Pinnacle West Capital Corp DEF 14A, filed Apr 5, 2023

Pinnacle West Capital Corp DEF 14A, filed Apr 5, 2023

A Message from Our Chairman, President and CEO

A Message from Our Lead Director

Notice of the 2023 Annual Meeting of Shareholders

About this DEF 14A

About this DEF 14A

Proxy Statement Summary

Information About Our Board and Corporate Governance

Proposals to be Voted Upon

The Value We Create

The Value We Create for Our Stakeholders

Financial Highlights

Customer Highlights

Employee Highlights

Our DEI Strategy: Key Areas of Focus

Environmental Highlights

Community Highlights

Governance Highlights

Board Highlights

Compensation Highlights

Director Nomination Process

Board Effectiveness

Board and Committee Structure

Board Oversight and Engagement

To our Shareholders:

Dear Fellow Shareholders,

Shareholder Value

2022 Financial and Operating Highlights

Customer Care Center

Customer Advisory Board

Employee Network Groups

APS Clean Energy Commitment

Directors’ Key Skills and Experience

Director Qualifications

Personal Qualities of our Directors

Nominees for the Board

Board Refreshment Planning

Director Retirement Policy

Board Evaluations

Director Onboarding

Director Education

Director Resignation Policies

The Board’s Leadership Structure

Board Committees

Board Meetings and Attendance

Company Culture

Strategic Plan

Environmental, Social and Governance (“ESG”)

Human Capital Management

Codes of Ethics

The Board’s Role in Risk Oversight

Skills and Experience Possessed by Our Director Nominees

Shareholder Recommendation of Board Candidates for the 2024 Annual Meeting

Proxy Access

Our Board Evaluation Process

Lead Director

Chairman and CEO

Code of Ethical Conduct (“Code of Ethics”)

Code of Ethics for Financial Executives

Responsibilities

Highlights of Certain Risks

Building Shareholder Value Through our APS Promise
and 10-Year Strategic Plan

Reflections on 2022

The APS Promise and the 10-Year Strategic Plan

Board of Directors

Sustainability

On Behalf of the Board

Company Strategy

Board Tenure

Dr. Dale Klein

Kristine Svinicki

Board Diversity

Sustainability

TABLE OF CONTENTS

Finance and Accounting

Business Operations and Strategy

Leadership Experience in a Large Organization

The Company’s Industry

Risk Oversight and Risk Management

Public Policy and Regulatory Compliance

Ability to Attract & Retain Top Talent

Supply Chain Constraints

Pinnacle West Capital Corp (PNW)

DEF 14A 2023-04-05

View Original

Added on June 12, 2026

Pinnacle West Capital Corp filed this DEF 14A on April 5, 2023.

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.


INDEX OF FREQUENTLY REQUESTED INFORMATION
Auditor Fees	128
Beneficial Ownership Table	129
Board Evaluations	25
Board Leadership	26
CEO Pay Ratio	109
Clawback Policies	84
Code of Ethics	35
Company Culture	33
Compensation Consultant	69
Corp. Gov. Guidelines	20
Director Attendance	33
Director Independence	55
Director Biographies	44
Director Skills Matrix	43
Director Tenure	17
ESG Framework	34
Financial Highlights	5
Human Capital Management	35
Lead Director Duties	26
Management Succession	39
Named Executive Officers (“NEOs”) for 2022	60
Pay Versus Performance	110
Peer Group	71
Perks	83
Related Party Transactions	139
Risk Oversight	36
Stock Ownership Guidelines	84
Strategic Plan	33
Succession Planning	39

VOTING ITEMS
1.	To elect eleven Directors to serve until the 2024 Annual Meeting of Shareholders
		FOR each Director nominee
2.	To hold an advisory vote to approve executive compensation
		FOR
3.	To hold an advisory vote on the frequency of our shareholders advisory votes on executive compensation
	1	YEAR
4.	To approve the first amendment to Pinnacle West Capital Corporation 2021 Long-Term Incentive Plan
		FOR
5.	To ratify the appointment of our independent accountant for the year ending December 31, 2023
		FOR
6.	To act upon a shareholder proposal requesting adoption of a policy separating the chairman and CEO roles and requiring an independent Board Chairman whenever possible, if properly presented at the 2023 Annual Meeting of Shareholders
		AGAINST
Your vote is important. Whether you plan to participate in the Annual Meeting or not, please promptly vote by telephone, over the Internet, by proxy card, or by voting instruction form. By order of the Board of Directors, Diane Wood Corporate Secretary April 5, 2023 The Proxy Statement and form of proxy are first being made available to shareholders on or about April 5, 2023.

May 17, 2023
1:30 p.m. Eastern Daylight Time
EXECUTIVE OFFICES ADDRESS: PINNACLE WEST CAPITAL CORPORATION Post Office Box 53999 Phoenix, Arizona 85072-3999
	DATE AND TIME
	Wednesday, May 17, 2023 at 1:30 p.m. Eastern Daylight Time
	LOCATION
	Online at www.virtualshareholdermeeting. com/PNW
	WHO CAN VOTE
	All shareholders of record at the close of business on March 10, 2023, are entitled to notice of and to vote at the Annual Meeting
ADVANCE VOTING METHODS
	INTERNET
	www.proxyvote.com
	TELEPHONE
	1-800-690-6903
	MAIL
	Mark, sign, date, and mail your proxy card or voting instruction form (a postage-paid envelope is provided for mailing in the United States)

