The accompanying proxy is solicited on behalf of the Board for the Annual Meeting to be held on Tuesday, May 19, 2020, at 1:00 p.m. Central Time, in a virtual format only via live audio webcast at www.virtualshareholdermeeting.com/NI2020. The common stock, $.01 par value per share, of the Company represented by the accompanying proxy will be voted as directed. If you return a signed proxy card without indicating how you want to vote your shares, the shares represented by the accompanying proxy will be voted as recommended by the Board:

This proxy statement and the accompanying proxy card are first being sent to stockholders on April 13, 2020. We will bear the expense of this mail solicitation, which may be supplemented by telephone, facsimile, email and personal solicitation by our officers, employees and agents. To aid in the solicitation of proxies, we have retained D.F. King for a fee of $9,500, plus reimbursement of expenses. We may incur additional fees if we request additional services. We will also request brokerage houses and other nominees and fiduciaries to forward proxy materials, at our expense, to the beneficial owners of stock held as of 5:00 p.m. Eastern Time on March 24, 2020, the record date for voting.

We use the terms “NiSource,” the “Company,” “we,” “our” and “us” in this proxy statement to refer to NiSource Inc.

Holders of shares of common stock as of the close of business on March 24, 2020, are entitled to notice of and to vote at the Annual Meeting and any adjournment thereof. As of March 24, 2020, 382,683,443 shares of common stock were issued and outstanding. Each share of common stock outstanding on that date is entitled to one vote on each matter presented at the Annual Meeting.

All votes must be received by the proxy tabulator by 11:59 p.m. Eastern Time on May 18, 2020.

If your shares are held in a brokerage account or by a bank, broker, trust or other nominee (herein referred to as a “Broker”), you are considered a “beneficial owner” of shares held in “street name.” As a beneficial owner, you will receive proxy materials and voting instructions from the stockholder of record that holds your shares. You must follow the voting instructions in order to have your shares of common stock voted.

If your shares are held in street name and you do not provide the Broker with instructions as to how to vote such shares, your Broker will only be able to vote your shares at its discretion on certain “routine” matters as permitted by New York Stock Exchange (“NYSE”) rules. The proposal to ratify the appointment of our independent registered public accounting firm is the only proposal considered a routine matter and, accordingly, at the Annual Meeting, Brokers will only have discretionary authority to vote your shares with regard to Proposal No. 3, the ratification of the appointment of Deloitte as our independent registered public accounting firm for 2020. A “broker non-vote” occurs when a Broker holding shares for a beneficial owner does not have discretionary authority to vote the shares and has not received instructions from the beneficial owner as to how the beneficial owner would like the shares to be voted. Brokers will not have discretionary authority to vote your shares with respect to the other proposals to be presented at the Annual Meeting. Therefore, it is important that you instruct your Broker or other nominee how to vote your shares. If Brokers exercise their discretionary voting authority on Proposal No. 3, such shares will be considered present at the Annual Meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting, which are considered “non-routine.”

If you hold your shares of common stock in our 401(k) Plan, those shares are held in the name of Fidelity Management Trust Company (“Fidelity”), the administrator of the 401(k) Plan. You will receive a proxy card that includes the number of shares of our common stock held in the 401(k) Plan. You should instruct Fidelity how to vote your shares by completing and returning the proxy card or by voting your shares by Internet or by telephone, as detailed above under “Voting Your Proxy.” If you do not instruct Fidelity how to vote your shares, or if you sign the proxy card with no further instructions as to how to vote your shares, Fidelity will vote your shares in the same proportion as the shares for which it receives instructions from all other participants, to the extent permitted under applicable law. To allow enough time for Fidelity to vote your shares in accordance with your direction, your voting instructions must be received by Fidelity no later than 11:59 p.m. Eastern Time on May 14, 2020.

Format of Meeting. In light of public health concerns regarding the coronavirus (“COVID-19”) outbreak, this year’s Annual Meeting will be conducted in a virtual format only in order to assist in protecting the health and well-being of our stockholders and employees and to provide access to our stockholders regardless of geographic location. There is no in-person meeting for you to attend. We designed the format of this year's Annual Meeting to ensure that our stockholders who attend the Annual Meeting will be afforded similar rights and opportunities to participate as they would at an in-person meeting.

Attending the Meeting. You are entitled to attend and participate in the Annual Meeting if you were a stockholder of record as of the close of business on March 24, 2020, the record date, or hold a legal proxy for the Annual Meeting provided by your Broker as described below. To attend and participate in the Annual Meeting, visit www.virtualshareholdermeeting.com/NI2020 and enter your 16-digit control number, which can be found on your proxy card, voting instruction form or email you received with your proxy materials. If your shares are held by a Broker and you do not have a control number, please contact your Broker as soon as possible so that you can be provided with a control number.

Voting During the Meeting. You may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. If your shares are held in street name by a Broker, then, in order to be able to vote at the Annual Meeting, you must obtain an executed legal proxy from the Broker indicating that you were the beneficial owner of the shares on March 24, 2020, the record date for voting, and that the Broker is giving you its proxy to vote the shares. If your shares are held in the 401(k) Plan, you will not be able to vote your shares at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described above under “Voting Your Proxy.” Votes cast at the Annual Meeting or represented by proxy at the Annual Meeting will be tabulated by the inspector of election.

Technical Assistance. The Annual Meeting will begin promptly at 1:00 p.m. Central Time. We encourage you to access the Annual Meeting approximately 15 minutes in advance to allow ample time for you to log in to the meeting and test your computer audio system. We recommend that you carefully review the above procedures needed to gain admission in advance. Technicians will be ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the meeting login page at www.virtualshareholdermeeting.com/NI2020.

Submitting Questions During the Meeting. As part of the Annual Meeting, we will hold a live question and answer session during which we intend to answer questions submitted during the meeting that are relevant to the purposes of the meeting and the Company's business in accordance with the Annual Meeting procedures posted on the meeting website, as time permits. Questions may be submitted by stockholders that have used 16-digit control numbers to enter the meeting at www.virtualshareholdermeeting.com/NI2020. Questions and answers may be grouped by topic and substantially similar questions may be grouped and answered once.

