Table of Contents
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-K/A
Amendment No. 1
|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2020
or
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
to
Commission file number
1-10934
ENBRIDGE INC.
(Exact Name of Registrant as Specified in Its Charter)
|
Canada
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98-0377957
|
|
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
200, 425 - 1st Street S.W.
Calgary, Alberta, Canada T2P 3L8
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code (403)
231-3900
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
|
Trading
Symbol(s)
|
|
Name of each exchange
on which registered
|
|
Common Shares
|
|
ENB
|
|
New York Stock Exchange
|
|
6.375%
Fixed-to-Floating
Subordinated Notes Series 2018-B due 2078
|
|
ENBA
|
|
New York Stock Exchange
|
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
☒
No
☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
☐
No
☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act.
| Large Accelerated Filer |
☒
|
Accelerated Filer |
☐
|
|||
|
Non-Accelerated
Filer
|
☐
|
Smaller reporting company |
☐
|
|||
| Emerging growth company |
☐
|
|||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act). Yes
☐
No
☒
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes
☒
No
☐
The aggregate market value of the registrant’s common shares held by
non-affiliates
computed by reference to the price at which the common equity was last sold on June 30, 2020, was approximately US$59.2 billion.
As at February 5, 2021, the registrant had 2,025,495,603 common shares outstanding.
EXPLANATORY NOTE
Enbridge Inc., a corporation existing under the
, qualifies as a foreign private issuer in the United States for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Although, as a foreign private issuer, Enbridge Inc. is not required to do so, Enbridge Inc. currently files annual reports on Form
Canada Business Corporations Act
10-K,
quarterly reports on Form
10-Q,
and current reports on Form
8-K
with the Securities and Exchange Commission (“SEC”) instead of filing the reporting forms available to foreign private issuers. Enbridge Inc. prepares and files a management proxy circular and related material under Canadian requirements. As Enbridge Inc.’s management proxy circular is not filed pursuant to Regulation 14A, Enbridge Inc. may not incorporate by reference information required by Part III of its Form
10-K
from its management proxy circular.
Enbridge Inc. filed its Annual Report on Form
10-K
for the fiscal year ended December 31, 2020 (the “Original Filing”) on February 12, 2021. In reliance upon and as permitted by Instruction G(3) to Form
10-K,
Enbridge Inc. is filing this Amendment No. 1 on Form
10-K/A
in order to include in the Original Filing the Part III information not previously included in the Original Filing.
Except as stated herein, no other changes have been made to the Original Filing. The Original Filing continues to speak as of the date of the Original Filing, and, other than the information provided in Parts III and IV hereof, we have not updated the disclosures contained in the Original Filing to reflect any events which occurred at a date subsequent to the filing of the Original Filing.
In this Amendment No. 1 on Form
10-K/A,
the terms “Enbridge,” “we,” “our” and “company” mean Enbridge Inc. “Board of Directors” or “Board” means the Board of Directors of Enbridge. “Enbridge shares” or “common shares” mean common shares of Enbridge. All dollar amounts are in Canadian dollars (“C$” or “$”) unless stated otherwise. US$ means United States of America (“U.S.”) dollars.
All references to our websites and to our Canadian management proxy circular, dated March 2, 2021 and filed with the SEC on March 8, 2021 as Exhibit 99.1 to our Current Report on Form
8-K
(the “Circular”) contained herein do not constitute incorporation by reference of information contained on such websites and the Circular and such information should not be considered part of this document.
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Page
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Item 10.
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4 | |||||
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Item 11.
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17 | |||||
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Item 12.
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66 | |||||
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Item 13.
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67 | |||||
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Item 14.
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68 | |||||
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Item 15.
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69 | |||||
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Item 16.
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69 | |||||
| 70 | ||||||
| 71 | ||||||
3
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS OF REGISTRANT
Director profiles
Shareholders elect directors to the Board for a term of one year, expiring at the end of the next annual meeting. The profiles that follow provide information about the nominated directors, including their backgrounds, experience, current directorships, Enbridge securities held and the Board committees they sit on. Additional information regarding skills and experience of our directors can be found beginning on page 15.
4
5
|
Susan M. Cunningham
Age 65
Houston, Texas, USA
Independent
Director since
February 13, 2019
Latest date of retirement
May 2031
2020 annual meeting votes for: 97.37%
|
|
Ms. Cunningham has been an Advisor for Darcy Partners (consulting firm) since 2017. From 2014 to 2017, Ms. Cunningham was Executive Vice President, EHSR (Environment, Health, Safety, Regulatory) and New Frontiers (global exploration, new ventures, geoscience and business innovation) at Noble Energy, Inc. From 2001 to 2013, she held various senior management roles with Noble Energy, Inc. Prior thereto, Ms. Cunningham held positions with Texaco U.S.A., Statoil Energy, Inc. and Amoco Corporation. Ms. Cunningham holds a BA in Geology and Geography from McMaster University and is a graduate of Rice University’s Executive Management Program. She was also Chairman of the OTC (Offshore Technology Conference) from 2010 to 2011.
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|||||||||||||||
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Enbridge Board/Board committee memberships
|
2020 meeting
attendance
1
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|||||||||||||||||
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Board of Directors
|
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6 out of 6
|
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100%
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|||||||||||||
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Corporate Social Responsibility (Chair)
8
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2 out of 2
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100%
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|||||||||||||
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Human Resources & Compensation
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4 out of 4
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100%
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|||||||||||||
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Safety & Reliability
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4 out of 4
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100%
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|||||||||||||
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Total
|
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16 out of 16
|
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100%
|
|
|||||||||||||
|
Enbridge securities held
3
|
||||||||||||||||||
|
|
Enbridge
shares |
DSUs
4
|
Total market value of
Enbridge shares & DSUs
5
|
Minimum
required
6
|
||||||||||||||
|
|
2,581
|
|
|
7,827
|
|
$460,564
|
|
$925,880
|
|
|||||||||
|
Other board/board committee memberships
7
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||||||||||||||||||
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Public
7
|
||||||||||||||||||
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Oil Search Limited
(public oil and gas exploration and production)
|
|
Director
Member, audit and financial risk committee, sustainability committee and project and technology committee
|
|
|||||||||||||||
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Whiting Petroleum Corporation
(public oil and gas exploration and production)
|
|
Director
Chair, ESG committee
Member, audit committee
|
|
|||||||||||||||
|
Gregory L. Ebel
Age 56
Houston, Texas, USA
Independent
Director since
February 27, 2017
Latest date of retirement
May 2039
2020 annual meeting votes for: 91.77%
|
|
Mr. Ebel served as Chairman, President and Chief Executive Officer of Spectra Energy Corp (“Spectra Energy”) from January 1, 2009 to February 27, 2017 at which time he became a Director of Enbridge and Chair of the Enbridge Board. Prior to that time, Mr. Ebel served as Spectra Energy’s Group Executive and Chief Financial Officer beginning in January 2007. He served as President of Union Gas Limited from January 2005 until January 2007, and Vice President, Investor & Shareholder Relations of Duke Energy Corporation from November 2002 until January 2005. Mr. Ebel joined Duke Energy in March 2002 as Managing Director of Mergers and Acquisitions in connection with Duke Energy’s acquisition of Westcoast Energy Inc. Mr. Ebel holds a BA (Bachelor of Arts, Honours) from York University and is a graduate of the Advanced Management Program at the Harvard Business School.
|
|
|||||||||||||||||||
|
Enbridge Board/Board committee memberships
9
|
2020 meeting
attendance
1
|
|||||||||||||||||||||
|
Board of Directors (Chair)
|
|
6 out of 6
|
|
100%
|
|
|||||||||||||||||
|
Total
|
|
6 out of 6
|
|
100%
|
|
|||||||||||||||||
|
Enbridge securities held
3
|
||||||||||||||||||||||
|
|
Enbridge
shares |
DSUs
4
|
Stock
Options
10
|
Total market value of
Enbridge shares & DSUs
(excluding stock options)
5
|
Minimum
required
6
|
|||||||||||||||||
|
|
651,845
|
|
|
32,217
|
|
|
405,408
|
|
$30,269,732
|
|
$925,880
|
|
||||||||||
|
Other board/board committee memberships
7
|
||||||||||||||||||||||
|
Public
7
|
||||||||||||||||||||||
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The Mosaic Company
(public producer and marketer of concentrated phosphate and potash)
|
|
Chair of the Board
Member, audit committee and corporate governance and nominating committee
|
|
|||||||||||||||||||
|
Baker Hughes Company
(public supplier of oilfield services and products)
|
|
Director
Chair, audit committee
Member, governance and corporate responsibility committee
|
|
|||||||||||||||||||
|
Former
U.S.-listed
company directorships (last 5 years)
|
||||||||||||||||||||||
|
Spectra Energy Corp
|
|
|
||||||||||||||||||||
7
9
10
11
12
|
1
|
Percentages are rounded to the nearest whole number.
|
|
2
|
Ms. Carter was appointed to the Human Resources & Compensation Committee on May 4, 2020.
|
|
3
|
Information about beneficial ownership and about securities controlled or directed was provided by the director nominees and is as at March 2, 2021.
|
|
4
|
DSUs refer to deferred share units and are defined on page 59 of this Amendment No. 1 on Form 10-K/A.
|
|
5
|
Total market value = number of common shares or deferred share units × closing price of Enbridge shares on the TSX on March 2, 2021 of $44.25, rounded to the nearest dollar.
|
|
6
|
Directors must hold at least three times their annual US$242,250 Board retainer in DSUs or Enbridge shares within five years of becoming a director on our Board. Amounts are converted to C$ using US$1 = C$1.2740, the published WM/Reuters 4 pm London exchange rate for December 31, 2020. All director nominees meet or exceed this requirement except Mses. Madden and Cunningham, who have until February 12, 2024 and February 13, 2024, respectively, Mr. Goff, who has until February 11, 2025, and Mr. Poloz, who has until June 4, 2025, to meet this requirement.