		About Pinnacle West WHO WE ARE We are Pinnacle West Capital Corporation (“Pinnacle West,” “PNW” or the “Company”). We are an investor-owned electric utility holding company based in Phoenix, Arizona, with consolidated assets of about $23 billion. For more than 130 years, Pinnacle West, through our affiliates, has provided energy and energy-related products to people and businesses throughout Arizona. Our success enables us to reinvest in our home state’s growth and give back to our communities, enhancing Arizona’s continued economic and cultural vitality. Pinnacle West derives essentially all of our revenues and earnings from our principal subsidiary, Arizona Public Service Company (“APS”). APS is a wholly owned, vertically integrated electric utility that provides either retail or wholesale electric service to most of the state of Arizona. APS is also the operator and co-owner of the Palo Verde Generating Station — a primary source of clean electricity for the Southwest and the largest nuclear power plant in the United States. APS serves more than 1.3 million homes and businesses in 11 of Arizona’s 15 counties, and is a leader in delivering affordable, clean and reliable energy in the Southwest.

Proposal	Board Recommendation		Page Reference
1. Election of Directors The Board of Directors and the Corporate Governance and Public Responsibility Committee believe that the eleven nominees possess the skills and experience necessary to serve on the Board and have concluded that each nominee is qualified to serve as Director.		FOR	42
2. Advisory Vote on Executive Compensation The Company has designed its executive compensation program to align executives’ interests with those of our shareholders, make executives accountable for business and individual performance by putting pay at risk, and attract, retain and reward the executive talent required to achieve our corporate objectives and to increase long-term shareholder value. We believe that our compensation policies and practices promote a pay at risk philosophy and, as such, are aligned with the interests of our shareholders.		FOR	58
3. Advisory Vote on the Frequency of the Advisory Vote on Executive Compensation The Company believes that an annual advisory vote on the compensation of our Named Executive Officers, as defined on page 60 of this Proxy Statement, is in the best interests of our shareholders.	1	YEAR	115
4. Approval of the First Amendment to the Pinnacle West Capital Corporation 2021 Long-Term Incentive Plan (the “2021 Plan”) We are asking the Company’s shareholders to approve an amendment (the “First Amendment”) to the 2021 Plan to: (i) increase the maximum number of shares of the Company’s common stock authorized for issuance over the term of the 2021 Plan, (ii) change the time-based vesting of restricted stock and restricted stock units subject to the five percent limitation from three years to one year; and (iii) extend the term of the 2021 Plan to June 1, 2033, unless terminated earlier by the Board. We are not making any other changes to the 2021 Plan.		FOR	116
5. Ratification of the Appointment of Deloitte & Touché LLP (“D&T”) as the Independent Accountant for the Company The Audit Committee has discussed the qualifications and performance of D&T and believes that the continued retention of D&T to serve as the Company’s independent accountant is in the best interest of the Company and its shareholders.		FOR	126
6. A Shareholder Proposal A shareholder proposal requesting the adoption of a policy separating the chairman and CEO roles and requiring an independent Board Chairman whenever possible, if properly presented at the 2023 Annual Meeting of Shareholders.		AGAINST	131


	The APS Promise		Our Strategy
Our Purpose As Arizona stewards, we do what is right for the people and prosperity of our state. Our Vision Create a sustainable energy future for Arizona. Our Mission Serve our customers with clean, reliable and affordable energy.		How we will execute our mission to achieve our vision.
		Long-term issues and priority areas of focus for our business over the next ten years: • focus on customer experience and community stewardship; • support an evolving workforce; • decarbonize and manage generation resources; • achieve a constructive regulatory environment; and • ensure long-term financial health.
	Our Principles
The culture and behaviors that will enable us to fulfill our purpose, vision and mission. Design for Tomorrow See the Way Forward Innovate with Courage Value Learning Empower Each Other Embrace Diverse Perspectives Challenge Respectfully Unite as One Team Succeed Together Create Clarity Anchor in Safety Deliver for the Community		Strategies and Goals Actions and targets that guide resources and efforts to address our long-term issues: Business Plan — defines how each business unit executes our strategy. Performance Ambitions — defines the enterprise wide priorities across both “run” and “change” the business activities over a five-year period. Tiered Metrics — provides a clear look at what the Company is trying to accomplish by measuring what matters. Performance Management — recognizes and rewards the individual contributions to priority work.


	Financial
	Creating long-term value for our shareholders is dependent upon having the right strategy to drive our operational performance. We recognize the links between strong customer satisfaction, a constructive regulatory environment and financial health and stability. To support future value creation for our shareholders, we are committed to enhancing our customer focus and improving our regulatory relationships. In addition, our strong customer growth and clean energy investments contribute to our potential to continue to build shareholder value.
	► Page 5
	Customers
	Customers are at the core of what we do every day at APS, and we are committed to providing options that make it easier for them to do business with us. Recognizing that creating customer value is inextricably linked to increasing shareholder value, our focus remains on our customers and our goal of achieving an industry-leading customer experience.
	► Page 6
	Employees
	Our more than 5,800 dedicated employees strengthen our Company with their skills, experience and diverse perspectives. We recognize that the next generation of employees has its own unique career expectations, and we are taking steps to support changing needs and priorities. We also continue to develop new strategies to attract and retain our highly skilled employees, and ensure they remain engaged during this time of change.
	► Page 8
	Environment
	APS demonstrates commitment to its role as a leader in environmental and sustainability stewardship by establishing sound environmental policies, managing environmental risks, implementing environmental management systems and driving the adoption of sustainable concepts. Anchored by our Clean Energy Commitment to provide 100% clean, carbon-free electricity by 2050, our sustainability initiatives also include ensuring adequate water security, waste management, and biodiversity.
	► Page 12
	Communities
	In addition to powering Arizona, we empower communities across Arizona through programs and partnerships dedicated to improving the lives of Arizonans. We not only invest in the communities where we do business; we also focus on building meaningful relationships, which help us manage our social, economic and environmental impact.
	► Page 14


