EDGAR 10-K Filing

Company CIK: 7323
Filing Year: 2021
Filename: 7323_10-K_2021_0000065984-21-000096.json

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ITEM 1. BUSINESS

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ITEM 1A. RISK FACTORS

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ITEM 1B. UNRESOLVED STAFF COMMENTS

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ITEM 2. PROPERTIES
Item 2. Properties
Information regarding the registrant’s properties is included in Part I. Item 1. - Entergy’s Business under the sections titled “Utility - Property and Other Generation Resources” and “Entergy Wholesale Commodities - Property” in this report.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
Details of the registrant’s material environmental regulation and proceedings and other regulatory proceedings and litigation that are pending or those terminated in the fourth quarter of 2020 are discussed in Part I. Item 1. - Entergy’s Business under the sections titled “Retail Rate Regulation,” “Environmental Regulation,” and “Litigation” and “Impairment of Long-lived Assets” in Note 14 to the financial statements.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
INFORMATION ABOUT EXECUTIVE OFFICERS OF ENTERGY CORPORATION
Executive Officers
Name Age Position Period
Leo P. Denault (a)
61 Chairman of the Board and Chief Executive Officer of Entergy Corporation
2013-Present
A. Christopher Bakken, III (a)
59 Executive Vice President and Chief Nuclear Officer of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy
2016-Present
Project Director, Hinkley Point C of EDF Energy
2009-2016
Marcus V. Brown (a)
59 Executive Vice President and General Counsel of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy
2013-Present
Andrew S. Marsh (a)
49 Executive Vice President and Chief Financial Officer of Entergy Corporation
2013-Present
Director of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy
2013-Present
Chief Financial Officer of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy
2014-Present
Name Age Position Period
Roderick K. West (a)
52 Group President Utility Operations of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas
2017-Present
President, Chief Executive Officer, and Director of System Energy
2017-Present
Director of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy
2017-Present
President and Chief Executive Officer of Entergy New Orleans
Executive Vice President of Entergy Corporation
2010-2017
Chief Administrative Officer of Entergy Corporation
2010-2016
Paul D. Hinnenkamp (a)
59 Executive Vice President and Chief Operating Officer of Entergy Corporation
2017-Present
Director of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas
2015-Present
Senior Vice President and Chief Operating Officer of Entergy Corporation
2015-2017
Senior Vice President, Capital Project Management and Technology of Entergy Services, Inc.
Kathryn A. Collins 57 Senior Vice President and Chief Human Resources Officer, Entergy Corporation 2020-Present
Chief Human Resources Officer, Arcosa, Inc. 2018-2020
Vice President, Human Resources, Trinity, Inc. 2014-2018
Julie E. Harbert (a)
47 Senior Vice President, Corporate Business Services of Entergy Corporation
2019-Present
Vice President, Shared Services of Entergy Services, Inc.
2017-2019
Senior Vice President, Global Business Services of Philips Health Tech
2015-2017
Kimberly A. Fontan (a)
47 Senior Vice President and Chief Accounting Officer of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy
2019-Present
Vice President, System Planning of Entergy Services, Inc.
2017-2019
Vice President, Regulatory Services of Entergy Services, Inc.
2015-2017
Peter S. Norgeot, Jr. (a)
55 Senior Vice President, Transformation of Entergy Corporation
2018-Present
Senior Vice President, Power Generation of Entergy Services
2017-2018
Vice President, Fossil Generation of Entergy Services
2015-2017
(a)In addition, this officer is an executive officer and/or director of various other wholly owned subsidiaries of Entergy Corporation and its operating companies.
Each officer of Entergy Corporation is elected yearly by the Board of Directors. Each officer’s age and title are provided as of December 31, 2020.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrants’ Common Equity and Related Stockholder Matters
Entergy Corporation
The shares of Entergy Corporation’s common stock are listed on the New York Stock and Chicago Stock Exchanges under the ticker symbol ETR. As of January 31, 2021, there were 22,817 stockholders of record of Entergy Corporation.
Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities (1)
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Plan Maximum $ Amount of Shares that May Yet be Purchased Under a Plan (2)
10/01/2020 - 10/31/2020 - $- - $350,052,918
11/01/2020 - 11/30/2020 - $- - $350,052,918
12/01/2020 - 12/31/2020 - $- - $350,052,918
Total - $- -
In accordance with Entergy’s stock-based compensation plans, Entergy periodically grants stock options to key employees, which may be exercised to obtain shares of Entergy’s common stock. According to the plans, these shares can be newly issued shares, treasury stock, or shares purchased on the open market. Entergy’s management has been authorized by the Board to repurchase on the open market shares up to an amount sufficient to fund the exercise of grants under the plans. In addition to this authority, the Board has authorized share repurchase programs to enable opportunistic purchases in response to market conditions. In October 2010 the Board granted authority for a $500 million share repurchase program. The amount of share repurchases under these programs may vary as a result of material changes in business results or capital spending or new investment opportunities. In addition, in the first quarter 2020, Entergy withheld 151,159 shares of its common stock at $126.31 per share, 79,153 shares of its common stock at $129.55 per share, 41,167 shares of its common stock at $131.52 per share, 2,269 shares of its common stock at $124.28 per share, 1,331 shares of its common stock at $123.74 per share, 1,088 shares of its common stock at $102.93 per share, 441 shares of its common stock at $132.19 per share, 71 shares of its common stock at $86.51 per share, 31 shares of its common stock at $115.90 per share, and 19 shares of its common stock at $86.74 per share to pay income taxes due upon vesting of restricted stock granted and payout of performance units as part of its long-term incentive program.
(1)See Note 12 to the financial statements for additional discussion of the stock-based compensation plans.
(2)Maximum amount of shares that may yet be repurchased relates only to the $500 million plan does not include an estimate of the amount of shares that may be purchased to fund the exercise of grants under the stock-based compensation plans.
Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy
There is no market for the common equity of the Registrant Subsidiaries. Information with respect to restrictions that limit the ability of the Registrant Subsidiaries to pay dividends or distributions is presented in Note 7 to the financial statements.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Selected Financial Data
Refer to “SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON OF ENTERGY CORPORATION AND SUBSIDIARIES, ENTERGY ARKANSAS, LLC AND SUBSIDIARIES, ENTERGY LOUISIANA, LLC AND SUBSIDIARIES, ENTERGY MISSISSIPPI, LLC, ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES, ENTERGY TEXAS, INC. AND SUBSIDIARIES, and SYSTEM ENERGY RESOURCES, INC.” which follow each company’s financial statements in this report, for information with respect to selected financial data and certain operating statistics.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Refer to “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS OF ENTERGY CORPORATION AND SUBSIDIARIES, ENTERGY ARKANSAS, LLC AND SUBSIDIARIES, ENTERGY LOUISIANA, LLC AND SUBSIDIARIES, ENTERGY MISSISSIPPI, LLC, ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES, ENTERGY TEXAS, INC. AND SUBSIDIARIES, and SYSTEM ENERGY RESOURCES, INC.”

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Refer to “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS OF ENTERGY CORPORATION AND SUBSIDIARIES - Market and Credit Risk Sensitive Instruments.”

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
Refer to “TABLE OF CONTENTS - Entergy Corporation and Subsidiaries, Entergy Arkansas, LLC and Subsidiaries, Entergy Louisiana, LLC and Subsidiaries, Entergy Mississippi, LLC, Entergy New Orleans, LLC and Subsidiaries, Entergy Texas, Inc. and Subsidiaries, and System Energy Resources, Inc.”

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes In and Disagreements With Accountants On Accounting and Financial Disclosure
No event that would be described in response to this item has occurred with respect to Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, or System Energy.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
As of December 31, 2020, evaluations were performed under the supervision and with the participation of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy (individually “Registrant” and collectively the “Registrants”) management, including their respective Principal Executive Officers (PEO) and Principal Financial Officers (PFO). The evaluations assessed the effectiveness of the Registrants’ disclosure controls and procedures. Based on the evaluations, each PEO and PFO has concluded that, as to the Registrant or Registrants for which they serve as PEO or PFO, the Registrant’s or Registrants’ disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms; and that the Registrant’s or Registrants’ disclosure controls and procedures are also effective in reasonably assuring that such information is accumulated and communicated to the Registrant’s or Registrants’ management, including their respective PEOs and PFOs, as appropriate to allow timely decisions regarding required disclosure.
Internal Control over Financial Reporting (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)
The managements of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy (individually “Registrant” and collectively the “Registrants”) are responsible for establishing and maintaining adequate internal control over financial reporting for the Registrants. Each Registrant’s internal control system is designed to provide reasonable assurance regarding the preparation and fair presentation of each Registrant’s financial statements presented in accordance with generally accepted accounting principles.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Each Registrant’s management assessed the effectiveness of each Registrant’s internal control over financial reporting as of December 31, 2020. In making this assessment, each Registrant’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. The 2013 COSO Framework was utilized for management’s assessment.
Based on each management’s assessment and the criteria set forth by the 2013 COSO Framework, each Registrant’s management believes that each Registrant maintained effective internal control over financial reporting as of December 31, 2020.
The report of Deloitte & Touche LLP, Entergy Corporation’s independent registered public accounting firm, regarding Entergy Corporation’s internal control over financial reporting is included herein. The report of Deloitte & Touche LLP is not applicable to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy because these Registrants are non-accelerated filers.
Changes in Internal Controls over Financial Reporting
Under the supervision and with the participation of each Registrant’s management, including its respective PEO and PFO, each Registrant evaluated changes in internal control over financial reporting that occurred during the quarter ended December 31, 2020 and found no change that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.
Attestation Report of Registered Public Accounting Firm
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and Board of Directors of
Entergy Corporation and Subsidiaries
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Entergy Corporation and Subsidiaries (the “Corporation”) as of December 31, 2020, based on criteria established in Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020 of the Corporation and our report dated February 26, 2021 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Item 9A, Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Corporation’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
New Orleans, Louisiana
February 26, 2021
PART III

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ITEM 9B. OTHER INFORMATION

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers, and Corporate Governance of the Registrants (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas)
Information required by this item concerning directors of Entergy Corporation is set forth under the heading “Proposal 1 - Election of Directors” contained in the Proxy Statement of Entergy Corporation, to be filed in connection with its Annual Meeting of Stockholders to be held May 7, 2021, and is incorporated herein by reference.
All officers and directors listed below held the specified positions with their respective companies as of the date of filing this report, unless otherwise noted.
Name Age Position Period
Entergy Arkansas, LLC
Directors
Laura R. Landreaux
47 President and Chief Executive Officer of Entergy Arkansas
2018-Present
Director of Entergy Arkansas
2018-Present
Operational Finance Director of Entergy Arkansas
2017-2018
Vice President, Regulatory Affairs of Entergy Arkansas
2014-2017
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Officers
A. Christopher Bakken, III
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Marcus V. Brown
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Leo P. Denault
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Laura R. Landreaux
See information under the Entergy Arkansas Directors Section above.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Kimberly A. Fontan
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
ENTERGY LOUISIANA, LLC
Directors
Phillip R. May, Jr.
58 President and Chief Executive Officer of Entergy Louisiana
2013-Present
Director of Entergy Louisiana
2013-Present
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Officers
A. Christopher Bakken, III
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Marcus V. Brown
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Leo P. Denault
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Phillip R. May, Jr.
See information under the Entergy Louisiana Directors Section above.
Kimberly A. Fontan
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
ENTERGY MISSISSIPPI, LLC
Directors
Haley R. Fisackerly
55 President and Chief Executive Officer of Entergy Mississippi
2008-Present
Director of Entergy Mississippi
2008-Present
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Officers
Marcus V. Brown
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Leo P. Denault
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Haley R. Fisackerly
See information under the Entergy Mississippi Directors Section above.
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Kimberly A. Fontan
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
ENTERGY NEW ORLEANS, LLC
Directors
David D. Ellis
52 President and Chief Executive Officer of Entergy New Orleans
2018-Present
Director of Entergy New Orleans
2018-Present
President and Chief Executive Officer, Global Power Technologies
Managing Director and Chairman of Comverge International, Inc.
2010-2017
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Officers
Marcus V. Brown
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Leo P. Denault
See information under the Information about Executive Officers of Entergy Corporation in Part I.
David D. Ellis
See information under the Entergy New Orleans Directors Section above.
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Kimberly A. Fontan
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
ENTERGY TEXAS, INC.
Directors
Sallie T. Rainer
58 President and Chief Executive Officer of Entergy Texas
2012-Present
Director of Entergy Texas
2012-Present
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Officers
Marcus V. Brown
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Leo P. Denault
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Paul D. Hinnenkamp
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Andrew S. Marsh
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Kimberly A. Fontan
See information under the Information about Executive Officers of Entergy Corporation in Part I.
Sallie T. Rainer
See information under the Entergy Texas Directors Section above.
Roderick K. West
See information under the Information about Executive Officers of Entergy Corporation in Part I.
The directors and officers of Entergy Texas are elected annually to serve by the unanimous consent of its sole common stockholder. The directors and officers of Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC and Entergy New Orleans, LLC are elected annually to serve by the unanimous consent of the sole common membership owner, Entergy Utility Holding Company, LLC. Entergy Corporation’s directors are elected annually at the annual meeting of shareholders. Entergy Corporation’s officers are elected at the annual organizational meeting of the Board of Directors, which immediately follows the annual meeting of shareholders. The age of each officer and director for whom information is presented above is as of December 31, 2020.
Corporate Governance Guidelines and Committee Charters
Each of the Audit, Corporate Governance, and Personnel Committees of Entergy Corporation’s Board of Directors operates under a written charter. In addition, the Board has adopted Corporate Governance Guidelines. Each charter and the guidelines are available through Entergy’s website (www.entergy.com) or upon written request.
Audit Committee of the Entergy Corporation Board
The following directors are members of the Audit Committee of Entergy Corporation’s Board of Directors:
Patrick J. Condon (Chairman)
Philip L. Frederickson
M. Elise Hyland
Karen A. Puckett
All Audit Committee members are independent. In addition to the general independence requirements of the NYSE, all Audit Committee members must meet the heightened independence standards imposed by the SEC and NYSE. All Audit Committee members possess the level of financial literacy required by the NYSE rules and the Board has determined that Messrs. Condon and Frederickson satisfy the financial expertise requirements of the NYSE and have the requisite experience to be designated an audit committee financial expert as that term is defined by the rules of the SEC.
Code of Ethics
Effective October 2018, the Entergy Corporation Board of Directors adopted a Code of Business Conduct and Ethics that applies to members of the Entergy Corporation Board of Directors and all Entergy officers and employees. The Code of Business Conduct and Ethics includes Special Provisions Relating to Principal Executive Officer and Senior Financial Officers. It is to be read in conjunction with Entergy’s omnibus code of integrity under which Entergy operates, called the Code of Entegrity, as well as system policies. All employees are expected to abide by the Codes. Non-bargaining employees are required to acknowledge annually that they understand and abide by the Code of Entegrity. The Code of Business Conduct and Ethics, including any amendments or any waivers thereto, and the Code of Entegrity are available through Entergy’s website (www.entergy.com) or upon written request.
Nominations to the Entergy Corporation Board of Directors; Nominating Procedure
Shareholders wishing to recommend a candidate to the Corporate Governance Committee should do so by submitting the recommendation in writing to Entergy Corporation’s Secretary at 639 Loyola Avenue, P.O. Box 61000, New Orleans, LA 70161, and it will be forwarded to the Corporate Governance Committee members for their consideration. Any recommendation should include:
•the number of shares of Entergy Corporation stock held by the shareholder;
•the name and address of the candidate;
•a brief biographical description of the candidate, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements discussed in the Proxy Statement under “Board of Directors - Identifying Director Candidates”; and
•the candidate’s signed consent to be named in the Proxy Statement and a representation of such candidates’ intent to serve as a director for the entire term if elected.
Once the Corporate Governance Committee receives the recommendation, it may request additional information from the candidate about the candidate’s independence, qualifications, and other information that would assist the Corporate Governance Committee in evaluating the candidate, as well as certain information that must be disclosed about the candidate in the Proxy Statement, if nominated. The Corporate Governance Committee will apply the same standards in considering director candidates recommended by shareholders as it applies to other candidates.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
ENTERGY CORPORATION
Information concerning compensation earned by the directors and officers of Entergy Corporation is set forth in its Proxy Statement, to be filed in connection with the Annual Meeting of Shareholders to be held May 7, 2021, under the headings “Compensation Discussion and Analysis,” “Annual Compensation Programs Risk Assessment,” “Executive Compensation Tables,” “Pay Ratio Disclosure,” “Our 2021 Director Nominees,” and “2020 Non-Employee Director Compensation,” all of which information is incorporated herein by reference. References in this section to the “Company” refer to Entergy Corporation.
ENTERGY ARKANSAS, ENTERGY LOUISIANA, ENTERGY MISSISSIPPI, ENTERGY NEW ORLEANS, AND ENTERGY TEXAS
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes Entergy Corporation’s executive compensation policies, programs, philosophy and decisions regarding the Named Executive Officers (“NEOs”) for 2020. It also explains how and why the Personnel Committee of Entergy Corporation’s Board of Directors arrived at the specific compensation decisions involving the NEOs in 2020 who were:
Name(1)
Title
A. Christopher Bakken, III
Executive Vice President, Nuclear Operations/Chief Nuclear Officer
Marcus V. Brown Executive Vice President and General Counsel
Leo P. Denault
Chairman of the Board and Chief Executive Officer
David D. Ellis
President and Chief Executive Officer, Entergy New Orleans
Haley R. Fisackerly
President and Chief Executive Officer, Entergy Mississippi
Laura R. Landreaux
President and Chief Executive Officer, Entergy Arkansas
Andrew S. Marsh
Executive Vice President and Chief Financial Officer, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas
Phillip R. May, Jr.
President and Chief Executive Officer, Entergy Louisiana
Sallie T. Rainer
President and Chief Executive Officer, Entergy Texas
Roderick K. West
Group President, Utility Operations
(1)Messrs. Bakken, Brown, Denault, Marsh, and West hold the positions referenced above as executive officers of Entergy Corporation and are members of Entergy Corporation’s Office of the Chief Executive (“OCE”). No additional compensation was paid in 2020 to any of these officers for their service as NEOs of the Utility operating companies.
Entergy Corporation’s Compensation Principles and Philosophy
Entergy Corporation’s executive compensation programs are based on a philosophy of pay for performance that supports its strategy and business objectives. It believes the executive pay programs:
•Motivate its management team to drive strong financial and operational results by linking pay to performance.
