Exelon Corp DEF 14A, filed Mar 20, 2024

Exelon Corp (EXC)

DEF 14A 2024-03-20 For: 2024-04-30

View Original

Added on June 12, 2026

About this DEF 14A

Exelon Corp filed this DEF 14A on March 20, 2024.

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Check the appropriate box:

☐			Preliminary Proxy Statement
☐			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☑			Definitive Proxy Statement
☐			Definitive Additional Materials
☐			Soliciting Material under §240.14a-12


Payment of Filing Fee (Check all boxes that apply):

☑			No fee required
☐			Fee paid previously with preliminary materials
☐			Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11


Notice of the Annual Meeting of Shareholders and 2024 Proxy Statement						1


Letter from the Board of Directors to Our Shareholders						2


About Exelon						4


Driving Sustainable Change: Highlights of our Responsible Business Practices						6


Proxy Voting Roadmap						14


Board and Corporate Governance Matters						15



Proposal 1 Election of Directors


Director Qualifications and Nomination						15
Board Matrix						16
Director Nominees						19
Overview of Board’s Role						26
Oversight of Risk						28
Board Dynamics						30
Board Committees						31
Board, Committee, and Individual Director Assessment and Feedback						34
Director Orientation and Education						35
Governance Matters						35
Director Compensation						35

Audit and Risk Committee Matters						38



Proposal 2 Ratification of PwC as Exelon’s Independent Auditor for 2024


Evaluation of the Independent Auditor						38
Critical Audit Matters						40
Independent Auditor Fees						40
Report of the Audit and Risk Committee						41


Executive Compensation						42


Proposal 3 Say-on-Pay: Advisory Vote on Executive Compensation


Compensation Discussion & Analysis (CD&A)						43


Compensation Governance and Oversight						52
Compensation Committee Report						55
Executive Compensation Tables						56
CEO Pay Ratio						66
Pay for Performance						67



Proposal 4 Management Proposal: Amendment to Articles to Allow Shareholders to Call Special Meeting




Proposal 5 Shareholder Proposal


Ownership of Exelon Stock						76


Other Significant Owners of Exelon Stock						77


Additional Information						78


Frequently Asked Questions						81


Appendix						83

A - Amendments to Articles of Incorporation						83
B - Amendments to Bylaws						84
C - Definitions of Non-GAAP Measures						87
D - Categorical Standards of Independence						89
E - Key Terms & Acronyms						90


Items of Business			Board Recommendation:
1.Election of Directors 2.Ratify appointment of PricewaterhouseCoopers LLP as independent auditor for 2024 3.Advisory Vote on Executive Compensation 4.Management Proposal: Approve an amendment to our Articles of Incorporation to allow shareholders owning at least 25% of our stock to call special meetings 5.Shareholder Proposal, if properly presented			FOR FOR FOR FOR AGAINST


Cautionary Statements Regarding Forward-Looking Information This proxy statement contains certain forward-looking statements within the meaning of federal securities laws that are subject to risks and uncertainties. The factors that could cause actual results to differ materially from the forward-looking statements made by Exelon Corporation include those factors discussed herein, as well as (1) the Registrants’ 2023 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on February 21, 2024 in (a) Part I, ITEM 1A. Risk Factors; (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 18, Commitments and Contingencies; and (2) other factors discussed in filings with the SEC by the Registrants. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this proxy statement. Exelon does not undertake any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this proxy statement.


Non-GAAP financial measures discussed in this Proxy Statement are identified by the phrase “non-GAAP” and/or an asterisk (*). Reconciliations of these non-GAAP measures to the most comparable GAAP measures are provided in Appendix C. Web links throughout this document are provided for convenience only and are not intended to be active hyperlinks to the referenced websites. Information contained on our website is not part of this proxy statement.


ONLINE:			Vote online at www.proxyvote.com 24 hours a day
BY PHONE:			Call toll-free 1-800-690-6903
BY MAIL:			If you have received a printed version of these proxy materials, mark, date, sign and mail your proxy card in the postage-paid envelope provided.