|
|
7
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Public
Private
Not
-for
-profit
|
|
8
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Ms. Cunningham was appointed to the Corporate Social Responsibility Committee on May 4, 2020.
|
|
9
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Mr. Ebel is not a member of any Board committee, but as Chair of the Board he attends their meetings.
|
|
10
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Mr. Ebel’s stock options were Spectra Energy options that converted into options to purchase Enbridge shares upon the closing of the Merger Transaction (as defined on page 67). No new Enbridge stock options were granted to Mr. Ebel in his capacity as a Director of Enbridge or Chair of the Enbridge Board.
|
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11
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Mr. England was appointed to the Corporate Social Responsibility Committee on May 4, 2020.
|
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12
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Mr. Goff was appointed to the Governance Committee and the Human Resources & Compensation Committee on May 4, 2020.
|
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13
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Ms. Kempston Darkes ceased being a member of the Corporate Social Responsibility Committee on May 4, 2020.
|
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14
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Ms. Kempston Darkes is not standing for re-election to the Canadian National Railway Company board and will retire from that board in April 2021.
|
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15
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Mr. Monaco is not a member of any Board committee, but as President & CEO he attends their meetings at the request of such committees.
|
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16
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As President & CEO, Mr. Monaco is required to hold Enbridge shares equal to six times his base salary (see page 44). Mr. Monaco is not required to hold Enbridge shares as a director.
|
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17
|
Mr. Poloz was appointed to the Board on June 4, 2020. He was appointed to Audit, Finance & Risk Committee and the Safety & Reliability Committee on July 22, 2020.
|
13
Director independence
|
Name
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Independent
|
Not independent
|
Reason for non-independence
|
|||||||
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Gregory L. Ebel (Chair)
|
✓
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|||
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Pamela L. Carter
|
✓
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|||
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Marcel R. Coutu
|
✓
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Susan M. Cunningham
|
✓
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J. Herb England
|
✓
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Gregory J. Goff
|
✓
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V. Maureen Kempston Darkes
|
✓
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Teresa S. Madden
|
✓
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Al Monaco (President & CEO)
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✓
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President & CEO of the company
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Stephen S. Poloz
|
✓
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|||
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Dan. C. Tutcher
|
✓
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|||
Current Board committee participation
|
Director
|
Audit,
Finance & Risk Committee |
Corporate
Social Responsibility Committee |
Governance
Committee |
Human
Resources & Compensation Committee |
Safety &
Reliability Committee |
|||||||||||||||
|
Not Independent
|
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|||||
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Al Monaco
1
(President & CEO)
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|||||
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Independent
|
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|||||
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Pamela L. Carter
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|
✓
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chair
|
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|
✓
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|||||
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Marcel R. Coutu
2
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✓
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✓
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|||||
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Susan M. Cunningham
3
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chair
|
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✓
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✓
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|
|||||
|
Gregory L. Ebel
1
(Chair)
|
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|||||
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J. Herb England
2
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✓
|
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✓
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✓
|
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|||||
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Gregory J. Goff
|
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✓
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|
✓
|
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|||||
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V. Maureen Kempston Darkes
4
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chair
|
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✓
|
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|||||
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Teresa S. Madden
2, 5
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chair
|
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✓
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|||||
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Stephen S. Poloz
|
|
✓
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✓
|
|
|||||
|
Dan C. Tutcher
6
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✓
|
|
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|
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|
chair
|
|
|||||
|
1
|
Messrs. Monaco and Ebel are not members of any of the committees of the Board. They attend committee meetings in their capacities as President & CEO and Chair of the Board, respectively.
|
|
2
|
Ms. Madden and Messrs. Coutu and England each qualify as an audit committee financial expert, as defined under the
U.S. Securities Exchange Act of 1934
52-110
–
Audit Committees
|
|
3
|
Ms. Cunningham was appointed as Chair of the Corporate Social Responsibility Committee on May 4, 2020.
|
|
4
|
Ms. Kempston Darkes was appointed as Chair of the Human Resources & Compensation Committee on May 4, 2020.
|
|
5
|
Ms. Madden was appointed Chair of the Audit, Finance & Risk Committee on May 4, 2020.
|
|
6
|
Mr. Tutcher was appointed Chair of the Safety & Reliability Committee on July 22, 2020.
|
14
Mix of skills and experience
We maintain a skills and experience matrix for our directors in areas we think are important for a corporation like ours. We use this skills matrix to annually assess our Board composition and in the recruitment of new directors. The table below indicates each director’s skills and experience in the areas indicated based on a self-assessment by each director.
|
Area
|
Carter
|
Coutu
|
Cunningham
|
Ebel
|
England
|
Goff
|
Kempston
Darkes
|
Madden
|
Monaco
|
Poloz
|
Tutcher
|
|||||||||||
|
Managing and Leading Strategy and Growth
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||
|
International
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||
|
CEO / CFO / Executive Officer
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||
|
Governance / Board
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||
|
Operations (Oil & Gas / Energy)
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
—
|
✓
|
|||||||||||
|
Risk Oversight / Management
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||
|
Corporate Social Responsibility & Sustainability
|
✓
|
—
|
✓
|
✓
|
—
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||
|
Energy Marketing
|
—
|
✓
|
—
|
✓
|
—
|
✓
|
✓
|
✓
|
✓
|
—
|
✓
|
|||||||||||
|
Human Resources / Compensation
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
—
|
✓
|
|||||||||||
|
Investment Banking / Mergers and Acquisitions
|
✓
|
✓
|
—
|
✓
|
✓
|
✓
|
—
|
✓
|
✓
|
—
|
✓
|
|||||||||||
|
Financial Literacy
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||
|
Information Technology
|
✓
|
✓
|
—
|
✓
|
—
|
✓
|
—
|
✓
|
✓
|
—
|
—
|
|||||||||||
|
Health, Safety & Environment
|
✓
|
✓
|
✓
|
✓
|
—
|
✓
|
✓
|
✓
|
✓
|
—
|
✓
|
|||||||||||
|
Public Policy and Government and Stakeholder Relations
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
|||||||||||
|
Emerging Sectors / Growth Opportunities
|
✓
|
✓
|
—
|
✓
|
✓
|
✓
|
✓
|
✓
|
✓
|
—
|
✓
|
|||||||||||
15
EXECUTIVE OFFICERS OF REGISTRANT
The information regarding executive officers is included in
of the Original Filing.
Part I.
Item 1. Business - Executive Officers
CORPORATE GOVERNANCE
Enbridge is a “foreign private issuer” pursuant to applicable U.S. securities laws. Accordingly, Enbridge is permitted to follow home country practice instead of certain governance requirements set out in the New York Stock Exchange (the “NYSE”) rules, provided we disclose any significant differences between our governance practices and those required by the NYSE. Further information regarding those differences is available on our website (www.enbridge.com).
We have a comprehensive system of stewardship and accountability that meets applicable Canadian and U.S. requirements, including:
|
•
|
Canadian Securities Administrators National Policy
58-201 –
Corporate Governance Guidelines
58-101
– Disclosure of Corporate Governance Practices
52-110
–
Audit Committees
|
|
•
|
requirements of the CBCA; and
|
|
•
|
the corporate governance guidelines of the NYSE.
|
STATEMENT ON BUSINESS CONDUCT
Our Statement on Business Conduct (available on our website at www.enbridge.com) is our formal statement of expectations that applies to all individuals at Enbridge and our subsidiaries, including our directors, officers, employees, contingent workers as well as consultants and contractors retained by Enbridge. It discusses what we expect in various areas including:
|
•
|
complying with the law, applicable rules and all policies;
|
|
•
|
avoiding conflicts of interest, including examples of acceptable forms of gifts and entertainment;
|
|
•
|
anti-corruption and money laundering;
|
|
•
|
acquiring, using and maintaining assets (including computers and communication devices) appropriately;
|
|
•
|
data privacy, records management, and proprietary, confidential and insider information;
|
|
•
|
protecting health, safety and the environment;
|
|
•
|
interacting with landowners, customers, shareholders, employees and others; and
|
|
•
|
respectful workplace/no harassment.
|
The Board approved a revised Statement on Business Conduct in 2017, which became effective on September 29, 2017.
On the commencement of employment with Enbridge and annually thereafter, all Enbridge employees and contingent workers active in the company’s human resources information system are required to complete Statement on Business Conduct training and certify compliance with the Statement on Business Conduct. In addition, employees and contingent workers are also required to disclose any actual or potential conflicts of interest.
Directors must also certify their compliance with the Statement on Business Conduct on an annual basis.
During January 2021, all employees and contingent workers active in the company’s human resources information system were required to complete online Statement on Business Conduct training, certify their compliance and declare any real or potential conflicts of interest. As of the date of the Circular, approximately 99.2% of these Enbridge employees and contingent workers had certified compliance with the Statement on Business Conduct for the year ended December 31, 2020. All 11 current directors on the Board have also certified their compliance with the Statement on Business Conduct for the year ended December 31, 2020.
AUDIT, FINANCE & RISK COMMITTEE
The Audit, Finance & Risk Committee fulfills public company audit committee obligations and assists the Board with oversight of: the integrity of the company’s financial statements; the company’s compliance with legal and regulatory requirements; the independent auditor’s qualifications and independence; and the performance of the company’s internal audit function and external auditors. The committee also assists the Board with the company’s risk identification, assessment and management program.
