

  

Threshold
($)

  

Target
($)

  

Maximum
($)

  

Threshold
Number
of Shares
of Stock
or Units
(#)

  

Target
Number
of Shares
of Stock
or Units
(#)

  

Maximum
Number
of Shares
of Stock
or Units
(#)

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)
Pedro J. Pizarro
Stock Options 3/1/2016 2/24/2016 116,785 66.88 906,252
TSR Performance Shares 3/1/2016 2/24/2016 687 2,749 5,498 226,600
EPS Performance Shares 3/1/2016 2/24/2016 847 3,388 6,776 226,589
Restricted Stock Units 3/1/2016 2/24/2016 6,776 453,179
Stock Options 9/30/2016 8/24/2016 75,836 72.25 646,881
TSR Performance Shares 9/30/2016 8/24/2016 460 1,838 3,676 161,799
EPS Performance Shares 9/30/2016 8/24/2016 560 2,239 4,478 161,768
Restricted Stock Units 9/30/2016 8/24/2016 4,477 323,463
Annual Incentive N/A 784,885 1,569,770
Theodore F. Craver, Jr.(5)
Stock Options 3/1/2016 2/24/2016 382,571 66.88 2,968,751
TSR Performance Shares 3/1/2016 2/24/2016 2,251 9,004 18,008 742,200
EPS Performance Shares 3/1/2016 2/24/2016 2,775 11,098 22,196 742,234
Restricted Stock Units 3/1/2016 2/24/2016 22,195 1,484,421
Annual Incentive N/A 1,562,500 3,125,000
Maria Rigatti
Stock Options 3/1/2016 2/24/2016 22,103 66.88 171,519
TSR Performance Shares 3/1/2016 2/24/2016 130 521 1,042 42,946
EPS Performance Shares 3/1/2016 2/24/2016 161 642 1,284 42,937
Restricted Stock Units 3/1/2016 2/24/2016 1,283 85,807
Stock Options 9/30/2016 8/24/2016 22,294 72.25 190,168
TSR Performance Shares 9/30/2016 8/24/2016 135 541 1,082 47,624
EPS Performance Shares 9/30/2016 8/24/2016 165 659 1,318 47,613
Restricted Stock Units 9/30/2016 8/24/2016 1,317 95,153
Annual Incentive N/A 246,694 493,388
W. James Scilacci(5)
Stock Options 3/1/2016 2/24/2016 87,952 66.88 682,508
TSR Performance Shares 3/1/2016 2/24/2016 518 2,070 4,140 170,630
EPS Performance Shares 3/1/2016 2/24/2016 638 2,552 5,104 170,678
Restricted Stock Units 3/1/2016 2/24/2016 5,103 341,289
Annual Incentive N/A 487,500 975,000
Adam S. Umanoff
Stock Options 3/1/2016 2/24/2016 76,015 66.88 589,876
TSR Performance Shares 3/1/2016 2/24/2016 448 1,790 3,580 147,550
EPS Performance Shares 3/1/2016 2/24/2016 551 2,205 4,410 147,470
Restricted Stock Units 3/1/2016 2/24/2016 4,410 294,941
Annual Incentive N/A 412,500 825,000

2017 Proxy Statement

41



Table of Contents

EXECUTIVE COMPENSATION

 

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(2)

Estimated Future Payouts
Under Equity Incentive
Plan Awards
(3)

   

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)

   

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)

    Exercise
or Base
Price of
Option
Awards
($/Sh)
   

Grant
Date Fair
Value of
Stock
and
Option
Awards
(4)
($)

Name

  

Grant
Date
(1)

  

Date of
Committee
Action

   

Threshold
($)

   

Target
($)

   

Maximum
($)

   

Threshold
Number
of Shares
of Stock
or Units
(#)

   

Target
Number
of Shares
of Stock
or Units
(#)

   

Maximum
Number
of Shares
of Stock
or Units
(#)

