Company: SREA
Filing Date: 2025-03-28
Form Type: DEF 14A
Source: 0001140361-25-010983
Chunk: 77

Company: SEMPRA
Filing Date: 2025-03-28
Form: DEF 14A
Chunk 77
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 Compensation Peer Group as disclosed in their 2024 proxy statements, Chief Executive Officer share ownership guidelines ranged from two times to eight times base salary and 89% of these peers had a Chief Executive Officer share ownership guideline of six times base salary or less. For purposes of the guidelines, we include shares owned directly and through our 401(k) savings plan. We also include phantom shares of our common stock into which compensation has been deferred, deferred restricted stock units that have vested, unvested service-based restricted stock units, and the in-the-money value of service-based stock options. We expect officers to meet these guidelines within five years after hire or promotion to an officer-level position or promotion to a role with a higher share ownership guideline. Until such time as the applicable share ownership guideline is met, executive officers are expected to retain (and not sell) a number of shares equal to at least 50% of the net after-tax shares acquired through equity compensation awards.

| 2025 Proxy Statement |     | 65 |

TABLE OF CONTENTS Executive Compensation As of March 20, 2025, the record date for the Annual Shareholders Meeting, (i) Mr. Martin’s stock ownership was nearly 16 times his base salary (and over 11 times his base salary excluding the in-the-money value of service-based stock options) and (ii) the other named executive officers, excluding Mr. Mihalik who retired January 1, 2025 and is no longer subject to these guidelines, met or exceeded their respective stock ownership guidelines (with or without including the in-the-money value of service-based stock options). Impact of Regulatory Requirements Tax Deductibility of Pay Section 162(m) of the Internal Revenue Code places a limit of $1 million on the annual amount of compensation that publicly held companies may deduct for federal income tax purposes for “covered employees.” The Compensation and Talent Development Committee believes that tax deductibility is one important factor in designing and evaluating our executive compensation program. In light of the elimination of the exception for performance-based compensation under Section 162(m), providing compensation that is not fully tax deductible is required by competitive and other circumstances. Accordingly, since the elimination of the exception for performance-based compensation, the Compensation and Talent Development Committee has determined it to be in the best interest of the company and our shareholders to provide a portion of compensation that is not fully tax deductible by the company. Other Tax, Accounting and Regulatory Considerations Many other Internal Revenue Code provisions, SEC regulations and accounting rules affect the design of executive pay