You may revoke your proxy at any time before a vote is taken or the authority granted is otherwise exercised. To revoke a proxy, you may send a letter to our Corporate Secretary (which must be received before a vote is taken) indicating that you want to revoke your proxy, or you can supersede your initial proxy by submitting a duly executed proxy bearing a later date, voting by telephone or through the Internet on a later date, or attending the virtual Annual Meeting and voting during the meeting. Attending the virtual Annual Meeting will not in and of itself revoke a proxy.

A quorum of stockholders is necessary to take action at the Annual Meeting. A majority of the outstanding shares of common stock, present during the virtual Annual Meeting or represented by proxy, will constitute a quorum at the Annual Meeting. The inspectors of election appointed for the Annual Meeting will determine whether or not a quorum is present. Abstentions are counted for purposes of determining whether a quorum is present. As explained above under “Discretionary Voting by Brokers and ‘Broker Non-Votes,” if Brokers exercise their discretionary voting authority on Proposal No. 3, such shares will be considered present at the meeting for quorum purposes and broker non-votes will occur as to each of the other proposals presented at the Annual Meeting.

Under our Corporate Governance Guidelines, a majority of the Board must be comprised of “independent directors.” In order to assist the Board in making its determination of director independence, the Board has adopted categorical standards of independence consistent with the standards contained in Section 303A.02 of the NYSE Listed Company Manual. The Board also has adopted an additional independence standard providing that a director who is an executive officer or director of a company that receives payments from us in an amount which exceeds 1% of such other company’s consolidated gross revenues is not “independent” until three years after falling below such threshold. A copy of our Corporate Governance Guidelines is posted on our website at https://www.nisource.com/investors/governance.

The Board has affirmatively determined that, with the exception of Mr. Hamrock, all of the members of the Board and all nominees are “independent directors” as defined in Section 303A.02 of the NYSE Listed Company Manual and meet the additional standard for independence set by the Board.

We have established policies and procedures with respect to the review, approval and ratification of any transactions with related persons.

Under its charter, the Nominating and Governance Committee reviews reports and disclosures of insider and related person transactions. Under our Code of Business Conduct, the following situations may present a conflict of interest and must be reviewed by the Nominating and Governance Committee to determine if they involve a direct or indirect interest of any director, executive officer or employee (including immediate family members) or otherwise present a conflict of interest:

Related person transactions are annually reviewed and, if appropriate, ratified by the Nominating and Governance Committee. Directors, individuals subject to Section 16 (“Section 16 Officer(s)”) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and senior executive officers are expected to raise any potential transactions involving a conflict of interest that relate to them with the Nominating and Governance Committee so that they may be reviewed in a prompt manner.

There were no transactions between the Company and any officer, director or nominee for director, or any affiliate of or person related to any of them, since January 1, 2019, of the type or amount required to be disclosed under the applicable Securities and Exchange Commission (“SEC”) rules.

Stockholders and other interested persons may communicate any concerns they may have regarding the Company as follows:

We are committed to engaging with our stockholders and soliciting their views and input on important governance, environmental, social, executive compensation and other matters. Our Nominating and Governance Committee is responsible for overseeing the stockholder engagement process and the periodic review and assessment of stockholder input on governance matters. Our independent directors are available to engage in dialogue with stockholders on matters of significance in order to understand stockholders’ views. In addition, management regularly participates in investor and industry conferences throughout the year to discuss performance and share its perspective on the Company and industry developments.

We have a Code of Business Conduct to promote: (i) ethical behavior, including the ethical handling of conflicts of interest; (ii) full, fair, accurate, timely and understandable financial disclosure; (iii) compliance with applicable laws, rules and regulations; (iv) accountability for adherence to our code; and (v) prompt internal reporting of violations of our code. Our Code of Business Conduct satisfies applicable SEC and NYSE requirements and applies to all directors, officers (including our principal executive officer, principal financial officer, principal accounting officer and controller), as well as to our employees of and our affiliates. A copy of our Code of Business Conduct is available on our website at https://www.nisource.com/investors/governance and also is available to any stockholder upon written request to our Corporate Secretary at the address noted above under the heading “Communications with the Board and Non-Management Directors.”

Any waiver of our Code of Business Conduct for any director, executive officer or Section 16 officer may be made only by the Audit Committee of the Board and must be promptly disclosed to the extent and in the manner required by the SEC or the NYSE and posted on our website. No such waivers have been granted.

The Nominating and Governance Committee is responsible for annually reviewing and reassessing the Corporate Governance Guidelines and submitting any recommended changes to the Board for its approval. A copy of the Corporate Governance Guidelines can be found on our website at https://www.nisource.com/investors/governance and is also available to any stockholder upon written request to our Corporate Secretary.

Our Corporate Governance Guidelines state that we should remain free to configure leadership of the Board in the way that best serves our interests at the time and, accordingly, the Board has no fixed policy with respect to combining or separating the offices of Chairman and CEO. If the Chairman is not an independent director, an independent Lead Director will be chosen annually by the Board, taking into account the recommendation of the Nominating and Governance Committee. The Chairman or, if the Chairman is not an independent director, the Lead Director will be the presiding director of executive sessions of the Board. To promote open discussion among the non-management directors, the Board schedules regular executive sessions at meetings of the Board and each of its committees.

Since late 2006, the offices of Chairman and CEO of the Company have been held by different individuals, with the Chairman being an independent director.

The duties of the Chairman of the Board are as follows:

The Board periodically reviews the structure and the division of responsibilities between the role of independent Chairman and CEO. The structure and division of responsibilities is intended to maintain the integrity of the oversight function of the Board by providing a separate framework of responsibilities for the independent Chairman as set forth above.