Electricity in southern NJ						Electricity & natural gas in MD


Electricity in northern IL						Electricity & natural gas in DE and electricity in MD


Electricity & natural gas in eastern PA						Electricity in D.C. and MD


6 T&D-only utilities Operate across seven regulatory jurisdictions			4 metro areas served Chicago, Philadelphia, Baltimore, and D.C.
$21.8 billion operating revenue in 2023			$34.5 billion Projected capital investment over 2024 through 2027
19,962 Employees across our operating companies1			10.7 million Electric and gas customers served by our 6 utilities2


Operations-Driven Goals (Scope 1 & 2 Emissions)
To make progress toward our 2050 goal of net-zero emissions from operations, we are taking actions in the following areas:

Electrifying 30% of our light and heavy-duty vehicle fleet by 2025 and 50% by 2030	Focusing technology and infrastructure investments on increasing energy efficiency and utilizing clean electricity for buildings we own	Investing in equipment and processes to reduce SF6 leakage from our systems	Modernizing natural gas infrastructure to increase safety and reliability and to minimize methane leaks


Supporting Clean Energy Goals in Our Communities (Customer-driven Scope 2 and Scope 3 Emissions)
Beyond our own operations, we will continue to advocate for sound climate policies and technology solutions that reduce emissions while maintaining affordability, help our communities thrive and ensure that the economic and environmental benefits of clean energy are shared equitably. Our actions will focus on empowering our customers and supporting our communities with:

•Transportation electrification, efficiency, and conservation programs •Leveraging alternative fuels to reduce natural gas lifecycle emissions •Partnering with communities to develop and implement clean infrastructure solutions that are accessible to all customers •Investing in and supporting small businesses that are tackling climate problems in our communities •Building connected communities that harness digital solutions to integrate clean technologies



What is Scope 1, Scope 2, and Scope 3? Scope 1, 2 and 3 is a way of categorizing GHG emissions resulting from a company’s own operations and from its wider value chain.

Scope 1: Direct emissions from company-owned and controlled sources - e.g., company facilities and vehicles, fugitive emissions.

Scope 2: Indirect emissions from the consumption of purchased electricity. Exelon divides these into operations-driven Scope 2, associated with our occupied building use, and customer-driven Scope 2, associated with T&D system use and losses.

Scope 3: Indirect emissions that occur in the company’s value chain - i.e., emissions associated with the production, generation, and end-use of the energy our customers consume. Exelon groups customer-driven Scope 2 T&D use with Scope 3 customer emissions for the purposes of GHG emissions management efforts.


Our DEI strategy is centered around three primary values:						Examples of how our culture reflects our values:

Providing a workplace that ensures mutual respect and where each individual has the opportunity to grow and contribute at their greatest potential.						•Pay Equity: To support the company’s pay equity goals, Exelon conducts analysis on gender and racial pay equity. •Racial Equity Task Force: Exelon’s company wide Racial Equity Task Force works to drive progress in six key areas: Culture, Customers, Community, Workforce Development, Policy Reform, and Environmental Justice. •Equal by 30: Exelon is an ambassador for Clean Energy Education & Empowerment International’s Equal by 30 campaign to work toward equal pay, equal leadership, and equal opportunities for women in the clean energy sector by 2030. •Religious Accommodations: Reasonable accommodation of employees’ religious practices including time and space for prayer and accommodations for religious dress/attire and dietary restrictions. Additionally, employees receive 4 floating holidays per year.


Attracting, retaining, and developing employees who will best serve and represent our customers, partners, and communities.						•Women in the Workforce: Exelon is focused on creating an environment that attracts and retains women by enabling them to stay in the workforce, grow with the company, and move up within the company. Initiatives include career development programs focused on women and comprehensive health and well-being benefits. •Employee Resource Groups (ERG): Exelon supports 10 ERGs that are open to all employees to share experiences and connect with colleagues. Over 10,000 employees participate in at least one ERG, and there are over 42 chapters spread across the company. •DEI Resources and Webinars: Regular communication from senior leadership reinforces our values and expectations and highlights engagement opportunities and educational resources to equip leaders and employees with the tools and resources needed to advance an inclusive culture that values diversity and the diverse viewpoints that help drive our business.