Financial literacy
The Board defines an individual as financially literate if he or she can read and understand financial statements that are generally comparable to ours in breadth and complexity of issues. The Board has determined that all of the members of the Audit, Finance & Risk Committee are financially literate according to the meaning of NI
52-110
and the rules of the NYSE. It has also determined that Ms. Madden and Messrs. Coutu and England each qualify as “audit committee financial experts” as defined by the Exchange Act. The Board bases this determination on each director’s education, skills and experience.
16
ITEM 11. EXECUTIVE COMPENSATION
As a foreign private issuer in the United States, we are deemed to comply with this Item if we provide information required by Items 6.B and 6.E.2 of Form
20-F,
with more detailed information provided if otherwise made publicly available or required to be disclosed in Canada. We have provided information required by Items 6.B and 6.E.2 of Form
20-F
in the Circular. As a foreign private issuer in the United States we are not required to disclose executive compensation according to the requirements of Regulation
S-K
that apply to U.S. domestic issuers, and we are not otherwise required to adhere to the U.S. requirements relative to certain other proxy disclosures and requirements. Our executive compensation disclosure complies with Canadian requirements, which are, in many respects, substantially similar to U.S. rules.
Compensation committee interlocks and insider participation
The table below sets out the board interlocks in 2020. The Board has determined that the board interlocks set out below do not impair the ability of these directors to exercise independent judgment as members of our Board.
|
Name
|
Serve together on this board of a
public company |
Serve on these committees
|
||
|
Marcel R. Coutu
|
Brookfield Asset Management Inc.
|
Chair, audit committee
Member, management resources and compensation committee
|
||
|
V. Maureen Kempston Darkes
|
Chair, risk management committee
Member, management resources and compensation committee
|
|||
17
Compensation discussion and analysis
|
1
|
Mr. Whelen retired effective November 15, 2020.
|
|
19
|
||
|
21
|
||
|
22
|
||
|
23
|
||
|
24
|
||
|
24
|
||
|
25
|
||
|
27
|
||
|
33
|
||
|
33
|
||
|
38
|
||
|
38
|
||
|
40
|
||
|
40
|
||
|
42
|
||
|
43
|
||
|
45
|
||
18
Executive summary
Strategic focus
Our 2020 Strategic Plan continued to emphasize disciplined organic growth of our four blue chip franchises: Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage and Renewable Power Generation. Our strategic priorities are focused on driving growth through the enhancement of existing asset returns, along with prudent investment in new
in-franchise
and capital efficient organic growth projects that fit our low risk pipeline-utility model. At the foundation of our strategic plan is a continued focus on the safe and reliable transportation of energy to end use markets, which is always our number one priority.
We delivered strong results driven by solid operating performance across the entire asset base despite the unprecedented impact of
COVID-19,
demonstrating the resiliency of cashflows associated with Enbridge’s
low-risk
business model.
Compensation philosophy
Our executive compensation design is grounded in a
philosophy. Accordingly, base salary is the sole fixed source of our NEOs’ total direct compensation and variable compensation amounts earned by our NEOs are strongly aligned to the achievement of Enbridge’s strategic priorities. Compensation is targeted at median within the markets where Enbridge competes, with performance driving “at risk” incentive payouts up or down accordingly. The vast majority of executive compensation is considered “at risk” because its value is based on specific performance criteria and/or share price and payout is not guaranteed.
pay-for-performance
Exemplifying our values
Enbridge’s overall response to the pandemic exemplified our values and focus on our people, the communities in which we operate and our shareholders.
The
COVID-19
crisis has taken an unprecedented human and economic toll. As a company that employs thousands of people across hundreds of communities, and that safely delivers affordable, reliable energy that fuels quality of life for millions, we take our responsibility to be resilient in the service of our shareholders seriously.
From the outset of the pandemic, Enbridge’s priority has been to protect its employees, their families and communities, while continuing to safely operate essential infrastructure that delivers the energy people rely on every day.
Management acted swiftly and with compassion to support our employees. This included immediately implementing a work-from-home policy wherever possible and new safety protocols to protect our people, keeping our systems running safely and maintaining work on critical projects. Our emergency childcare benefit was doubled, our compassionate care benefits were enhanced, and our mental health program was significantly expanded to ensure our people had the support they needed to cope with balancing personal and work responsibilities.
Performance highlights for 2020
|
Priorities
|
Actions
|
|||
|
1
|
Delivered distributable cash flow (“DCF”) and dividend growth
|
• Strong financial and operating performance
• Delivered $4.67 DCF per share
1
, above the midpoint of the 2020 guidance range
• Increased dividend for the 25th consecutive year
• Achieved $300 million of cost savings
|
||
|
2
|
Advanced and extended secured growth program
|
• Completed $1.6 billion of secured growth projects in 2020
• Added $5 billion of planned gas pipeline modernization and utility growth capital projects to secured growth inventory through 2023
• Reached final investment decisions on 500 MW Fécamp offshore wind farm
• Completed construction of the U.S. portion of Line 3 Replacement Program in North Dakota and commenced construction on the final segment in Minnesota
• Advanced development and construction on $16 billion of capital to be placed into service between 2021 and 2023
|
||
|
3
|
Maintained balance sheet strength and flexibility
|
• Exited 2020 with 4.6x
Debt-to-EBITDA
• Maintained industry-leading investment grade credit ratings
• Added $3 billion of available liquidity
• Sold $400 million in assets, further strengthening financial flexibility
|
||
|
4
|
Advanced strategic priorities
|
• Advanced Mainline Contracting offering process with the Canada Energy Regulator
• Completed rate proceedings on Texas Eastern, Algonquin and B.C. Pipeline systems
• Realized synergy capture within Gas Distribution and Storage
|
||
|
1
|
DCF per share is a
non-GAAP
measure; this measure is defined and reconciled in Item 11 –
“Non-GAAP
reconciliation”.
|
19
Compensation highlights for 2020
The following table shows annual base salary increases, voluntary base salary reductions and awards under the short-, medium- and long-term incentive plans for the NEOs, in each case as a percentage of base salary:
|
Executive
|
Annual base
salary increase
1
|
Base salary
reduction
2
|
Short-term
incentive payment |
Medium-term
incentive award |
Long-term
incentive award |
|||||||||||||||
|
Al Monaco
|
|
5%
|
|
|
-15%
|
|
|
207%
|
|
|
520%
|
|
|
130%
|
|
|||||
|
Colin K. Gruending
|
|
25%
3
|
|
|
-10%
|
|
|
130%
|
|
|
320%
|
|
|
80%
|
|
|||||
|
John K. Whelen
|
|
3%
|
|
|
-10%
|
|
|
127%
|
|
|
320%
|
|
|
80%
|
|
|||||
|
William T. Yardley
|
|
3%
|
|
|
-10%
|
|
|
121%
|
|
|
320%
|
|
|
80%
|
|
|||||
|
Vern D. Yu
|
|
20%
3
|
|
|
-10%
|
|
|
114%
|
|
|
320%
|
|
|
80%
|
|
|||||
|
Robert R. Rooney
|
|
5%
|
|
|
-10%
|
|
|
114%
|
|
|
280%
|
|
|
70%
|
|
|||||
|
1
|
Annual base salary increases were effective April 1, 2020.
|
|
2
|
In response to the
COVID-19
pandemic, reduced energy demand and reduced commodity prices, the CEO implemented voluntary base salary reductions, effective June 1, 2020.
|
|
3
|
Mr. Gruending and Mr. Yu each received a base salary increase to better align their positioning relative to the competitive market, as part of a
phased-in
approach since their role changes in 2019.
|
20
Compensation policies and practices
|
What we do
|
What we don’t do
|
|||||
|
|
✓
Use a
pay-for-performance
|
×
|
|
|||
|
|
✓
Use a blend of short-, medium- and long-term incentive awards that are linked to business plans for the respective timeframe
|
×
|
|
|||
|
|
✓
Incorporate risk management principles into all decision-making processes to ensure compensation programs do not encourage inappropriate or excessive risk-taking by executives
|
×
re-price
out-of-the-money
|
|
|||
|
|
✓
Regularly review executive compensation programs through third-party experts to ensure ongoing alignment with shareholders and regulatory compliance
|
×
|
|
|||
|
|
✓
Use both preventative and incident-based safety, environmental and operational metrics that are directly linked to short-term incentive awards
|
×
|
|
|||
|
|
✓
Have meaningful stock ownership requirements that align the interests of executives with those of Enbridge shareholders
|
×
|
|
|||
|
|
✓
Benchmark executive compensation programs against a group of similar companies in Canada and the U.S. to ensure that executives are rewarded at competitive levels
|
×
non-employee
directors
|
|
|||
|
|
✓
Have an incentive compensation clawback policy
|
×
|
|
|||
|
|
✓
Use double-trigger
change-in-control
|
×
gross-ups
to awards
|
|
|||
21
Assessing 2020 performance
As always, Enbridge’s focus on the safety of its employees, their families and their communities was at the forefront of our corporate actions in response to the
COVID-19
pandemic. Our response was swift and compassionate, supporting our employees and our operations. This included implementing an immediate work-from-home policy wherever possible and new safety protocols to protect our people, keeping our systems running safely and maintaining work on critical projects.
The following tables and charts outline key performance achievements for 2020.