The Board takes an active role in monitoring and assessing our strategic, compliance, operational and financial risks, as well as cybersecurity risks. The Board administers its oversight function through utilization of its various committees. Our Risk Management Committee, which consists of members of our senior management, is responsible for oversight of our risk management process. Senior management regularly provides reports on our risks to the Board, the Audit Committee and the Board committees that oversee the applicable risks. Additionally, the Audit Committee discusses with management and the independent registered public accounting firm the effect of regulatory and accounting initiatives on our financial statements and is responsible

for review and evaluation of our major risk exposures, including cybersecurity and supplier risks, and the steps management has taken to monitor and control such exposures. In addition, the Compensation Committee, the Environmental, Safety and Sustainability (“ESS”) Committee, the Finance Committee and the Nominating and Governance Committee are each charged with overseeing the risks associated with their respective areas of responsibility.

The Board met 19 times during 2019. Each incumbent director attended at least 89% of the total number of meetings of the Board and of the committees of the Board on which he or she served, and in each case, during the periods that he or she served. Pursuant to our Corporate Governance Guidelines, directors are expected to attend all Board meetings, to spend the time needed to discharge their responsibilities as directors, and to attend the annual meeting of stockholders. All then-serving directors attended the 2019 annual meeting of stockholders.

Pursuant to our Corporate Governance Guidelines, the Board expects that our senior officers will regularly attend Board and Committee meetings, present proposals and otherwise assist in the work of the Board. Members of the Board have direct access to all of our employees, outside advisors and independent registered public accounting firm.

The Board has established five standing committees to assist the Board in carrying out its duties: the Audit Committee, the Compensation Committee, the ESS Committee, the Finance Committee and the Nominating and Governance Committee. The Board also established a Search Committee, an ad hoc committee to assist the Nominating and Governance Committee and the Board in identifying qualified director candidates. The Search Committee did not meet during 2019. The Board evaluates the structure and membership of its committees on an annual basis, appoints the independent members of the Board to serve on the committees and elects committee chairs following the annual meeting of stockholders. The following table shows the composition of each standing Board committee as of the date of this proxy statement. Mr. Hamrock does not serve on any committee, but is invited to attend various committee meetings. Mr. Kabat, Chairman of the Board, is invited to attend all meetings of each of the committees.

The summaries below are qualified by reference to the entire charter for each of the Audit, Compensation, ESS, Finance and Nominating and Governance Committees; each of which can be found on our website at https://www.nisource.com/investors/governance and is also available to any stockholder upon written request to our Corporate Secretary. Additionally, any committee may perform other duties and responsibilities, consistent with their respective charters, our Amended and Restated Bylaws (our “Bylaws”), governing law, the rules of the NYSE, the federal securities laws and such other requirements applicable to us, delegated to any committee by the Board, or in the case of the Compensation Committee, under any provision of any of our benefit or compensation plans.

The Audit Committee met nine times in 2019. Our Audit Committee is responsible for the oversight of our internal audit function and financial reporting process. The Audit Committee has the sole authority to appoint, retain or replace our independent registered public accounting firm and is responsible for, among other things:

The Board has determined that all of the members of the Audit Committee are independent as defined under the applicable NYSE and SEC rules, including the additional independence standard for audit committee members, and meet our additional independence standard set forth in our Corporate Governance Guidelines.

For more information regarding the Audit Committee, see “Audit Committee Report,” “Proposal 3 — Ratification of Independent Registered Public Accounting Firm” and “Independent Registered Public Accounting Firm Fees” below.

The Compensation Committee met six times in 2019. The Compensation Committee apprises the Board with respect to the evaluation, compensation and benefits of our executives. Its responsibilities include, among others:

The Compensation Committee has authority to delegate its responsibilities to subcommittees as deemed appropriate, provided the subcommittees are composed entirely of independent directors who also meet the other requirements for membership of the Compensation Committee.

All of the directors serving on the Compensation Committee are: (i) independent as defined under the applicable NYSE and SEC rules and meet the additional independence standard set forth in the Corporate Governance Guidelines and the additional NYSE independence standard for members of compensation committees and (ii) “non-employee directors” as defined under Rule 16b-3 of the Exchange Act. For additional information regarding the Compensation Committee's principles, policies and practices, please see the discussion under “Executive Compensation - Compensation Discussion and Analysis”.

The ESS Committee met five times during 2019. The ESS Committee assists the Board in overseeing the programs, performance and risks relative to environmental, safety and sustainability matters. Its responsibilities include, among others:

The Finance Committee met six times during 2019. Its responsibilities include the following, among others:

The Nominating and Governance Committee met five times in 2019. Its responsibilities include, among others:

The Nominating and Governance Committee, with the assistance of the independent compensation consultant, annually reviews the amount and composition of non-employee director compensation. Please see the discussion under the heading “Director Compensation” for a description of the compensation we provide to our non-employee directors.

Director Selection Process. The Nominating and Governance Committee identifies and screens candidates for director and makes its recommendations for director to the Board. At times the Board may establish an ad hoc search committee to assist the Nominating and Governance Committee in this process. Additionally, the Nominating and Governance Committee has the authority to retain a search firm to help it identify director candidates to the extent it deems necessary or appropriate. The Board established a search committee to assist the Nominating and Governance Committee and the Board in identifying qualified director candidates. The Nominating and Governance Committee has also engaged the firm of Heidrick & Struggles International, Inc., which firm recommended Ms. Hersman for director. In considering candidates for director, the Nominating and Governance Committee considers the skills, expertise, experience and qualifications that will best complement the overall mix of skills and expertise of the Board in view of the strategy of, and the risks and opportunities that we face, as well as each candidate’s relevant business, academic and industry experience, professional background, age, current employment, community service, other board service and other factors. In addition, the Nominating and Governance Committee takes into account the racial, ethnic and gender diversity of the Board and actively seeks minority and female candidates.

