in-depth oversight of risk, the Board has delegated some specific risk oversight
responsibility to its committees, as summarized below and as described in those committees’ charters. The Nominating, Governance, and Sustainability Committee is charged with ensuring that risk oversight roles have been properly allocated, and
the Audit Committee reviews Evergy’s enterprise risk management policies and framework. Management is responsible for developing and implementing appropriate risk management practices on a day-to-day basis.
At least once each year, the Board receives a report from management
on key business and compliance risks and related mitigation plans. The Board also receives updates on significant events and the status of, and changes in, such risks and mitigation plans. In addition, management makes regular presentations to
the Board focusing on significant risk areas and corresponding mitigation plans and activities.
Board Attendance at Annual Meeting. Our Corporate Governance Guidelines provide that all directors are encouraged to attend annual meetings of shareholders.
Mandatory Retirement / Tenure Policy. All directors serving on the Board as of June 4, 2018 have a mandatory retirement age of 75, meaning that any such director is not eligible to stand for election or re-election at the annual meeting of
shareholders following his or her 75th birthday. Any director appointed after June 4, 2018 will not be able to stand for election or re-election at the annual meeting of shareholders following the earlier of (i) his or her 72nd
birthday or (ii) 16 years of service. In addition, any director who experiences a significant change in primary employment since election to the Board must offer to resign, which offer will be evaluated by the Board in light of the individual
circumstances.
Stock Ownership Requirements. Our Corporate Governance Guidelines provide that non-employee directors are expected, within five years of their initial election to the Board, to acquire and hold Evergy stock with a value equal to at least five
times the amount of the annual non-employee director cash retainer. Our CEO is required to hold Evergy stock with a value equal to six times the amount of his or her base salary. All director nominees are in compliance with the policy.
No Hedging / Pledging. Our securities trading policy, which was adopted by the Board and is overseen by our Nominating, Governance, and Sustainability Committee, prohibits all employees, officers, and directors from trading in options, warrants, and puts
and calls related to Evergy. Our policy also prohibits all employees, officers, and directors from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise
engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Evergy securities. The policy also prohibits all employees, officers, and directors from holding Evergy securities in a
margin account or pledging Evergy securities as collateral.
Oversight and Disclosure of Political
Contributions. Our Nominating, Governance, and Sustainability Committee reviews and approves the annual political contribution budget, and reviews reports on political expenditures. Our investor relations
website, investors.evergy.com, also contains a copy of our policy with respect to political contributions and information regarding
certain political expenditures.
Human Rights Policy. The Board has adopted a formal human rights policy which is available on our investor relations website, investors.evergy.com.
Emissions Reductions and Environmental Leadership. Evergy is committed to a long-term strategy to reduce CO2 emissions in a cost-effective and reliable manner. In 2022, Evergy achieved a reduction of CO2 emissions by 44% from 2005 levels and
reductions in sulfur dioxide and nitrogen oxide emissions by 98% and 88%, respectively, relative to 2005 levels. Evergy has a long-term target to achieve net-zero CO2 emissions by 2045 with an interim goal of a 70% reduction of CO2
emissions from 2005 levels by 2030. The trajectory and timing of reaching the company’s net-zero goal will be dependent on enabling technologies and supportive policies and regulations, among other external factors. In 2022, Evergy added an
environmental metric to the LTIP (as defined below) based on total megawatts of owned renewables additions by year-end 2024 or buy-ins of firm power purchase agreements (“PPA”).
Diversity, Equity, and Inclusion. Evergy strives to maintain a diverse, inclusive, and equitable people first culture that empowers a stronger future together. Beyond creating an inclusive culture within our company, Evergy strives to be
nationally recognized as a leader in the realm of supplier diversity. By increasing opportunities for diverse suppliers and enhancing the competitiveness of the supply chain, we promote economic value for our customers, shareholders, and the
communities we serve. Our supplier diversity initiatives benefit both underrepresented businesses and the communities in which they are located through job creation, increased wages, and tax revenue. Evergy’s active supplier diversity program
has been in place for more than 30 years and involved $280 million of diverse supplier spending in 2022. To further promote and reinforce our commitment to DE&I, our AIP for 2022 includes a discretionary DE&I modifier.
Evergy’s 2021 Master Credit Facility with
Non-Emission and Diversity Metrics. In 2021, Evergy amended and restated its $2.5 billion master credit facility, with certain pricing terms based on diversity and non-CO2 emitting generation goals.
The applicable interest rates and commitment fees for the facility are subject to upward or downward adjustments,