Corporate actions
|
Delivered strong financial results
|
Optimized the base business
|
|||
|
• Achieved DCF per share
1
above the midpoint of guidance range
• Solid operational performance across all business lines
• 4.6x
Debt-to-EBITDA
|
• Achieved $300 million in cost savings
• Completed rate proceedings on Texas Eastern, Algonquin and B.C. Pipeline
• Captured synergies through amalgamated utilities
|
|||
|
Growing organically
|
Executed capital program
|
|||
|
• Added approximately $5 billion of growth capital to the secured growth inventory in 2020
• Completed construction of the U.S. portion of Line 3 Replacement Program in North Dakota and commenced construction on the final segment in Minnesota
|
• Completed $1.6 billion of secured growth projects, including the final phase of Atlantic Bridge, Sabal Trail Phase II, the 2020 Modernization Program within Gas Transmission and Midstream, and the 2020 Utility Growth Program, including the Owen Sound Reinforcement and Windsor Line Replacement projects
|
|||
|
1
|
DCF per share is a
non-GAAP
measure; this measure is defined and reconciled in Item 11 –
“Non-GAAP
reconciliation”.
|
2020 project execution
|
Project
|
Expected ISD
|
Capital ($B)
1
|
||||||
|
Gas Transmission and Midstream
|
Sabal Trail Phase II
|
In-service
|
|
US$0.1
|
|
|||
|
2020 Modernization Program
|
In-service
|
|
US$0.7
|
|
||||
|
Gas Distribution and Storage
|
2020 Utility Growth Program
|
In-service
|
|
0.5
|
|
|||
|
2020 Total
|
|
1.6
|
|
|||||
|
1
|
U.S. dollars have been converted to Canadian dollars using an exchange rate of US$1 = C$1.30.
|
Financial
DCF per share
1
|
1
|
DCF and DCF per share are
non-GAAP
measures; these measures are defined and reconciled in Item 11 –
“Non-GAAP
reconciliation”.
|
22
Approach to executive compensation
Enbridge’s approach to executive compensation is set by the Human Resources & Compensation (“HRC”) Committee and approved by the Board. The compensation programs are designed to accomplish three objectives:
|
•
|
attract and retain a highly effective executive team;
|
|
•
|
align executives’ actions with Enbridge’s business strategy and the interests of Enbridge shareholders and other stakeholders; and
|
|
•
|
incentivize and reward executives for short-, medium- and long-term performance.
|
Alignment with company strategy
|
Safety and operational reliability is Enbridge’s number one priority.
|
Enbridge’s vision is to be the leading energy delivery company in North America. To achieve this goal, we are committed to delivering the energy people need and want, and creating value for all stakeholders. We aim to be the first choice of our customers, attract and retain energized employees and maintain the trust of our stakeholders.
Central to achieving this vision is a relentless focus on safety, operational reliability and protection of the environment to ensure that the needs of all stakeholders are met, and that Enbridge continues to be a good citizen within the communities in which we live and operate.
Enbridge’s executive compensation programs are aligned with the achievement of our strategic priorities and are designed to link payouts to those outcomes. They motivate management to deliver exceptional value to Enbridge stakeholders through strong corporate performance and investing capital in ways that minimize risk and maximize return, while always supporting the core business goal of delivering energy safely and reliably.
Management is committed to delivering steady, visible and predictable results, and operating assets in an ethical and responsible manner.
Executive compensation design
Enbridge’s executive compensation design consists of several components that balance the use of short- (annual incentive), medium- (performance stock units and restricted stock units) and long-term vehicles (stock options). The following chart describes the NEOs’ compensation components and the time horizon for vesting and/or realized value.
23
Pay for performance
|
Performance is foundational to Enbridge’s executive compensation design; incentive compensation plans incorporate operational safety and financial performance conditions.
|
Performance is the cornerstone of Enbridge’s executive compensation design. The Board reviews Enbridge’s business plans over the short-, medium- and long-term and the HRC Committee ensures the compensation programs are linked to these time frames. This focuses management on delivering value to Enbridge shareholders not only in the short term, but also continued performance over the long term.
Relevant corporate and business unit performance measures are established for the short-term incentive plan (“STIP”) that focus on the critical safety, reliability, environmental, customer, employee and financial aspects of the business.
The performance measures for the medium- and long-term incentive plans focus on overall corporate performance aligned with Enbridge shareholder expectations for cash flow growth and total shareholder return.
When assessing performance, the HRC Committee considers performance results in the context of other qualitative factors not captured in the formal metrics, including key performance indicators relative to peers and the qualitative aspects of management’s responsibilities.
At risk compensation
|
The vast majority of compensation for Enbridge’s President & CEO and other NEOs is considered
“at risk”. |
The chart below shows the target compensation mix for the President & CEO and the average for the other NEOs. The short-, medium- and long-term incentives are “at risk” because their value is based on specific performance criteria and payout is not guaranteed.
In 2020, 89% of the target total direct compensation for the President & CEO, and an average of 83% for the other NEOs, was at risk, directly aligning corporate, business unit and individual performance with the interests of Enbridge shareholders.
2020 compensation decisions
Base salary
Effective April 1, 2020, annual base salary adjustments, as shown below, were provided to the President & CEO and other NEOs. Mr. Gruending and Mr. Yu each received a base salary increase to better align their positioning relative to the competitive market, as part of a
phased-in
approach since their role changes in 2019.
While Enbridge demonstrated resilience throughout the crises in 2020, it was not immune to the precipitous decline in economic activity and reduced demand for energy. Management took prudent and necessary action to reduce operating costs across the business and avoided company-wide layoffs by pursuing initiatives including organization-wide salary rollbacks (with voluntary base salary reductions for the CEO (15%) and other NEOs (10%) and Board compensation reduction (15%) effective June 1, 2020), a voluntary workforce reduction program and supply chain efficiencies.
|
Executive
|
Base salary
at January 1, 2020
1
|
April 1, 2020
increase % |
Base salary
at April 1, 2020
1
|
June 1, 2020
reduction % |
Base salary
at December 31, 2020
1
|
Total %
change in base salary in 2020 |
||||||||||||||||||
|
Al Monaco
|
$
|
1,630,000
|
|
|
5%
|
|
$
|
1,712,000
|
|
|
-15%
|
|
$
|
1,455,200
|
|
|
-11%
|
|
||||||
|
Colin K. Gruending
|
$
|
525,000
|
|
|
25%
|
|
$
|
656,300
|
|
|
-10%
|
|
$
|
590,670
|
|
|
13%
|
|
||||||
|
John K. Whelen
|
$
|
641,200
|
|
|
3%
|
|
$
|
660,400
|
|
|
-10%
|
|
$
|
594,360
|
|
|
-7%
|
|
||||||
|
William T. Yardley
|
$
|
725,290
|
|
|
3%
|
|
$
|
747,075
|
|
|
-10%
|
|
$
|
672,367
|
|
|
-7%
|
|
||||||
|
Vern D. Yu
|
$
|
569,300
|
|
|
20%
|
|
$
|
683,200
|
|
|
-10%
|
|
$
|
614,880
|
|
|
8%
|
|
||||||
|
Robert R. Rooney
|
$
|
569,300
|
|
|
5%
|
|
$
|
597,800
|
|
|
-10%
|
|
$
|
538,020
|
|
|
-5%
|
|
||||||
|
1
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
24
Short-term incentive
It is critically important to ensure all Enbridge executives are incentivized to achieve not only financial results but also operational results in areas such as safety and environmental performance. For this reason, our STIP awards are designed to be a comprehensive analysis of corporate, business unit and individual performance, as determined by our HRC Committee.
|
•
|
Corporate performance.
|
|
•
|
Business unit performance.
|
|
•
|
Individual performance.
|
Performance metrics and ranges for threshold, target and maximum incentive opportunities for the corporate component of the STIP award are determined by the HRC Committee at the beginning of the year. Each executive’s target award and payout range reflect the level of responsibility associated with their role, as well as competitive practice, and is established as a percentage of base salary. In 2020, the STIP targets were adjusted as part of a
phased-in
approach to align overall compensation to the competitive market, recognizing the increasing complexity of the business.
For 2020, each NEO’s target STIP award and corresponding weighting of corporate, business unit and individual performance metrics were as follows:
|
Executive
|
2020 target
STIP (% of base salary) |
2020 target
STIP
1 2
|
Performance Measure Weighting
|
2019 target
STIP (% of base salary) |
||||||||||||||||||||
|
Corporate
|
Business
Unit |
Individual
|
||||||||||||||||||||||
|
Al Monaco
|
|
145
|
%
|
$
|
2,241,900
|
|
|
60
|
%
|
|
20
|
%
|
|
20
|
%
|
|
140
|
%
|
||||||
|
Colin K. Gruending
|
|
90
|
%
|
$
|
528,370
|
|
|
60
|
%
|
|
20
|
%
|
|
20
|
%
|
|
80
|
%
|
||||||
|
John K. Whelen
3
|
|
90
|
%
|
$
|
488,240
|
|
|
60
|
%
|
|
20
|
%
|
|
20
|
%
|
|
80
|
%
|
||||||
|
William T. Yardley
|
|
90
|
%
|
$
|
630,020
|
|
|
40
|
%
|
|
40
|
%
|
|
20
|
%
|
|
80
|
%
|
||||||
|
Vern D. Yu
|
|
90
|
%
|
$
|
555,120
|
|
|
40
|
%
|
|
40
|
%
|
|
20
|
%
|
|
80
|
%
|
||||||
|
Robert R. Rooney
|
|
80
|
%
|
$
|
445,920
|
|
|
60
|
%
|
|
20
|
%
|
|
20
|
%
|
|
75
|
%
|
||||||
|
1
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
|
2
|
2020 target STIP awards are based on base salary earned in 2020.
|
|
3
|
Mr. Whelen’s 2020 target STIP award has been prorated based on his retirement date of November 15, 2020.
|
The HRC Committee retains discretion to change performance measures, scorecards and the award levels when it believes it is reasonable to do so, considering matters such as key performance indicators and the business environment in which the performance was achieved. In addition, the HRC Committee retains discretion to approve adjustments to the calculated STIP award to reflect extraordinary events and other factors not contemplated in the original measures or targets. In 2020, no such adjustments were made to performance measures, scorecards or award levels, despite the unprecedented challenges Enbridge faced due to the
COVID-19
pandemic and the reduced energy demand.