The Nominating and Governance Committee seeks to identify and recommend candidates with a reputation for, and record of, integrity and good business judgment who have experience in positions with a high degree of responsibility and are leaders in the organizations with which they are affiliated; are effective in working in complex collegial settings; are free from conflicts of interest that could interfere with a director’s duties to us and our stockholders; and are willing and able to make the necessary commitment of time and attention required for effective service on the Board, including

limiting their service on other boards to a reasonable number. The Nominating and Governance Committee also takes into account the candidate’s level of financial literacy. The Nominating and Governance Committee monitors the mix of skills and experience of the directors in order to assess whether the Board has the necessary tools to perform its oversight function effectively. The Nominating and Governance Committee also assesses the diversity of the Board as a part of its annual self-assessment process as described in more detail below. The Nominating and Governance Committee will consider nominees for directors recommended by stockholders and will use the same criteria to evaluate candidates proposed by stockholders as it uses to evaluate the candidates identified by the Board.

The Board has determined that all of the members of the Nominating and Governance Committee are independent as defined under the applicable NYSE rules and meet the additional independence standard set forth in the Corporate Governance Guidelines.

For information on how to nominate a person for election as a director at the 2021 Annual Meeting, please see the discussion under the heading “Stockholder Proposals and Nominations for 2021 Annual Meeting.”

Board Evaluation Process.  The Nominating and Governance Committee oversees the self-evaluation process, which is used by the Board and by each committee of the Board to determine effectiveness and identify opportunities for improvement. Annually at its meeting in March, the Nominating and Governance Committee initiates the self-evaluation process and approves the form of written evaluation questionnaires that are distributed to each director for completion. The written evaluation questionnaires are updated each year as necessary to reflect changes identified in the prior year, any committee charter changes and any suggestions from the directors. The questionnaires solicit feedback on Board composition, Board meeting mechanics including information received, core responsibilities, relationship with management, committee functioning and other relevant matters. In addition, on an ongoing basis, the Chairman meets with each director individually to solicit feedback with respect to both the full Board and any committee on which the director serves, in addition to individual director performance and Board dynamics. Our Board utilizes the results of these evaluations in making decisions on Board agendas, Board structure, committee responsibilities and agendas, information presented to the Board, and continued service of individual directors on the Board.

No Mandatory Retirement Age or Term Limits. Our Corporate Governance Guidelines set forth that we do not believe that mandatory retirement ages or term limits serve our needs. The Board periodically evaluates the performance and qualifications of individual directors in connection with the nomination process. In addition, although the Nominating and Governance Committee will consider length of service in recommending candidates for re-election, the Board does not believe that adopting a set term limit for directors serves our interests. Such limits may result in the loss of contributions from directors who have been able to develop, over a period of time, increasing insight into our operations and our strategic direction. The Nominating and Governance Committee reviews these policies as part of its annual governance review and will consider modifications to these policies as deemed necessary and in our best interests and the best interests of our stockholders.

purchased on the open market, awards of restricted stock or restricted stock units through the prior Non-Employee Director Stock Incentive Plan or Omnibus Plan, and shares beneficially owned in a trust or by a spouse or other immediate family member residing in the same household. All of the non-employee director nominees are in compliance with the stock ownership guideline or are within the five-year transition period included in the Corporate Governance Guidelines.

Each director has a significant portion of his or her compensation directly aligned with long-term stockholder value. Approximately fifty-nine percent (59%) of a non-employee director’s 2019 annual retainer (valued as of the time of award and excluding committee retainers) consisted of restricted stock units, which are converted into common stock when vested and distributed to the director.

The table below sets forth all compensation earned by or paid to our non-employee directors in 2019. Our CEO did not receive any additional compensation for his service on the Board. His compensation for serving as CEO is discussed in the Executive Compensation section of this Proxy Statement.

This CD&A describes our compensation philosophy and the material elements of our 2019 executive compensation program applicable to the Named Executive Officers.

The Named Executive Officers in 2019 were:

During 2019, we continued to execute on our established infrastructure investment-driven business strategy and remained deeply focused on our top priority- safety. We continue to invest in safety improvements, implement policies and procedures, develop technical training and guidelines for our employees and leverage new tools and technology to improve our maps, records and infrastructure performance. Importantly, we followed through on our commitment to accelerate and enhance our schedule for implementation of a Safety Management System (“SMS”) across all of our operating companies. Key developments during 2019 included:

Our total shareholder return was twelve percent for 2019 and reflected a significant improvement, as compared to 2018, although we underperformed both major utility indices.

During 2019, the Compensation Committee made the following key decisions with respect to 2019 compensation:

The key design priorities of our 2019 executive compensation program were to:

The Compensation Committee believes that our executive compensation program is thoughtfully and effectively constructed to fulfill our compensation objectives and reward effective leadership decisions that create value for our stockholders, customers and other key stakeholders.

We design our executive compensation program to attract, retain and motivate highly-qualified executive talent. We believe highly-qualified executive talent is an essential driver of the successful achievement of our business objectives.

The principal elements of compensation that we provide to our executives, including all of the Named Executive Officers, are: base salary; annual short-term performance-based cash incentives; and long-term performance-based and service-based equity incentive awards. We use short- and long-term performance-based compensation to motivate our executives to meet and exceed our business objectives over both time horizons. To emphasize safety as a priority throughout the organization, safety-related criteria are included as performance goals in both our Annual Performance-Based Cash Incentive Plan and our Customer Value Framework, as described below. We also include service-based equity in the form of service-based restricted stock units (“RSUs”) in order to enhance the attractiveness and talent retention aspects of our executive compensation program.

Our long-term incentive program is denominated entirely in common stock to align the interests of executives with those of our stockholders as the ultimate value of our long-term incentive compensation is determined by the performance of our stock. The principal elements of our 2019 total compensation program, time horizon and design objectives of each element are shown below.

We generally target total compensation (base salary, target annual short-term performance-based cash incentives and target long-term equity incentive awards) to be competitive with the compensation paid to similarly positioned executives at companies within our compensation peer group (the “Comparator Group”) as described in the section entitled “Our Executive Compensation Process - Competitive Market Review.” We do not, however, manage pay to a stipulated percentile of the Comparator Group practices.