Integrating diversity, equity, and inclusion as a business imperative and a core value.						•DEI Performance Goals: Beginning in 2021, all management employees were required to have an annual performance goal incorporating activities to support a culture of diversity, equity and inclusion at the company. •Diverse Suppliers: Exelon publishes an annual report detailing our spending with diverse suppliers – nearly $3.2 billion in 2023. •Community Impact Capital Fund (CICF): In 2022, Exelon launched the CICF in partnership with the Exelon Foundation to strengthen communities and help businesses grow by providing affordable capital to businesses that have traditionally been challenged in accessing and securing funding and increasing business capacity and subsequent employment opportunities for diverse local communities.


TOTAL EMPLOYEES 19,962 In 2023, Exelon’s turnover rate was approximately 7.4% of which approximately half were planned retirements			EXELON’S EXECUTIVE COMMITTEE 63.6% are women and/or people of color			Women Overall 28.2% Management 33.3% People of Color Overall 40.9% Management 37.5% Veterans 5.6% Disabled 3.3%



Advance an affordable and clean energy future for our customers and communities Enable innovative technologies to serve customer needs			Ensure the reliability, security, and efficiency of the nation’s critical electric grid Ensure and protect customer choice with fair and equal access to the marketplace


www.exeloncorp.com			1


www.exeloncorp.com			3


www.exeloncorp.com			5


www.exeloncorp.com			7



1 Election of Directors		SEE PAGE 15



Elect 9 Director nominees named in the proxy statement.

	The Board recommends a vote “FOR” each Director nominee.



2 Ratification of Independent Auditor		SEE PAGE 38



Ratify the appointment of PricewaterhouseCoopers LLP (PwC) as Exelon’s independent auditor for 2024. PwC has served as the Company’s independent auditor since the Company’s formation in 2000. PwC has become deeply familiar with the Company’s operations and businesses, accounting policies and practices, and internal controls over financial reporting. The Audit and Risk Committee believes this experience and expertise is valuable to the Company and its shareholders.

	The Board recommends a vote “FOR” the ratification of PricewaterhouseCoopers LLP as Exelon’s independent auditor for 2024.



3 Say-on-Pay		SEE PAGE 42



Approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement. Our compensation program is largely performance-based and is driven by rigorous goals that are tied to achieving financial and operational results that align the interests of executives with those of the Company’s shareholders.

	The Board recommends a vote “FOR” the approval of the compensation paid to the Company’s named executive officers.



4 Management Proposal		SEE PAGE 72



Approve an amendment to our Articles of Incorporation to allow shareholders owning at least 25% of our stock to call special meetings. We are asking shareholders to approve an amendment to our governing document that would allow shareholders collectively owning 25% or more of our outstanding capital stock to call special meetings, reflecting the minimum ownership threshold permitted under the law of Pennsylvania, our state of incorporation.

	The Board recommends a vote “FOR” the approval of this proposal.



5 Shareholder Proposal		SEE PAGE 74



	The Board recommends a vote “AGAINST” this proposal.



PROPOSAL 1
			Election of Directors The Corporate Governance Committee collaborates with the Board Chair to determine the appropriate mix of skills and characteristics that our Board requires. The Board has determined that the current composition and size of the Board is appropriate for Exelon, considering the Company’s size, geographic scope, and need to access a wide range of views and backgrounds to reflect the diversity and complexity of our business and the markets and communities we serve. There are 9 nominees for election at the 2024 annual meeting.



			The Board recommends a vote “FOR” each Director nominee.