As illustrated below, STIP awards are earned between
0-200%
of the target award based on achievement of the applicable corporate, business unit and individual performance metrics and giving effect to the applicable weighting of each metric.
25
Corporate performance
The corporate performance component is reviewed annually to select measures that align with our strategy and are appropriate for measuring annual performance. The same corporate component metrics and goals apply to each NEO. In February 2020, the HRC Committee approved management’s recommendation to use DCF per share. The HRC retains discretion to consider other factors (including our performance relative to our peers, other key performance indicators and market conditions) in assessing the strength of the corporate performance metrics and also retains discretion to determine the overall corporate performance payout.
The HRC Committee agreed to the use of DCF per share as the corporate performance metric because it believes DCF per share is an appropriate measure of financial
performance for the enterprise. Focusing management on this metric will enhance transparency of Enbridge’s cash flow growth, increase comparability of results relative to peers and help ensure full value recognition for Enbridge’s superior assets and commercial and growth arrangements, which provides a low risk value proposition for shareholders.
For 2020, DCF per share targets were set using the external financial guidance range to determine threshold and target payments. For any payout to occur, Enbridge must achieve threshold performance. For a maximum payout to occur, Enbridge must achieve the top of the guidance range, which ensures there is appropriate stretch in the plan. Despite the unprecedented impact of
COVID-19
and reduced energy demand, the targets were not revised
in-year.
For purposes of Enbridge’s 2020 STIP awards, 2020 DCF per share was determined to be $4.69 and resulted in a performance multiplier of 1.27x, representing 100% of the corporate performance metric. No discretion was applied beyond standard normalizations.
|
2020 corporate STIP metric
|
DCF per share
1
|
Performance multiplier
2
|
||
|
Threshold (guidance minimum)
|
$4.50
|
0.5x
|
||
|
Target (guidance midpoint)
|
$4.65
|
1.0x
|
||
|
Maximum (guidance maximum)
|
$4.80
|
2.0x
|
||
|
Actual
|
$4.69
|
1.27x
|
||
|
1
|
DCF per share is a
non-GAAP
measure; this measure is defined and reconciled in Item 11 –
“Non-GAAP
reconciliation”.
|
|
2
|
DCF per share between thresholds in this table result in a performance multiplier calculated on a linear basis.
|
Business unit performance
The HRC Committee approved the application of the following scorecards for each of the NEOs. While the specific metrics used vary by business unit, each scorecard includes objectives relating to operational performance and reliability, financial performance and project execution as outlined below:
|
Executive
|
Business unit metrics
|
Description
|
||
|
Al Monaco
|
Composite measure
1
|
• Non-financial
operating measures for the combined enterprise (including enterprise safety and environment)
|
||
|
Colin K. Gruending
|
Central Functions
|
• Weighted average of overall business unit results
• Financial (corporate cost containment)
|
||
|
John K. Whelen
|
Central Functions (70%)
|
• Weighted average of overall business unit results
• Financial (corporate cost containment)
|
||
|
Energy Marketing (20%)
|
• Financial, operating and commercial measures for the Energy Marketing business unit
|
|||
|
Power Operations (10%)
|
• Financial, operating and commercial measures for the Power Operations business unit
|
|||
|
William T. Yardley
|
Gas Transmission and Midstream
|
• Financial, operating and commercial measures for the Gas Transmission and Midstream business unit
|
||
|
Vern D. Yu
|
Liquids Pipelines
|
• Financial, operating and commercial measures for the Liquids Pipelines business unit
|
||
|
Robert R. Rooney
|
Central Functions
|
• Weighted average of overall business unit results
• Financial (corporate cost containment)
|
||
|
1
|
The business unit metric for Mr. Monaco is a composite measure, representing enterprise-wide performance as, in his capacity as President & CEO, he oversees the overall organization.
|
26
Individual performance
In the first quarter of 2020, after discussion with the Board, the HRC Committee approved individual performance objectives for Mr. Monaco, taking into consideration the company’s financial and strategic priorities. For our other NEOs, Mr. Monaco established their individual objectives for 2020 at the start of the year, based on strategic and operational priorities related to each executive’s portfolio and other factors.
Short-term incentive award outcomes
Each NEO’s calculated STIP award, as well as the actual award, is as follows:
|
Executive
|
Corporate
multiplier |
x
|
Weight
|
+
|
Business
Unit multiplier |
x
|
Weight
|
+
|
Individual
multiplier |
x
|
Weight
|
=
|
Overall
multiplier |
|||||||||||||||||||||||||||||||||||||||
|
Al Monaco
|
|
1.27
|
|
|
x
|
|
|
60
|
%
|
|
+
|
|
|
1.34
|
|
|
x
|
|
|
20
|
%
|
|
+
|
|
|
2.00
|
|
|
x
|
|
|
20
|
%
|
|
=
|
|
|
1.43
|
|
|||||||||||||
|
Colin K. Gruending
|
|
1.27
|
|
|
x
|
|
|
60
|
%
|
|
+
|
|
|
1.50
|
|
|
x
|
|
|
20
|
%
|
|
+
|
|
|
1.90
|
|
|
x
|
|
|
20
|
%
|
|
=
|
|
|
1.44
|
|
|||||||||||||
|
John K. Whelen
|
|
1.27
|
|
|
x
|
|
|
60
|
%
|
|
+
|
|
|
1.56
|
|
|
x
|
|
|
20
|
%
|
|
+
|
|
|
1.70
|
|
|
x
|
|
|
20
|
%
|
|
=
|
|
|
1.41
|
|
|||||||||||||
|
William T. Yardley
|
|
1.27
|
|
|
x
|
|
|
40
|
%
|
|
+
|
|
|
1.15
|
|
|
x
|
|
|
40
|
%
|
|
+
|
|
|
1.90
|
|
|
x
|
|
|
20
|
%
|
|
=
|
|
|
1.35
|
|
|||||||||||||
|
Vern D. Yu
|
|
1.27
|
|
|
x
|
|
|
40
|
%
|
|
+
|
|
|
0.95
|
|
|
x
|
|
|
40
|
%
|
|
+
|
|
|
1.90
|
|
|
x
|
|
|
20
|
%
|
|
=
|
|
|
1.27
|
|
|||||||||||||
|
Robert R. Rooney
|
|
1.27
|
|
|
x
|
|
|
60
|
%
|
|
+
|
|
|
1.50
|
|
|
x
|
|
|
20
|
%
|
|
+
|
|
|
1.80
|
|
|
x
|
|
|
20
|
%
|
|
=
|
|
|
1.42
|
|
|||||||||||||
Short-term incentive award calculations
Enbridge delivered strong results in 2020 driven by solid operating performance across the entire asset base despite the unprecedented impact of
COVID-19
and reduced energy demand, demonstrating the resiliency of cashflows associated with Enbridge’s
low-risk
business model. Though the business environment changed drastically because of these crises, management was held to account against the original 2020 STIP targets set at the beginning of the year and well in advance of
COVID-19.
Performance outcomes are based on actual results relative to the agreed targets and were achieved through early, swift and sustained management actions throughout 2020. Furthermore, no discretion was requested nor applied to the calculated awards.
|
Executive
|
Base salary
1 2
($) |
x
|
STIP target
(%) |
x
|
Overall
multiplier |
=
|
Calculated
award ($)
1
|
Actual award
($)
1
|
||||||||||||||||||||||||
|
Al Monaco
|
|
1,546,139
|
|
|
x
|
|
|
145
|
%
|
|
x
|
|
|
1.43
|
|
|
=
|
|
|
3,205,919
|
|
|
3,205,919
|
|
||||||||
|
Colin K. Gruending
|
|
587,074
|
|
|
x
|
|
|
90
|
%
|
|
x
|
|
|
1.44
|
|
|
=
|
|
|
761,904
|
|
|
761,904
|
|
||||||||
|
John K. Whelen
|
|
542,492
|
|
|
x
|
|
|
90
|
%
|
|
x
|
|
|
1.41
|
|
|
=
|
|
|
690,766
|
|
|
690,766
|
|
||||||||
|
William T. Yardley
|
|
700,018
|
|
|
x
|
|
|
90
|
%
|
|
x
|
|
|
1.35
|
|
|
=
|
|
|
849,262
|
|
|
849,262
|
|
||||||||
|
Vern D. Yu
|
|
616,801
|
|
|
x
|
|
|
90
|
%
|
|
x
|
|
|
1.27
|
|
|
=
|
|
|
703,893
|
|
|
703,893
|
|
||||||||
|
Robert R. Rooney
|
|
557,394
|
|
|
x
|
|
|
80
|
%
|
|
x
|
|
|
1.42
|
|
|
=
|
|
|
634,091
|
|
|
634,091
|
|
||||||||
|
1
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
|
2
|
Base salary used in the calculation is reflective of base salary earned in 2020.
|
Medium- and long-term incentives
Medium- and long-term incentive awards were granted in 2020 under the Enbridge Inc. 2019 Long Term Incentive Plan (2019 LTIP).
In 2020, we introduced share-settled restricted stock units (“RSUs”) into the overall pay mix, enhancing retentive value and maintaining alignment with shareholders. This change aligns with our strategy and the competitive market while maintaining the majority of our pay mix in
performance-based
vehicles to align with our
pay-for-performance philosophy.
Enbridge’s medium- and long-term incentive for executives includes three primary vehicles: performance stock units (“PSUs”), RSUs and incentive stock options (“ISOs”).
Enbridge’s medium- and long-term incentives are forward-looking compensation vehicles, and as such, grants are considered part of the compensation for the year of grant and onward instead of in recognition of prior performance or previously granted awards.
The various awards that apply to executives have different terms, vesting conditions and performance criteria, mitigating the risk that executives produce only short-term results. This approach also benefits shareholders and helps maximize the ongoing retentive value of the medium- and long-term incentives granted to executives.