	Customer Experience Strategy Council
	In 2021, we initiated an organization-wide customer experience strategy council designed to further drive a customer-oriented culture and improve JDP performance. Through this and other ongoing initiatives, we improved our customers’ experiences in 2022 by: • continuing empathy and knowledge training for care center advisors, and introducing easy-to-use functionality for our automated phone system; • creating more flexible payment arrangements, as well as introducing new customer payment channels, including Amazon Pay, PayPal and Venmo; • simplifying our financial assistance process for customers and community partner agencies, thus significantly increasing the number of customers and financial support provided; • implementing numerous aps.com enhancements, including improving page-loading speeds, adding user-friendly dashboards and simplifying content; • enhancing functionality of our online outage center, and auto-enrolling more than 1 million customers for outage email and text notifications; and • launching a broad-reaching, multi-channel communications campaign focused on messages that matter most to our customers — reliability, energy-efficiency, financial assistance, the environment, and programs that enable customers to design their own personalized energy experience.


	Diversity, Equity, and Inclusion (“DEI”)
	At APS, we believe that belonging matters. When we feel seen, heard, and valued, we can more effectively unite behind our APS Promise. You can find more information on the APS Promise on the inside back cover of this Proxy Statement. We create this sense of belonging through our commitment to inclusion. Inclusion at APS involves taking deliberate action to embrace the unique perspectives of each employee. True inclusion brings greater appreciation for our diversity. This allows us to equitably leverage our powerful workforce so we can succeed together to bring our APS Promise to life.
	Employee diversity:⁽¹⁾ • 35% are ethnically or racially diverse • 26% are female • 15% are veterans
			• We are a couple of years into the DEI Strategy that we launched in 2021. Key activities in 2022 included: • bringing inclusive leadership education to the business unit leadership teams and covering topics such as cultural competence and unconscious bias; • developing and launching a DEI self-paced module for all employees, explaining how cultural competence drives inclusion of diverse groups; • conducting cultural competence assessments with our inclusion council groups; and • holding listening sessions with employees to learn about what matters most to them.
	New hires in 2022:
	• 44% were ethnically or racially diverse • 40% were female • 7% were veterans
	39% of all officers are female⁽¹⁾ 18% of all officers are ethnically or racially diverse

Alignment & Accountability		Workforce Evolution		Leveraging Connections
	DEI Education and Dialogue — Create experiential learning to ensure alignment around relevant concepts across the organization		Talent Acquisition — Analyze and evolve current recruiting and selection processes to improve external diverse hiring		Employee Network Groups — Evolve our ENGs to increasingly serve as business resources over time

	DEI Governance and Influence — Build governance structure to ensure alignment and accountability		Talent Development, Performance and Succession — Assess existing talent processes to ensure equity and improve diverse representation among leadership		Employee Communication and Events — Visibly demonstrate our commitment to diversity, expose employees to different cultures and perspectives and recognize key occasions

	DEI Analytics — Extract data-driven insights to shape our DEI approach and monitor progress through meaningful measures		Workforce Development — Explore our current activities and create clarity and ownership for developing talent pipelines to create a diverse workforce for the future		Internal Partnerships — Partner with key internal stakeholder groups to ensure an integrated and aligned approach

	Policies and Practices — Assess and revise internal policies and practices to ensure equity				External Partnerships and Recognition — Partner with external organizations to benchmark, innovate, and be recognized for our DEI efforts


		The African American Network for Diversity and Inclusion’s mission is to create a collaborative and highly engaged network of African-American employees that promote the interests of AANDI, its strategic initiatives and the values of APS.
		The Lesbian, Gay, Bisexual & Transgender Alliance’s mission is to empower inclusion through community, support, and education.
		The Veteran Engagement, Transition & Retention Network’s mission is to develop opportunities benefiting our honored Arizona veterans. We strive to promote their service to our country, leadership skills, and the achievements of veterans in the organization.
		Women in Search of Excellence’s mission is to build a community at APS to further develop women as they achieve their personal and professional excellence.
		Palo Verde Young Generation in Nuclear’s mission is to unite young professionals for the purpose of strengthening its community by focusing on the success of nuclear technology.
		Palo Verde Women in Nuclear’s mission is to promote an environment in which all employees are able to succeed while working to encourage public awareness about nuclear energy.
		The Native American Network Organization’s mission is to attract and develop Native American talent by providing professional development opportunities, assisting in recruiting and retention, and encouraging community development.
		Next Gen’s mission is to unite professionals new to the utility industry by providing professional development opportunities, enhance recruitment and retention, and organize community outreach programs.
		The Hispanic Organization for Leadership and Advancement promotes a culture of inclusiveness and community stewardship across APS, as well as develops high-performing leaders in pursuit of operational excellence and continuous self-improvement.
		Links’ mission is to connect experienced employees with opportunities for development, networking, and engagement.


