NiSource Inc. President and CEO Robert Skaggs Jr.’s total compensation and
the company’s common-stock value both increased by the same proportion last
year: 40 percent.
According to NiSource’s 2009 proxy statement, filed with the U.S. Securities
and Exchange Commission, Skaggs earned a total of $4,138,377 in
2009—compared to $2,948,605 in 2008—in base salary, stock awards,
incentives, and other forms of compensation.
Between Dec. 31, 2008, and Dec. 31, 2009, the company’s common-stock value
similarly rose by 40 percent: from $10.97 to $15.38.
Skaggs’s salary last year was comprised of the following:
•A base salary of $800,000, compared to $791,667 in 2008, a nominal increase
of 1 percent. In 2009 the Corporate Governance Committee accepted Skaggs’
recommendation that the base salaries of its senior executives be frozen,
“given the current economic climate and the company-wide cost savings
initiatives being implemented,” the SEC filing states.
•Stock awards totaling $2,012,215—an amount based on the average market
price on the grant date—compared to $1,802,236 in 2008, an increase of 11.7
percent. NiSource makes stock awards, the filing states, to “align the
interests of executives with the company’s long-term stockholders” and to
“support the company’s philosophy of paying for performance because the
contingent stock”—of which Skaggs was awarded 203,941 shares—“will not vest
unless the company achieves its performance goals over the measurement
•Incentive plan compensation totaling $690,000 in restricted stock. In
January, the filing states, Skaggs asked—“as he had in prior years”—not to
receive his cash payout for 2009 under the Incentive Plan, which would have
been $690,000. The Corporate Governance Committee “agreed to this request”
but “in place of the cash payment, however,” awarded Skaggs 46,685
restricted stock units with a face value of $690,000. This stock award
represents the single largest increase in Skaggs’ total compensation last
year and accounts for 16.7 percent of that compensation. Generally, NiSource
calculates incentives in accordance with three measures: net operating
earnings per share; corporate funds from operations; and total debt at the
end of the year.
•A change of $575,622 in the present actuarial value of Skaggs’ accumulated
benefits under pension plans, compared to $294,699 in 2008, an increase of
•And $60,540 in all other compensation, compared to $60,003 in 2008, an
increase of 0.9 percent. “All other compensation” specifically refers to
perquisites, which are “limited in number and modest in dollar value,” the
filing states. Last year the only perquisites offered were financial
planning and tax advisory services.
According to the filing, Skaggs’ total compensation “remains below the 50th
percentile for CEOs in the energy company comparative group.”
Total compensation for the upper echelon of NiSource’s executive
officers—Skaggs and executive vice-presidents Stephen Smith, Michael
O’Donnell, Christopher Helms, and Jimmy Staton—was $10,337,619 in 2009,
compared to $8,808,667 in 2008, an increase of 17 percent.