27
Medium- and long-term incentive grants are determined as follows:
The table below outlines the medium- and long-term incentive plans used in 2020.
|
PSU
|
RSU
|
ISO
|
||||
|
Term
|
Three years
|
Three years
|
10 years
|
|||
|
Description
|
Phantom share/units with performance conditions that affect the payout
|
Phantom share/units
|
Options to acquire Enbridge shares
For U.S. participants, awards are granted in
non-qualified
options that do not meet the requirements of section 422 of the U.S. Internal Revenue Code
|
|||
|
Frequency
|
Granted annually
|
Granted annually
|
Granted annually
|
|||
|
Performance conditions
|
50% DCF per share growth relative to a target set at the beginning of the term
|
n/a
|
n/a
|
|||
|
50% total shareholder return (“TSR”) performance relative to peers
|
||||||
|
Vesting
|
Units cliff vest at the end of the term including dividend equivalents as additional units
|
Units cliff vest at the end of the term including dividend equivalents as additional units
|
Options vest 25% per year over four years, starting on the first anniversary of the grant date
|
|||
|
Payout
|
Paid out in cash based on market value of an Enbridge share at the end of the term, subject to adjustment from
0-200%
based on achievement of the performance conditions above
|
Settled in shares at the end of the term
|
Participant acquires Enbridge shares at the exercise price defined as fair market value at the time of grant
|
|||
Medium- and long-term incentive targets (as a % of base salary)
The table below shows the target medium- and long-term incentive awards for each NEO in 2020, as well as the amount each plan contributes to that total, in each case as a percentage of base salary. These targets represent a 60%/20%/20% PSU/RSU/ISO vehicle mix.
|
Executive
|
Total 2020 target
medium- and long-
term incentives
|
Annual grant
|
||||||||||||
|
PSUs
|
RSUs
|
ISOs
|
||||||||||||
|
Al Monaco
|
|
650
|
%
|
390%
|
|
130
|
%
|
|
130
|
%
|
||||
|
Colin K. Gruending
|
|
400
|
%
|
240%
|
|
80
|
%
|
|
80
|
%
|
||||
|
John K. Whelen
|
|
400
|
%
|
240%
|
|
80
|
%
|
|
80
|
%
|
||||
|
William T. Yardley
|
|
400
|
%
|
240%
|
|
80
|
%
|
|
80
|
%
|
||||
|
Vern D. Yu
|
|
400
|
%
|
240%
|
|
80
|
%
|
|
80
|
%
|
||||
|
Robert R. Rooney
|
|
350
|
%
|
210%
|
|
70
|
%
|
|
70
|
%
|
||||
28
Performance stock units
PSUs are granted annually, in the first quarter of the year, and vest after three years based on the achievement of
pre-established
and specific performance measures; the executives’ potential payout at the end of the performance period can range from 0% to 200% of the target award depending on the level of achievement of the performance measures.
For grants in 2020, the following two performance measures were used, each weighted at 50%:
|
•
|
DCF per share growth.
This measure represents a commitment to Enbridge shareholders to achieve distributable cash flow growth that demonstrates Enbridge’s ability to deliver on its growth plan and continued dividend increases. Measurement against Enbridge’s long-range plan, as well as against industry growth rates, differentiates this metric compared to its use in the STIP, which is based on the
1-year
external guidance range. The different measurement standards are designed to avoid excessive overlap between Enbridge’s compensation programs. Furthermore, DCF per share growth is only one of two equally weighted metrics used for PSUs.
|
|
•
|
Relative TSR.
|
Payout is determined at the end of the three-year term using an actual performance multiplier that ranges from 0% to 200% depending on whether the performance conditions are met. The final Enbridge share price for payout is the volume weighted average trading price of Enbridge shares on the TSX or NYSE for the 20 trading days immediately preceding the maturity date, on which performance is certified. Payout is made in cash.
2020 performance stock unit grant
The mechanics of the 2020 PSU grant is illustrated below.
29
The following PSU grants were made to the NEOs in 2020:
|
Executive
|
Number of PSUs granted (#)
|
Grant value (as % of base salary)
1
|
||||||
|
Al Monaco
|
|
124,500
|
|
|
390%
|
|
||
|
Colin K. Gruending
|
|
24,680
|
|
|
240%
|
|
||
|
John K. Whelen
|
|
30,140
|
|
|
240%
|
|
||
|
William T. Yardley
|
|
35,260
|
|
|
240%
|
|
||
|
Vern D. Yu
|
|
26,760
|
|
|
240%
|
|
||
|
Robert R. Rooney
|
|
23,410
|
|
|
210%
|
|
||
|
1
|
PSU grant sizes were based on the
20-day
volume weighted average share price immediately preceding January 1, 2020.
|
Restricted stock units
RSUs are granted annually, in the first quarter of the year, and vest after three years. Payout is determined at the end of the three-year term. The final Enbridge share price at the end of the term is the volume weighted average trading price of Enbridge shares on the TSX or NYSE for the last 20 trading days before the end of the term. These awards, including dividend equivalents accrued as additional RSUs, are settled in Enbridge shares.
2020 restricted stock unit grant
The following RSU grants were made to the NEOs in 2020:
|
Executive
|
Number of RSUs granted (#)
|
Grant value (as % of base salary)
1
|
||||||
|
Al Monaco
|
|
41,500
|
|
|
130%
|
|
||
|
Colin K. Gruending
|
|
8,230
|
|
|
80%
|
|
||
|
John K. Whelen
|
|
10,050
|
|
|
80%
|
|
||
|
William T. Yardley
|
|
11,750
|
|
|
80%
|
|
||
|
Vern D. Yu
|
|
8,920
|
|
|
80%
|
|
||
|
Robert R. Rooney
|
|
7,800
|
|
|
70%
|
|
||
|
1
|
RSU grant sizes were based on the
20-day
volume weighted average share price immediately preceding January 1, 2020.
|
Incentive stock options
ISOs provide executives an opportunity to buy Enbridge shares at some point in the future at the exercise price defined at the time of grant. Members of Enbridge’s senior management, including all of the NEOs, are eligible to receive ISOs.
ISOs are typically granted in February or March every year to both Canadian and U.S. members of senior management. ISOs vest in equal instalments over a four-year period. The maximum term of an ISO is 10 years, but the term can be reduced if the executive leaves Enbridge as described in the “Termination provisions of equity compensation plans” section. The exercise price of an ISO is the closing price of an Enbridge share on the listed exchange the last trading day before the grant date. The grant date will be no earlier than the third trading day after a trading blackout period ends. ISOs are never backdated or
re-priced.
ISOs may be granted to executives when they join Enbridge, normally effective on the executive’s date of hire. If the hire date falls within a blackout period, the grant is delayed until after the end of the blackout period.
30
2020 incentive stock option grant
The following ISO grants were made to the NEOs in 2020:
|
Executive
|
Number of ISOs granted (#)
|
Grant value (as % of base salary)
1
|
||||||
|
Al Monaco
|
|
614,200
|
|
|
130
|
%
|
||
|
Colin K. Gruending
|
|
121,740
|
|
|
80
|
%
|
||
|
John K. Whelen
|
|
148,680
|
|
|
80
|
%
|
||
|
William T. Yardley
|
|
129,020
|
|
|
80
|
%
|
||
|
Vern D. Yu
|
|
132,010
|
|
|
80
|
%
|
||
|
Robert R. Rooney
|
|
115,510
|
|
|
70
|
%
|
||
|
1
|
Differences in value as reported in the 2020 summary compensation table are not reflective of discretionary adjustments but rather are due to differences in valuations using the Black-Scholes model at the time of approval and grant date.
|
Awards vesting in 2020
2018 performance stock unit payout
The PSUs granted in February 2018 matured on December 31, 2020 and both performance targets were exceeded. The DCF per share compound growth was 9.15%, while the relative TSR performance placed at the 77th percentile. The overall performance multiplier of 1.82x was calculated based on the following metrics:
|
Multiplier
1
|
DCF per share compound growth
|
TSR
|
||||
|
Threshold
|
0.0x
|
3.4%
|
at or below 25th percentile
|
|||
|
Target
|
1.0x
|
6.0%
|
at median
|
|||
|
Maximum
|
2.0x
|
11.0%
|
at or above 75th percentile
|
|||
|
Actual
|
1.82x
|
9.15% (1.63x multiplier)
|
77th percentile (2.00x multiplier)
|
|||
|
1
|
Performance between the thresholds in this table results in a performance multiplier calculated on a linear basis.
|
Adjusted DCF per share is based on operating cash flows and is a
non-GAAP
measure, which is defined and reconciled in Item 11 –
“Non-GAAP
reconciliation”.
For incentive compensation purposes, adjusted DCF per share also includes certain adjustments for events or circumstances not contemplated at the time the performance metrics were originally established – see Item 11 – “Non-GAAP reconciliation”.