Recognition
• Energy Star Partner of the Year for Energy Efficiency Program Delivery. Over the past year, APS continued to promote energy efficiency with offerings across multiple program areas, while managing demand and reducing lifetime carbon dioxide emissions by 2.3 billion pounds. • Pinnacle West maintained its “AA” rating from MSCI (as of February 14, 2023). • On the list of Top 100 Green Utilities from Energy Intelligence for the fourth year in a row.
Energy Innovation
APS is in the midst of one of the greatest periods of change in our Company’s 130-plus year history. • 2,400 MW of renewable capacity today • Plan to add at least 2,500 MW of additional clean energy technologies, including solar and storage, by 2025			Our 10 grid-scale solar plants are powered by more than 1 million solar panels
Reducing Water Consumption
Operating in the water-constrained Southwest desert, APS is challenged to maximize our use of water resources: • 34% reduction⁽¹⁾ in groundwater use in 2022 • 71% of water consumed by APS power plants in 2022 came from treated effluent water
Projected Conservation of Non-Renewable Water Supplies:
2025		2035
50%	79%	80%		95%
groundwater reduction⁽¹⁾	use of treated effluent water	groundwater reduction⁽¹⁾		use of treated effluent water


Our Commitment: 100% Clean Energy by 2050 We’ve set a bold, three-part goal to provide a clean energy future for our customers: • a 2030 target of achieving a resource mix that is 65% clean energy, with 45% of the generation portfolio coming from renewable energy; • a 2031 commitment to end APS’s use of coal-fired generation; and • a 2050 goal to provide 100% clean, carbon-free electricity. A Clean Economic Future • Our clean energy plan will be guided by sound science and focused on achieving environmental and economic gains — all while maintaining affordable, reliable service for our customers • Collaboration with customers, regulators and other stakeholders is key to our plan’s ultimate success. We look forward to working alongside those who believe in this vision to move forward together to keep Arizona clean, beautiful and thriving Pathways to 100% Clean			Clean Energy Pathway
	Policy Decisions	Electrification
	Support policy decisions that leverage market-based technology and innovation to attract investment in Arizona	Electrification will drive a cleaner environment and more energy-efficient operations throughout the economy
	Existing Power Sources	Modernization of the Electric Grid
	Near-term use of natural gas until technological advances are available to maintain reliable service at reasonable prices	Continue to advance infrastructure that is responsive and resilient while providing customers more choice and control
	Evolving Market-Based Solutions	Energy Storage Solutions
	Participation in the Energy Imbalance Market (“EIM”) provides access to clean energy resources while saving customers money	Storage creates opportunities to take advantage of midday solar generation and better respond to peak demand


	Coal Communities Transition
	The transition away from coal-fired power plants toward a clean energy future will pose unique economic challenges for the communities around these plants. We worked collaboratively with community leaders and stakeholders to propose a comprehensive Coal Communities Transition Plan. The proposed framework provides substantial financial and economic development support to build new economic opportunities and addresses a transition strategy for plant employees. We are committed to continuing our long-running partnership with the Navajo Nation in other areas as well, including expanding electrification and developing tribal renewable projects. The ACC approved a portion of the plan in the 2019 rate case decision, and we have requested approval of the remainder in our current rate case application.
	Community Engagement
	At APS, we initiate and maintain relationships with stakeholders to understand our communities’ needs and identify opportunities to build healthy and sustainable communities. Our External Affairs team collaborates with representatives from a wide range of community and government entities — including state, county, municipal and tribal governments; military bases; school districts; nonprofits; business organizations; and public interest groups to maximize existing resources to address important community issues and opportunities. In November 2022, APS hosted a Community Partnership Summit where 85 community leaders attended, representing 72 of our key partnership organizations. These relationships are one important way we collect, record and address feedback so that we work together to address concerns. In addition, the ACC has a grievance process for our customers.


Board Independence • Independent Lead Director role with clearly defined and robust responsibilities • Ten of our eleven Director nominees are independent and the members of all of the Board committees are independent	Board Oversight • Defined oversight of environmental, social, and governance practices by the Corporate Governance and Public Responsibility Committee • Robust management succession planning • Focused Board oversight of strategy and risk • Thorough CEO performance oversight process Board Performance • Annual Board, committee and individual Director evaluations and discussions with the Lead Director • Director skills and experience necessary to provide oversight of our strategy and operations • Robust Board refreshment, with Director retirement policy	Shareholder Rights • A group of 15% of our shareholders can call a special meeting • Annual elections of all Directors with cumulative voting • No poison pill plan or similar anti-takeover provision in place • No supermajority provisions in our Articles of Incorporation or Bylaws • Proxy access rights allow up to 20 shareholders owning 3% of our outstanding stock for at least 3 years to nominate up to 25% of the Board

Name		Occupation	Age⁽²⁾	Director Since	Independent	Committees
	Glynis A. Bryan	Chief Financial Officer, Insight Enterprises, Inc.	64	2020
	Gonzalo A. de la Melena, Jr.	Founder and Chief Executive Officer, Emerging Airport Adventures, LLC	54	2022
	Richard P. Fox	Independent Consultant and former Managing Partner, Ernst & Young	75	2014
	Jeffrey B. Guldner	Chairman of the Board, President and Chief Executive Officer of PNW and Chairman of the Board and Chief Executive Officer of APS	57	2019
	Dale E. Klein, Ph.D.	Professor, Walker Department of Mechanical Engineering, Cockrell School of Engineering, The University of Texas at Austin	75	2010
	Kathryn L. Munro	Lead Director Principal, BridgeWest, LLC	74	2000
	Bruce J. Nordstrom	Of Counsel and CPA, Nordstrom & Associates, P.C.	73	2000
	Paula J. Sims	Consultant	61	2016
	William H. Spence	Former Chairman and Chief Executive Officer, PPL Corporation	66	2021
	Kristine L. Svinicki	Former Nuclear Regulatory Commission (“NRC”) Chairman	56	2023
	James E. Trevathan, Jr.	Former Executive Vice President and Chief Operating Officer, Waste Management, Inc.	69	2018
	David P. Wagener	Managing Partner, Wagener Capital Management	68	2014
Committees