When making decisions about our executive compensation program, the Compensation Committee takes into account the stockholders’ view of such matters. In 2019, approximately 97% of the votes cast by our investors were voted in favor of our Say-on-Pay Proposal at our 2019 annual meeting of stockholders. No changes were made to the design of our executive compensation program in response to the 2019 Say-on-Pay vote.

We believe that a significant percentage of total compensation for the Named Executive Officers should consist of variable and at-risk compensation. The Compensation Committee believes the appropriate mix of compensation elements should take into account our financial and strategic objectives, the competitive environment, retentive elements, Company performance, individual performance and responsibilities, and evolving governance practices. Additionally, the Compensation Committee reviews and assesses total Named Executive Officer compensation to evaluate whether we offer well-balanced incentives for senior executives to focus on serving both Company and stockholder interests.

The following charts show the proportion of 2019 target total compensation for our CEO and the other Named Executive Officers payable in fixed compensation (base salary) and variable and at-risk compensation (target annual performance-based cash incentives and the target grant date fair value of the annual long-term performance-based equity incentive awards) formats.

The following table shows 2019 target total compensation and each element of target total compensation for each Named Executive Officer.

Base salary is designed to provide all our employees, including the Named Executive Officers, with a level of fixed pay that is commensurate with the employee’s role and responsibility. We believe that by delivering base salaries that are designed to be reflective of market norms, we are well-positioned to attract, retain and motivate top caliber executives in an increasingly competitive labor environment. The Compensation Committee annually reviews the base salaries of the Named Executive Officers, along with the salaries of all our other senior executives, to evaluate whether they are competitive within our industry. In reviewing the base salaries, the Compensation Committee considers the base salaries of similarly situated executives in the Comparator Group. See the section entitled “Our Executive Compensation Process - Competitive Market Review.”

The Compensation Committee determines any base salary changes for all our senior executives, including the Named Executive Officers, based on a combination of factors that include: competitive pay standards; level of responsibility; experience; internal pay equity considerations; and historical compensation. Additionally, the Compensation Committee considers recommendations from our CEO, Mr. Hamrock, reflecting his assessment of individual Named Executive Officer performance and their contributions to the achievement of business objectives. CEO pay is evaluated separately by the Compensation Committee, taking into account those factors reviewed for all other senior executives other than the recommendation from Mr. Hamrock. The Compensation Committee then provides its recommendation regarding CEO compensation to the independent members of the Board for approval. See the section below entitled “Compensation Committee Actions Related to 2019 Compensation - 2019 Base Salaries” for more information.

The Cash Incentive Plan provides the Named Executive Officers with the opportunity to earn a cash incentive award tied to both Company performance and their individual contributions to our performance. A threshold financial trigger of net operating earnings per share (“NOEPS”) must be met before any award may be paid under the Cash Incentive Plan. Once the financial trigger is met, awards to all of our senior executives, including the Named Executive Officers, are subject to one corporate financial performance goal (weighted 75%) and four operational goals related to key business imperatives of safety and customer care (weighted 25%).

The NOEPS financial performance goal is determined based on the Company’s annual financial plan, which is approved by the Board at the beginning of the year, and is designed to achieve our goal of creating sustainable stockholder value by growing earnings and providing a strong dividend. The safety and customer care goals are designed to incent achievement of key business imperatives. In addition, under the terms of the Omnibus Plan, the Compensation Committee retains discretion to adjust Cash Incentive Plan awards downward, either on a formulaic or discretionary basis, as the Compensation Committee determines to be appropriate to reflect other items of Company or individual performance deemed relevant by the Compensation Committee.

Importantly, eligibility for participation in the Cash Incentive Plan extends to nearly all our employees. Every eligible employee has an incentive opportunity at trigger, target and stretch levels of performance. The Compensation Committee identifies expectations for all employees, including the Named Executive Officers. With respect to the CEO, the Compensation Committee makes recommendations regarding his award opportunities for consideration and approval by the independent members of the Board. See the section below entitled “Compensation Committee Actions Related to 2019 Compensation - 2019 Cash Incentive Plan” for more information regarding the 2019 Cash Incentive Plan, including incentive opportunities, performance measures and weightings, goals and payouts for each of the Named Executive Officers.

LTIP Design Overview. The LTIP provides the Named Executive Officers and our senior executives with the opportunity to earn shares of our stock based on performance and continued service. The 2019 LTIP awards were entirely comprised of equity in the form of PSUs (80% of the 2019 target LTIP award) and RSUs (20% of the 2019 target LTIP award). The PSUs are eligible to vest based on financial performance and progress with respect to several key business imperatives that we believe build stockholder value, subject to the achievement of a threshold cumulative financial trigger. The RSUs will vest after the completion of a multi-year service condition. The 2019 LTIP award program is designed to:

The key LTIP design elements that are intended to drive Company financial and operational performance and align with stockholder interests are shown below.

PSUs. The 2019 PSUs (80% of the 2019 target LTIP award) are eligible for vesting only if a cumulative NOEPS performance trigger is met over a three-year performance period. The NOEPS financial performance goal is determined based on the Company’s annual financial plan, which is approved by the Board at the beginning of the performance period, and is designed to achieve our goal of creating sustainable stockholder value by growing earnings and providing a strong dividend. If the NOEPS performance trigger is achieved, 80% of the target PSUs (65% of the 2019 target LTIP award) will vest based on NOEPS performance above the trigger, as modified by our RTSR performance (which can reduce or increase the vesting level by up to 25%). The Compensation Committee selected cumulative NOEPS as a goal and RTSR as a modifier because it believes it is important that each executive has personal financial exposure to the performance of our stock and, therefore, is aligned with the financial interests of stockholders.

The Compensation Committee determined that because NOEPS continues to be viewed as a core driver of our financial performance and stockholder value creation, this measure remained appropriate for both the short-term and long-term incentive programs. As a result, the Compensation Committee utilized NOEPS as a performance measure in both the 2019 LTIP award and the 2019 Cash Incentive Plan.