•Attract and retain a highly experienced, diverse and successful management team.
•Incentivize and reward the achievement of results that are deemed by the Personnel Committee to be consistent with the overall goals and strategic direction that the Entergy Corporation Board has approved.
•Create sustainable value for the benefit of all of Entergy Corporation’s stakeholders, including its customers, employees, communities and owners.
•Align the interests of the executives and Entergy Corporation’s investors in its long-term business strategy by directly tying the value of equity-based awards to Entergy Corporation’s stock price performance and relative total shareholder return.
Executive Compensation Best Practices:
Entergy Corporation regularly reviews its executive compensation programs to align them with commonly viewed best practices in the market and to reflect feedback from discussions with Entergy Corporation’s investors on executive compensation.
What Entergy Corporation Does
✓
Executive compensation programs are highly correlated to performance and focused on long-term value creation
✓
Double trigger for cash severance payments and equity acceleration in the event of a change in control
✓
Clawback policy
✓
Maximum payout capped at 200% of target for annual incentive awards and Long-Term Performance Unit Program for members of the OCE
✓
Rigorous goal setting aligned with externally disclosed annual and multi-year financial targets
✓
Minimum vesting periods for equity-based awards
✓
Long-term compensation mix weighted more toward performance units than service-based equity awards
✓
All long-term incentive compensation is settled in Entergy Corporation common stock
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Rigorous stock ownership and share retention requirements
✓
Annual Say on Pay vote
✓
Annual Compensation Risk Assessment
What Entergy Corporation Doesn’t Do
×
No 280G tax “gross up” payments in the event of a change in control
×
No tax “gross up” payments on any executive perquisites for members of the OCE, other than relocation benefits
×
No option repricing or cash buy-outs for underwater options without shareholder approval
×
No agreements providing for severance payments to executive officers that exceed 2.99 times annual base salary and annual incentive awards without shareholder approval
×
No unusual or excessive perquisites
×
No hedging or pledging of Entergy Corporation common stock
×
No fixed term employment agreements
×
No new officer participation in the System Executive Retirement Plan
×
No grants of supplemental service credit to newly-hired officers under any of Entergy Corporation’s non-qualified retirement plans
How Entergy Corporation Makes Compensation Decisions
The Personnel Committee oversees the executive compensation programs and policies with the advice of its independent compensation consultant and support from Entergy Corporation’s management team.
Personnel Committee •
The Personnel Committee is responsible for the review and approval of all aspects of the executive compensation programs and policies.
•
Among its duties, the Personnel Committee is responsible for approving the compensation for all members of the OCE, including:
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Annual review of the compensation elements and mix of elements for the following year;
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Annual review and approval of incentive program design, goals and objectives for alignment with Entergy Corporation’s compensation and business strategies;
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Evaluation of Company and individual performance results in light of these goals and objectives;
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Evaluation of the competitiveness of each executive officer’s total compensation package;
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Approval of any changes to its executive officers’ compensation, including but not limited to, base salary, annual and long-term incentive award opportunities and retention programs;
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Evaluation of the performance of Entergy Corporation’s Chairman and Chief Executive Officer; and
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Reporting, at least annually, to the Entergy Corporation Board of Directors on succession planning.
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The Personnel Committee also receives reports and engages on other significant matters affecting the general employee population, including workforce diversity, inclusion and belonging, organizational health and safety.
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The Personnel Committee has the sole authority to hire its compensation consultant, approve its compensation, determine the nature and scope of its services, evaluate its performance and terminate its engagement.
Management •
Entergy Corporation’s Chief Executive Officer and Chief Human Resources Officer (CHRO) work closely with the Personnel Committee in managing the executive compensation programs and attend meetings of the Personnel Committee. Mr. Denault and the CHRO, Kathryn Collins since she joined Entergy Corporation, attended all of the Personnel Committee meetings held in 2020.
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The Chief Executive Officer reviews with the committee the performance of the members of the OCE other than himself and makes recommendations to the committee regarding compensation for these executive officers.
Independent Compensation Consultant •
During 2020, Pay Governance, LLC (“Pay Governance”) assisted the Personnel Committee with its responsibilities related to Entergy Corporation’s executive compensation programs.
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Pay Governance:
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Regularly attended meetings of the committee;
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Conducted studies of competitive compensation practices;
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Identified Entergy Corporation’s market surveys and proxy peer group;
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Provided updates on executive compensation trends and regulatory developments;
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Reviewed base salary, annual incentives and long-term incentive compensation opportunities relative to competitive practices; and
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Developed conclusions and recommendations related to the executive compensation programs for consideration by the committee.
2021 Executive Compensation Program Enhancements
Annual Incentive Awards. Feedback from Entergy Corporation’s investors has indicated that environmental, social and governance (or ESG) issues are being viewed as increasingly vital to long-term performance. In addition, investors are expecting more transparency regarding corporate ESG commitments. This echoes Entergy Corporation’s own commitment to ESG and all of its critical stakeholders. Thus, Entergy Corporation conducted a comprehensive review of its incentive program in 2020 to identify and prioritize the optimal incentive metrics - including ESG goals - to use in the 2021 program. Historically, Entergy Corporation has used two financial measures to determine the Entergy Achievement Multiplier (“EAM”), which is the performance metric used to determine the maximum funding available for annual incentive awards. ESG and other performance metrics were considered in determining the allocation of incentive funds to certain workgroups and individual recipients. However, to demonstrate Entergy Corporation’s strong commitment to its ESG goals, and to more explicitly link compensation to the interests of its stakeholders, the EAM will be determined based on financial and non-financial measures beginning in 2021. Specifically, a financial measure will be weighted 60%, while quantitative and qualitative non-financial measures, including ESG metrics, will account for the remaining 40%.
Financial Measure: Keeping with the committee’s goal of aligning performance measures with financial results that link to externally communicated investor guidance, ETR Tax Adjusted earnings per share or ETR Tax Adjusted EPS will continue to be used as the financial measure to determine 60% of the EAM. ETR Tax Adjusted EPS is based on Entergy’s Adjusted Earnings Per Share (“ETR Adjusted EPS”), which is the earnings measure that is used for external guidance. ETR Adjusted EPS adjusts Entergy Corporation’s as reported (GAAP) earnings per share results to eliminate the impact of its Entergy Wholesale Commodities business, significant tax items and other non-routine items. To arrive at ETR Tax Adjusted EPS, ETR Adjusted EPS is adjusted to add back the effect of significant tax items, and to eliminate the effect of: (i) major storms, including the impact on total debt of pending securitizations, (ii) the resolution of certain unresolved regulatory litigation matters, (iii) unrealized gains or losses on equity securities, (iv) potential effects of federal income tax law changes, and (v) elective contributions to pension plans or trusts related to non-qualified postretirement benefits that deviate from original plan assumptions.
Non-Financial Measures: The following non-financial metrics will be used to determine 40% of the EAM for 2021:
Measure Description Rationale
Safety Quantitative measure of serious injury and fatalities per 100 employees or contractors as defined by EEI. •Ensures a safe and incident-free workplace is maintained for all of Entergy Corporation’s employees and contractors.
Diversity, Inclusion & Belonging (DIB) Overall qualitative assessment of DIB key performance indicators assessed in the workforce, workplace and marketplace, informed by quantitative measures; progress on DIB initiatives; and responsiveness to emergent issues. •Reinforces the commitment to be a fair and equitable work environment that is welcoming to all and allows Entergy Corporation to attract and retain superb talent, allowing it to execute its strategy to be the Premier Utility.
•Drives an engaged workforce; customer-centric service and solutions; enhancement of owner value; and community partnerships.
Environmental Stewardship Assessment of progress toward environmental commitments through performance on key initiatives and Utility CO2 emission rate outcomes. •Reinforces Entergy Corporation’s commitment to long-term sustainability and a reduced impact on the environment. Ensures accountability for achieving its significant external commitments to reduce carbon emissions.
Customer Net Promoter Score Utilize quantitative Residential Net Promoter Score benchmark survey process. •Incentivizes actions that drive positive customer outcomes (as measured through customer feedback) including impacts on reliability improvements, responsiveness, continuous improvement and innovation.
•Signals overall health and loyalty of Entergy Corporation’s customer relationship.
Targets for each of the non-financial measures will be clearly defined and will be designed to drive employee behaviors that support all four of Entergy Corporation’s stakeholders - customers, employees, communities and our owners.
Long-Term Performance Incentive Program (“LTIP”). In recent performance periods, Entergy Corporation has used two financial measures to determine awards under the LTIP - a cumulative earnings per share (EPS) measure (most recently cumulative ETR Adjusted EPS) and relative total shareholder return (“TSR”). To emphasize the importance of strong cash generation for the long-term health of its business, Entergy Corporation is replacing the EPS measure with a credit measure - adjusted FFO/Debt ratio for the 2021 - 2023 performance period. The adjusted FFO/Debt ratio is the ratio of: (i) adjusted funds from operations calculated as operating cash flow adjusted for allowance for funds used during construction, working capital and the effects of securitization revenue, and the pre-defined exclusions discussed above for the annual incentives; to (ii) total debt, excluding outstanding or pending securitization debt. The Personnel Committee decided to use this ratio because it emphasizes financial stability, noting that a financially healthy utility creates the capacity to make investments on behalf of customers, addresses the needs of communities, provides low-cost access to capital markets and promotes employee confidence. Relative TSR will continue to be used as the other performance measure for the 2021 - 2023 LTIP performance period, with relative TSR weighted 80% and the credit measure weighted 20%. Relative TSR measures Entergy Corporation’s total TSR relative to the TSR of the companies in the Philadelphia Utility Index as of December 31, 2020. Targets for the LTIP performance measures will include the same exclusions that will be used to determine the annual incentive financial measure targets.
2020 Incentive Payouts
Performance measures and targets for the 2020 annual incentive awards were determined by the Personnel Committee in January 2020 and the targets and measures for the 2018 - 2020 LTIP performance cycle were
established in January 2018. In January 2021, the Personnel Committee certified the results for the EAM for the 2020 annual incentive awards and the 2018 - 2020 LTIP performance cycle. The Personnel Committee did not make any adjustments to the targets for either program for the impact of COVID-19 on Entergy Corporation and its subsidiaries.
Entergy Corporation believes the 2020 incentive pay outcomes for the NEOs demonstrate the application of its pay for performance philosophy.
Annual Incentive Awards
The Personnel Committee determined that the 2020 EAM would be based on two equally weighted performance metrics:
•ETR Tax Adjusted Earnings Per Share (“ETR Tax Adjusted EPS”): Entergy Corporation uses a single non-GAAP earnings measure for guidance and investor reporting purposes that reflects its ongoing business. This measure, Entergy Adjusted Earnings Per Share (“ETR Adjusted EPS”) adjusts Entergy Corporation’s as reported (GAAP) earnings per share results to eliminate the impact of its Entergy Wholesale Commodities business, significant tax items and other non-routine items. ETR Tax Adjusted EPS is based on the externally reported ETR Adjusted EPS, which is then adjusted to add back the effect of significant tax items, and to eliminate the effect of major storms, the resolution of certain unresolved regulatory litigation matters, changes in federal income tax law and unrealized gains or losses on equity securities (the “Pre-Determined Exclusions”), as well as other items the Personnel Committee may consider appropriate adjustments based on management accountability and business rationale.
•Entergy Adjusted Operating Cash Flow (“ETR Adjusted OCF”): ETR Adjusted OCF is calculated based on Entergy Corporation’s as-reported (GAAP) operating cash flow, adjusted to eliminate the effect of any Pre-Determined Exclusions.
The 2020 annual incentive award targets and results determined by the Personnel Committee were:
Annual Incentive Program Performance Goals 2020 Targets 2020 Results
ETR Tax Adjusted EPS $5.60 $6.90
ETR Adjusted OCF ($ billions) $3.450 $3.127
EAM as a percentage of target 100% 120%
Average NEO Payout (as a percentage of target) 124%
In January 2021, the Personnel Committee determined that ETR Adjusted EPS exceeded the maximum by $1.30, but fell short of achieving its ETR Adjusted OCF target of $3.45 billion by approximately $323 million, leading to a preliminary EAM of 118%. In recognition of management’s success in achieving positive outcomes in 2020 on certain strategic efforts deemed critical to Entergy Corporation’s long-term success, the committee exercised its discretion to increase the EAM by 2% to 120%. Based on each NEO’s individual accountabilities and accomplishments, the committee then determined individual annual incentive awards of 115% to 150% of the target opportunity for each of the NEOs.
Long-Term Performance Unit Program
In January 2018, the Personnel Committee chose relative TSR and Cumulative Adjusted Utility, Plant & Other Earnings Per Share (“Cumulative Adjusted UP&O EPS”), each weighted equally, as the performance measures for the 2018 - 2020 LTIP performance period. Cumulative Adjusted UP&O EPS adjusts Entergy Corporation’s cumulative operational Utility, Parent & Other results to eliminate the impact of tax items and weather. Similar to the way targets are established for the annual incentive awards, the relative TSR and Cumulative Adjusted UP&O EPS performance measures were established by the Personnel Committee after the Board’s review of Entergy Corporation’s strategic plan.
The targets and results for the 2018 - 2020 LTIP performance period as determined by the Personnel Committee were:
LTIP Results 2018 - 2020 LTIP Target 2018 - 2020 LTIP Result
Relative TSR Median 2nd Quartile
Cumulative Adjusted UP&O EPS $15.20 $15.25
Payout (as a percentage of target) 100% 126%
What Entergy Corporation Pays and Why
Principal Executive Compensation Elements
The principal components of Entergy Corporation’s 2020 executive compensation programs and the purpose of each component were:
Compensation Element Form Performance Metrics Primary Purpose Vesting Period Subject to Clawback
Base Salary Cash N/A Provides a base level of competitive cash compensation for executive talent. N/A N/A
Annual Incentive Cash ETR Tax Adjusted EPS (50%) Motivates and rewards executives for performance on key financial measures during the year. 1 year ü
ETR Adjusted OCF
(50%)
Long-Term Performance Units Equity Relative TSR (80%) Focuses the executive officers on building long-term shareholder value, growing earnings and increases executives’ ownership of Entergy Corporation common stock. 3 years ü
Cumulative ETR Adjusted EPS (20%)
Stock Options Equity N/A Align interests of executives with long-term shareholder value, provide competitive compensation, and increase executives’ ownership in Entergy Corporation common stock. 3 years ü
Restricted Stock Equity N/A Aligns interests of executives with long-term shareholder value, provides competitive compensation, retains executive talent and increases the executives’ ownership in Entergy Corporation common stock. 3 years ü
Competitive Positioning
Market Data for Compensation Comparison
Annually, the Personnel Committee reviews:
•Published and private compensation survey data compiled by Pay Governance, the Personnel Committee’s independent compensation consultant;
•Both utility and general industry data to determine total cash compensation (base salary and annual incentive) for non-industry specific roles;
•Data from utility companies to determine total cash compensation for management roles that are utility-specific, such as Group President, Utility Operations; and
•Utility market data to determine long-term incentives for all positions.
How the Personnel Committee Uses the Market Data
The Personnel Committee uses this survey data to develop compensation opportunities that are designed to deliver total direct compensation (“TDC”) within a targeted range of approximately the 50th percentile of the surveyed companies in the aggregate. In most cases, the committee considers its objectives to have been met if Entergy Corporation’s Chief Executive Officer and the eight other executive officers (including the applicable NEOs) who constitute the OCE each has a target compensation opportunity that falls within a targeted range of 85% - 115% of the 50th percentile of the survey data. In general, compensation levels for an executive officer who is new to a position tend to be at the lower end of the competitive range, while seasoned executive officers whose experience and skill set are viewed as critical to retain would be positioned at the higher end of the competitive range. Generally, differences in the levels of TDC among the NEOs are primarily driven by the scope of their responsibilities, differences in the competitive market pay range for similar positions, performance and considerations of internal pay equity.
Proxy Peer Group
Although the survey data described above are the primary data used in benchmarking compensation, the committee uses compensation information from the companies included in the Philadelphia Utility Index to evaluate the overall reasonableness of Entergy Corporation’s compensation programs and to determine relative TSR for the 2020 - 2022 LTIP performance period. The companies included in the Philadelphia Utility Index at the time the Personnel Committee approved the 2020 compensation model and framework were:
AES Corporation
El Paso Electric Co.*
Ameren Corporation
Eversource Energy
American Electric Power Co. Inc.
Exelon Corporation
American Water Works Company, Inc.
FirstEnergy Corporation
CenterPoint Energy Inc.
NextEra Energy, Inc.
Consolidated Edison Inc.
Pinnacle West Capital Corporation
Dominion Energy
Public Service Enterprise Group, Inc.
DTE Energy Company
Southern Company
Duke Energy Corporation
Xcel Energy, Inc.
Edison International
*El Paso Electric Co. is no longer included in the Philadelphia Utility Index.
2020 Compensation Decisions
Base Salary
When setting the base salaries of the NEOs who are members of the OCE, the Personnel Committee generally targets the range of compensation paid to similarly situated executive officers of the companies included in the market data previously discussed in this Compensation Discussion and Analysis under “Competitive Positioning.” For the other NEOs, their salaries are established by their immediate supervisors using the same criteria. The base salaries of the NEOs are considered annually as part of the performance review process, and upon a NEO’s promotion or other change in job responsibilities. Based on this review in 2020 and after reviewing the market data above, all of the NEOs, other than Mr. Denault, received increases in their base salaries ranging from approximately 2.5% to 6.15%. In 2020, Mr. Denault did not receive an increase in his base salary. Instead, the
Personnel Committee increased Mr. Denault’s TDC by increasing his long-term incentive target opportunities; thereby, increasing the portion of his compensation that is “at risk” and further aligning his interests with those of Entergy Corporation’s shareholders.
The following table sets forth the 2019 and 2020 base salaries for the Named Executive Officers. Changes in base salaries for 2020 were effective in April.