The performance peer group for the 2018 PSU payout was as follows:
31
This resulted in the following payouts for the NEOs in early 2021:
|
Executive
|
PSUs
granted (#) |
+
|
Notionally
reinvested dividends (#) |
Total
PSUs (#) |
x
|
Performance
multiplier |
x
|
Final
share price
1 2
($) |
=
|
Payout
($) |
||||||||||||||||||||||||||||||
|
Al Monaco
|
|
103,590
|
|
|
+
|
|
|
22,849
|
|
|
126,439
|
|
|
x
|
|
|
1.82x
|
|
|
x
|
|
|
42.26
|
|
|
=
|
|
|
9,724,864
|
|
||||||||||
|
Colin K. Gruending
|
|
6,440
|
|
|
+
|
|
|
1,421
|
|
|
7,861
|
|
|
x
|
|
|
1.82x
|
|
|
x
|
|
|
42.26
|
|
|
=
|
|
|
604,577
|
|
||||||||||
|
John K. Whelen
|
|
27,125
|
|
|
+
|
|
|
5,983
|
|
|
33,108
|
|
|
x
|
|
|
1.82x
|
|
|
x
|
|
|
42.26
|
|
|
=
|
|
|
2,546,456
|
|
||||||||||
|
William T. Yardley
|
|
32,070
|
|
|
+
|
|
|
7,092
|
|
|
39,162
|
|
|
x
|
|
|
1.82x
|
|
|
x
|
|
|
41.88
|
|
|
=
|
|
|
2,984,853
|
|
||||||||||
|
Vern D. Yu
|
|
16,440
|
|
|
+
|
|
|
3,626
|
|
|
20,066
|
|
|
x
|
|
|
1.82x
|
|
|
x
|
|
|
42.26
|
|
|
=
|
|
|
1,543,361
|
|
||||||||||
|
Robert R. Rooney
|
|
20,090
|
|
|
+
|
|
|
4,431
|
|
|
24,521
|
|
|
x
|
|
|
1.82x
|
|
|
x
|
|
|
42.26
|
|
|
=
|
|
|
1,886,017
|
|
||||||||||
|
1
|
The volume weighted average share price of an Enbridge share on the TSX or NYSE for the 20 trading days immediately preceding December 31, 2020.
|
|
2
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
2017 Spectra Energy phantom stock unit payout
The 2017 Spectra Energy phantom stock units granted to Mr. Yardley on February 14, 2017 vested on February 14, 2020.
|
Executive
|
Total
phantom stock units (#) |
x
|
Final
share price
1 2
($) |
=
|
Payout
($)
2 3
|
|||||||||||||||
|
William T. Yardley
|
|
17,908
|
|
|
x
|
|
|
53.76
|
|
|
=
|
|
|
962,820
|
|
|||||
|
1
|
The closing price of an Enbridge share on the NYSE on February 14, 2020.
|
|
2
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
|
3
|
In addition to the amount above, a dividend payout in cash of US$109,938 was made.
|
2018 restricted stock unit payout
Mr. Gruending received a 2018 RSU grant which vested on December 1, 2020.
|
Executive
|
RSUs
granted (#) |
+
|
Notionally
reinvested dividends (#) |
Total
RSUs (#) |
x
|
Final
share price
1
($) |
=
|
Payout
($) |
||||||||
|
Colin K. Gruending
|
4,960
|
+
|
998
|
5,958
|
x
|
38.25
|
=
|
227,877
|
||||||||
|
1
|
The volume weighted average share price of an Enbridge share on the TSX for the 20 trading days immediately preceding December 1, 2020.
|
2019 restricted stock unit payout
On May 8, 2019, Mr. Yardley was awarded a retention award given his critical role in delivering Gas Transmission and Midstream strategic priorities. This award consisted of 40,421 RSUs, 20% of which vested on May 8, 2020, the first anniversary of the grant. Another 20% of the award will vest on the second anniversary, and the remaining 60% on the third anniversary of the grant date. The table below outlines the tranche that vested in 2020:
|
Executive
|
RSUs
granted (#) |
+
|
Notionally
reinvested dividends (#) |
Total
RSUs (#) |
x
|
Final
share price
1 2
($) |
=
|
Payout
2
($) |
||||||||||||||||||||||||
|
William T. Yardley
|
|
8,084
|
|
|
+
|
|
|
522
|
|
|
8,606
|
|
|
x
|
|
|
37.61
|
|
|
=
|
|
|
323,675
|
|
||||||||
|
1
|
The volume weighted average share price of an Enbridge share on the NYSE for the 20 trading days immediately preceding May 8, 2020.
|
|
2
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
32
2021 changes
Enbridge has always integrated ESG into its strategy and decisions and takes pride in its industry leadership. To reinforce this, management took two important steps; the introduction of Inclusion as a core company value and, in November 2020, the announcement of ESG goals, including for GHG emissions reduction and increased diversity and inclusion within Enbridge’s workforce and on its Board of Directors. Of note, and further reinforcing accountability to stakeholders, beginning in 2021, progress towards goals will be reflected in incentive compensation for all employees, including the CEO and executive management.
2020 was an unprecedented year for Enbridge due to the impact of
COVID-19,
reduced demand for energy and reduced commodity prices. In response to these factors, management implemented voluntary base salary reductions for NEOs, as outlined in the 2020 compensation decisions. This action supported our short-term cost reduction initiative in response to the
potential financial implications of the business environment at that time. We have been closely monitoring the impact that our base salary reductions have had on our competitiveness. In light of the success of our cost reduction initiative, business performance in 2020 and to align with our compensation philosophy of providing market competitive pay levels, reinstatement of
pre-rollback
base salaries will take place in 2021.
On February 18, 2021, Mr. Yu was awarded a $2 million retention award given his critical role in delivering Liquids Pipelines strategic priorities and the execution of Enbridge’s overall strategy. The award was delivered in the form of RSUs to align with the shareholder experience over the term. 20% of the award will vest on each of the first and second anniversaries of the grant date, with the remainder of such award vesting on the third anniversary of grant, in each case, subject to Mr. Yu’s continued employment with Enbridge.
Profiles have been prepared for each of the NEOs that provide:
|
•
|
A summary of individual accomplishments in 2020; and
|
|
•
|
2020 pay mix (2020 base salary, STIP with respect to 2020 and medium- and long-term incentives granted in 2020).
|
The values provided in the NEOs’ profiles are taken from the 2020 summary compensation table.
33
Al Monaco
|
President & CEO
Mr. Monaco is responsible for setting and executing Enbridge’s strategic priorities and serves on the company’s Board of Directors.
|
In 2020, Mr. Monaco provided strategic and executive leadership in the following areas:
|
•
|
Health, safety and wellbeing of our workforce in a global pandemic
|
|
•
|
Operational reliability and undisrupted delivery service to customers across all of our systems in a pandemic-challenged environment
|
|
•
|
Early and decisive action in mitigating the financial impact of
COVID-19
and severe disruption in North American energy demand
|
|
•
|
Achievement of DCF per share budget despite unprecedented industry downturn and loss of liquids pipeline throughput
|
|
•
|
Maintaining strong balance sheet and increasing financial liquidity that protected the business in a volatile and unpredictable operating and capital markets environment
|
|
•
|
Achievement of substantial overhead savings, including through voluntary workforce reduction program while retaining critical staff and improving employee engagement
|
|
•
|
Dividend increase of 10%—25th consecutive year
|
|
•
|
Obtaining all regulatory approvals and permits and commenced Line 3 Replacement Program construction in Minnesota
|
|
•
|
Completion and into service of $1.6 billion of capital projects
|
|
•
|
Securing an additional $5 billion of new growth projects
|
|
•
|
Sale of $0.4 billion of
non-core
assets
|
|
•
|
Achievement of
Debt-to-EBITDA
|
|
•
|
Establishment of industry leading emissions reductions targets tied to executive compensation
|
|
•
|
Establishment of diversity and inclusion targets tied to executive compensation
|
|
•
|
Establishment of extended
3-year
growth outlook and revised capital allocation framework
|
|
•
|
Advancement of lower carbon footprint strategy including growth in offshore renewables business – one new project sanctioned; two projects began construction
|
|
•
|
Significant shareholder engagement and
top-rated
investor relations program
|
|
•
|
Senior management rotations supporting development/succession planning
|
|
President & CEO compensation
Our President & CEO is primarily responsible for executing our long-term business strategy as well as shorter-term strategies that support our long-term objectives. The HRC Committee recognizes that Mr. Monaco is managing a changing and increasingly complex business and that it is important to reward these efforts. In 2020, these efforts included decisive action to mitigate the impact of
COVID-19
on our financial and operational performance as well as on the health and safety of our employees, customers and communities. The HRC Committee believes Mr. Monaco’s compensation should be consistent with this level of responsibility and thus evaluates his pay annually and, if necessary, adjusts it to ensure it is aligned with the market and our strategic goals. Recent adjustments to certain elements of Mr. Monaco’s pay have resulted in an increase in his target total direct compensation. These adjustments demonstrate the HRC Committee’s efforts to bring his pay closer to the market median, using a
phased-in
approach over a period of years, and to recognize his role in the company’s success. Consistent with our philosophy, a significant portion of the overall increase was delivered through LTIP, which are aligned to the achievement of our strategic priorities and with shareholder interests.
|
|
34
Colin K. Gruending
|
Executive Vice President & Chief Financial Officer
Mr. Gruending is responsible for all corporate financial affairs of the company, including financial planning and reporting, tax, treasury and financial risk management.
|
In 2020, Mr. Gruending provided strategic and executive oversight in the following areas:
|
•
|
Stewardship of the company’s financial performance to achieve budgeted results, notwithstanding challenges posed by
COVID-19
and related lower transportation demand, including the swift development and implementation of a cost reduction and amended financing plan to retain maximum enterprise strength, in the case of a prolonged pandemic
|
|
•
|
Raising $8.5 billion of long-term capital on attractive terms in support of the company’s growth program
|
|
•
|
Stewardship of the capital allocation framework and sustained and strengthened Enbridge’s financial position
(Debt-to-EBITDA
|
|
•
|
Advancement of the execution of Enbridge’s Enterprise Resource Planning implementation, an initiative to automate and harmonize key financial and work management systems
|
|
•
|
Development of the 2021 budget, financing plan, and
3-year
outlook
|
|
•
|
The company’s accounting, treasury, risk management, taxation, audit, and investor relations functions, including the development of top talent and strengthening engagement levels
|
John K. Whelen
|
Former Executive Vice President
Mr. Whelen was responsible for all corporate development affairs of the company, strategy and planning, Energy Services and the Power business.