Highest personal and professional ethics, integrity, and values Broad training and experience at the policy-making level in business, government, education, or technology Willingness to remain current with industry and other developments relevant to Exelon’s strategic direction A commitment to representing the long-term interests of shareholders, customers, employees, and communities served by the Company and its subsidiaries An inquiring and independent mind, practical wisdom, and mature judgment			Expertise that is useful to the enterprise and complementary to the background and experience of other Directors Willingness to devote the required amount of time to carrying out the duties and responsibilities of Board membership and a commitment to serve over a period of years to develop knowledge about Exelon’s principal operations Involvement only in activities or interests that do not conflict with responsibilities to Exelon and its shareholders


Overview of Board’s Role						Governance Snapshot

Exelon’s business, property and affairs are managed under the direction of the Board of Directors. The Board considers the interests of all of its constituencies including shareholders, customers, employees, and the communities we serve. The Board is committed to ensuring that Exelon conducts business in accordance with the highest standards of ethics, integrity, and transparency. Governance Highlights Exelon’s Board remains committed to maintaining the highest standards of corporate governance. We believe our strong corporate governance practices help us achieve our performance goals and maintain the trust and confidence of our shareholders, employees, customers, regulators, and other stakeholders. Below is a summary of our corporate governance practices, and more detail is presented in our Corporate Governance Principles, which are available on the Exelon website at www.exeloncorp.com on the Governance page. Proxy Access •Eligible shareholders may submit nominees for consideration by the Corporate Governance Committee or nominate Directors through Exelon’s “proxy access” bylaws. Oversight of Risk Management •The Board regularly reviews management’s systematic approach to identifying and assessing risks faced by Exelon and each business unit, taking into account emerging trends and developments and incorporating capital investment and business opportunities. Our Audit and Risk Committee oversees Exelon’s risk management strategy, policies and practices, and risk exposures. The full Board oversees Exelon’s cybersecurity program and engages with the Chief Information Security Officer and a cross-functional management team at each regular quarterly meeting regarding the risks from cybersecurity threats. In March 2024, the Board approved the formation of an Operations, Safety, and Customer Experience Committee, which will oversee Exelon’s risks and risk mitigation plans related to our operations and the health and safety of our employees and contractors and members of the public. Shareholder Engagement •Exelon has a long-standing practice of engaging with our shareholders on corporate governance matters throughout the year, as may be necessary or helpful, to understand the positions of our investors and to share Exelon’s perspective on matters of mutual interest. See also the Compensation Discussion & Analysis section for a summary of the input received during 2023 related to our executive compensation program. Continuing Education •Continuing director education is provided during Board and Committee meetings. The Company also encourages and pays for Director participation in externally offered director development opportunities. Other Governance Best Practices •Independent Directors meet regularly in executive sessions without management during Board and Committee meetings. •Disclosures regarding political activities and contributions are provided through semi-annual reports available on www.exeloncorp.com.						Director Elections: Annual Vote Standard: Majority of votes cast in uncontested elections Chair Independence: Independent Committee Independence: 100% Independent Board Self-Evaluation: Annual Committee Self-Evaluation: Annual Director Evaluation: Biennial includes input from peers and executive management Mandatory Retirement Age: 75 Director Stock Ownership: 5x annual cash retainer within 5 years; hedging, pledging, and short sales prohibited Outside Boards (Non-CEOs): Maximum of 3 in addition to Exelon (4 total) Outside Boards (Active CEOs): Maximum of 1 in addition to Exelon (2 total)



	Chair: Paul Bowers	Members:1 Rodgers Cheshire, Jojo, Richo, Rogers

	Meetings in 2023: 6	Committee is 100% Independent


Committee Responsibilities: •Assists Board in the oversight and review of the quality and integrity of the Company’s financial statements and internal controls over financial reporting •Appoints, retains, and oversees the independent auditor and evaluates its qualifications, performance, independence, and fees •Oversees the Company’s internal audit function •Oversees risk management functions and strategies, including compliance with risk management program, but excluding cyber •Oversees compliance with Exelon’s Code of Business Conduct, and the process for the receipt and response to complaints regarding accounting, internal controls, ethics, or audit matters Audit Committee Financial Experts The Board of Directors has determined that Messrs. Bowers and Rogers are “Audit Committee Financial Experts” as defined by SEC rules. See page 41 for the Audit Committee Report.