	Pay Element	Measurement Period	Performance Link	Description
	Cash	Salary is based on experience, performance and responsibilities and is benchmarked to a peer group and market survey data to align with competitive levels.
	Cash	1 year	Earnings CEO: 50.0% Other NEOs: 50.0%	Universal measure of business financial performance; encourages achievement of bottom-line earnings growth goals.
	Cash	1 year	Business Unit Performance 50.0%	Pre-established operational business unit performance goals that include safety, customer experience and operational quality and efficiency metrics.
	Performance Shares 70%	3 years	Relative TSR 40%	Links pay to key measures generating shareholder value relative to others in the industry.
			EPS Performance 40%	Links pay to key measures generating shareholder value and financial targets.
			Clean Megawatts Installed 20%	Links pay to our Clean Energy Commitment.
	Restricted Stock Units 30%	Vest ratably over 4 years	Stock Price	Encourages retention; value dependent upon share price appreciation and four-year vesting to encourage retention.
	We provide benefits, including pension and deferred compensation programs, change of control agreements and limited perquisites, that are designed to attract and retain our executive talent.
(1) For additional details on our executive compensation program for our NEOs, see page 67 of this Proxy Statement.

High Standards		We look for individuals who set high standards and expectations for themselves and others and who demonstrate a commitment to accomplishing those standards and expectations.
Informed Judgment		Directors should be thoughtful in their deliberations. We look for individuals who demonstrate intelligence, wisdom and thoughtfulness in decision making. Their decision-making process should include a willingness to thoroughly discuss issues, ask questions, express reservations and voice dissent.
Integrity and Accountability		Directors should act with integrity. We look for individuals who have integrity and strength of character in their personal and professional dealings. Our Directors should be prepared to be, and are, held accountable for their decisions.
Time and Effort		Directors need time to properly discharge their responsibilities as Directors, including reviewing written materials provided in advance of Board or committee meetings and attending and participating in those meetings. We look for individuals who are willing and able to commit this time to the Board. We also look for Directors who are willing to make themselves accessible to management upon request.
Other Commitments		We look for individuals who will monitor their other commitments to ensure that these other commitments do not impact their service to our Company. Our Directors may not serve on more than three other boards of public companies in addition to the Pinnacle West Board without the prior approval of the Corporate Governance and Public Responsibility Committee. Our Directors also may not serve as a member of the Audit Committee if he or she serves on the audit committees of more than three public companies (including the Company) unless the Board determines that such simultaneous service would not impair the ability of such member to effectively serve on the Company’s Audit Committee.

	2016 • Paula J. Sims added
	2018 • Roy A. Herberger, Jr. retired
	2018 • James E. Trevathan, Jr. added
	2020 • Glynis A. Bryan added
	2020 • Michael L. Gallagher retired
	2021 • William H. Spence added
	2021 • Humberto S. Lopez retired
	2022 • Gonzalo A. de la Melena, Jr. added
	2022 • Denis A. Cortese retired
	February 2023 • Kristine L. Svinicki added
	May 2023 • Dale E. Klein scheduled retirement

1	Board Evaluation Each Director completes a comprehensive written evaluation of Board and committee performance Reviewed on a one-year stand-alone basis and three-year basis to identify year-over-year trends	Topics covered include, among others: • Board composition and effectiveness • Competency and accountability • Deliberations and administration • Committee effectiveness • Specific skills, experience and expertise recommended by Directors to be added or enhanced
2	Director Self-Evaluation Each Director evaluates different areas of their performance as a Director	Topics covered include, among others: • Independence • Knowledge and expertise • Judgment and skills • Participation and contribution to collective decision-making
3	One-on-One Discussions Conducted by the Lead Director, who initially reviews the assessment results, in a formal annual call The Lead Director is prepared to have hard conversations, if necessary, to keep the Board, and each individual Director, functioning at a high level	Topics covered include, among others: • The Board, its functions and membership • Board and committee structure • Processes for effective communication and feedback • Director’s plan with respect to continuing Board service • Any other topic the individual Director wishes to discuss
4	Evaluation Results	The results of the evaluations and calls are presented to the Corporate Governance and Public Responsibility Committee and the full Board each February
5	Feedback Incorporated	Based on the evaluation results, changes in practices or procedures are considered and implemented as needed