Named Executive Officer 2019 Base Salary 2020 Base Salary
A. Christopher Bakken, III $654,078 $673,700
Marcus V. Brown $666,250 $690,000
Leo P. Denault $1,260,000 $1,260,000
David D. Ellis $313,388 $321,849
Haley R. Fisackerly $376,023 $388,244
Laura R. Landreaux $316,470 $326,755
Andrew S. Marsh $650,000 $690,000
Phillip R. May, Jr. $392,043 $404,784
Sallie T. Rainer $347,422 $358,713
Roderick K. West $714,013 $731,863
Annual Incentive Compensation
In 2020, annual incentive awards were tied to Entergy Corporation’s financial and operational performance through the EAM. Entergy Corporation uses the following process to determine annual incentive awards:
•Establish Performance Measures to Determine EAM Pool. Annually, the Personnel Committee engages in a rigorous process to determine the performance measures used to determine the EAM. The Personnel Committee’s goal is to establish measures that are consistent with Entergy Corporation’s strategy and business objectives for the upcoming year, as reflected in its strategic plan, and are designed to drive results that represent a high level of achievement. These measures are approved based on a comprehensive review of Entergy Corporation’s strategic plan by its full Board of Directors conducted in December of the preceding year and updated in January to reflect key drivers of anticipated changes in performance from the preceding year.
•Establish Target Achievement Levels. In January, after Entergy Corporation’s strategic plan is updated to reflect any changes from that reviewed in December, the Personnel Committee establishes the specific targets that must be achieved for each performance measure. The Personnel Committee also seeks to assure that the targets:
◦Take into account changes in the business environment and specific challenges facing Entergy Corporation;
◦Reflect an appropriate balancing of the various risks and opportunities recognized at the time the targets are set; and
◦Are aligned with external expectations communicated to Entergy Corporation’s shareholders.
•Establish NEO Target Opportunities. In January of each year, the Personnel Committee establishes the target opportunities for the members of the OCE based on its review of the competitive analysis of job-specific market data prepared by Pay Governance as well as the officer’s role, individual performance and internal equity considerations. For the NEOs who are members of the OCE (Messrs. Bakken, Brown, Denault, Marsh and West), target award opportunities are established based on these factors. For the other NEOs, target award opportunities are determined based on their management level within the Entergy organization. Executive management levels at Entergy Corporation range from ML level 1 through ML level 4 (the “ML 1-4 Officers”). At December 31, 2020, Mr. May held a Level 3 position, and Mr. Ellis,
Mr. Fisackerly, Ms. Landreaux and Ms. Rainer held Level 4 positions. Accordingly, their respective incentive award opportunities differ from one another based on either their management level or the external market data developed by the Committee’s independent compensation consultant. The 2020 target opportunities were increased for Mr. Bakken, Mr. Brown, Mr. Marsh and Mr. West to align more closely with market data and internal pay equity. Mr. Denault’s 2020 target opportunity was unchanged from the level set in 2019 due to the Personnel Committee’s decision to increase his TDC by increasing his long-term incentive target opportunities. The target levels for the other NEOs are comparable to the levels set for 2019.
•Determine the EAM. In January, after the end of the fiscal year, the Finance and Personnel Committees jointly review Entergy Corporation’s financial results and the Personnel Committee determines the EAM, which represents the level of success in achieving the performance objectives established by the committee and determines the maximum funding level of the annual incentive plan, as a percentage of the total target opportunity.
•Determine Annual Incentive Awards. To determine individual executive officer awards under the annual incentive plan, the Personnel Committee considers not only each executive’s role in executing on Entergy Corporation’s strategies and delivering the financial performance achieved, but also the individual’s accountability for any challenges Entergy Corporation experienced during the year.
Establishing 2020 Financial Measures and Targets
Using the process described above, in December 2019, the Personnel Committee decided to use ETR Tax Adjusted EPS and ETR Adjusted OCF, with each measure weighted equally, as the performance measures for determining the 2020 EAM pool. ETR Tax Adjusted EPS is based on ETR Adjusted EPS, which is the primary earnings measure used by Entergy Corporation externally and the measure on which it provides annual earnings guidance. To arrive at ETR Tax Adjusted EPS, ETR Adjusted EPS is adjusted to add back the effect of any significant tax items that were excluded to arrive at ETR Adjusted EPS and to eliminate the effects, if any, of the Pre-Determined Exclusions. ETR Adjusted OCF is calculated based on Entergy Corporation’s as-reported (GAAP) operating cash flow, adjusted to eliminate the effect of any significant non-routine items not representative of the ongoing business, such as items associated with the decisions to sell or close the Entergy Wholesale Commodities nuclear plants, and any Pre-Determined Exclusions. The Personnel Committee determined that ETR Tax Adjusted EPS and ETR Adjusted OCF were the appropriate metrics to use for annual incentives in 2020 because:
•They are based on objective financial measures that Entergy Corporation and its investors consider to be important in evaluating its financial performance;
•They are based on the same metrics we use for internal and external financial reporting; and
•They provide both discipline and transparency.
The Personnel Committee considered it appropriate to use ETR Tax Adjusted EPS, which adds back the effect of significant tax items that may have been excluded from ETR Adjusted EPS, as the earnings measure because of the significant financial benefits to Entergy Corporation resulting from such tax items and the management effort required to achieve them. The Personnel Committee also considered the appropriateness of excluding the effect of each of the specific Pre-Determined Exclusions it had identified from each of the financial measures. It viewed the exclusion of major storms as appropriate because although Entergy Corporation includes estimates for storm costs in its financial plan, it does not include estimates for a major storm event, such as a hurricane. The Personnel Committee considered the exclusion of any unanticipated effects of the tax reform legislation adopted at the end of 2017 to be appropriate because of the lingering uncertainty around those effects and the inability of management to impact those results. The Personnel Committee approved the other exclusions from reported results - for the impact of certain legacy unresolved regulatory litigation and unanticipated unrealized gains and losses on securities held by Entergy Corporation’s nuclear decommissioning trusts - primarily because of management’s inability to influence either of the related outcomes. The Personnel Committee further provided that in determining the 2020 EAM, the 2020 results would be subject to adjustment for other items the committee may consider appropriate in its review of 2020 performance, considering management accountability and business
rationale, and the EAM as so calculated would be subject to further adjustment at the committee’s discretion based on business considerations.
In determining the targets to set for 2020, the Personnel Committee reviewed anticipated drivers and risks to Entergy Corporation’s expectations for its adjusted earnings and operating cash flow for 2020 as set forth in its financial plan, as well as factors driving the strong financial performance achieved in 2019. The Personnel Committee confirmed that the proposed plan targets for ETR Tax Adjusted EPS and ETR Adjusted OCF reflected significant growth in the core earnings and consolidated operating cash flow measures underlying the annual incentive plan targets. The Personnel Committee also noted that while the 2020 ETR Tax Adjusted EPS target was less than the 2019 results, the 2020 target represented significant growth in the underlying ETR Adjusted EPS both from 2019 results and from the 2019 target, with the primary driver of the higher results in 2019 being certain one-time tax benefits that would not be recurring in 2020. The Personnel Committee also considered the potential impact of a wide range of identified risks and opportunities and confirmed that the related annual incentive plan targets reflected a reasonable balancing of such risks and opportunities and an appropriate degree of challenge.
2020 Performance Assessment
The following table shows the 2020 annual incentive plan performance metrics and targets established by the Personnel Committee to determine the 2020 EAM and 2020 results:
Annual Incentive Plan Targets and Results
Performance Goals(1)
Weight Minimum Target Maximum 2020 Results
ETR Tax Adjusted EPS ($) 50% 5.04 5.60 6.16 6.90
ETR Adjusted OCF ($ billions)
50% 3.070 3.450 3.830 3.127
EAM as % of Target 25% 100% 200% 120%
(1)Payouts for performance between achievement levels are calculated using straight-line interpolation, with no payout for performance below the minimum achievement level for both performance measures.
In January 2021, the Finance and Personnel Committees jointly reviewed Entergy Corporation’s financial results against the performance objectives reflected in the table above. Management discussed with the committees Entergy Corporation’s ETR Tax Adjusted EPS and the ETR Adjusted OCF results for 2020, including primary factors explaining how those results compared to the 2020 business plan and annual incentive plan targets set in January 2020. ETR Tax Adjusted EPS exceeded the ETR Tax Adjusted EPS target of $5.60 per share by $1.30, but management fell short of achieving its ETR Adjusted OCF target of $3.45 billion by approximately $323 million, leading to a preliminary EAM of 118%. These results reflected a positive adjustment of $0.10 to ETR Tax Adjusted EPS and a positive adjustment of $274 million to ETR Adjusted OCF for the effects on earnings and operational cash flow of major storms impacting Entergy Corporation’s service area during 2020, consistent with the Pre-Determined Exclusions approved when the targets were set at the beginning of the year. The results also reflected a positive adjustment of $100 million to ETR Adjusted OCF for the effect on operational cash flow of additional voluntary contributions made to Entergy Corporation’s pension plan in 2020 over and above the required level of contributions, which adjustment was made because the committee did not consider it appropriate for management to be penalized in the incentive compensation process for choosing to make such elective contributions, consistent with the Pre-Determined Exclusion for items the committee determined should be excluded based on management accountability and business rationale.
The Personnel Committee considered whether 2020 ETR Tax Adjusted EPS or ETR Adjusted OCF should be adjusted for any other factors that had impacted 2020 results. The committee noted that 2020 revenues and cash flow had been adversely impacted by reduced sales resulting from unfavorable weather, the COVID-19 pandemic and, to a lesser extent, major storms, which collectively reduced ETR Adjusted EPS by approximately $0.71 per share, and ETR Adjusted OCF by approximately $663 million as compared to plan. In addition, the Personnel Committee noted that ETR Adjusted OCF had been further reduced by approximately $178 million due to increased customer arrearages as a result of regulatory moratoria on customer disconnects following the onset of the pandemic. As noted, both ETR Tax Adjusted EPS and ETR Adjusted OCF were adjusted to reflect the impact of
major storms as a Pre-Determined Exclusion. However, the committee decided not to adjust the results to reflect the impact of the COVID-19 pandemic, the disconnect moratoria or the unfavorable weather experienced in 2020.
In addition to the foregoing financial results, the Personnel Committee considered management’s degree of success in achieving various operational and regulatory goals set out at the beginning of the year and in overcoming certain challenges that arose in the business during the course of the year. The committee took note of not only the many ways management had created value for all Entergy Corporation’s key stakeholders during 2020, but also the major challenges that were overcome in the process, including the COVID-19 pandemic and the challenges of responding to three hurricanes in a record-breaking storm season for the Gulf Coast. The committee also noted that despite these challenges, management had remained focused on achieving strong financial results for the benefit of all of its stakeholders while at the same time driving positive outcomes in certain areas that would contribute to Entergy Corporation’s long term sustainability, including particularly the achievement of its 2020 CO2 emissions goal, development and announcement of its goal to achieve net zero carbon emissions by 2050, and significant enhancements to its sustainability disclosure and reporting, and substantial progress in other important ESG and sustainability efforts. In recognition of these accomplishments, which the committee considers to be critical to Entergy Corporation’s long-term success, the committee exercised its discretion to increase the EAM by 2% to 120%.
To determine individual NEO annual incentive awards for the NEOs who are member of the OCE, the Personnel Committee considered individual performance in executing on Entergy Corporation’s strategies and delivering the strong financial performance achieved in 2020. In addition, the Personnel Committee considered the individual’s key accountabilities and accomplishments in relation to certain operational and regulatory challenges Entergy Corporation experienced during the year. With these considerations in mind, the Personnel Committee approved payouts ranging from 115% to 120% of target for each of the NEOs who are members of the OCE.
After the EAM was established to determine overall funding for the annual incentive awards, Entergy Corporation’s Chief Executive Officer allocated incentive award funding to individual business units based on business unit results. Individual awards were determined for the remaining NEOs who are not members of the OCE by their immediate supervisor based on the individual officer’s key accountabilities, accomplishments, and performance. This resulted in payouts that ranged from 117% of target to 150% of target for the NEOs who are not members of the OCE.
Based on the foregoing evaluation of management performance, the Named Executive Officers received the following annual incentive payouts for 2020:
Named Executive Officer Base Salary Target as Percentage of Base Salary Payout as Percentage of Target 2020 Annual
Incentive Award
A. Christopher Bakken, III $673,700 75% 115% $581,066
Marcus V. Brown $690,000 80% 120% $662,400
Leo P. Denault $1,260,000 140% 120% $2,116,800
David D. Ellis $321,849 40% 128% $164,955
Haley R. Fisackerly $388,244 40% 150% $232,737
Laura R. Landreaux $326,755 40% 128% $167,153
Andrew S. Marsh $690,000 85% 120% $703,800
Phillip R. May, Jr. $404,784 60% 117% $284,881
Sallie T. Rainer $358,713 40% 122% $175,713
Roderick K. West $731,863 80% 115% $673,314
Long-Term Incentive Compensation
Overview
Long-term incentive compensation, consisting solely of equity awards in 2020, represents the largest portion of executive officer compensation, and as noted earlier, the increase in Mr. Denault’s TDC opportunity was delivered in the form of long-term incentive compensation. Entergy Corporation believes the combination of long-term incentives it employs provides a compelling performance-based compensation opportunity, acts in retaining the senior management team, and aligns the interests of Entergy Corporation’s executive officers with the interests of its shareholders and customers by enhancing executives focus on Entergy Corporation’s long-term goals. In general, Entergy Corporation seeks to allocate the total value of long-term incentive compensation 60% to performance units and 40% to a combination of stock options and restricted stock, equally divided in value, based on the value the compensation model seeks to deliver.
For each NEO who is a member of the OCE, a dollar value is established to determine that NEO’s long-term incentive awards target. The targeted award value for each NEO is determined based on market median compensation data for the officer’s role, adjusted to reflect individual performance and internal equity. In January 2020, the Personnel Committee approved the 2020 long-term incentive award target amounts for each NEO with each NEO’s target amount increasing in recognition of the contributions made to Entergy Corporation in 2019. This target amount was then converted into the number of performance units, stock options and shares of restricted stock granted to each NEO based on the allocation described above.
In consultation with Entergy Corporation’s Chief Executive Officer, the Personnel Committee reviews each of the other NEO’s performance, role and responsibilities, strengths, developmental opportunities and internal equity and allocates awards of restricted stock and stock options to each of these officers based on these factors. Grants of long-term performance units for these NEOs were determined based on the average of the market data for the officers within a specific management level, without regard to the officer’s specific job function, and allocated as described above.
2020 Long-Term Incentive Award Mix
Long-Term Performance Unit Program
The NEOs are issued performance unit awards under the LTIP.
•Each performance unit represents one share of Entergy Corporation’s common stock at the end of the three-year performance period, plus dividends accrued during the performance period.
•The performance units and accrued dividends on any shares earned during the performance period are settled in shares of Entergy Corporation common stock.
•The Personnel Committee sets payout opportunities for the program at the outset of each performance period.
•No payout under this program will be made if relative TSR for the performance period falls within the lowest quartile of the peer companies in the Philadelphia Utility Index and Cumulative ETR Adjusted EPS is below the minimum performance goal.
•All shares paid out under the LTIP are required to be retained by Entergy Corporation’s officers until applicable executive stock ownership requirements are met.
The LTIP specifies a minimum, target and maximum achievement level, the achievement of which will determine the number of performance units that may be earned by each participant. For the 2020 - 2022 LTIP performance period, the Personnel Committee chose the performance measures and targets set forth below.
2020-2022 LTIP Unit Program Period: Measures and Goals(1)
Performance Measures(1)
LTIP
Measure Weight Payout
Relative TSR 80% Minimum (25%) - Bottom of 3rd Quartile
Target (100%) - Median Percentile
Maximum (200%) - Top Quartile
Cumulative ETR Adjusted EPS 20% Minimum (25%) - $16.07
Target (100%) - $17.85
Maximum (200%) - $19.63
(1)Payouts for performance between achievement levels are calculated using straight-line interpolation, with no payouts for performance below the minimum achievement level for both performance measures.
Performance Measures
Relative TSR
•The Personnel Committee chose relative TSR as a performance measure because it reflects Entergy Corporation’s creation of shareholder value relative to other electric utilities included in the Philadelphia Utility Index over the performance period. By measuring performance in relation to an industry benchmark, this measure is intended to isolate and reward management for the creation of shareholder value that is not driven by events that affect the industry as a whole.
•Minimum, target and maximum performance levels are determined by reference to the ranking of Entergy Corporation’s TSR in relation to the TSR of the companies in the Philadelphia Utility Index. The Personnel Committee identified the Philadelphia Utility Index as the appropriate industry peer group for determining relative TSR because the companies included in this index, in the aggregate, are deemed to be comparable to Entergy Corporation in terms of business and scale.
Cumulative ETR Adjusted EPS
•Cumulative ETR Adjusted EPS, which adjusts Entergy Corporation’s as reported (GAAP) results to eliminate the impact of earnings or loss from Entergy Wholesale Commodities and other non-routine items, was selected in 2020 as a performance measure because the Personnel Committee wished to incentivize management to achieve steady, predictable earnings growth for Entergy Corporation over the 3 year performance period, and because it aligns with the earnings measure used to communicate Entergy Corporation’s earnings expectations externally to investors.
•In a manner similar to the way targets are established for the annual incentives, targets for the Cumulative ETR Adjusted EPS performance measure were established by the Personnel Committee after the Entergy Corporation Board’s review of Entergy’s strategic plan for the three-year period beginning in 2020 and are consistent with the earnings expectations for Entergy Corporation that are communicated to investors. These targets also incorporate the Pre-Determined Exclusions discussed previously with respect to the annual incentive measures.
Stock Options and Restricted Stock
Entergy Corporation grants stock options and shares of restricted stock because they align the interests of the executive officers with long-term shareholder value, provide competitive compensation, and increase the executives’ ownership in Entergy Corporation common stock. Generally, stock options are granted with a maximum term of ten years, and vest one-third on each of the first three anniversaries of the date of grant. The exercise price for each option granted in 2020 was $131.72, which was the closing price of Entergy Corporation’s common stock on the date of grant. Shares of restricted stock vest one-third on each of the first three anniversaries
of the date of grant, are paid dividends which are reinvested in shares of Entergy Corporation common stock and have full voting rights. The dividend reinvestment shares are subject to forfeiture similar to the terms of the original grant.
2020 Long-Term Incentive Awards
In January 2020, the Personnel Committee granted the following long-term performance units, stock options and shares of restricted stock to each NEO. The number of long-term performance units, stock options and shares of restricted stock were determined as discussed above under “Long-Term Incentive Compensation - Overview.”
Named Executive Officer
2020-2022
Target LTIP Units Stock Options Shares of
Restricted Stock
A. Christopher Bakken, III 7,758 29,279 3,104
Marcus V. Brown 7,571 28,574 3,029
Leo P. Denault 31,263 117,990 12,505
David D. Ellis 950 3,200 500
Haley R. Fisackerly 950 4,300 750
Laura R. Landreaux 950 4,300 750
Andrew S. Marsh 9,560 36,079 3,824
Phillip R. May, Jr.