	Chair: Marjorie Rodgers Cheshire	Members:2 Anderson, Jojo, Lillie

	Meetings in 2023: 4	Committee is 100% Independent


Committee Responsibilities: •Assists Board in establishing performance criteria, evaluation, and compensation for CEO •Approves executive compensation program design for executive officers, other than the CEO •Monitors and reviews leadership and succession information for executive roles •Retains the Committee’s independent compensation consultant •Reviews Compensation Discussion and Analysis and prepares Compensation Committee Report for this proxy statement Compensation Committee Interlocks and Insider Participation During 2023, none of Exelon’s executive officers served on the board of directors of any entities whose executive officers serve on the Talent Management and Compensation Committee (TMCC) or our Board. No current member of the TMCC was an executive officer or employee of Exelon during 2023 or at any time, and no member had any relationship with Exelon that would require disclosure under the SEC rules. See page 55 for the Compensation Committee Report.



	Chair:3 Tony Anderson	Members:3 Bowers, Young

	Meetings in 2023: 4	Committee is 100% Independent


Committee Responsibilities: •Identifies and recommends qualified candidates for election by the Board and shareholders and oversees Board and Committee structure and composition •Recommends Corporate Governance Principles and advises on corporate governance issues including evaluation processes for the Board, Committees, each Director, the Board Chair and CEO •Oversees Exelon’s environmental strategies, including climate change and sustainability policies •Oversees Utility board governance policies and practices, qualifications and election of Utility directors, and annual review of the Utility boards and directors •Reviews Exelon’s director compensation program and retains an independent compensation consultant •Authorized to retain an independent search firm to identify Director candidates



FACILITATED DISCUSSIONS	The Chair of the CGC facilitates a discussion with the Board in executive session regarding the Board’s performance. As part of this discussion, the Board Chair steps out to allow the other Directors to discuss the Chair’s performance. Directors are provided a list of questions and discussion topics to review prior to the discussion, focusing on what the Board is doing well and opportunities for improvement. Discussion topics include the following:

	•Overall Board performance and areas of focus including oversight of Company operations, strategy and financial performance •Board composition, including whether the Board has an appropriate balance of diversity, skills, experience and backgrounds	•Board and Company culture •Management engagement with the Board and Committees •Quality of information and materials provided to the Directors •Board meeting logistics



REVIEW AND NEXT STEPS	Following the completion of the session, the Board Chair and CGC Chair review the assessment with the Board, and the Board develops plans to take actions based on the results, as appropriate. The CGC Chair separately provides the Board Chair with feedback based on the discussion of the Chair’s performance.



			QUESTIONNAIRES			The Chair of the CGC requests input from all Directors with regard to each Director undergoing assessment, including what Directors does well, should continue to do, and stop doing.




			DISCUSSION AND NEXT STEPS			After reviewing the input received, the CGC Chair collaborates with the Board Chair to provide constructive feedback separately to individual Directors undergoing assessment for developmental opportunities.


Role			Annual Cash Retainer ($)
Non-Employee Director			125,000
Board Chair			180,000
Committee Chairs:
Audit and Risk Committee			25,000
Talent Management and Compensation Committee			20,000
Corporate Governance Committee			20,000


Name			Total Deferred Stock Units (#)
Anderson			57,525
Bowers			9,665
Cheshire			14,939
Jojo			42,767
Lillie			2,849
Richo			1,732
Rogers			2,849
Young			25,509
Total All Directors			157,835


Director Name	Cash Fees ($) (Note 4)	Equity Compensation ($) (Note 5)	All Other Compensation ($) (Note 6)	Total Compensation ($)
Anderson	165,000	165,000	—	330,000
Berzin1	47,734	52,582	15,000	115,316
Bowers	162,102	165,000	—	327,102
Cheshire	158,681	165,000	952	324,633
Gutierrez1	39,835	52,582	—	92,417
Jojo	131,319	165,000	1,253	297,572
Joskow1	39,835	52,582	—	92,417
Lillie2	85,508	112,871	15,461	213,840
Richo3	51,630	68,601	—	120,231
Rogers2	85,508	112,871	—	198,379
Young	305,000	165,000	—	470,000
Total All Directors	1,272,152	1,277,089	32,666	2,581,907