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)
Kevin M. Payne
Stock Options 3/1/2016 2/24/2016 16,882 66.88 131,004
TSR Performance Shares 3/1/2016 2/24/2016 100 398 796 32,807
EPS Performance Shares 3/1/2016 2/24/2016 123 490 980 32,771
Restricted Stock Units 3/1/2016 2/24/2016 980 65,542
Stock Options 6/30/2016 5/25/2016 20,795 77.67 191,938
TSR Performance Shares 6/30/2016 5/25/2016 124 495 990 48,065
EPS Performance Shares 6/30/2016 5/25/2016 155 618 1,236 48,000
Restricted Stock Units 6/30/2016 5/25/2016 1,236 96,000
Annual Incentive N/A 270,878 541,756
Ronald L. Litzinger
Stock Options 3/1/2016 2/24/2016 81,186 66.88 630,003
TSR Performance Shares 3/1/2016 2/24/2016 478 1,911 3,822 157,524
EPS Performance Shares 3/1/2016 2/24/2016 589 2,355 4,710 157,502
Restricted Stock Units 3/1/2016 2/24/2016 4,710 315,005
Annual Incentive N/A 420,000 840,000
(1) Options, performance shares, and restricted stock units were granted to each NEO on March 1, 2016 as part of the NEO’s compensation package for his or her position as of that date. Additional options, performance shares, and restricted stock units were granted to Mr. Payne in connection with his election as SCE CEO effective June 1, 2016 (the actual grant date of June 30, 2016 was the last New York Stock Exchange trading date for that quarter). Additional options, performance shares, and restricted stock units were granted to Mr. Pizarro and Ms. Rigatti in connection with their respective elections as EIX CEO and EIX EVP and CFO, effective September 30, 2016.
(2) Maximum amounts reported reflect 200% of the applicable annual incentive target under the EICP and are lower than the maximum annual incentive award payable under the 162(m) Program to participating NEOs; NEOs who participate in the 162(m) Program receive the applicable award under the EICP if it is less than the applicable maximum under the 162(m) Program. For information regarding the description of performance-based conditions under the 162(m) Program and the EICP, see “Annual Incentive Awards” in the CD&A above.
(3) Half of each NEO’s 2016 performance share award value was granted in performance shares subject to a TSR vesting metric and the other half of the award value was granted in performance shares subject to an EPS vesting metric. The TSR and EPS components of each NEO’s award are subject to different threshold and other vesting requirements. In order to reflect these differences, the table above reports the TSR and EPS components of each NEO’s 2016 performance share award as separate awards. See “Long-Term Incentive Awards” in the CD&A above for information regarding the terms of the awards, the description of performance based vesting conditions, and the criteria for determining the amounts payable.
(4) The amounts shown for options, performance shares, and restricted stock units represent the grant date fair value of the awards in 2016 determined in accordance with FASB ASC Topic 718. There is no guarantee that, if and when the awards vest, they will have this value. Assumptions used in the calculation of these amounts are referenced in footnotes (2) and (3) to the EIX Summary Compensation Table.
(5) In accordance with the terms and conditions of the awards, 1/4 of the options, performance shares, and restricted stock units awarded in 2016 to Messrs. Craver and Scilacci terminated for no value in connection with their respective retirements. Similarly, the annual incentive awards to Messrs. Craver and Scilacci were prorated, based on (i) the ratio of the number of workdays from January 2016 through September 30, 2016, compared to (ii) the total number of workdays in 2016. The amounts shown in the Grants of Plan-Based Awards Table are presented before taking these forfeitures and proration, respectively, into account.

42

2017 Proxy Statement




Table of Contents

EXECUTIVE COMPENSATION

SCE Grants of Plan-Based Awards Table – Fiscal Year 2016

 

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(2)

Estimated Future Payouts
Under Equity Incentive
Plan Awards
(3)

   

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)

   

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)

    Exercise
or Base
Price of
Option
Awards
($/Sh)
   

Grant
Date Fair
Value of
Stock
and
Option
Awards
(4)
($)

Name

   

Grant
Date
(1)

   

Date of
Committee
Action

   

Threshold
($)

   

Target
($)

   

Maximum
($)

   

Threshold
Number
of Shares
of Stock
or Units
(#)

   

Target
Number
of Shares
of Stock
or Units
(#)

   

Maximum
Number
of Shares
of Stock
or Units
(#)

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)
Kevin M. Payne
Stock Options 3/1/2016 2/24/2016 16,882 66.88 131,004
TSR Performance Shares 3/1/2016 2/24/2016 100 398 796 32,807
EPS Performance Shares 3/1/2016 2/24/2016 123 490 980 32,771
Restricted Stock Units 3/1/2016 2/24/2016 980 65,542
Stock Options 6/30/2016 5/25/2016 20,795 77.67 191,938
TSR Performance Shares 6/30/2016 5/25/2016 124 495 990 48,065
EPS Performance Shares 6/30/2016 5/25/2016 155 618 1,236 48,000
Restricted Stock Units 6/30/2016 5/25/2016 1,236 96,000
Annual Incentive N/A 270,878 541,756
Pedro J. Pizarro
Stock Options 3/1/2016 2/24/2016 116,785 66.88 906,252
TSR Performance Shares 3/1/2016 2/24/2016 687 2,749 5,498 226,600
EPS Performance Shares 3/1/2016 2/24/2016 847 3,388 6,776 226,589
Restricted Stock Units 3/1/2016 2/24/2016 6,776 453,179
Stock Options 9/30/2016 8/24/2016 75,836 72.25 646,881
TSR Performance Shares 9/30/2016 8/24/2016 460 1,838 3,676 161,799
EPS Performance Shares 9/30/2016 8/24/2016 560 2,239 4,478