Shareholder Outreach			Board Access
	In 2022, we contacted the holders of approximately 70% of the shares outstanding		Our Board is focused on shareholder feedback. Our Lead Director and other members of the Board, depending on the topic to be discussed, have participated in shareholder discussions, providing shareholders with direct access to the Board.
Matters Discussed in our Fall 2022 Outreach
• Our strategy • Our performance • Our Clean Energy Commitment		• Board refreshment • Our employees • Executive compensation		• Customer experience • Diversity, equity and inclusion
We Listen to our Shareholders
What our shareholders think is important to us. We want to ensure we have the opportunity to engage directly with our shareholders. We seek to maintain a transparent and productive dialogue with our shareholders. Each year we take feedback from our shareholders, ESG rating agencies and organizations, and other stakeholders to ensure our strategy and focus align with the interests of our shareholders and community.
Board Responsiveness
In response to feedback we’ve received, we improved shareholder rights by decreasing the number of shares required to call a special meeting of shareholders from 25% to 15%, refined our executive compensation program to further align pay-for-performance — as detailed in the CD&A — and we announced our bold aspiration to serve customers with 100% clean, carbon-free energy by 2050. In addition, we set an interim target to achieve 65% clean, carbon-free energy and 45% renewables by 2030. We also revised our performance share metrics to add a new clean megawatts installed metric. In 2019, 2020 and 2022, we received a shareholder proposal with respect to the shareholder special meeting right. In 2019, the proposal was rejected by a margin of 7.2%, in 2020, the proposal was rejected by a margin of 22.88%, and in 2022, the proposal was rejected by a margin of 29.25%. As part of our shareholder outreach program, we discussed the topic with our shareholders to get a better understanding of their preferences with regard to the threshold to calling a special meeting. As a result of these discussions, we found that there was no consensus from our shareholders as to what they believed the proper threshold should be, though a majority of them did not believe that 10% was the proper threshold, as reflected in the vote results each year the proposal was presented.


SPRING	SUMMER	FALL	WINTER
We publish annual communications to our shareholders: Annual Report, Proxy Statement, and Corporate Responsibility Report. We reach out to our shareholders and discuss proxy-related topics in connection with our Annual Meeting held in May.	We review the results of the Annual Meeting and potential improvements to our governance policies and practices.	We reach out to our shareholders in order to discuss the Annual Meeting outcome and to understand their priorities for the year. We communicate shareholder feedback to the Board and use it to enhance our governance practices, our disclosures and our sustainability and compensation programs.	The cycle concludes with the Board considering our shareholders’ feedback and determining whether to implement items in response.

8.3⁽¹⁾YEARS

Independent

Diverse
Ethnicity

Average tenure of independent Directors

Over 10 years


DIVERSITY
Gender or Ethnicity
FINANCE & ACCOUNTING
Audit Expertise
Finance/Capital Allocation
Financial Literacy and Accounting
Investment Experience
BUSINESS OPERATIONS AND STRATEGY
Business Strategy
Complex Operations Experience
Corporate Governance
Customer Perspectives
Extensive Knowledge of Company’s Business Environment
Sustainability
LEADERSHIP EXPERIENCE IN A LARGE ORGANIZATION
CEO/Senior Leadership
Public Board Service
Human Capital Management
THE COMPANY’S INDUSTRY
Nuclear Experience
Utility Industry Experience
PUBLIC POLICY AND REGULATORY COMPLIANCE
Government/Public Policy/Regulatory
RISK OVERSIGHT AND RISK MANAGEMENT
Risk Oversight and Risk Management
■ Board Leadership


GLYNIS A. BRYAN
Age 64 Director since: 2020 INDEPENDENT DIRECTOR Committees: • Audit • Finance • Nuclear and Operating	Background
	• Since 2007: CFO, Insight Enterprises, Inc. (computer hardware, software, and technology solutions) • Ms. Bryan is also a director of Pentair plc, but her term will expire on May 9, 2023, and she is not standing for re-election.
	Qualifications As a CFO for more than 20 years, Ms. Bryan brings to the Board broad functional experience in financial planning and analysis, treasury, capital markets and managing financial risk. In addition to her executive leadership experience, she also has more than 15 years of public company board experience, serving on the Board of Pentair plc where she serves as the Chair of the Audit and Finance Committee and previously served as the Chair of the Governance Committee. Ms. Bryan also brings added diversity to the Board as a woman of color.	Nominee Skills and Experience As a long-tenured CFO and member of a public board of a large, multinational corporation, Ms. Bryan brings the following key attributes to the Company: • Audit Expertise • Finance/Capital Allocation • Financial Literacy/Accounting • Business Strategy • Complex Operations Experience • CEO/Senior Leadership • Public Board Service • Government/Public Policy/Regulatory • Risk Oversight and Risk Management


GONZALO A. DE LA MELENA, JR.
Age 54 Director since: 2022 INDEPENDENT DIRECTOR Committees: • Audit • Nuclear and Operating	Background
	• Since 2012: Founder and CEO, Emerging Airport Ventures, LLC (airport concessions company) • Mr. de la Melena served as the CEO of the Arizona Hispanic Chamber of Commerce from 2010 to 2020 • Mr. de la Melena currently serves on the Board of Directors of Gainey Business Bank (de novo), Education Forward Arizona and the Airport Minority Advisory Council
	Qualifications As the current Founder and CEO of Emerging Airport Ventures, Mr. de la Melena brings a deep understanding of finance, investment experience and CEO experience to the Board. As an Arizonan, Mr. de la Melena can provide valuable insight into our customers’ expectations, needs, and perspectives. As the former CEO of the Hispanic Chamber of Commerce, he brings extensive experience in economic development, which is a valuable attribute in light of Arizona’s fast growth and development. Mr. de la Melena also brings added diversity to the Board as a member of the Hispanic community.	Nominee Skills and Experience As the current CEO and Founder of Emerging Airport Ventures and as an Arizonan, and as the former CEO of the Arizona Hispanic Chamber of Commerce, Mr. de la Melena brings the following key attributes to the Company: • Finance/Capital Allocation • Financial Literacy and Accounting • Investment Experience • Business Strategy • Customer Perspectives • Sustainability • CEO/Senior Leadership • Human Capital Management • Government/Public Policy/Regulatory