1,400 7,300 1,100
Sallie T. Rainer 950 4,300 750
Roderick K. West 8,401 31,705 3,361
All of the performance units, shares of restricted stock and stock options granted to the NEOs in 2020 were granted pursuant to the 2019 Omnibus Incentive Plan or 2019 OIP. The 2019 OIP requires both a change in control and an involuntary job loss without cause or a resignation by the NEO for good reason within 24 months following a change in control (a “double trigger”) for the acceleration of these awards upon a change in control.
2020 LTIP Payouts
Payout for the 2018 - 2020 LTIP Performance Period. In January 2018, the Personnel Committee chose relative TSR and Cumulative Adjusted UP&O EPS as the performance measures, each weighted equally, for the 2018 - 2020 LTIP performance period. Cumulative Adjusted UP&O EPS, which adjusted Entergy Corporation’s operational Utility, Parent & Other results to eliminate the impact of tax items and weather (the “UP&O Adjustments”), was added as a performance measure because it aligned with Entergy Corporation’s externally communicated earnings measure on its core utility business and was the primary measure on which Entergy Corporation communicated its long term earnings outlooks in 2018. Similar to the way targets are established for the annual incentive program, targets for the Cumulative Adjusted UP&O EPS performance measure were established by the Personnel Committee after the Entergy Corporation Board’s review of Entergy Corporation’s strategic plan. These targets also exclude the Pre-Determined Exclusions discussed previously with respect to the annual incentive measures, as well as the UP&O Adjustments. The payout was determined based on the achievement of the following performance goals established for both performance measures by the committee at the beginning of the performance period:
2018-2020 LTIP Performance Period Measures and Goals
Performance Measure(1)
LTIP
Measure Weight Payout
Relative TSR 50% Minimum (25%) - Bottom of 3rd Quartile
Target (100%) - Median Percentile
Maximum (200%) - Top Quartile
Cumulative Adjusted UP&O EPS ($) 50% Minimum (25%) - $13.68
Target (100%) - $15.20
Maximum (200%) - $16.72
(1)Payouts for performance between achievement levels are calculated using straight-line interpolation, with no payouts for performance below the minimum achievement level.
In January 2021, the Personnel Committee reviewed Entergy Corporation’s TSR and the Cumulative Adjusted UP&O EPS for the 2018 - 2020 LTIP performance period in order to determine the payout to participants based upon the performance measures and range of potential payouts for the 2018 - 2020 LTIP performance period as provided above. The committee compared Entergy Corporation’s TSR against the TSR of the companies that were included in the Philadelphia Utility Index throughout the three year performance period, which were:
AES Corporation Edison International
Ameren Corporation Eversource Energy
American Electric Power Co. Inc. Exelon Corporation
American Water Works Company, Inc. FirstEnergy Corporation
CenterPoint Energy Inc. NextEra Energy, Inc.
Consolidated Edison Inc. PG&E Corporation
Dominion Energy Public Service Enterprise Group, Inc.
DTE Energy Company Southern Company
Duke Energy Corporation Xcel Energy, Inc.
As recommended by the Finance Committee, the Personnel Committee concluded that Entergy Corporation’s relative TSR for the 2018 - 2020 performance period was in the second quartile, and that Cumulative Adjusted UP&O EPS was $15.25, yielding a payout of 126% of target for the NEOs.
Named Executive Officer
2018-2020 Target Number of Shares Issued(1)
Value of Shares Actually Issued(2)
Grant Date Fair Value(3)
A. Christopher Bakken, III 7,900 11,048 $1,050,886 $651,079
Marcus V. Brown 7,900 11,048 $1,050,886 $651,079
Leo P. Denault 42,700 59,718 $5,680,376 $3,519,121
David D. Ellis(4)
1,100 1,488 $141,539 $90,657
Haley R. Fisackerly 1,650 2,307 $219,442 $135,985
Laura R. Landreaux(5)
1,375 1,892 $179,967 $113,321
Andrew S. Marsh 7,900 11,048 $1,050,886 $651,079
Phillip R. May, Jr.
2,550 3,566 $339,198 $210,158
Sallie T. Rainer 1,650 2,307 $219,442 $135,985
Roderick K. West 7,900 11,048 $1,050,886 $651,079
(1)Includes accrued dividends.
(2)Value determined based on the closing price of Entergy Corporation common stock on January 19, 2021 ($95.12), the date the Personnel Committee certified the 2018-2020 performance period results.
(3)Represents the aggregate grant date fair value calculated in accordance with applicable accounting rules as reflected in the 2018 Summary Compensation Table.
(4)As a new hire in 2018, Mr. Ellis received a pro-rata target award opportunity for the 2018 - 2020 performance period.
(5)As a new officer in 2018, Ms. Landreaux received a pro-rata target award opportunity for the 2018 - 2020 performance period.
Benefits and Perquisites
Entergy Corporation’s NEOs are eligible to participate in or receive the following benefits:
Plan Type Description
Retirement Plans Entergy Corporation-sponsored:
Entergy Retirement Plan - a tax-qualified final average pay defined benefit pension plan that covers a broad group of employees hired before July 1, 2014.
Cash Balance Plan - a tax-qualified cash balance defined benefit pension plan that covers a broad group of employees hired on or after July 1, 2014 and before January 1, 2021.
Pension Equalization Plan - a non-qualified pension restoration plan for a select group of management or highly compensated employees who participate in the Entergy Retirement Plan.
Cash Balance Equalization Plan - a non-qualified restoration plan for a select group of management or highly compensated employees who participate in the Cash Balance Plan.
System Executive Retirement Plan - a non-qualified supplemental retirement plan for individuals who became executive officers before July 1, 2014.
Savings Plan Entergy Corporation-sponsored 401(k) Savings Plan that covers a broad group of employees.
Health & Welfare Benefits Medical, dental and vision coverage, health care and dependent care reimbursement plans, life and accidental death and dismemberment insurance, business travel accident insurance, and long-term disability insurance.
Eligibility, coverage levels, potential employee contributions, and other plan design features are the same for the NEOs as for the broad employee population.
2020 Perquisites Corporate aircraft usage and annual mandatory physical exams. The NEOs who are members of the OCE do not receive tax gross ups on any benefits, except for relocation assistance.
In 2020, the NEOs who are not members of the OCE also were provided in 2020 with club dues and tax gross up payments on this perquisite.
For additional information regarding perquisites, see the “All Other Compensation” column in the 2020 Summary Compensation Table.
Deferred Compensation The NEOs are eligible to defer up to 100% of their base salary and annual incentive awards into the Entergy Corporation sponsored Executive Deferred Compensation Plan.
Executive Disability Plan Eligible individuals who become disabled under the terms of the plan are eligible for 65% of the difference between their annual base salary and $276,923 (i.e. the annual base salary that produces the maximum $15,000 monthly disability payment under the general long-term disability plan).
Entergy Corporation provides these benefits to the NEOs as part of its effort to provide a competitive executive compensation program and because it believes that these benefits are important retention and recruitment tools since many of the companies with which it competes for executive talent provide similar arrangements to their senior executive officers.
Severance and Retention Arrangements
The Personnel Committee believes that retention and transitional compensation arrangements are an important part of overall compensation as they help to secure the continued employment and dedication of the NEOs, notwithstanding any concern that they might have at the time of a change in control regarding their own continued employment. In addition, the Personnel Committee believes that these arrangements are important as recruitment and retention devices, as many of the companies with which Entergy Corporation competes for executive talent have similar arrangements in place for their senior employees.
To achieve these objectives, Entergy Corporation has established a System Executive Continuity Plan under which ML 1-4 Officers are entitled to receive “change in control” payments and benefits if such officer’s employment is involuntarily terminated without cause or if the officer resigns for good reason, in each case, in connection with a change in control of Entergy Corporation and its subsidiaries. Entergy Corporation strives to ensure that the benefits and payment levels under the System Executive Continuity Plan are consistent with market practices. Entergy Corporation’s executive officers, including the NEOs, are not entitled to any tax gross up payments on any severance benefits received under this plan. For more information regarding the System Executive Continuity Plan, see “2020 Potential Payments Upon Termination or Change in Control.”
Nuclear Retention Plan
Mr. Bakken participates in the Nuclear Retention Plan, a retention plan for officers and other leaders with expertise in the nuclear industry. The Personnel Committee authorized this plan to attract and retain key management and employee talent in the nuclear power field, a field that requires unique technical and other expertise that is in great demand in the utility industry. The plan provides for bonuses to be paid annually over a three-year service period with the bonus opportunity dependent on the participant’s management level and continued employment. Each annual payment is equal to an amount ranging from 15% to 30% of the employee’s base salary as of their date of enrollment in the plan.
In recognition of the value Entergy Corporation places on Mr. Bakken as a member of its senior management team and his extensive experience in the nuclear industry, and to keep his pay competitive, in May 2019, Mr. Bakken’s participation in the plan was renewed for another three-year period beginning on May 1, 2019. In accordance with the terms and conditions of the Nuclear Retention Plan, in May 2020 Mr. Bakken received, and in May 2021 and 2022, Mr. Bakken will receive a cash bonus equal to 30% of $654,078, his base salary as of May 1, 2019. The three-year period covered and percentage of base salary paid to Mr. Bakken under the plan are consistent with the terms of participation of other senior executive officers who participate in this plan.
Risk Mitigation and Other Pay Practices
Entergy Corporation strives to ensure that its compensation philosophy and practices are in line with the best practices of companies in its industry as well as other companies in the S&P 500. Some of these practices include the following:
Clawback Provisions
Entergy Corporation has adopted a clawback policy that covers all individuals subject to Section 16 of the Exchange Act, including all of the NEOs. Under the policy, which goes beyond the requirements of Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley), incentives paid to covered executive officers are required to be reimbursed where:
•(i) the payment was predicated upon the achievement of certain financial results with respect to the applicable performance period that were subsequently determined to be the subject of a material restatement other than a restatement due to changes in accounting policy; or (ii) a material miscalculation of a performance award occurs, whether or not the financial statements were restated and, in either such case, a lower payment would have been made to the executive officer based upon the restated financial results or correct calculation; or
•in the Board of Directors’ view, the executive officer engaged in fraud that caused or partially caused the need for a restatement or caused a material miscalculation of a performance award, in each case, whether or not the financial statements were restated.
The amount required to be reimbursed is equal to the excess of the gross incentive payment made over the gross payment that would have been made if the original payment had been determined based on the restated financial results or correct calculation. In addition, Entergy Corporation will seek to recover any compensation received by its Chief Executive Officer and Chief Financial Officer that is required to be reimbursed under Sarbanes-Oxley following a material restatement of Entergy Corporation’s financial statements.
Stock Ownership Guidelines and Share Retention Requirements
For many years, Entergy Corporation has had stock ownership guidelines for executives, including the NEOs. These guidelines are designed to align the executives’ long-term financial interests with the interests of Entergy Corporation’s shareholders. Annually, the Personnel Committee monitors the executive officers’ compliance with these guidelines with all of the NEOs satisfying the applicable ownership guidelines at that time. The ownership guidelines are as follows:
The ownership guidelines are as follows:
Role Value of Common Stock to be Owned
Chief Executive Officer (ML-1) 6 x base salary
Executive Vice Presidents (ML-2) 3 x base salary
Senior Vice Presidents (ML-3) 2 x base salary
Vice Presidents (ML-4) 1 x base salary
Further, to facilitate compliance with the guidelines, until an executive officer satisfies the stock ownership guidelines, the officer must retain:
•all net after-tax shares paid out under the LTIP;
•all net after-tax shares of the restricted stock and restricted stock units received upon vesting; and
•at least 75% of the after-tax net shares received upon the exercise of Entergy Corporation stock options.
Trading Controls
Executive officers, including the NEOs, are required to receive permission from Entergy Corporation’s General Counsel or his designee prior to entering into any transaction involving Entergy Corporation securities, including gifts, other than the exercise of employee stock options. Trading is generally permitted only during specified open trading windows beginning shortly after the release of earnings. Employees, who are subject to trading restrictions, including the NEOs, may enter into trading plans under Rule 10b5-1 of the Exchange Act, but these trading plans may be entered into only during an open trading window and must be approved by Entergy Corporation. A NEO bears full responsibility if he or she violates Entergy Corporation’s policy by buying or selling shares of Entergy Corporation stock without pre-approval or when trading is restricted.
Entergy Corporation also prohibits directors and executive officers, including the NEOs, from pledging any Entergy Corporation securities or entering into margin accounts involving Entergy Corporation securities. Entergy Corporation prohibits these transactions because of the potential that sales of Entergy Corporation securities could occur outside trading periods and without the required approval of the General Counsel.
Entergy Corporation also has adopted an anti-hedging policy that prohibits officers, directors, and employees from entering into hedging or monetization transactions involving Entergy Corporation’s common stock. Prohibited transactions include, without limitation, zero-cost collars, forward sale contracts, purchase or sale of options, puts, calls, straddles or equity swaps or other derivatives that are directly linked to Entergy Corporation’s stock or transactions involving “short-sales” of its common stock.
Compensation Consultant Independence
Annually, the Personnel Committee reviews the relationship with its compensation consultant to determine whether any conflicts of interest exist that would prevent Pay Governance from independently advising the Personnel Committee. Factors considered by the committee when assessing the independence of its compensation consultant included, among others:
•Pay Governance has policies in place to prevent conflicts of interest;
•No member of Pay Governance’s consulting team serving the committee has a business relationship with any member of the committee or any of Entergy Corporation’s executive officers;
•Neither Pay Governance nor any of its principals own any shares of Entergy Corporation’s common stock; and
•The amount of fees paid to Pay Governance is less than 1% of Pay Governance’s total consulting income.
Based on these factors, the Personnel Committee concluded that Pay Governance is independent in accordance with SEC and NYSE rules and that no conflicts of interest exist that would prevent Pay Governance from independently advising the committee.
In addition, Pay Governance has agreed that it will not accept any engagement with management without prior approval from the Personnel Committee, and Entergy Corporation’s Board has adopted a policy that prohibits a compensation consultant from providing other services to it if the aggregate amount for those services would exceed $120,000 in any year. During 2020, Pay Governance did not provide any services to Entergy Corporation other than the services it performed on behalf of the Personnel and Corporate Governance Committees, and it worked with Entergy Corporation’s management only as directed by the committees.
PERSONNEL COMMITTEE REPORT
The Personnel Committee Report included in the Entergy Corporation Proxy Statement is incorporated by reference, but will not be deemed to be “filed” in this Annual Report on Form 10-K. None of the Registrant Subsidiaries has a compensation committee or other board committee performing equivalent functions. The board of directors of each of the Registrant Subsidiaries is comprised of individuals who are officers or employees of Entergy Corporation or one of the Registrant Subsidiaries. These boards do not make determinations regarding the compensation paid to executive officers of the Registrant Subsidiaries.
EXECUTIVE COMPENSATION TABLES
2020 Summary Compensation Tables
The following table summarizes the total compensation paid or earned by each of the NEOs for the fiscal year ended December 31, 2020, and to the extent required by SEC executive compensation disclosure rules, the fiscal years ended December 31, 2019 and 2018. For information on the principal positions held by each of the NEOs, see Item 10, “Directors, Executive Officers, and Corporate Governance of the Registrants.”
The compensation set forth in the table represents the aggregate compensation paid by all Entergy System companies. For additional information regarding the material terms of the awards reported in the following tables, including a general description of the formula or criteria to be applied in determining the amounts payable, see “Compensation Discussion and Analysis.”
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
Name and Principal Position
(1)
Year
Salary
(2)
Bonus
(3)
Stock
Awards
(4)
Option
Awards
(5)
Non-Equity
Incentive
Plan
Compen-sation
(6)
Change in
Pension
Value and
Non-qualified
Deferred
Compen-sation
Earnings
(7)
All
Other
Compen-sation
(8)
Total
Total Without Change in Pension Value
(9)
A. Christopher Bakken, III 2020 $693,819 $196,223 $1,666,710 $335,245 $581,066 $115,100 $85,846 $3,674,009 $3,558,909
Executive Vice President and 2019 $649,507 $181,500 $1,273,399 $303,023 $618,104 $98,500 $62,407 $3,186,440 $3,087,940
Chief Nuclear Officer of Entergy Corp. 2018 $632,967 $181,500 $1,041,479 $283,095 $544,959 $108,700 $452,012 $3,244,712 $3,136,012
Marcus V. Brown 2020 $709,688 $- $1,626,512 $327,172 $662,400 $1,746,000 $78,631 $5,150,403 $3,404,403
Executive Vice President and 2019 $661,563 $- $1,248,839 $297,182 $684,573 $1,455,300 $69,955 $4,417,412 $2,962,112
General Counsel of Entergy Corp. 2018 $644,231 $- $1,041,479 $283,095 $546,000 $371,800 $61,885 $2,948,490 $2,576,690
Leo P. Denault 2020 $1,308,462 $- $6,716,017 $1,350,986 $2,116,800 $4,416,700 $289,632 $16,198,597 $11,781,897
Chairman of the 2019 $1,260,000 $- $5,391,253 $1,282,994 $2,416,680 $3,704,500 $208,822 $14,264,249 $10,559,749
Board and CEO - 2018 $1,251,346 $- $4,744,977 $1,168,029 $2,041,200 $982,800 $138,104 $10,326,456 $9,343,656
Entergy Corp.