The Compensation Committee continued its practice of supplementing the NOEPS measure with additional operational performance measures that we believe build stockholder value in order to strike an appropriate balance with respect to incentivizing earnings growth, non-financial business imperatives and stockholder returns over both the short-term and long-term horizons. If the NOEPS vesting trigger is achieved, the remaining 20% of the target PSUs (15% of the 2019 target LTIP award) will vest based on the Company’s successful execution of the Customer Value Framework, with each category of the Customer Value Framework equally weighted in the determination of this portion of the LTIP Award.

The Customer Value Framework represents important enterprise-wide customer value initiatives, the achievement of which requires the coordinated, cross functional efforts of the Named Executive Officers. We believe these customer value initiatives are key business imperatives that build stockholder value over the long-term. The Compensation Committee utilized NSCBS and JD Power (as defined in the section entitled “2019 Cash Incentive Plan”) as safety and customer care performance measures under the Customer Value Framework portion of the 2019 LTIP in addition to the 2019 Cash Incentive Plan to reflect the significance of these key business imperatives. Additionally, the Compensation Committee tied 2019 LTIP payouts to our performance related to our long-term impact on our employees and the environment by including organizational culture and environmental goals in the Customer Value Framework along with a cost containment measure tied to the conservation of our financial resources, thereby further aligning the 2019 LTIP with the interests of our customers and stockholders.

RSUs. The remaining 20% of the 2019 target LTIP award consists of RSUs that will vest based on the executive’s continued employment through February 28, 2022, subject to earlier vesting for certain qualifying terminations of employment prior to that date. This service-based award is designed to reward long-term service and thereby adds a retention incentive to our compensation mix. Additionally, RSUs are considered by the Compensation Committee to be at-risk and aligned with stockholder interests as the ultimate value of the RSUs will fluctuate based on our stock price performance.

Other Design Considerations. The Compensation Committee believes that the long-term incentive program promotes decision making that is consistent with our long-term business objectives. When establishing long-term equity incentive opportunity levels for our senior executives, including the Named Executive Officers, the Compensation Committee considers, among other things, the executive’s base salary, the appropriate mix of cash and equity incentive opportunities, prior awards under the LTIP and the compensation practices for similarly situated executives both within the Company and our Comparator Group. The actual value of the 2019 LTIP Award, if any, will depend upon Company performance relative to pre-established performance measures and our stock price at the time the awards are settled.

The Named Executive Officers also participate in an executive deferred compensation plan and receive executive severance and change-in-control compensation and benefits, a limited number of perquisites and a number of other employee benefits that generally are extended to our entire employee population. We believe that these other forms of compensation and benefits are generally comparable to those that are provided to similarly situated executives at other companies of our size and thereby serve the objectives of our compensation program to attract and retain our senior executives.

We provide Change-in-Control and Termination Agreements with the intent of ensuring that our senior executives continue to apply thoroughly objective judgment to appropriately safeguard stockholder value and maximize investor return in relation to any potential change-in-control. The Change-in-Control and Termination Agreements provide cash severance benefits upon a double-trigger (meaning there must be both a qualifying change-in-control and termination of employment) and do not include any “gross-up” payments to executives for excise taxes incurred with respect to a change-in-control of the Company. We maintain Change-in-Control and Termination Agreements with each of the Named Executive Officers and all the Named Executive Officers are subject to our executive severance policy.

Additionally, the Omnibus Plan provides for double-trigger vesting for equity awards that are assumed or replaced by an acquiring company upon a change-in-control. In the event equity awards are not assumed or replaced in a change-in-control, then the outstanding equity awards will vest upon the occurrence of a change-in-control alone. For further information regarding the benefits to be received upon termination of employment or change-in-control, see the table in the section entitled “Potential Payments upon Termination of Employment or a Change-in-Control of the Company” and the accompanying narrative.

Perquisites are not a principal element of our executive compensation program. We provide a limited number of perquisites that are intended to assist the Named Executive Officers in the performance of their duties on our behalf or to otherwise provide benefits that have a combined personal and business purpose. Generally, we do not reimburse the Named Executive Officers for the payment of personal income taxes they incur in connection with their receipt of these benefits. For information regarding 2019 perquisites, see the 2019 Summary Compensation Table and footnote (6) to that table.

Eligible executives, including the Named Executive Officers, may elect to defer between 5% and 80% of their base salary and annual cash incentive payout under our Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). The Deferred Compensation Plan provides an opportunity for eligible executives to defer their cash compensation without regard to the limits imposed by the IRS for amounts that may be deferred under our 401(k) Plan. The material terms of the Deferred Compensation Plan are described in the narrative to the 2019 Non-qualified Deferred Compensation Table.

During 2019, we maintained a tax-qualified defined benefit pension plan for nearly all salaried exempt employees hired before January 1, 2010, all non-exempt employees (both non-union and certain union employees) hired before January 1, 2013, as well as for other union employees, regardless of hire date, and a non-qualified defined benefit pension plan (the “Pension Restoration Plan”) for all eligible employees with annual compensation or pension benefits in excess of the limits imposed by the Internal Revenue Service (“IRS”), including any eligible Named Executive Officer. The Pension Restoration Plan provides for a pension benefit under the same formula provided under the tax-qualified plan but without regard to the IRS limits and reduced by amounts paid under the tax-qualified plan. The material terms of the pension programs are described in the narrative to the 2019 Pension Benefits Table.

The Named Executive Officers are eligible to participate in the same tax-qualified 401(k) Plan as most employees and in a non-qualified defined contribution plan (the “Savings Restoration Plan”) maintained for eligible executive employees. The 401(k) Plan includes a Company match that varies depending on the pension plan in which the employee participates and a Company profit sharing contribution for most employees of between 0.5% and 1.5% of the employee’s eligible earnings based on achievement of the overall corporate NOEPS measure. In addition, for salaried employees hired after January 1, 2010, and non-union non-exempt employees hired after January 1, 2013, the 401(k) Plan includes a 3% Company contribution to the employee accounts. The Savings Restoration Plan provides for Company contributions in excess of IRS limits under the 401(k) Plan for eligible employees, including the Named Executive Officers. The material terms of the Savings Restoration Plan are described in the narrative to the 2019 Non-qualified Deferred Compensation Table.