RICHARD P. FOX
Age 75 Director since: 2014 INDEPENDENT DIRECTOR Committees: • Corporate Governance and Public Responsibility • Finance • Human Resources (Chair)	Background
	• Since 2001: Consultant and independent board member for companies in various industries • Mr. Fox previously held executive, operational and financial positions at CyberSafe Corporation (“CyberSafe”), Wall Data, Incorporated (“Wall Data”) and PACCAR Inc., and is a former Managing Partner of Ernst & Young’s Seattle office • Mr. Fox is also a director of FrontDoor, Inc. and Univar Solutions, Inc. • Within the past five years, Mr. Fox has served as a director of ServiceMaster, LiveRamp Holdings, Inc., Global Holdings, and Acxiom Corporation
	Qualifications As a former Managing Partner of Ernst & Young, former CFO of Wall Data, and President and COO of CyberSafe, Mr. Fox has a deep understanding of auditing, financial and accounting matters. Mr. Fox has also served on the boards of several companies throughout his career, including seven public companies, giving him extensive insights into corporate governance, human capital management and compensation, investment opportunities, risk oversight and risk management, and the customer perspective. His extensive board experience, including service on various audit, governance, human resources and finance committees, including chairmanships, adds to the Board’s depth and capabilities.	Nominee Skills and Experience As a former Managing Partner of Ernst & Young, one of the “Big Four” auditing firms with multinational operations, Mr. Fox brings the following key attributes to the Company: • Finance/Capital Allocation • Financial Literacy and Accounting • Investment Experience • Corporate Governance • Customer Perspectives • Sustainability • Public Board Service • Human Capital Management • Risk Oversight and Risk Management


JEFFREY B. GULDNER
Age 57 Director since: 2019 CHAIRMAN OF THE BOARD, PRESIDENT AND CEO OF PNW AND CHAIRMAN OF THE BOARD AND CEO OF APS	Background
	• Since May 2022: Chairman of the Board, President and CEO of the Company and Chairman of the Board and CEO of APS • From August 2021 to May 2022: Chairman of the Board, President and CEO of the Company and APS • From November 2019 to August 2021: Chairman of the Board, President and CEO of the Company and Chairman of the Board and CEO of APS • From December 2018 to January 2020: President of APS • From May 2017 to November 2019: Executive Vice President, Public Policy of the Company • From May 2017 to December 2018: Executive Vice President, Public Policy of APS • From May 2017 to August 2018: General Counsel of the Company and APS • From 2014 to May 2017: Senior Vice President, Public Policy of APS
	Qualifications Mr. Guldner joined the Company in 2004 and has held a number of leadership and executive positions responsible for several different areas of importance to the health and success of the Company, including public policy, legal, rates and regulation, government affairs and customer service. Prior to joining APS, Mr. Guldner was a partner in the Phoenix office of Snell & Wilmer LLP, where he practiced public utility, telecommunications and energy law. Before practicing law, Mr. Guldner served as a surface warfare officer in the United States Navy and was an assistant professor of naval history at the University of Washington.	Nominee Skills and Experience Mr. Guldner has comprehensive experience within the Company in many different areas of importance to the overall health of the Company, including the development of strategy with respect to rates and regulation, as well as our clean energy vision. Mr. Guldner brings the following key attributes to the Company: • Business Strategy • Customer Perspective • Extensive Knowledge of Company’s Business Environment • Sustainability • CEO/Senior Leadership • Human Capital Management • Utility Industry Experience • Government/Public Policy/Regulatory • Risk Oversight and Risk Management


KATHRYN L. MUNRO
Age 74 Director since: 2000 INDEPENDENT DIRECTOR Lead Director Committees: • Corporate Governance and Public Responsibility (Chair) • Finance • Human Resources	Background
	• Since July 2003: Principal of BridgeWest, LLC (investment company) • From February 1999 until July 2003: Chairman of BridgeWest, LLC • From 1996 to 2000: Chief Executive Officer of Bank of America’s (“BofA”) Southwest Banking Group • From 1994 to 1996: President of BofA Arizona. Prior to that, Ms. Munro held a variety of senior positions during her 20-year career with BofA • Ms. Munro is Lead director of Knight-Swift Transportation Holdings, Inc. (“Knight-Swift”) • Within the past five years, Ms. Munro has served as a director of Premera Blue Cross
	Qualifications As principal of an investment company, former CEO of BofA’s Southwest Banking Group, and President of BofA Arizona, Ms. Munro brings business and investment acumen, financial and capital allocation experience, and leadership skills to the Company. Her extensive knowledge of the Company’s business environment includes experience with the cycles in Arizona’s economy, which assists a growing infrastructure company like Pinnacle West in accessing capital and meeting its financing needs. Ms. Munro is an experienced Director, currently serving on the boards of Knight-Swift, providing her experience in human capital management and compensation, corporate governance, and risk oversight and risk management.	Nominee Skills and Experience As a former CEO of BofA’s Southwest Banking Group, Ms. Munro brings a wealth of experience to the Company, including the following key attributes: • Finance/Capital Allocation • Investment Experience • Corporate Governance • Extensive Knowledge of Company’s Business Environment • Sustainability • CEO/Senior Leadership • Public Board Service • Human Capital Management • Risk Oversight and Risk Management