David D. Ellis 2020 $331,803 $- $219,889 $36,640 $164,955 $32,200 $19,323 $804,810 $772,610
CEO - Entergy 2019 $311,004 $- $188,861 $39,104 $159,804 $18,000 $15,267 $732,040 $714,040
New Orleans 2018 $7,258 $200,000 $- $- $- $600 $35,308 $243,166 $242,566
Haley R. Fisackerly 2020 $384,848 $- $252,819 $49,235 $232,737 $836,200 $48,101 $1,803,940 $967,740
CEO - Entergy 2019 $373,313 $- $197,780 $51,584 $274,570 $644,700 $37,897 $1,579,844 $935,144
Mississippi 2018 $363,089 $- $198,449 $46,134 $172,000 $- $35,982 $815,654 $815,654
Laura R. Landreaux 2020 $323,907 $- $252,819 $49,235 $167,153 $330,700 $26,698 $1,150,512 $819,812
CEO - Entergy 2019 $314,407 $- $188,861 $42,432 $263,523 $228,700 $26,536 $1,064,459 $835,759
Arkansas 2018 $246,136 $- $273,062 $- $124,000 $21,500 $10,741 $675,439 $653,939
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k)
Name and Principal Position
(1)
Year
Salary
(2)
Bonus
(3)
Stock
Awards
(4)
Option
Awards
(5)
Non-Equity
Incentive
Plan
Compen-sation
(6)
Change in
Pension
Value and
Non-qualified
Deferred
Compen-sation
Earnings
(7)
All
Other
Compen-sation
(8)
Total
Total Without Change in Pension Value
(9)
Andrew S. Marsh 2020 $704,692 $- $2,053,717 $413,105 $703,800 $2,054,000 $77,741 $6,007,055 $3,953,055
Executive Vice 2019 $641,923 $- $1,579,663 $375,914 $712,400 $1,554,300 $69,863 $4,934,063 $3,379,763
President and CFO - 2018 $615,654 $- $1,057,095 $342,510 $531,188 $- $57,638 $2,604,085 $2,604,085
Entergy Corp.,
Entergy Arkansas,
Entergy Louisiana,
Entergy Mississippi,
Entergy New
Orleans,
Entergy Texas
Phillip R. May, Jr. 2020 $416,677 $- $371,882 $83,585 $284,881 $1,072,100 $28,836 $2,257,961 $1,185,861
CEO - Entergy 2019 $389,016 $- $294,183 $77,376 $407,922 $877,100 $28,297 $2,073,894 $1,196,794
Louisiana 2018 $377,108 $- $288,238 $69,201 $270,000 $- $26,874 $1,031,421 $1,031,421
Sallie T. Rainer 2020 $369,133 $- $252,819 $49,235 $175,713 $663,100 $33,383 $1,543,383 $880,283
CEO - Entergy 2019 $344,722 $- $197,780 $51,584 $219,069 $617,200 $37,361 $1,467,716 $850,516
Texas 2018 $335,263 $- $198,449 $46,134 $159,000 $- $35,379 $774,225 $774,225
Roderick K. West 2020 $754,742 $- $1,804,816 $363,022 $673,314 $1,976,400 $59,730 $5,632,024 $3,655,624
Group President 2019 $709,023 $- $1,340,679 $319,039 $674,742 $1,604,100 $67,191 $4,714,774 $3,110,674
Utility Operations of 2018 $690,581 $- $1,057,095 $297,075 $560,762 $- $67,234 $2,672,747 $2,672,747
Entergy Corp.
(1)Mr. Ellis was named Chief Executive Officer, Entergy New Orleans in December 2018, and Ms. Landreaux was named Chief Executive Officer, Entergy Arkansas in July 2018.
(2)The amounts in column (c) represent the actual base salary paid to the NEOs in the applicable year. The 2020 base salary amounts include an amount attributable to an extra pay period that occurred in 2020 as the NEOs are paid on a bi-weekly basis. The 2020 changes in base salaries noted in the Compensation Discussion and Analysis were effective in April 2020.
(3)The amount in column (d) in 2020, 2019, and 2018 for Mr. Bakken represents the cash bonus paid to him pursuant to the Nuclear Retention Plan. See “Nuclear Retention Plan” in Compensation Discussion and Analysis. The amount in column (d) in 2018 for Mr. Ellis represents a cash sign-on bonus paid in connection with his commencement of employment with Entergy New Orleans.
(4)The amounts in column (e) represent the aggregate grant date fair value of restricted stock and performance units granted under the 2015 Equity Ownership Plan of Entergy Corporation and Subsidiaries (the “2015 EOP”) and the 2019 OIP (together with the 2015 EOP, the “Equity Plans”), each calculated in accordance with FASB ASC Topic 718, without taking into account estimated forfeitures. The grant date fair value of the restricted stock is based on the closing price of Entergy Corporation common stock on the date of grant. The grant date fair value of the portion of the performance units with vesting based on the total shareholder return was measured using a Monte Carlo simulation valuation model. The simulation model applies a risk-free interest rate and an expected volatility assumption. The risk-free interest rate is assumed to equal the yield on a three-year treasury bond on the grant date. Volatility is based on historical volatility for the 36-month period preceding the grant date. The performance units in the table are also valued based on the probable outcome of the applicable performance condition at the time of grant. The maximum value of shares that would be received if the highest achievement level is attained with respect to both the total shareholder return and Cumulative ETR Adjusted EPS, for performance units granted in 2020 are as follows: Mr. Bakken,
$2,043,768; Mr. Brown, $1,994,504; Mr. Denault, $8,235,925; Mr. Ellis, $250,268; Mr. Fisackerly, $250,268; Ms. Landreaux $250,268; Mr. Marsh, $2,518,486; Mr. May, $368,816; Ms. Rainer, $250,268; and Mr. West, $2,213,159.
(5)The amounts in column (f) represent the aggregate grant date fair value of stock options granted under the Equity Plans calculated in accordance with FASB ASC Topic 718. For a discussion of the relevant assumptions used in valuing these awards, see Note 12 to the financial statements.
(6)The amounts in column (g) represent annual incentive award cash payments made under the 2019 OIP.
(7)For all NEOs, the amounts in column (h) include the annual actuarial increase in the present value of these NEOs’ benefits under all pension plans established by Entergy Corporation using interest rate and mortality rate assumptions consistent with those used in Entergy Corporation’s financial statements and include amounts which the NEOs may not currently be entitled to receive because such amounts are not vested (see “2020 Pension Benefits”). The increase in pension benefits for all of the NEOs in 2020 was driven by a decline in the discount rate that was a result of the decrease in prevailing interest rates. None of the increases for any of the NEOs is attributable to above-market or preferential earnings on non-qualified deferred compensation. For 2018, the aggregate change in the actuarial present value was a decrease of pension benefits of $52,000 for Mr. Fisackerly, $163,000 for Mr. Marsh, $700 for Mr. May, $110,700 for Ms. Rainer, and $149,300 for Mr. West.
(8)The amounts in column (i) for 2020 include (a) matching contributions by Entergy Corporation under the Savings Plan to each of the NEOs; (b) dividends paid on restricted stock when vested; (c) life insurance premiums; (d) tax gross up payments on club dues; and (e) perquisites and other compensation as described further below. The amounts are listed in the following table:
Named Executive Officer Company Contribution - Savings Plan Dividends Paid on Restricted Stock Life Insurance Premium Tax Gross Up Payments Perquisites and Other Compensation
Total
A. Christopher Bakken, III $17,100 $52,032 $12,415 $- $4,299 $85,846
Marcus V. Brown $11,970 $56,953 $7,482 $- $2,226 $78,631
Leo P. Denault $11,970 $173,952 $11,484 $- $92,226 $289,632
David D. Ellis $17,100 $658 $745 $- $820 $19,323
Haley R. Fisackerly $11,970 $8,305 $5,705 $7,939 $14,182 $48,101
Laura R. Landreaux $- $13,094 $493 $4,281 $8,829 $26,697
Andrew S. Marsh $11,970 $59,177 $6,594 $- $- $77,741
Phillip R. May, Jr. $11,970 $10,902 $5,964 $- $- $28,836
Sallie T. Rainer $11,970 $8,564 $1,580 $2,836 $8,433 $33,383
Roderick K. West $11,970 $41,931 $4,002 $- $1,827 $59,730
(9)In order to show the effect that the year-over-year change in pension value had on total compensation, as determined under applicable SEC rules, we have included an additional column to show total compensation minus the change in pension value. The amounts reported in the Total Without Change in Pension Value column may differ substantially from the amounts reported in the Total column required under SEC rules and are not a substitute for total compensation. Total Without Change in Pension Value represents total compensation, as determined under applicable SEC rules, minus the change in pension value reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column. The change in pension value is subject to many external variables, such as interest rates, assumptions about life expectancy and changes in the discount rate determined at each year end, which are functions of economic factors and actuarial calculations that are not related to Entergy Corporation’s performance and are outside of the control of the Personnel Committee.
Perquisites and Other Compensation
The amounts set forth in column (i) also include perquisites and other personal benefits that Entergy Corporation provides to its NEOs as part of providing a competitive executive compensation program and for employee retention. The following perquisites were provided to the NEOs in 2020.
Named Executive Officer Personal Use of Corporate Aircraft Club Dues Executive Physical Exams
A. Christopher Bakken, III X
Marcus V. Brown X X
Leo P. Denault X X
David D. Ellis X
Haley R. Fisackerly X X
Laura R. Landreaux X
Andrew S. Marsh X
Phillip R. May, Jr.
Sallie T. Rainer X
Roderick K. West X
For security and business reasons, Entergy Corporation’s Chief Executive Officer is permitted to use its corporate aircraft for personal use at the expense of Entergy Corporation. The other NEOs may use the corporate aircraft for personal travel subject to the approval of Entergy Corporation’s Chief Executive Officer. The Personnel Committee reviews the level of usage throughout the year. Entergy Corporation believes that its officers’ ability to use its plane for limited personal use saves time and provides additional security for them, thereby benefiting Entergy Corporation. The amounts included in column (i) for the personal use of corporate aircraft, reflect the incremental cost to Entergy Corporation for use of the corporate aircraft, determined on the basis of the variable operational costs of each flight, including fuel, maintenance, flight crew travel expense, catering, communications, and fees, including flight planning, ground handling, and landing permits. The aggregate incremental aircraft usage cost associated with Mr. Denault’s personal use of the corporate aircraft was $86,618 for fiscal year 2020. In addition, Entergy Corporation offers its executives comprehensive annual physical exams at Entergy Corporation’s expense. None of the other perquisites referenced above exceeded $25,000 for any of the other NEOs.
2020 Grants of Plan-Based Awards
The following table summarizes award grants during 2020 to the NEOs.
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)
Estimated Future Payouts under Equity Incentive Plan Awards (2)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)
Name Grant Date Thresh-old Target
Maximum
Thresh-old
Target
Maximum
All Other Stock Awards: Number of Shares of Stock or Units All Other Option Awards: Number of Securities Under-lying Options Exercise or Base Price of Option Awards Grant Date Fair Value of Stock and Option Awards
($) ($) ($) (#)
(#)
(#)
(#)
(3)
(#)
(4)
($/Sh) ($)
(5)
A. Christopher 1/30/20 $- $505,275 $1,010,550
Bakken, III 1/30/20 1,940 7,758 15,516 $1,257,851
1/30/20 3,104 $408,859
1/30/20 29,279 $131.72 $335,245
Marcus V. 1/30/20 $- $552,000 $1,104,000
Brown 1/30/20 1,893 7,571 15,142 $1,227,532
1/30/20 3,029 $398,980
1/30/20 28,574 $131.72 $327,172
Leo P. 1/30/20 $- $1,764,000 $3,528,000
Denault 1/30/20 7,816 31,263 62,526 $5,068,858
1/30/20 12,505 $1,647,159
1/30/20 117,990 $131.72 $1,350,986
David D. 1/30/20 $- $128,740 $257,480
Ellis 1/30/20 238 950 1,900 $154,029
500 $65,860
3,200 $131.72 $36,640
Haley R. 1/30/20 $- $155,297 $310,594
Fisackerly 1/30/20 238 950 1,900 $154,029
1/30/20 750 $98,790
1/30/20 4,300 $131.72 $49,235
Laura R. 1/30/20 $- $130,702 $261,404
Landreaux 1/30/20 238 950 1,900 $154,029
1/30/20 750 $98,790
4,300 $131.72 $49,235
Andrew S. 1/30/20 $- $586,500 $1,173,000
Marsh 1/30/20 2,390 9,560 19,120 $1,550,020
1/30/20 3,824 $503,697
1/30/20 36,079 $131.72 $413,105
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1)
Estimated Future Payouts under Equity Incentive Plan Awards (2)
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)
Name Grant Date Thresh-old Target
Maximum
Thresh-old
Target
Maximum
All Other Stock Awards: Number of Shares of Stock or Units All Other Option Awards: Number of Securities Under-lying Options Exercise or Base Price of Option Awards Grant Date Fair Value of Stock and Option Awards
($) ($) ($) (#)
(#)
(#)
(#)
(3)
(#)
(4)
($/Sh) ($)
(5)
Phillip R. 1/30/20 $- $242,870 $485,740
May, Jr. 1/30/20 350 1,400 2,800 $226,990
1/30/20 1,100 $144,892
1/30/20 7,300 $131.72 $85,585
Sallie T. 1/30/20 $- $143,485 $286,970
Rainer 1/30/20 238 950 1,900 $154,029
1/30/20 750 $98,790
1/30/20 4,300 $131.72 $49,235
Roderick K. 1/30/20 $- $585,490 $1,170,980
West 1/30/20 2,100 8,401 16,802 $1,362,105
1/30/20 3,361 $442,711
1/30/20 31,705 $131.72 $363,022
(1)The amounts in columns (c), (d), and (e) represent minimum, target, and maximum payment levels under the annual incentive program. The actual amounts awarded are reported in column (g) of the Summary Compensation Table.
(2)The amounts in columns (f), (g), and (h) represent the minimum, target, and maximum payment levels under the LTIP. Performance under the program is measured by Entergy Corporation’s total shareholder return relative to the total shareholder returns of the companies included in the Philadelphia Utility Index and Cumulative Entergy Adjusted EPS with total shareholder return weighted eighty percent and Cumulative Entergy Adjusted EPS weighted twenty percent. There is no payout under the program if Entergy Corporation’s total shareholder return falls within the lowest quartile of the peer companies in the Philadelphia Utility Index and Cumulative Entergy Adjusted EPS is below the minimum performance goal. Subject to the achievement of performance targets, each unit will be converted into one share of Entergy Corporation’s common stock on the last day of the performance period (December 31, 2022). Accrued dividends on the shares earned will also be paid in Entergy Corporation common stock.
(3)The amounts in column (i) represent shares of restricted stock granted under the 2019 OIP. Shares of restricted stock vest one-third on each of the first through third anniversaries of the grant date, have voting rights, and accrue dividends during the vesting period.
(4)The amounts in column (j) represent options to purchase shares of Entergy Corporation’s common stock. The options vest one-third on each of the first through third anniversaries of the grant date and have a ten-year term from the date of grant. The options were granted under the 2019 OIP.
(5)The amounts in column (l) are valued based on the aggregate grant date fair value of the award calculated in accordance with FASB ASC Topic 718 and, in the case of the performance units, are based on the probable outcome of the applicable performance conditions. See Notes 4 and 5 to the 2020 Summary Compensation Table for a discussion of the relevant assumptions used in calculating the grant date fair value.
2020 Outstanding Equity Awards at Fiscal Year-End
The following table summarizes, for each NEO, unexercised options, restricted stock that has not vested, and equity incentive plan awards outstanding as of December 31, 2020.
Option Awards Stock Awards
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Name Number of Securities Underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options Option Exercise Price Option Expiration Date Number of Shares or Units of Stock That Have Not Vested Market Value of Shares or Units of Stock That Have Not Vested Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (#) (#) ($) (#) ($) (#) ($)
A. Christopher Bakken, III - 29,279(1)
$131.72 1/30/2030
- 24,281(2)
$89.19 1/31/2029
- 13,500(3)
$78.08 1/25/2028
1,940(4)
$193,640
19,136(5)
$1,910,538
3,104(6)
$309,903
2,403(7)
$239,916
1,667(8)
$166,433
20,000(9)
$1,996,800
Marcus V. Brown - 28,574(1)
$131.72 1/30/2030
- 23,813(2)
$89.19 1/31/2029
- 13,500(3)
$78.08 1/25/2028
1,893(4)
$188,972
18,766(5)
$1,873,597
3,029(6)
$302,415
2,357(7)
$235,323
1,667(8)
$166,433
Option Awards Stock Awards
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Name Number of Securities Underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options Option Exercise Price Option Expiration Date Number of Shares or Units of Stock That Have Not Vested Market Value of Shares or Units of Stock That Have Not Vested Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (#) (#) ($) (#) ($) (#) ($)
Leo P. Denault - 117,990(1)
$131.72 1/30/2030
51,402 102,804(2)
$89.19 1/31/2029
111,400 55,700(3)
$78.08 1/25/2028
179,400 - $70.53 1/26/2027
167,000 - $70.56 1/28/2026
88,000 - $89.90 1/29/2025
106,000 - $63.17 1/30/2024
50,000 - $64.60 1/31/2023
7,816(4)
$780,324
81,016(5)
$8,088,637
12,505(6)
$1,248,499
10,173(7)
$1,015,672
5,234(8)
$522,563
David D. Ellis - 3,200(1)
$131.72 1/30/2030
1,566 3,134(2)
$89.19 1/31/2029
238(4)
$23,712
2,900(5)
$289,536
500(6)
$49,920
334(7)
$33,347
Haley R. Fisackerly - 4,300(1)
$131.72 1/30/2030
- 4,134(2)
$89.19 1/31/2029
- 2,200(3)
$78.08 1/25/2028
238(4)
$23,712
2,900(5)
$289,536
750(6)
$74,880
400(7)
$39,936
267(8)
$26,657
Option Awards Stock Awards
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Name Number of Securities Underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options Option Exercise Price Option Expiration Date Number of Shares or Units of Stock That Have Not Vested Market Value of Shares or Units of Stock That Have Not Vested Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (#) (#) ($) (#) ($) (#) ($)
Laura R. Landreaux - 4,300(1)
$131.72 1/30/2030
1,700 3,400(2)
$89.19 1/31/2029
238(4)
$23,712
2,900(5)
$289,536
750(6)
$74,880
334(7)
$33,347
400(8)
$39,936
Andrew S. Marsh - 36,079(1)
$131.72 1/30/2030
15,060 30,122(2)
$89.19 1/31/2029
32,666 16,334(3)
$78.08 1/25/2028
44,000 - $70.53 1/26/2027
45,000 - $70.56 1/28/2026
24,000 - $89.90 1/29/2025
35,000 - $63.17 1/30/2024
32,000 - $64.60 1/31/2023
10,000 - $71.30 1/26/2022
4,000 - $72.79 1/27/2021
2,390(4)
$238,618
23,738(5)
$2,370,002
3,824(6)
$381,788
2,981(7)
$297,623
1,734(8)
$173,123
Phillip R. May, Jr. - 7,300(1)
$131.72 1/30/2030
- 6,200(2)
$89.19 1/31/2029
- 3,300(3)
$78.08 1/25/2028
350(4)
$34,944
4,300(5)
$429,312
1,100(6)
$109,824
600(7)
$59,904
343(8)
$33,347
Option Awards Stock Awards
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Name Number of Securities Underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options Option Exercise Price Option Expiration Date Number of Shares or Units of Stock That Have Not Vested Market Value of Shares or Units of Stock That Have Not Vested Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
(#) (#) (#) ($) (#) ($) (#) ($)
Sallie T. Rainer - 4,300(1)
$131.72 1/30/2030
2,066 4,134(2)
$89.19 1/31/2029
2,200 2,200(3)
$78.08 1/25/2028
2,600 - $70.53 1/26/2027
238(4)
$23,712
2,900(5)
$289,536
750(6)
$74,880
400(7)
$39,936
267(8)
$26,657
Roderick K. West - 31,705(1)
$131.72 1/30/2030
- 25,564(2)
$89.19 1/31/2029
- 14,167(3)
$78.08 1/25/2028
2,100(4)
$209,689
20,146(5)
$2,011,377
3,361(6)
$335,562
2,530(7)
$252,595
1,734(8)
$173,123
(1)Consists of options granted under the 2019 OIP; 1/3 of the options vested on January 30, 2021 and 1/3 of the remaining options will vest on each of January 30, 2022 and January 30, 2023.