We also provide the Named Executive Officers other broad-based benefits such as medical, dental, life insurance and long-term disability coverage on the same terms and conditions to all employees. We believe that these broad-based benefits enhance our reputation as an employer of choice.

The Compensation Committee is responsible for evaluating and determining the compensation of our senior executives and for overseeing the administration of our equity plans and grants. In doing so, the Compensation Committee takes into account various factors when making compensation decisions, including:

The Compensation Committee reviews the performance and compensation of our CEO and his executive direct reports each year and apprises the Board accordingly. For our CEO, the Compensation Committee evaluates CEO performance in light of our goals and objectives and considers recommendations from the Compensation Committee’s independent compensation consultant, that are reflective of the Compensation Committee’s assessment of our CEO’s performance and compensation competitiveness. Following this evaluation, the Compensation Committee submits its recommendations to the independent members of the Board for review and approval.

When considering changes in compensation for senior executives that report to our CEO, including the Named Executive Officers, the Compensation Committee considers input from the CEO and the Senior Vice President, Chief Human Resources Officer, in addition to the Compensation Committee’s independent compensation consultant.

For 2019, the Compensation Committee engaged the services of Meridian as its independent compensation consultant to advise it with respect to executive compensation design, comparative compensation practices and compensation matters relating to the Board. The Compensation Committee takes recommendations from Meridian into consideration along with its evaluation of the individual performance of each executive officer. In addition, during 2019 and early 2020, Meridian assisted in the evaluation and review of the NiSource Inc. 2020 Omnibus Incentive Plan, which is described in detail in Proposal 4.

Each year, the Compensation Committee evaluates the independence and quality of the services provided by its independent compensation consultant. In reviewing Meridian’s engagement for 2019, the Compensation Committee considered the factors set forth in SEC Rule 10C-1(b)(4) and the applicable NYSE rules and determined that Meridian was independent.

In connection with its compensation decision making, the Compensation Committee reviews the executive compensation practices in effect at other companies in the Comparator Group. These companies comprised leading gas, electric, and multi-line utilities that were selected by the Compensation Committee for their operational comparability and because we generally compete with these companies for similar executive talent. For 2019, the Compensation Committee, with input from Meridian, added Avista Corporation, Black Hills Corporation, New Jersey Resources Corporation and Southwest Gas Holdings, Inc. to the Comparator Group to continue to align us with operationally similar companies. Additionally, due to their acquisitions, the Compensation Committee removed Piedmont Natural Gas Company, Inc., SCANA Corporation and WGL Holdings from the Comparator Group for 2019. For purposes of evaluating 2019 compensation practices, the Comparator Group included the companies shown below.

The Compensation Committee reviewed and, as appropriate, took action with respect to each element of total compensation for each Named Executive Officer following the principles, practices and processes described above. The Compensation Committee’s compensation determinations and recommendations were based primarily upon recognition of the roles, responsibilities and performance of each Named Executive Officer, a review of the Comparator Group and an assessment of total Named Executive Officer compensation.

The Compensation Committee annually reviews the base salaries of the Named Executive Officers, and all our senior executives, to evaluate whether they are competitive and appropriately reflect performance. In setting 2019 base salary levels, the Compensation Committee considered competitive market data, the competitiveness of the annual total target compensation of each Named Executive Officer, responsibilities, experience, internal pay equity, historical compensation practices, individual performance and contributions to achievement of business objectives. Based on this assessment, the Compensation Committee (or, in the case of our CEO, the independent members of the Board) approved 2019 base salary levels, effective June 1, 2019. The Compensation Committee did not recommend a 2019 base salary increase for our CEO, noting that his cash compensation was deemed to be appropriately aligned with the competitive market. With respect to Mr. Vegas, the Compensation Committee approved an increase of approximately 14.3%, taking into account (i) his effective performance in core aspects of his role as Executive Vice President, Gas Utilities, (ii) his successful assumption of additional duties during 2018, and (iii) the need for further alignment of his cash compensation with the competitive market. Below are the 2019 and 2018 annual base salary levels for each Named Executive Officer.

In January 2019, the Compensation Committee established performance measures and goals to be used to determine the 2019 Cash Incentive Plan payouts for the Named Executive Officers and all of our other participating employees. In addition, the Compensation Committee set each Named Executive Officer’s Cash Incentive Plan trigger, target and stretch opportunities taking into account the following factors: competitive market practice of the Comparator Group, input from Meridian, historical payouts and individual performance. Based on this assessment, the Compensation Committee made no changes to the Cash Incentive Plan opportunities for the Named Executive Officers.

The 2019 Cash Incentive Plan awards for the Named Executive Officers, and all our senior executives, were subject to achievement of one corporate financial goal, NOEPS, and four operational goals related to customer care and safety, as detailed in the table below. The Compensation Committee approved these measures for the annual performance period because they were deemed important to our success in increasing stockholder value. The incentive opportunities for the Named Executive Officers were contingent on achievement of goals relating to these measures.

The 2019 performance measures, performance goals, associated weighting of each performance measure, and formulaic results as a percentage of the target Cash Incentive Plan opportunity are shown below.

The 2019 Cash Incentive Plan opportunities and actual payout amounts as approved by the Compensation Committee (and with respect to the CEO, by the independent members of the Board) are shown below.

In January 2019, the Compensation Committee approved a grant of PSUs to our senior executives including each of the Named Executive Officers. For 2019, the Compensation Committee retained the design used for the 2018 LTIP awards, except it eliminated the discretionary assessment of individual performance included in 2018 LTIP with respect to 20% of the target PSUs (15% of the LTIP award) that were tied to key business imperatives. In doing so, the Compensation Committee increased the emphasis on the achievement of certain key business imperatives, tying payout to their achievement regardless of individual considerations and contingent on our financial performance, thus seeking to further align incentive payouts with stockholder interests. Consistent with the philosophy and principles articulated above, the Compensation Committee believes that the 2019 LTIP awards:

In determining the 2019 LTIP award values awarded to the Named Executive Officers and all our senior executives in January 2019, the Compensation Committee considered the competitive pay practices of our Comparator Group, input from Meridian, the historical mix of fixed compensation versus variable incentive compensation, internal pay equity and the expectations of the executive’s role in driving our strategic and financial objectives and individual performance. Based on this assessment, the Compensation Committee (or, in the case of our CEO, the independent members of the Board) approved the 2019 LTIP award values for each Named Executive Officer.