BRUCE J. NORDSTROM
Age 73 Director since: 2000 INDEPENDENT DIRECTOR Committees: • Audit (Chair) • Corporate Governance and Public Responsibility • Human Resources	Background
	• Since January 2021: Of Counsel to and certified public accountant, Nordstrom & Associates, P.C., in Flagstaff, Arizona • June 2019 to December 2020: Vice President of and certified public accountant, Nordstrom & Associates, P.C. • From 1988 to June 2019: President of and certified public accountant, Nordstrom & Associates, P.C.
	Qualifications As the former president of and current Of Counsel to an accounting firm, Mr. Nordstrom has gained an extensive accounting, auditing and financial skill set, as well as experience in strategy development and the principles of risk oversight and risk management. His tenure with the Company in addition to operating an Arizona-based business has provided him with extensive knowledge of the Company’s business environment. Furthermore, as an individual who built an accounting firm in Flagstaff, Arizona, Mr. Nordstrom has obtained experience in human capital management and compensation and corporate governance, as well as a familiarity with the perspectives of customers in the northern Arizona service territory of APS.	Nominee Skills and Experience As the former President of Nordstrom & Associates, P.C. and a practicing CPA, Mr. Nordstrom brings the following key attributes to the Company: • Audit Expertise • Financial Literacy/Accounting • Investment Experience • Business Strategy • Corporate Governance • Customer Perspectives • Extensive Knowledge of Company’s Business Environment • Human Capital Management • Risk Oversight and Risk Management


PAULA J. SIMS
Age 61 Director since: 2016 INDEPENDENT DIRECTOR Committees: • Audit • Corporate Governance and Public Responsibility • Nuclear and Operating (Chair)	Background
	• Since December 2022: Consultant • From May 2012 to December 2022: Professor of Practice and Executive Coach, University of North Carolina Kenan-Flagler Business School • From January 2011 to June 2012: Senior Vice President of Corporate Development and Improvement and Chief Integration Officer for Duke/Progress Merger • From July 2010 to June 2012: Senior Vice President of Corporate Development and Improvement, Progress Energy, Inc. • From July 2007 to July 2010: Senior Vice President Power Operations, Progress Energy, Inc.
	Qualifications Ms. Sims worked directly in the utility industry for more than 13 years. She brings extensive leadership experience to the Company in business and finance strategy, electric utility operations, nuclear strategy, and operating in a regulated environment. In her prior roles at Progress Energy, Ms. Sims was responsible for complex business operations and strategy, including new generation, supply chain and information technology, as well as overall process and efficiency improvements. Her experience gives her extensive insight into the operational, financial, regulatory, and risk-related matters that are of ever-increasing significance to the Company.	Nominee Skills and Experience Ms. Sims brings hands-on experience in electric utility operations, including generation, renewable energy, energy efficiency, fuels and energy trading, and customer service, as well as an understanding of the role of management and executive oversight, and brings the following key attributes to the Company: • Financial Literacy and Accounting • Complex Operations Experience • Corporate Governance • Sustainability • CEO/Senior Leadership • Nuclear Experience • Utility Industry Experience • Government/Public Policy/Regulatory • Risk Oversight and Risk Management


WILLIAM H. SPENCE
Age 66 Director since: 2021 INDEPENDENT DIRECTOR Committees: • Finance • Human Resources • Nuclear and Operating	Background
	• Since March 2021: Former Chairman of the Board, PPL Corporation (investor-owned electric utility) • From June 2020 to March 2021: Chairman of the Board, PPL Corporation • From March 2012 to June 2020: Chairman of the Board, President and Chief Executive Officer, PPL Corporation • Mr. Spence is also a director of the Williams Companies, Inc.
	Qualifications As the former Chief Executive of an investor-owned electric utility company, Mr. Spence brings a broad range of operating experience in the energy industry. He has extensive experience in strategy development and risk management and has a comprehensive understanding of the issues facing an electric utility, including regulatory strategy and customer service. He also brings significant public board experience both from his role as Chairman of PPL Corporation and from his service as a director of the Williams Companies, Inc.	Nominee Skills and Experience As a former CEO of an electric utility, Mr. Spence brings the following skills to the Board: • Business Strategy • Complex Operations Experience • Customer Perspectives • Sustainability • CEO/Senior Leadership • Public Board Experience • Nuclear Experience • Utility Industry Experience • Government/Public Policy/Regulatory


KRISTINE L. SVINICKI
Age 56 Director since: 2023 INDEPENDENT DIRECTOR Committees: • Audit • Nuclear and Operating	Background
	• Since February 2021: Adjunct Professor, Nuclear Engineering and Radiological Sciences, University of Michigan • From March 2008 to January 2021: Chairman, U.S. Nuclear Regulatory Commission (January 2017-January 2021) and previously Commissioner (March 2008-January 2017) • From January 2001-March 2008: Professional Staff Member, U.S. Senate • From December 1990 to February 2001: Project Manager and Nuclear Engineer, U.S. Department of Energy • Ms. Svinicki is also a director of Southern Company and TerraPower
	Qualifications The NRC oversees nuclear power plant operations in the United States. As the former Chairman of the NRC, Ms. Svinicki brings expertise in all aspects of nuclear energy regulation, operation, technology and safety. Her broad national and international experience in all aspects of the nuclear utility industry, nuclear energy, government and regulation brings value to the Board, particularly from the perspective of our operations at Palo Verde Generating Station and business environment. Her service with the NRC, including her tenure as Chairman, gives her senior leadership experience in operating large, complex organizations, financial literacy and human capital managment and compensation experience.	Nominee Skills and Experience As a former U.S. Nuclear Regulartory Commission Chairman, Ms. Svinicki brings the following skills to the Board: • Finance/Capital Allocation • Financial Literacy and Accounting • Complex Operations Experience • CEO/Senior Leadership • Public Board Service • Human Capital Managment • Nuclear Experience • Utility Industry Experience • Government/Public Policy/Regulatory