PROPOSAL 2
			Ratification of PricewaterhouseCoopers LLP as Exelon’s Independent Auditor for 2024 Based on the most recent evaluation and consideration of factors described below, the Audit and Risk Committee (ARC or Committee) and the Board of Directors have determined that the retention of PricewaterhouseCoopers LLP (PwC) as the independent auditor remains in the best interests of the Company and its shareholders based on the Committee’s level of satisfaction with the quality of services provided by PwC. PwC has served as the Company’s independent auditor since 2000. The Committee believes PwC’s tenure as Exelon’s independent auditor is a benefit to audit quality given its experience with the Company and knowledge of the business. Because of PwC’s familiarity with Exelon, the firm has demonstrated an ability to focus on risks significant to the Company and its industry and has developed and implemented efficient and innovative audit processes, which have enabled the provision of services for fees considered competitive by the Committee.



			The Board recommends a vote “FOR” the ratification of PricewaterhouseCoopers LLP as Exelon’s Independent Auditor for 2024.



QUALITY OF THE INDEPENDENT AUDIT FIRM AND AUDIT PROCESS			•The number of restatements, material weaknesses and significant deficiencies to determine if any items reasonably should have been identified by the independent audit firm. •Results of the 2021 Public Company Accounting Oversight Board (PCAOB) inspection report issued in November 2022. •The risk associated with the independent audit firm based on their financial stability, compliance with applicable laws and professional standards, pending litigation or judgments against the independent audit firm, and results of applicable independent audit firm inspections.


ALIGNMENT WITH EXELON’S CORE VALUES			•Whether the independent audit firm and onsite team demonstrate a commitment to diversity, equity, and inclusion (DEI) aligned with Exelon’s core values. •Annual DEI assessment of third-party finance vendors by management led to PwC’s appointment to the DEI honor roll for the twelfth consecutive year.


LEVEL OF SERVICE PROVIDED BY THE INDEPENDENT AUDIT FIRM			•Results of annual assessment distributed to the Committee and management with frequent interactions with the independent audit firm. •Open access to and engagement with PwC subject matter experts providing valuable insights on matters important to Exelon.


GOOD FAITH NEGOTIATION OF FEES			•Robust biennial fee negotiation process. •Reasonableness of fees incurred against the annually approved fees and reported current fee estimates provided to the Committee quarterly.



Benefits of Tenure						Key Independence Controls


•Enhanced Audit Quality. PwC’s deep familiarity with the utilities industry and Exelon’s businesses and operations, accounting policies and practices, and internal controls over financial reporting is valuable to the Company and its shareholders. •Continuity Mitigates Disruption Risk. Onboarding a new independent auditor would require extensive education and significant time and resources for the new auditor to obtain a comparable level of familiarity with our business and control framework. Such a disruption could potentially distract from management’s focus on other matters •Continuity of Non-Audit Work. A new independent auditor would also disrupt non-audit workflows and could create conflicts related to consulting contracts on other matters. •Efficient Audit Plans. PwC’s knowledge of our business and control framework allows it to develop and implement efficient and innovative audit processes, enabling the provision of services for fees considered by the Committee to be competitive.						•Committee Oversight. The Committee and its Chair hold regular executive sessions with the independent auditor during which the Committee discusses the scope of PwC’s audit, any problems or difficulties encountered or observations made. •Lead Partner Rotation. PwC’s institutional knowledge and experience is balanced by the fresh perspective delivered by changes in the audit team resulting from mandatory audit partner rotation and routine turnover within the team that provides for new perspectives. The Committee is directly involved in the consideration and selection of its lead engagement partner. •Limits on non-audit services. The Committee has exclusive authority to pre-approve non-audit services and determine whether such services are consistent with auditor independence. •Independence assessment. On at least an annual basis, PwC provides the Committee reports regarding independence; conducts periodic internal reviews of its audit and other work and assesses the adequacy of partners and other staff serving the Company’s account consistent with independence requirements. •Regulatory Controls. PwC is an independent registered public accounting firm and is subject to PCAOB inspections, “Big 4” peer reviews and PCAOB and SEC oversight.


	Year Ended December 31,
(in thousands)		2023	2022
Audit Fees1		$14,220		$15,269
Audit Related Fees2		—		225
Tax Fees3		590		662
All Other Fees4		2,128		2,666
Total:		$16,938		$18,822