All our Named Executive Officers received increased 2019 LTIP award values except for our CEO. The Compensation Committee did not recommend an increase for 2019, noting that the CEO’s 2018 LTIP value and total CEO compensation was deemed appropriate and market competitive. In the case of Messrs. Brown and Vegas and Ms. Hightman, in considering increases from their 2018 award values, the Compensation Committee noted their successful assumption of additional duties, in addition to consistent strong performance in 2018, sustained leadership in each executive's role in driving our strategic and financial objectives, historical award levels and the market competiveness of their total compensation. The 2019 and 2018 LTIP award values for each Named Executive Officer are shown below.

The 2019 LTIP award values shown above were granted in the form of PSUs (80% of the 2019 LTIP award) and in the form of RSUs (20% of the 2019 LTIP award) as shown below. Vesting of the 2019 PSUs is dependent on our meeting certain financial performance measures over the 2019-2021 performance period (the “performance period”) and the executive’s continued employment through February 28, 2022. Vesting of the RSUs is dependent on the executive’s continued employment through February 28, 2022. Special vesting rules apply to both the PSUs and RSUs in the event of death, “Retirement,” “Disability” or a “Change-in-Control” (each as defined in the Omnibus Plan). Termination for any other reason prior to February 28, 2022, will result in forfeiture of the entire 2019 LTIP award.

The 2019 LTIP awards to Named Executive Officers are shown below.

2019 PSUs. All of the 2019 PSUs are subject to the achievement of a cumulative NOEPS trigger (calculated as detailed earlier under 2019 Cash Incentive Plan) in order for any vesting to occur. If the NOEPS trigger is achieved, 80% of the target PSUs (65% of the 2019 LTIP award) will vest based on NOEPS performance above the trigger, as modified by our RTSR performance (which can reduce or increase the vesting level of the award by up to 25%). The remaining 20% of the target PSUs (15% of the 2019 LTIP award) will vest based on the achievement of the Customer Value Framework (as described in the section entitled “Long Term Incentive Program-PSUs”). Vesting of the entire PSU portion of the 2019 LTIP award is subject to the executive’s continued employment through February 28, 2022. Termination for any reason other than death, “Retirement,” “Disability” or a “Change-in-Control” (each as defined in the Omnibus Plan) prior to February 28, 2022, will result in forfeiture of the entire 2019 LTIP award.

The Compensation Committee approved the use of cumulative NOEPS as the primary performance goal in the 2019 LTIP program design to tie a substantial percentage of the PSUs to the achievement of a key financial goal while measuring and rewarding relative performance with the use of the RTSR modifier. The Compensation Committee believes that this design enhances pay for performance transparency as payouts are directly linked to the Company’s absolute performance while retaining a relative performance element. As noted above, the NOEPS goal was established after considering our annual financial plan at the beginning of the performance period and was designed to be achievable with strong management performance over the three-year performance period.

Additionally, the Compensation Committee approved the vesting of a portion of the 2019 PSUs (15% of the 2019 LTIP award and 20% of the target PSU component) based the successful execution of the Customer Value Framework over the three-year performance period. In so doing, the Compensation Committee supplemented the financial measures that incentivize earnings strength with execution-focused transparency to strike an appropriate balance over the long-term. The Customer Value Framework is designed to be achievable overall, with each respective category weighted equally in the vesting determination. The Customer Value Framework is based on key business imperatives that align with enterprise-wide initiatives relating to safety, customer care, cost containment, organizational culture and environmental impact.

The measures and goals pertaining to the 2019 PSUs are shown below.

2019 RSUs. As discussed above, a portion of the 2019 LTIP award (20%) was granted in the form of RSUs in order to reward long-term service and retain executives over a multi-year service period. While the RSUs vest based on the executive’s continued service, the Compensation Committee views RSUs to be at-risk compensation because the ultimate value of the RSUs will fluctuate based on our stock price performance. The RSUs granted in January 2019 will vest after the completion of a three-year service period and the executive’s continued employment through February 28, 2022, subject to earlier vesting in the event of death, “Retirement,” “Disability” or a “Change-in-Control” (each as defined in the Omnibus Plan) prior to February 28, 2022.

2017 Performance Share Awards. In 2017, the Compensation Committee (and, in the case of the CEO, the independent members of the Board) approved grants of performance share awards to the Named Executive Officers. Vesting of the 2017 grants of performance share awards was dependent on our achievement relative to certain performance goals over the 2017-2019 performance period. The performance measures related to cumulative NOEPS and RTSR. Based on our performance during the three-year performance period beginning January 1, 2017, and ending December 31, 2019, 100% of the 2017 performance share awards vested as described below.

The performance measures, their weightings and results, as certified by the Compensation Committee, are shown below.

Vesting of the 2017 performance share awards remained subject to the executive’s continued employment through February 28, 2020. Thereafter, the 2017 performance shares fully vested and were paid to each Named Executive Officer one-for-one in shares of our common stock, as shown below.

Senior executives, including the Named Executive Officers, are generally expected to satisfy their applicable ownership guideline within five years of becoming subject to the guidelines provided below. Once the senior executive satisfies the applicable guideline, he or she must continue to own a sufficient number of shares to remain in compliance with the guideline. Until such time as the senior executive satisfies the applicable stock ownership guideline, the executive is required to hold at least 50% of the shares of common stock received upon the vesting of RSUs, PSUs and performance shares or the exercise of stock options. At the end of 2019, all of the Named Executive Officers exceeded the applicable ownership guideline.

We maintain various guidelines and policies including: