Progress Energy 2009 Annual Report Download - page 160

PROXY STATEMENT
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 Rewarding operating performance results that are consistent with reliable and efficient electric
service. We believe that to achieve this goal over the long term, we must:
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Therefore, we determine base salary levels and annual incentive compensation based on corporate
performance in these areas, along with individual contribution and performance.
 Attracting and retaining an experienced and effective management team. The competition
for skilled and experienced management is significant in the utility industry. We believe that the
management of our business requires executives with a variety of experiences and skills. We expect the
competition for talent to continue to intensify, particularly in the nuclear, renewable energy sources,
and emerging technologies areas, as the industry enters a significant capital expenditure phase and the
requirement for reliable and environmentally responsible generating capacity increases. To address this
issue, we have designed market-based compensation programs that are competitive and are aligned
with our corporate strategy.
Consistent with these principles, the Committee seeks to provide executive officers a compensation
program that is competitive in the market place and provides incentives necessary to motivate executives to perform
in the best interests of the Company and its shareholders.
In determining an individual executive officer’s compensation opportunity, the Committee believes that
it must be competitive within the marketplace for each particular executive officer. As such, the compensation
opportunities vary significantly from individual to individual based on the specific nature of the executive position.
For example, our Chief Executive Officer is responsible for the overall performance of the Company and, as such,
his position has a greater scope of responsibility than our other executive positions and is benchmarked accordingly.
From a market perspective, the position of chief executive officer receives a greater compensation opportunity than
other executive positions. The Committee therefore sets our Chief Executive Officer’s compensation opportunity at
levels that reflect the responsibilities of his position and the Committee’s expectations.
ASSESSMENT OF RISK
Our Company is highly regulated at both the federal and state levels, and therefore significant swings in
earnings performance or growth over time are less influenced by any particular individual or groups of individuals.
We believe the variable components of our compensation program for executive officers do not incentivize
excessive risk taking for the following reasons:
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volume or revenue targets.