(2)Consists of options granted under the 2015 EOP; 1/2 of the options vested on January 31, 2021 and the remaining options will vest on January 30, 2022.
(3)Consists of options granted under the 2015 EOP that vested on January 25, 2021.
(4)Consists of performance units granted under the 2019 OIP that will vest on December 31, 2022 based on two performance measures: 1) Entergy Corporation’s total shareholder return performance over the 2020-2022 performance period and 2) Cumulative Entergy Adjusted EPS with total shareholder return weighted eighty percent and Cumulative Entergy Adjusted EPS weighted twenty percent, as described under “What Entergy Corporation Pays and Why - Long-Term Incentive Compensation - 2020 Long-Term Incentive Award Mix - Long-Term Performance Unit Program” in the Compensation Discussion and Analysis.
(5)Consists of performance units granted under the 2015 EOP that will vest on December 31, 2021 based on two performance measures: 1) Entergy Corporation’s total shareholder return performance over the 2019-2021 performance period and 2) Cumulative Entergy Adjusted EPS with total shareholder return weighted eighty percent and Cumulative Entergy Adjusted EPS weighted twenty percent.
(6)Consists of shares of restricted stock granted under the 2019 OIP; 1/3 of the shares of restricted stock vested on January 30, 2021 and 1/3 of the remaining shares will vest on each of January 30, 2022 and January 30, 2023.
(7)Consists of shares of restricted stock granted under the 2015 EOP; 1/2 of the shares of restricted stock vested on January 31, 2021 and the remaining shares of restricted stock will vest on January 31, 2022.
(8)Consists of shares of restricted stock granted under the 2015 EOP that vested on January 25, 2021.
(9)Consists of restricted stock units granted under the 2015 EOP which will vest 1/2 on each of April 6, 2022 and April 6, 2025.
2020 Option Exercises and Stock Vested
The following table provides information concerning each exercise of stock options and each vesting of stock during 2020 for the NEOs.
Options Awards Stock Awards
(a) (b) (c) (d) (e)
Name Number of Shares Acquired on Exercise Value Realized on Exercise Number of Shares Acquired on Vesting Value Realized on Vesting (1)
(#) ($) (#) ($)
A. Christopher Bakken, III 38,174 $1,954,334 16,051 $1,701,473
Marcus V. Brown 40,075 $2,081,630 16,366 $1,742,234
Leo P. Denault - $- 77,044 $7,935,333
David D. Ellis - $- 1,659 $164,028
Haley R. Fisackerly 6,800 $351,077 3,122 $325,433
Laura R. Landreaux - $- 3,059 $331,489
Andrew S. Marsh - $- 37,861 $3,959,325
Phillip R. May, Jr. 13,900 $774,394 4,650 $480,241
Sallie T. Rainer - $- 3,140 $327,765
Roderick K. West 97,249 $4,940,267 15,436 $1,621,930
(1)Represents the value of performance units for the 2018 - 2020 performance period (payable solely in shares based on the closing stock price of Entergy Corporation on the date of vesting) under the LTIP and the vesting of shares of restricted stock in 2020.
2020 Pension Benefits
The following table shows the present value as of December 31, 2020, of accumulated benefits payable to each of the NEOs, including the number of years of service credited to each NEO, under the retirement plans sponsored by Entergy Corporation, determined using interest rate and mortality rate assumptions set forth in Note 11 to the financial statements. Additional information regarding these retirement plans follows this table.
Name Plan Name Number of Years Credited Service Present Value of Accumulated Benefit Payments During 2020
A. Christopher Bakken, III Cash Balance Equalization Plan 4.74 $287,400 $-
Cash Balance Plan 4.74 $95,800 $-
Marcus V. Brown(1)
System Executive Retirement Plan 25.74 $7,889,100 $-
Entergy Retirement Plan 25.74 $1,385,300 $-
Leo P. Denault (1)(2)
System Executive Retirement Plan 30.00 $30,747,600 $-
Entergy Retirement Plan 21.83 $1,230,700 $-
David D. Ellis Cash Balance Equalization Plan 2.06 $15,200 $-
Cash Balance Plan 2.06 $35,600 $-
Haley R. Fisackerly(1)
System Executive Retirement Plan 25.08 $2,338,800 $-
Entergy Retirement Plan 25.08 $1,249,300 $-
Laura R. Landreaux Pension Equalization Plan 13.48 $258,600 $-
Entergy Retirement Plan 13.48 $577,100 $-
Andrew S. Marsh System Executive Retirement Plan 22.37 $6,543,400 $-
Entergy Retirement Plan 22.37 $944,000 $-
Phillip R. May, Jr. (1)(3)
System Executive Retirement Plan 30.00 $3,747,400 $-
Entergy Retirement Plan 34.56 $1,827,300 $-
Sallie T. Rainer (1)(3)
System Executive Retirement Plan 30.00 $1,850,000 $-
Entergy Retirement Plan 36.00 $2,090,800 $-
Roderick K. West System Executive Retirement Plan 21.75 $7,667,200 $-
Entergy Retirement Plan 21.75 $994,300 $-
(1)As of December 31, 2020, Mr. Brown, Mr. Denault, Mr. Fisackerly, Mr. May, and Ms. Rainer were retirement eligible.
(2)In 2006, Mr. Denault entered into a retention agreement granting him additional years of service and permission to retire under the non-qualified System Executive Retirement Plan (“SERP”) in the event his employment is terminated by his Entergy employer other than for cause (as defined in the retention agreement), by Mr. Denault for good reason (as defined in the retention agreement), or on account of his death or disability. His retention agreement also provides that if he terminates employment for any other reason, he shall be entitled to up to an additional 15 years of service under the SERP only if his Entergy employer grants him permission to retire subject to the overall 30 year cap on service credit under the SERP. The amount reflected in the table for the SERP is calculated based on 30 years of service. The additional years of service credited to Mr. Denault under his retention agreement increased the present value of Mr. Denault’s benefit by $4,020,200.
(3)Service under the SERP is granted from the date of hire. Service under the qualified Entergy Retirement Plan is granted from the later of the date of hire or the plan participation date. The SERP amounts reflected in the table for Mr. May and Ms. Rainer are calculated based on 30 years of service pursuant to the terms of the SERP.
Retirement Benefits
The tables below contain summaries of the pension benefit plans sponsored by Entergy Corporation that the NEOs participated in during 2020. Benefits for the NEOs who participate in these plans are determined using the same formulas as for other eligible employees.
Qualified Retirement Benefits
Entergy Retirement Plan Cash Balance Plan
Eligible Named Executive Officers Marcus V. Brown
Haley R. Fisackerly
Leo P. Denault
Andrew S. Marsh
Laura R. Landreaux Phillip R. May, Jr.
Sallie T. Rainer
Roderick K. West A. Christopher Bakken, III
David D. Ellis
Eligibility Non-bargaining employees hired before July 1, 2014 Non-bargaining employees hired on or after July 1, 2014 and before January 1, 2021.
Vesting A participant becomes vested in the Entergy Retirement Plan upon attainment of at least 5 years of vesting service or upon attainment of age 65 while actively employed by an Entergy system company. A participant becomes vested in the Cash Balance Plan upon attainment of at least 3 years of vesting service or upon attainment of age 65 while actively employed by an Entergy system company.
Form of Payment Upon Retirement Benefits are payable as an annuity. For employees who separate from service on or after January 1, 2018, a single lump sum distribution may be elected by the participant if eligibility criteria are met. Benefits are payable as an annuity or single lump sum distribution.
Retirement Benefit Formula Benefits are calculated as a single life annuity payable at age 65 and generally are equal to 1.5% of a participant’s Final Average Monthly Earnings (FAME) multiplied by years of service (not to exceed 40).
“Earnings” for the purpose of calculating FAME generally includes the employee’s base salary and eligible annual incentive awards subject to Internal Revenue Code limitations, and excludes all other bonuses. Executive annual incentive awards are not eligible for inclusion in Earnings under this plan.
FAME is calculated using the employee’s average monthly Earnings for the 60 consecutive months in which the employee’s earnings were highest during the 120 month
period immediately preceding the employee’s retirement and includes up to 5 eligible annual incentive awards paid during the 60 month period.
The normal retirement benefit at age 65 is determined by converting the sum of an employee’s annual pay credits and his or her annual interest credits, into an actuarially equivalent annuity.
Pay credits ranging from 4-8% of an employee’s eligible Earnings are allocated annually to a notional account for the employee based on an employee’s age and years of service. Earnings for purposes of calculating an employee’s pay credit include the employee’s base salary and annual incentive awards subject to Internal Revenue Code limitations and exclude all other bonuses. Executive annual incentive awards are eligible for inclusion in Earnings under this plan.
Interest credits are calculated based upon the annual rate of interest on 30-year U.S. Treasury securities, as specified by the Internal Revenue Service, for the month of August preceding the first day of the applicable calendar year subject to a minimum rate of 2.6% and a maximum rate of 9%.
Benefit Timing Normal retirement age under the plan is 65.
A reduced terminated vested benefit may be commenced as early as age 55. The amount of this benefit is determined by reducing the normal retirement benefit by 7% per year for the first 5 years commencement precedes age 65, and 6% per year for each additional year commencement precedes age 65.
A subsidized early retirement benefit may be commenced by employees who are at least age 55 with 10 years of service at the time they separate from service. The amount of this benefit is determined by reducing the normal retirement benefit by 2% per year for each year that early retirement precedes age 65. Normal retirement age under the plan is 65.
A vested cash balance benefit can be commenced as early as the first day of the month following separation from service. The amount of the benefit is determined in the same manner as the normal retirement benefit described above in the “Retirement Benefit Formula” section.
Non-qualified Retirement Benefits
The NEOs are eligible to participate in certain non-qualified retirement benefit plans that provide retirement income, including the Pension Equalization Plan (“PEP”), the Cash Balance Equalization Plan, and the SERP. Each of these plans is an unfunded non-qualified defined benefit pension plan that provides benefits to key management employees. In these plans, as described below, an executive may participate in one or more non-qualified plans, but is only paid the amount due under the plan that provides the highest benefit. In general, upon disability, participants in the PEP and the SERP remain eligible for continued service credits until the earlier of recovery, separation from service due to disability, or retirement eligibility. Generally, spouses of participants who die before commencement of benefits may be eligible for a portion of the participant’s accrued benefit.
Pension Equalization Plan Cash Balance Equalization Plan System Executive Retirement Plan
Eligible Named Executive Officers Marcus V. Brown
Haley R. Fisackerly
Leo P. Denault
Laura R. Landreaux
Andrew S. Marsh
Phillip R. May, Jr.
Sallie T. Rainer
Roderick K. West
A. Christopher Bakken, III
David D. Ellis Marcus V. Brown
Haley R. Fisackerly
Leo P. Denault
Andrew S. Marsh
Phillip R. May, Jr.
Sallie T. Rainer
Roderick K. West
Eligibility Management or highly compensated employees who participate in the Entergy Retirement Plan Management or highly compensated employees who participate in the Cash Balance Plan Certain individuals who became executive officers before July 1, 2014
Form of Payment Upon Retirement Single lump sum distribution Single lump sum distribution Single lump sum distribution
Retirement Benefit Formula Benefits generally are equal to the actuarial present value of the difference between (1) the amount that would have been payable as an annuity under the Entergy Retirement Plan, including executive annual incentive awards as eligible earnings and without applying limitations of the Internal Revenue Code of 1986, as amended (the “Code”) on pension benefits and earnings that may be considered in calculating tax-qualified pension benefits, and (2) the amount actually payable as an annuity under the Entergy Retirement Plan.
Executive annual incentive awards are taken into account as eligible earnings under this plan.
Benefits generally are equal to the difference between the amount that would have been payable as a lump sum under the Cash Balance Plan, but for the Code limitations on pension benefits and earnings that may be considered in calculating tax-qualified cash balance plan benefits, and the amount actually payable as a lump sum under the Cash Balance Plan. Benefits generally are equal to the actuarial present value of a specified percentage, based on the participant’s years of service (including supplemental service granted under the plan) and management level of the participant’s “Final Average Monthly Compensation” (which is generally 1/36th of the sum of the participant’s base salary and annual incentive plan award for the 3 highest years during the last 10 years preceding separation from service), after first being reduced by the value of the participant’s Entergy Retirement Plan benefit.
Benefit timing Payable at age 65
Benefits payable prior to age 65 are subject to the same reduced terminated vested or early retirement reduction factors as benefits payable under the Entergy Retirement Plan as described above.
An employee with supplemental credited service who terminates employment prior to age 65 must receive prior written consent of the Entergy employer in order to receive the portion of their benefit attributable to their supplemental credited service agreement.
Benefits payable upon separation from service subject to the 6 month delay required under the Code Section 409A. Payable upon separation from service subject to 6 month delay required under the Code Section 409A. Payable at age 65
Prior to age 65, vesting is conditioned on the prior written consent of the officer’s Entergy employer.
Benefits payable prior to age 65 are subject to the same reduced terminated vested or subsidized early retirement reduction factors as benefits payable under the Entergy Retirement Plan as described above.
Benefits payable upon separation from service subject to the 6 month delay required under Internal Revenue Code Section 409A.
Additional Information
(1)Effective July 1, 2014, (a) no new grants of supplemental service may be provided to participants in the Pension Equalization Plan; (b) supplemental credited service granted prior to July 1, 2014 was grandfathered; and (c) participants in Entergy Corporation’s Cash Balance Plan are not eligible to participate in the Pension Equalization Plan and instead may be eligible to participate in the Cash Balance Equalization Plan.
(2)Benefits accrued under the SERP, PEP, and Cash Balance Equalization Plan, if any, will become fully vested if a participant is involuntarily terminated without cause or terminates his or her employment for good reason in connection with a change in control with payment generally made in a lump-sum payment as soon as reasonably practicable following the first day of the month after the termination of employment, unless delayed 6 months under Internal Revenue Code Section 409A.
(3)The SERP was closed to new executive officers effective July 1, 2014.
2020 Non-qualified Deferred Compensation
As of December 31, 2020, Mr. May had a deferred account balance under a frozen Defined Contribution Restoration Plan. The amount is deemed invested, as chosen by Mr. May, in certain T. Rowe Price investment funds that are also available to the participant under the Savings Plan. Mr. May has elected to receive the deferred account balance after he retires. The Defined Contribution Restoration Plan, until it was frozen in 2005, credited eligible employees’ deferral accounts with employer contributions to the extent contributions under the qualified savings plan in which the employee participated were subject to limitations imposed by the Internal Revenue Code.
Defined Contribution Restoration Plan
Name Executive Contributions in 2020 Registrant Contributions in 2020 Aggregate Earnings in 2020(1)
Aggregate Withdrawals/Distributions Aggregate Balance at December 31, 2020
(a) (b) (c) (d) (e) (f)
Phillip R. May, Jr. $- $- $80 $- $3,067
(1)Amounts in this column are not included in the Summary Compensation Table.
2020 Potential Payments Upon Termination or Change in Control
Entergy Corporation has plans and other arrangements that provide compensation to a NEO if his or her employment terminates under specified conditions, including following a change in control of Entergy Corporation or its subsidiaries.
Change in Control
Under Entergy Corporation’s System Executive Continuity Plan (the “Continuity Plan”), ML 1-4 Officers are eligible to receive the severance benefits described below if their employment is terminated by their Entergy System employer other than for cause or if they terminate their employment for good reason during a period beginning with a potential change in control and ending 24 months following the effective date of a change in control (a “Qualifying Termination”). A participant will not be eligible for benefits under the Continuity Plan if such participant: accepts employment with Entergy Corporation or any of its subsidiaries; elects to receive the benefits of another severance or separation program; removes, copies or fails to return any property belonging to Entergy Corporation or any of its subsidiaries or violates his or her non-compete provision (which generally runs for two years but extends to three years if permissible under applicable law). Entergy Corporation does not have any plans or agreements that provide for payments or benefits to any of the NEOs solely upon a change in control.
In the event of a Qualifying Termination, executive officers, including the NEOs, generally will receive the benefits set forth below:
Compensation Element Payment
Severance* A lump sum severance payment equal to a multiple of the sum of: (a) the participant’s annual base salary as in effect at any time within one year prior to the commencement of a change of control period or, if higher, immediately prior to a circumstance constituting good reason, plus (b) the participant’s annual incentive, calculated using the average annual target opportunity derived under the annual incentive program for the two calendar years immediately preceding the calendar year in which termination occurs.
Performance Units Under the 2015 EOP and the performance unit agreements in respect of the 2019 - 2021 performance period, participants would forfeit outstanding performance units, and in lieu of any payment for any outstanding performance period, would receive a single-lump sum payment calculated by multiplying the target performance units for the most recent performance period preceding (but not including) the calendar year in which termination occurs by the closing price of Entergy’s common stock as of the later of the date of such termination or the date of the Change in Control. Under the 2019 OIP and the performance unit agreements in respect of the 2020 - 2022 performance unit period, participants would receive a number of shares of Entergy common stock equal to the greater of (1) the target number of performance units subject to the performance unit agreement or (2) the number of units that would vest under the performance unit agreement calculated based on the performance of Entergy Corporation through the participant’s termination date, in either case pro-rated based on the portion of the performance period that occurs through the termination date.
Equity Awards All unvested stock options, shares of restricted stock and restricted stock units will vest immediately upon a “double trigger” Qualifying Termination pursuant to the terms of the 2015 EOP and 2019 OIP.
Retirement Benefits Benefits already accrued under the SERP, PEP and Cash Balance Equalization Plan, if any, will become fully vested.
Welfare Benefits Participants who are not retirement-eligible would be eligible to receive Entergy-subsidized COBRA benefits for a period ranging from 12 to 18 months.
* Cash severance payments are capped at 2.99 times the sum of (a) an executive’s annual base salary plus (b) the higher of his or her actual annual incentive payment under the annual incentive program or his or her annual incentive, calculated using the average annual target opportunity derived under the annual incentive program for the two calendar years immediately preceding the calendar year in which termination occurs. Any cash severance payments to be paid under the Continuity Plan in excess of this cap will be forfeited by the participant.
To protect shareholders and Entergy Corporation’s business model, executives are required to comply with non-compete, non-solicitation, confidentiality and non-denigration provisions. If an executive discloses non-public data or information concerning Entergy Corporation or any of its subsidiaries or violates his or her non-compete provision, he or she will be required to repay any benefits previously received under the Continuity Plan.
For purposes of the Continuity Plan the following events are generally defined as:
•Change in Control: (a) the purchase of 30% or more of either Entergy Corporation’s common stock or the combined voting power of Entergy Corporation’s voting securities; (b) the merger or consolidation of Entergy Corporation (unless its Board members constitute at least a majority of the board members of the surviving entity); (c) the liquidation, dissolution or sale of all or substantially all of Entergy Corporation’s assets; or (d) a change in the composition of Entergy Corporation’s Board such that, during any two-year period, the individuals serving at the beginning of the period no longer constitute a majority of Entergy Corporation’s Board at the end of the period.
•Potential Change in Control: (a) Entergy Corporation or an affiliate enters into an agreement the consummation of which would constitute a Change in Control; (b) the Entergy Corporation Board adopts resolutions determining that, for purposes of the Continuity Plan, a potential Change in Control has occurred; (c) a System Company or other person or entity publicly announces an intention to take actions that would constitute a Change in Control; or (d) any person or entity becomes the beneficial owner (directly or indirectly)
of Entergy Corporation’s outstanding shares of common stock constituting 20% or more of the voting power or value of the Entergy Corporation’s outstanding common stock.
•Cause: The participant’s (a) willful and continuous failure to perform substantially his or her duties after written demand for performance; (b) engagement in conduct that is materially injurious to Entergy Corporation or any of its subsidiaries; (c) conviction or guilty or nolo contendere plea to a felony or other crime that materially and adversely affects either his or her ability to perform his or her duties or Entergy Corporation’s reputation; (d) material violation of any agreement with Entergy Corporation or any of its subsidiaries; or (e) disclosure of any of Entergy Corporation’s confidential information without authorization.
•Good Reason: The participant’s (a) nature or status of duties and responsibilities is substantially altered or reduced; (b) salary is reduced by 5% or more; (c) primary work location is relocated outside the continental United States; (d) compensation plans are discontinued without an equitable replacement; (e) benefits or number of vacation days are substantially reduced; or (f) employment is terminated by an Entergy employer for reasons other than in accordance with the Continuity Plan.
Other Termination Events
For termination events, other than in connection with a Change in Control, the executive officers, including the NEOs, generally will receive the benefits set forth below:
Termination Event Compensation Element
Severance Annual Incentive Stock Options Restricted Stock Performance Units
Voluntary Resignation None Forfeited* Unvested options are forfeited. Vested options expire on the earlier of (i) 90 days from the last day of active employment and (ii) the option’s normal expiration date.
Forfeited Forfeited**
Termination for Cause None Forfeited Forfeited Forfeited Forfeited
Retirement None Pro-rated based on number of days employed during the performance period Unvested stock options granted prior to 2020 vest on the retirement date and expire on the earlier of (i) five years from the retirement date and (ii) the option’s normal expiration date. Unvested stock options granted in 2020 continue to vest following retirement, in accordance with the original vesting schedule and expire the earlier of (i) five years from the retirement date and (ii) the option’s normal expiration date. Forfeited Officers with a minimum of 12 months of participation are eligible for a pro-rated award based on actual performance and full months of service during the performance period
Death/Disability None Pro-rated based on number of days employed during the performance period
Unvested stock options vest on the termination date and expire on the earlier of (i) five years from the termination date and (ii) the option’s normal expiration date Fully Vest Officers are eligible for pro-rated award based on actual performance and full months of service during the performance period
* If an officer resigns after the completion of an annual incentive plan, he or she may receive, at Entergy Corporation’s discretion, an annual incentive payment.
** If an officer resigns after the completion of a LTIP performance period, he or she may receive a payout under the LTIP based on the outcome of the performance period.
Mr. Denault’s 2006 Retention Agreement
In 2006, Entergy Corporation entered into a retention agreement with Mr. Denault that provides benefits to him in addition to, or in lieu of, the benefits described above. Specifically, in the event of a Termination Event (as defined in his agreement): 1) Mr. Denault is entitled to a Target LTIP Award calculated by using the average annual number of performance units with respect to the two most recent performance periods preceding the calendar year in which his employment termination occurs, assuming all performance goals were achieved at target; and 2) all of Mr. Denault’s unvested stock options and shares of restricted stock will immediately vest.
In the event of death or disability, Mr. Denault would receive the greater of the Target LTIP Award calculated as described above or the pro-rated number of performance units for all open performance periods, based on the number of months of his participation in each open performance period.
Under the terms of his 2006 retention agreement, Mr. Denault’s employment may be terminated for cause upon Mr. Denault’s: (a) continuing failure to substantially perform his duties (other than because of physical or mental illness or after he has given notice of termination for good reason) that remains uncured for 30 days after receiving a written notice from the Personnel Committee; (b) willfully engaging in conduct that is demonstrably and materially injurious to Entergy; (c) conviction of or entrance of a plea of guilty or nolo contendere to a felony or other crime that has or may have a material adverse effect on his ability to carry out his duties or upon Entergy’s reputation; (d) material violation of any agreement that he has entered into with Entergy; or (e) unauthorized disclosure of Entergy’s confidential information.
Mr. Denault may terminate his employment for good reason upon: (a) the substantial reduction in the nature or status of his duties or responsibilities from those in effect immediately prior to the date of the retention agreement, other than de minimis acts that are remedied after notice from Mr. Denault; (b) a reduction of 5% or more in his base salary as in effect on the date of the retention agreement; (c) the relocation of his principal place of employment to a location other than the corporate headquarters; (d) the failure to continue to allow him to participate in programs or plans providing opportunities for equity awards, incentive compensation and other plans on a basis not materially less favorable than enjoyed at the time of the retention agreement (other than changes similarly affecting all senior executives); (e) the failure to continue to allow him to participate in programs or plans with opportunities for benefits not materially less favorable than those enjoyed by him under any of the pension, savings, life insurance, medical, health and accident, disability or vacation plans or policies at the time of the retention agreement (other than changes similarly affecting all senior executives); or (f) any purported termination of his employment not taken in accordance with his retention agreement.
Aggregate Termination Payments
The tables below reflect the amount of compensation each of the NEOs would have received if his or her employment had been terminated as of December 31, 2020 under the various scenarios described above. For purposes of these tables, a stock price of $99.84 was used, which was the closing market price of Entergy Corporation stock on December 31, 2020, the last trading day of the year.
Benefits and Payments Upon Termination Voluntary Resignation For Cause Termination for Good Reason or Not for Cause Retirement Disability Death Termination Related to a Change in Control
A. Christopher Bakken, III(1)
Severance Payment
- - - - - - $3,435,870
Performance Units(3)
- - - - $895,065 $895,065 $1,086,858
Stock Options
- - - - $552,353 $552,353 $552,353
Restricted Stock
- - - - $764,339 $764,339 $764,339
Welfare Benefits(5)
- - - - - - $22,248
Unvested Restricted Stock Units(7)
- - - - - - $1,996,800
Marcus V. Brown(2)
Severance Payment
- - - - - - $3,570,750
Performance Units(3)
- - - $876,595 $876,595 $876,595 $1,080,668
Stock Options
- - - $547,368 $547,368 $547,368 $547,368
Restricted Stock
- - - - $751,664 $751,664 $751,664
Welfare Benefits(6)
- - - - - - -
Leo P. Denault(2)
Severance Payment
- - - - - - $10,993,273
Performance Units(3)(4)
- - $4,512,768 $3,736,712 $4,512,768 $4,512,768 $5,902,641
Stock Options
- - $2,306,895 $2,306,895 $2,306,895 $2,306,895 $2,306,895
Restricted Stock
- - $2,966,300 - $2,966,300 $2,966,300 $2,966,300
Welfare Benefits(6)
- - - - - - -
David D. Ellis(1)
Severance Payment
- - - - - - $386,219
Performance Units(3)
- - - - $128,194 $128,194 $216,353
Stock Options
- - - - $33,377 $33,377 $33,377
Restricted Stock
- - - - $87,425 $87,425 $87,425
Welfare Benefits(5)
- - - - - - $19,908
Haley R. Fisackerly(2)
Severance Payment
- - - - - - $543,541
Performance Units(3)
- - - 128,194 $128,194 $128,194 $216,353
Stock Options
- - - 91,899 $91,899 $91,899 $91,899
Restricted Stock
- - - 150,174 $150,174 $150,174 $150,174
Welfare Benefits(6)
- - - - - - -
Laura R. Landreaux(1)
Severance Payment
- - - - - - $457,457
Performance Units(3)
- - - - $128,194 $128,194 $216,353
Stock Options
- - - - $36,210 $36,210 $36,210
Restricted Stock
- - - - $157,978 $157,978 $157,978
Welfare Benefits(5)
- - - - - - $19,908
Benefits and Payments Upon Termination Voluntary Resignation For Cause Termination for Good Reason or Not for Cause Retirement Disability Death Termination Related to a Change in Control
Andrew S. Marsh(1)
Severance Payment
- - - - - - $3,622,500
Performance Units(3)
- - - - $1,108,224 $1,108,224 $1,146,862
Stock Options
- - - - $676,227 $676,227 $676,227
Restricted Stock
- - - - $908,105 $908,105 $908,105
Welfare Benefits(5)
- - - - - - $29,862
Phillip R. May, Jr.(2)
Severance Payment
- - - - - - $1,295,309
Performance Units(3)
- - - $189,796 $189,796 $189,796 $361,121
Stock Options
- - - $137,838 $137,838 $137,838 $137,838
Restricted Stock
- - - - $215,243 $215,243 $215,243
Welfare Benefits(6)
- - - - - - -
Sallie T. Rainer(2)
Severance Payment
- - - - - - $502,198
Performance Units(3)
- - - $128,194 $128,194 $128,194 $216,353
Stock Options
- - - $91,899 $91,899 $91,899 $91,899
Restricted Stock
- - - - $150,174 $150,174 $150,174
Welfare Benefits(6)
- - - - - - -
Roderick K. West(1)
Severance Payment
- - - - - - $3,732,501
Performance Units(3)
- - - - $950,177 $950,177 $1,108,324
Stock Options
- - - - $580,531 $580,531 $580,531
Restricted Stock
- - - - $811,984 $811,984 $811,984
Welfare Benefits(5)
- - - - - - $29,862
1)See “2020 Pension Benefits” for a description of the pension benefits Mr. Bakken, Mr. Ellis, Ms. Landreaux, Mr. Marsh, and Mr. West may receive upon the occurrence of certain termination events.
2)As of December 31, 2020, Mr. Brown, Mr. Denault, Mr. Fisackerly, Mr. May, and Ms. Rainer are retirement eligible and would retire rather than voluntarily resign, and in addition to the payments and benefits in the table, Mr. Brown, Mr. Denault, Mr. Fisackerly, Mr. May, and Ms. Rainer also would be entitled to receive their vested pension benefits under the Entergy Retirement Plan. For a description of these benefits, see “2020 Pension Benefits.”
3)For purposes of the table, in the event of a qualifying termination related to a change in control, each NEO would receive a payment in respect of his performance units for the 2019 - 2021 performance period and a number of performance units for the 2020 - 2022 performance period, calculated as follows.
For the 2019 - 2021 performance period, each NEO would be entitled to receive a single-lump sum payment calculated using the target number of performance units that the officer would have been entitled to receive under the 2015 EOP with respect to the most recent performance period that precedes and does not include the officer’s date of termination. The value of Mr. Denault’s payments was calculated by multiplying the target performance units for the 2017 - 2019 LTIP performance period (48,700) by the closing price of Entergy Corporation stock on December 31, 2020 ($99.84), which would equal a payment of $4,862,208 for the forfeited performance units for the 2019 - 2021 performance period. The value of Mr. Bakken’s, Mr. Brown’s,
Mr. Marsh’s, and Mr. West’s was calculated by multiplying the target performance units for the 2017 - 2019 LTIP performance period (8,300) by the closing price of Entergy Corporation stock on December 31, 2020 ($99.84), which would equal a payment of $828,672 for the forfeited performance units for the 2019 - 2021 performance period. The value of Mr. May’s payment was calculated by multiplying the target performance units for the 2017 - 2019 LTIP performance period (3,150) by the closing price of Entergy Corporation stock on December 31, 2020 ($99.84), which would equal a payment of $314,496 for the forfeited performance units for the 2019 - 2021 performance period. The value of the payments for the other NEOs was calculated by multiplying the target performance units for the 2017 - 2019 LTIP performance period (1,850) by the closing price of Entergy Corporation stock on December 31, 2020 ($99.84), which would equal a payment of $184,704 for the forfeited performance units for the 2019 - 2021 performance period.
For the 2020 - 2022 performance period, in the event of a qualifying termination related to a change in control, each NEO would be entitled to receive a number of shares of Entergy Corporation stock equal to the greater of (1) the target number of performance units subject to the 2020 - 2022 performance unit agreement or (2) the number of performance units that would vest under the 2020 - 2022 performance unit agreement calculated based on Entergy Corporation’s actual performance through the NEO’s termination date, in either case pro-rated based on the portion of the performance period that occurs through the termination date. For purposes of the table, the values of the performance unit awards for the 2020 - 2022 performance period for each NEO were calculated as follows, based on the assumption that the target number of performance units was the greater number:
Mr. Bakken: 2,586 (12/36*7,758) performance units at target, assuming a stock price of $99.84 = $258,186
Mr. Brown: 2,524 (12/36*7,571) performance units at target, assuming a stock price of $99.84 = $251,996
Mr. Denault: 10,421 (12/36*31,263) performance units at target, assuming a stock price of $99.84 = $1,040,433
Mr. Ellis: 317 (12/36*950) performance units at target, assuming a stock price of $99.84 = $31,649
Mr. Fisackerly: 317 (12/36*950) performance units at target, assuming a stock price of $99.84 = $31,649
Ms. Landreaux: 317 (12/36*950) performance units at target, assuming a stock price of $99.84 = $31,649
Mr. May: 467 (12/36*1,400) performance units at target, assuming a stock price of $99.84 = $46,625
Mr. Marsh: 3,187 (12/36*9,560) performance units at target, assuming a stock price of $99.84 = $318,190
Ms. Rainer: 317 (12/36*950) performance units at target, assuming a stock price of $99.84 = $31,649
Mr. West: 2,801 (12/36*8,401) performance units at target, assuming a stock price of $99.84 = $279,652
The total values of the single sum payment for the 2019 - 2021 performance period and the performance units award for the 2020 - 2022 performance period upon a change in control for each NEO is as follows:
Mr. Bakken: $828,672 + $258,186 = $1,086,858
Mr. Brown: $828,672 + $251,996 = $1,080,668
Mr. Denault: $4,862,208 + $1,040,433 = $5,902,641
Mr. Ellis: $184,704 + $31,649 = $216,353
Mr. Fisackerly: $184,704 + $31,649 = $216,353
Ms. Landreaux: $184,704 + $31,649 = $216,353
Mr. May: $314,496 + $46,625 = $361,121
Mr. Marsh: $828,672 + $318,190 = $1,146,862
Ms. Rainer: $184,704 + $31,649 = $216,353
Mr. West: $828,672 + $279,652 = $1,108,324
For purposes of the table, the values of the awards payable in the event of retirement in the case of Mr. Denault, Mr. Brown, Mr. Fisackerly, Mr. May, or Ms. Rainer or upon death or disability, other than Mr. Denault, for each NEO were calculated as follows:
Mr. Bakken’s:
2019 - 2021 LTIP Performance Period: 6,379 (24/36*9,568) performance units at target, assuming a stock price of $99.84 = $636,879
2020 - 2022 LTIP Performance Period: 2,586 (12/36*7,758) performance units at target, assuming a stock price of $99.84 = $258,186
Total: $895,065
Mr. Brown’s:
2019 - 2021 LTIP Performance Period: 6,256 (24/36*9,383) performance units at target, assuming a stock price of $99.84 = $$624,599
2020 - 2022 LTIP Performance Period: 2,524 (12/36*7,571) performance units at target, assuming a stock price of $99.84 = $251,996
Total: $876,595
Mr. Denault’s:
2019 - 2021 LTIP Performance Period: 27,006 (24/36*40,508) performance units at target, assuming a stock price of $99.84 = $2,696,279
2020 - 2022 LTIP Performance Period: 10,421 (12/36*31,263) performance units at target, assuming a stock price of $99.84 = $1,040,433
Total: $3,736,712
Mr. Marsh’s:
2019 - 2021 LTIP Performance Period: 7,913 (24/36*11,869) performance units at target, assuming a stock price of $99.84 = $790,034
2020 - 2022 LTIP Performance Period: 3,187 (12/36*9,560) performance units at target, assuming a stock price of $99.84 = $318,190
Total: $1,108,224
Mr. May’s:
2019 - 2021 LTIP Performance Period: 1,434 (24/36*2,150) performance units at target, assuming a stock price of $99.84 = $143,171
2020 - 2022 LTIP Performance Period: 467 (12/36*1,400) performance units at target, assuming a stock price of $99.84 = $46,625
Total: $189,796
Mr. Ellis’s, Mr. Fisackerly’s, Ms. Landreaux’s and Ms. Rainer’s:
2019 - 2021 LTIP Performance Period: 967 (24/36*1,450) performance units at target, assuming a stock price of $99.84 = $96,545
2020 - 2022 LTIP Performance Period: 317 (12/36*950) performance units at target, assuming a stock price of $99.84 = $31,649
Total: $128,194
Mr. West’s:
2019 - 2021 LTIP Performance Period: 6,716 (24/36*10,073) performance units at target, assuming a stock price of $99.84 = $670,525
2020 - 2022 LTIP Performance Period: 2,801 (12/36*8,401) performance units at target, assuming a stock price of $99.84 = $279,652
Total: $950,177
4)For purposes of the table, the value of Mr. Denault’s retention payment was calculated by taking an average of the target performance units from the 2016 - 2018 LTIP (41,700) and from the 2017 - 2019 LTIP (48,700). This average number of units (45,200) multiplied by the closing price of Entergy stock on December 31, 2020 ($99.84) would equal a payment of $4,512,768.
5)Pursuant to the SERP, in the event of a termination related to a change in control, Mr. Bakken, Mr. Marsh, and Mr. West would be eligible to receive Entergy-subsidized COBRA benefits for 18 months and Mr. Ellis and Ms. Landreaux would be eligible to receive Entergy-subsidized COBRA benefits for 12 months.
6)Upon retirement, Mr. Brown, Mr. Denault, Mr. Fisackerly, Mr. May, and Ms. Rainer would be eligible for retiree medical and dental benefits, the same as all other retirees.
7)Mr. Bakken’s 20,000 restricted stock units vest in two equal installments on April 6, 2022 and April 6, 2025. In the event of a change in control, the unvested restricted stock units will fully vest upon Mr. Bakken’s Qualifying Termination during a change in control period. Pursuant to his restricted stock unit agreement, Mr. Bakken is subject to certain restrictions on his ability to compete with Entergy and its affiliates or solicit its employees or customers during and for 12 months after his employment with his Entergy employer. In addition, the restricted stock unit agreement limits Mr. Bakken’s ability to disparage Entergy and its affiliates. In the event of a breach of these restrictions, other than following certain constructive terminations of his employment, Mr. Bakken will forfeit any restricted stock units that are not yet vested and paid, and must repay to Entergy any shares of Entergy stock paid to him in respect of the restricted stock units and any amounts he received upon the sale or transfer of any such shares.
Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the following disclosure is being provided about the relationship of the annual total compensation of the employees of each of the Utility operating companies to the annual total compensation of their respective Presidents and Chief Executive Officers. The pay ratio estimate for each of the Utility operating companies has been calculated in a manner consistent with Item 402(u) of Regulation S-K.
Identification of Median Employee
For each of the Utility operating companies, October 2, 2020 was selected as the date on which to determine the median employee. This date is different from the date used in the prior year; however, the methodology used to determine the date is consistent with that used in the prior year. Both dates correspond to the first day of the three month period prior to fiscal year-end for which information can be obtained about employees and all subsidiaries have the same number of pay cycles. To identify the median employee from each of the Utility operating companies’ employee population base, all compensation included in Box 5 of Form W-2 was considered with all before-tax deductions added back to this compensation (“Box 5 Compensation”). For purposes of determining the median employee of each Utility operating company, Box 5 Compensation was selected as it is believed to be representative of the compensation received by the employees of each respective Utility operating company and is readily available.
The calculation of annual total compensation of the median employee for each Utility operating company is the same calculation used to determine total compensation for purposes of the 2020 Summary Compensation Table with respect to each of the NEOs.
Entergy Arkansas Ratio
For 2020,
•The median of the annual total compensation of all of Entergy Arkansas’s employees, other than Ms. Landreaux, was $135,370.
•Ms. Landreaux’s annual total compensation, as reported in the Total column of the 2020 Summary Compensation Table was $1,150,511.
•Based on this information, the ratio of the annual total compensation of Mrs. Landreaux to the median of the annual total compensation of all employees is estimated to be 8:1.
Entergy Louisiana Ratio
For 2020,
•The median of the annual total compensation of all of Entergy Louisiana’s employees, other than Mr. May, was $131,155.
•Mr. May’s annual total compensation, as reported in the Total column of the 2020 Summary Compensation Table, was $2,257,961.
•Based on this information, the ratio of the annual total compensation of Mr. May to the median of the annual total compensation of all employees is estimated to be 17:1.
Entergy Mississippi Ratio
For 2020,
•The median of the annual total compensation of all of Entergy Mississippi’s employees, other than Mr. Fisackerly, was $111,238.
•Mr. Fisackerly’s annual total compensation, as reported in the Total column of the 2020 Summary Compensation Table, was $1,803,939.
•Based on this information, the ratio of the annual total compensation of Mr. Fisackerly to the median of the annual total compensation of all employees is estimated to be 16:1.
Entergy New Orleans Ratio
For 2020,
•The median of the annual total compensation of all of Entergy New Orleans’s employees, other than Mr. Ellis, was $150,102.
•Mr. Ellis’s annual total compensation, as reported in the Total column of the 2020 Summary Compensation Table was $804,810.
•Based on this information, the ratio of the annual total compensation of Mr. Ellis to the median of the annual total compensation of all employees is estimated to be 5:1.
Entergy Texas Ratio
For 2020,
•The median of the annual total compensation of all of Entergy Texas’s employees, other than Ms. Rainer, was $160,680.
•Ms. Rainer’s annual total compensation, as reported in the Total column of the 2020 Summary Compensation Table, was $1,543,383.
•Based on this information, the ratio of the annual total compensation of Ms. Rainer to the median of the annual total compensation of all employees is estimated to be 10:1.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management
Entergy Corporation owns 100% of the outstanding common stock of registrant Entergy Texas and indirectly 100% of the outstanding common membership interests of registrants Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. The information with respect to persons known by Entergy Corporation to be beneficial owners of more than 5% of Entergy Corporation’s outstanding common stock is included under the heading “Entergy Share Ownership - Beneficial Owners of More Than Five Percent of Entergy Common Stock” in the Entergy Corporation Proxy Statement, which information is incorporated herein by reference. The registrants know of no contractual arrangements that may, at a subsequent date, result in a change in control of any of the registrants.
The following table sets forth the beneficial ownership of common stock of Entergy Corporation and stock-based units as of January 31, 2021 for all directors and NEOs. Unless otherwise noted, each person had sole voting and investment power over the number of shares of common stock and stock-based units of Entergy Corporation set forth across from his or her name.
Name Shares (1)(2)
Options Exercisable Within 60 Days Stock Units (3)
Entergy Corporation
A. Christopher Bakken, III** 18,115 35,399 -
Marcus V. Brown** 38,813 34,930 -
John R. Burbank* 3,353 - 563
Patrick J. Condon* 9,333 - -
Leo P. Denault*** 324,528 899,634 -
Kirkland H. Donald* 8,590 - 3,668
Brian W. Ellis* 64
Philip L. Frederickson* 7,889 - 805
Alexis M. Herman* 14,780 - -
M. Elise Hyland* 1,663 563
Stuart L. Levenick* 22,920 - -
Blanche L. Lincoln* 16,654 - -
Andrew S. Marsh** 90,482 281,147 -
Karen A. Puckett* 9,333 - -
Roderick K. West** 33,757 37,517 -
All directors and executive officers as a group (20 persons) 680,178 1,429,697 5,599
Entergy Arkansas
A. Christopher Bakken, III** 18,115 35,399 -
Marcus V. Brown** 38,813 34,930 -
Leo P. Denault** 324,528 899,634 -
Andrew S. Marsh*** 90,482 281,147 -
Laura R. Landreaux*** 5,678 4,833 -
Roderick K. West*** 33,757 37,517 -
All directors and executive officers as a group (8 persons) 556,160 1,390,535 -
Entergy Louisiana
A. Christopher Bakken, III** 18,115 35,399 -
Marcus V. Brown** 38,813 34,930 -
Leo P. Denault** 324,528 899,634 -
Andrew S. Marsh*** 90,482 281,147 -
Phillip R. May, Jr.*** 23,383 8,833 13
Roderick K. West*** 33,757 37,517 -
All directors and executive officers as a group (8 persons) 573,865 1,394,535 13
Name Shares (1)(2)
Options Exercisable Within 60 Days Stock Units (3)
Entergy Mississippi
Marcus V. Brown** 38,813 34,930 -
Leo P. Denault** 324,528 899,634 -
Haley R. Fisackerly*** 7,760 5,700 -
Andrew S. Marsh*** 90,482 281,147 -
Roderick K. West*** 33,757 37,517 -
All directors and executive officers as a group (7 persons) 540,127 1,356,003 -
Entergy New Orleans
Marcus V. Brown** 38,813 34,930 -
Leo P. Denault** 324,528 899,634 -
David D. Ellis*** 3,332 4,199 -
Andrew S. Marsh*** 90,482 281,147 -
Roderick K. West*** 33,757 37,517 -
All directors and executive officers as a group (7 persons) 535,699 1,354,502 -
Entergy Texas
Marcus V. Brown** 38,813 34,930 -
Leo P. Denault** 324,528 899,634 -
Andrew S. Marsh*** 90,482 281,147 -
Sallie T. Rainer*** 13,437 12,566 -
Roderick K. West*** 33,757 37,517 -
All directors and executive officers as a group (7 persons) 545,804 1,362,869 -
* Director of the respective company
** NEO of the respective company
*** Director and NEO of the respective company
(1)The number of shares of Entergy Corporation common stock owned by each individual and by all non-employee directors and executive officers as a group does not exceed one percent of the outstanding shares of Entergy Corporation common stock.
(2)For the non-employee directors, the balances include phantom units that are issued under the Service Recognition Program. All non-employee directors are credited with phantom units for each year of service on the Entergy Corporation Board. These phantom units do not have voting rights or accrue dividends, and will be settled in shares of Entergy Corporation common stock following the non-employee director’s separation from the Board.
(3)Represents the balances of phantom units each director or executive holds under the defined contribution restoration plan and the deferral provisions of Entergy Corporation’s equity ownership plans. These units will be paid out in either Entergy Corporation Common Stock or cash equivalent to the value of one share of Entergy Corporation common stock per unit on the date of payout, including accrued dividends. The deferral period is determined by the individual and is at least two years from the award of the bonus. Messrs. Donald and Frederickson have deferred receipt of some of their quarterly stock grants. The deferred shares will be settled in cash in an amount equal to the market value of Entergy Corporation common stock at the end of the deferral period.
Equity Compensation Plan Information
The following table summarizes the equity compensation plan information as of December 31, 2020. Information is included for equity compensation plans approved by the shareholders. There are no shares authorized for issuance under equity compensation plans not approved by the shareholders.
Plan Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted Average Exercise Price (b)(2)
Number of Securities Remaining Available for Future Issuance (excluding securities reflected in column (a))(c)
Equity compensation plans approved by security holders (1)
2,399,379 $89.63 6,108,451
Equity compensation plans not approved by security holders
- - -
Total 2,399,379 $89.63 6,108,451
(1)Includes the 2007 Equity Ownership Plan, the 2011 Equity Ownership Plan, the 2015 Equity Plan, and the 2019 Omnibus Incentive Plan. The 2007 Equity Ownership Plan was approved by Entergy Corporation shareholders on May 12, 2006, and only applied to awards granted between January 1, 2007 and May 5, 2011. The 2011 Equity Ownership Plan was approved by Entergy Corporation shareholders on May 6, 2011, and only applied to awards granted between May 6, 2011 and May 7, 2015. The 2015 Equity Plan was approved by Entergy Corporation shareholders on May 8, 2015, and only applied to awards granted between May 8, 2015 and May 3, 2019. The 2019 Omnibus Incentive Plan was approved by the Entergy Corporation shareholders on May 3, 2019, and 7,300,000 shares of Entergy Corporation common stock can be issued from the 2019 Omnibus Incentive Plan, with all shares available for equity-based incentive awards. The 2007 Equity Ownership Plan, the 2011 Equity Ownership Plan, the 2015 Equity Plan, and the 2019 Omnibus Incentive Plan (collectively, the “Plans”) are administered by the Personnel Committee of the Board of Directors (other than with respect to awards granted to non-employee directors, which awards are administered by the entire Board of Directors). Eligibility under the Plans is limited to the non-employee directors and to the officers and employees of an Entergy employer or an affiliate of Entergy Corporation. The Plans provide for the issuance of stock options, restricted stock, equity awards (units whose value is related to the value of shares of the common stock but do not represent actual shares of common stock), performance awards (performance shares or units valued by reference to shares of common stock or performance units valued by reference to financial measures or property other than common stock), restricted stock unit awards, and other stock-based awards.
(2)The weighted average exercise price reported in this column does not include outstanding performance awards.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Party Transactions and Director Independence
For information regarding certain relationship, related transactions and director independence of Entergy Corporation, see the Entergy Corporation Proxy Statement under the headings “Corporate Governance - Director Independence” and “Corporate Governance - Corporate Governance Policies - Review and Approval of Related Party Transactions.”
Entergy Corporation’s Board of Directors has adopted a written Related Party Transaction Approval Policy that applies to any transaction or series of transactions in which Entergy Corporation or a subsidiary is a participant:
•When the amount involved exceeds $120,000; and
•When a Related Party (an Entergy Corporation director or executive officer, any nominee for director, any shareholder owning an excess of 5% of the total equity of Entergy Corporation and any immediate family member of any such person) has a direct or indirect material interest in such transaction(s) (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).
The policy is administered by Entergy Corporation’s Corporate Governance Committee. The committee will consider relevant facts and circumstance in determining whether or not to approve or ratify such a transaction, and will approve or ratify only those transactions that are, in the Corporate Governance Committee’s judgment, appropriate or desirable under the circumstances. The Corporate Governance Committee has determined that certain types of transactions do not create or involve a direct or indirect material interest, including (i) compensation and related party transactions involving a director or an executive officer solely resulting from service as a director or employment with Entergy Corporation so long as the compensation is approved by the Entergy Corporation Board of Directors (or an appropriate committee); (ii) transactions involving public utility services at rates or charges fixed in conformity with law or governmental authority; or (iii) all business relationships between Entergy Corporation and a Related Party made in the ordinary course of business on terms and conditions generally available in the marketplace an in accordance with applicable law. To Entergy Corporation’s knowledge, since January 1, 2020, neither Entergy Corporation nor any of its affiliates has participated in any Related Party transaction.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)
Aggregate fees billed to Entergy Corporation (consolidated), Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy for the years ended December 31, 2020 and 2019 by Deloitte & Touche LLP were as follows:
2020 2019
Entergy Corporation (consolidated)
Audit Fees $9,323,550 $8,710,000
Audit-Related Fees (a) 786,000 775,000
Total audit and audit-related fees 10,109,550 9,485,000
Tax Fees - -
All Other Fees (b) 183,060 31,835
Total Fees (c) $10,292,610 $9,516,835
Entergy Arkansas
Audit Fees $1,137,507 $1,015,125
Audit-Related Fees (a) - -
Total audit and audit-related fees 1,137,507 1,015,125
Tax Fees - -
All Other Fees - -
Total Fees (c) $1,137,507 $1,015,125
Entergy Louisiana
Audit Fees $2,302,851 $1,871,918
Audit-Related Fees (a) 360,000 360,000
Total audit and audit-related fees 2,662,851 2,231,918
Tax Fees - -
All Other Fees - -
Total Fees (c) $2,662,851 $2,231,918
Entergy Mississippi
Audit Fees $982,507 $1,005,125
Audit-Related Fees (a) - -
Total audit and audit-related fees 982,507 1,005,125
Tax Fees - -
All Other Fees - -
Total Fees (c) $982,507 $1,005,125
2020 2019
Entergy New Orleans
Audit Fees $1,027,507 $950,125
Audit-Related Fees (a) - -
Total audit and audit-related fees 1,027,507 950,125
Tax Fees - -
All Other Fees - -
Total Fees (c) $1,027,507 $950,125
Entergy Texas
Audit Fees $1,258,220 $1,165,125
Audit-Related Fees (a) - -
Total audit and audit-related fees 1,258,220 1,165,125
Tax Fees - -
All Other Fees - -
Total Fees (c) $1,258,220 $1,165,125
System Energy
Audit Fees $1,017,507 $930,125
Audit-Related Fees (a) - -
Total audit and audit-related fees 1,017,507 930,125
Tax Fees - -
All Other Fees - -
Total Fees (c) $1,017,507 $930,125
(a)Includes fees for employee benefit plan audits, consultation on financial accounting and reporting, and other attestation services.
(b)Includes fees for cybersecurity assessment and license fee for accounting research tool.
(c)100% of fees paid in 2020 and 2019 were pre-approved by the Entergy Corporation Audit Committee.
Entergy Audit Committee Guidelines for Pre-approval of Independent Auditor Services
The Audit Committee has adopted the following guidelines regarding the engagement of Entergy’s independent auditor to perform services for Entergy:
1.The independent auditor will provide the Audit Committee, for approval, an annual engagement letter outlining the scope of services proposed to be performed during the fiscal year, including audit services and other permissible non-audit services (e.g. audit-related services, tax services, and all other services).
2.For other permissible services not included in the engagement letter, Entergy management will submit a description of the proposed service, including a budget estimate, to the Audit Committee for pre-approval. Management and the independent auditor must agree that the requested service is consistent with the SEC’s rules on auditor independence prior to submission to the Audit Committee. The Audit Committee, at its discretion, will pre-approve permissible services and has established the following additional guidelines for permissible non-audit services provided by the independent auditor:
aAggregate non-audit service fees are targeted at fifty percent or less of the approved audit service fee.
bAll other services should only be provided by the independent auditor if it is a highly qualified provider of that service or if the Audit Committee pre-approves the independent audit firm to provide the service.
3.The Audit Committee will be informed quarterly as to the status of pre-approved services actually provided by the independent auditor.
4.To ensure prompt handling of unexpected matters, the Audit Committee delegates to the Audit Committee Chair or its designee the authority to approve permissible services and fees. The Audit Committee Chair or designee will report action taken to the Audit Committee at the next scheduled Audit Committee meeting.
5.The Vice President and General Auditor will be responsible for tracking all independent auditor fees and will report quarterly to the Audit Committee.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
(a)1. Financial Statements and Independent Auditors’ Reports for Entergy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy are listed in the Table of Contents.
(a)2. Financial Statement Schedules
Reports of Independent Registered Public Accounting Firm (see page 542)
Financial Statement Schedules are listed in the Index to Financial Statement Schedules (see page S-1)
(a)3. Exhibits
Exhibits for Entergy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy are listed in the Exhibit Index (see page 520 and are incorporated by reference herein). Each management contract or compensatory plan or arrangement required to be filed as an exhibit hereto is identified as such by footnote in the Exhibit Index.