|
In 2020, Mr. Whelen provided strategic and executive oversight in the following areas:
|
•
|
Development and implementation of a dynamic strategic planning framework to assess and respond to challenges and opportunities arising from the impact of
COVID-19
and energy market disruptions
|
|
•
|
Delivery of an updated strategic plan in response to evolving energy fundamentals and changes in Enbridge’s business environment
|
|
•
|
Development of a framework and methodologies to support the implementation of enterprise-wide GHG emissions reduction goals and related measures that were announced in November of 2020
|
|
•
|
Advancement of a number of renewable power projects under construction or in earlier stages of development, including development and implementation of a strategy to develop renewable electric generation facilities to power Enbridge’s core operations
|
|
•
|
Development of staff and senior management for broader roles, ensuring a smooth succession and transition to new leadership of Corporate Development functions upon his retirement in November of 2020
|
35
William T. Yardley
|
Executive Vice President & President, Gas Transmission & Midstream
Mr. Yardley is responsible for Enbridge’s natural gas transmission and midstream business across North America.
|
In 2020, Mr. Yardley provided strategic and executive oversight in the following areas:
|
•
|
Completion of a transformational year in the system-wide asset integrity and modernization program
|
|
•
|
Implementation of rate initiatives on Algonquin and Texas Eastern, and filed rate proceedings on East Tennessee Natural Gas, Maritimes & Northeast Pipeline and Alliance Pipeline
|
|
•
|
Completion of the first-ever solar self-power project in Lambertville, NJ, a major step in a system-wide emissions reduction effort
|
|
•
|
Major contract renewal effort, achieving a revenue renewal rate of over 99% with customers on our major pipelines
|
|
•
|
Championing safe and responsible operations, resulting in a 50% decrease in business unit recordable injury frequency among employees and contractors and a 40% decrease in environmental incident frequency from 2019
|
|
•
|
Keeping US$3 billion of projects on track for
in-service
dates
|
|
•
|
Identifying $2 billion per year of future development opportunities
|
|
•
|
Securing pipeline agreements for liquefied natural gas projects for up to US$4 billion in investment opportunity, advancing gulf coast strategy
|
|
•
|
Demonstration of operational resiliency with minimal impacts to customers associated with 12 named tropical storms and hurricanes impacting Gas Transmission and Midstream assets in 2020
|
|
•
|
Ensuring safe continuity of operations at all times during the
COVID-19
pandemic
|
|
|
|
Vern D. Yu
|
Executive Vice President & President, Liquids Pipelines
Mr. Yu is responsible for Enbridge’s crude oil and liquids pipeline business across North America.
|
In 2020, Mr. Yu provided strategic and executive oversight in the following areas:
|
•
|
Implementation of significant new health and safety protocols related to
COVID-19
to ensure that the Liquids Pipelines system operated uninterrupted in 2020
|
|
•
|
Achievement of above target reliability
|
|
•
|
Achievement of 2020 financial performance within target range for Liquids Pipelines, overcoming an unprecedented reduction in refinery demand and an associated reduction in Mainline volumes due to
COVID-19
|
|
•
|
Implementation of significant system and cost efficiencies to offset reduced Mainline throughput
|
|
•
|
Achievement of record high volumes to the U.S. Gulf Coast through the Market Access pipelines
|
|
•
|
Completion of the North Dakota section of the Line 3 Replacement Program on budget and on schedule
|
|
•
|
Obtaining all necessary State and Federal permits to begin construction of the Minnesota section of the Line 3 Replacement Program
|
|
•
|
Progressing the regulatory process for Mainline contracting with the Canada Energy Regulator, answering more than 3,300 interrogatory requests
|
|
•
|
Completion of Line 5 tunnel permit applications
|
|
•
|
Implementation of a diversity plan for Liquids Pipelines and improved diversity within the leadership team
|
|
|
|
36
Robert R. Rooney
|
Executive Vice President & Chief Legal Officer
Mr. Rooney is responsible for the legal, ethics and compliance, security and aviation functions across Enbridge.
|
In 2020, Mr. Rooney provided executive oversight for a number of substantial legal, business and regulatory matters, including:
|
•
|
Acquiring all permits, approvals and judicial decisions necessary to commence construction of the Line 3 Replacement Program in Minnesota
|
|
•
|
Legal and regulatory aspects of the Ontario Energy Board approvals to advance Enbridge’s renewable natural gas and hydrogen projects
|
|
•
|
Legal and regulatory aspects for the
T-North
and
T-South
expansion projects in British Columbia
|
|
•
|
Legal and regulatory strategy for Line 5 in Michigan to maintain operations and advance the Great Lakes Tunnel project
|
|
•
|
Legal aspects of the European offshore wind business that achieved final investment decision at Fécamp, acquisition of an interest in Mistral and sell-downs to Canada Pension Plan Investment Board
|
|
•
|
Development of a new strategic plan for Security to support the company
|
|
•
|
Primary legal support for all corporate finance activities
|
|
•
|
Effective corporate governance and supported leading ESG practices
|
|
•
|
Legal and regulatory strategy for the Mainline contracting application to the Canada Energy Regulator
|
|
•
|
Management of the Aviation function to provide safe and efficient pipeline patrols and services
|
|
•
|
Continued advancement of our workforce diversity and inclusion initiatives
|
37
Other benefits elements
Retirement benefits
The NEOs participate in the Senior Management Pension Plan (“SMPP”), a
non-contributory
defined benefit plan that provides market competitive retirement income to all Canadian and U.S. members of senior management. Before becoming participants in the SMPP, certain NEOs participated in a
non-contributory
defined benefit or defined contribution pension plan.
Defined benefit plan
The following graphic shows how the SMPP retirement benefit payable at normal retirement age is calculated:
Key terms of the SMPP:
|
•
|
Eligibility: members of senior management join the SMPP on the later of their date of hire or promotion to a senior management position;
|
|
•
|
Vesting: plan participants are fully vested immediately;
|
|
•
|
Retirement age: normal retirement date is age 65. Participants can retire with an unreduced pension at age 60, or as early as age 55 if they have 30 years of service. If they have less than 30 years of service, they can still retire as early as age 55, but their retirement benefit is reduced by 3% per year before age 60;
|
|
•
|
Adjustment for inflation: retirement benefits are indexed at 50% of the annual increase in the consumer index price; and
|
|
•
|
Survivor benefits: the pension is payable for the life of the member. If the member is single at retirement, 15 years of pension payments are guaranteed. If the member is married at retirement and dies before their spouse, 60% of the pension will continue to be paid to the spouse for his/her lifetime.
|
The SMPP consists of benefits paid from the following
tax-qualified
and supplemental pension plans, collectively referred to as the SMPP:
|
•
|
Retirement Plan for Employees of Enbridge Inc. and Affiliates;
|
|
•
|
Enbridge Employee Services, Inc. Employees’ Pension Plan;
|
|
•
|
Enbridge Supplemental Pension Plan; and
|
|
•
|
Enbridge Employee Services Inc. Supplemental Pension Plan for United States Employees
|
Prior to the merger of Enbridge Inc. and Spectra Energy Corp (the Merger Transaction), Mr. Yardley participated in a qualified and a
non-qualified
cash balance arrangement, to which there are no further contributions or service accruals.
38
Summary of defined benefits
The following table outlines estimated annual retirement benefits, accrued pension obligations and compensatory and
non-compensatory
changes for the NEOs under the defined benefit pension plans. All information is based on the assumptions and methods used for the purposes of reporting the company’s financial statements and which are described in the company’s financial statements.
|
Executive
8
|
Credited
service (years) |
Annual benefits payable
|
Accrued
obligation at Jan 1, 2020 ($) |
Compensatory
change
1
($)
|
Non-
compensatory
change
2
($)
|
Accrued
obligation at Dec 31, 2020 ($) |
||||||||||||||||||||||
|
At year end
($) |
At age 65
($) |
|||||||||||||||||||||||||||
|
A
|
B
|
C
|
A+B+C
|
|||||||||||||||||||||||||
|
Al Monaco
3
|
|
22.08
|
|
|
1,463,000
|
|
|
1,625,000
|
|
|
26,182,000
|
|
|
1,462,000
|
|
|
2,333,000
|
|
|
29,977,000
|
|
|||||||
|
Colin K. Gruending
4
|
|
17.25
|
|
|
232,000
|
|
|
530,000
|
|
|
4,681,000
|
|
|
1,017,000
|
|
|
675,000
|
|
|
6,373,000
|
|
|||||||
|
John K. Whelen
5
|
|
23.03
|
|
|
447,000
|
|
|
447,000
|
|
|
8,039,000
|
|
|
525,000
|
|
|
1,438,000
|
|
|
10,002,000
|
|
|||||||
|
William T. Yardley
6 7
|
|
20.13
|
|
|
201,000
|
|
|
363,000
|
|
|
2,778,000
|
|
|
396,000
|
|
|
289,000
|
|
|
3,463,000
|
|
|||||||
|
Vern D. Yu
|
|
19.75
|
|
|
343,000
|
|
|
525,000
|
|
|
6,368,000
|
|
|
1,177,000
|
|
|
877,000
|
|
|
8,422,000
|
|
|||||||
|
Robert R. Rooney
|
|
3.92
|
|
|
67,000
|
|
|
86,000
|
|
|
895,000
|
|
|
349,000
|
|
|
136,000
|
|
|
1,380,000
|
|
|||||||
|
1
|
The components of compensatory change are current service cost and the difference between actual and estimated pensionable earnings.
|
|
2
|
The
non-compensatory
change includes interest on the accrued obligation at the start of the year, changes in actuarial assumptions and other experience gains and losses not related to compensation.
|
|
3
|
Mr. Monaco’s retirement benefit is calculated using a 2.5% accrual rate for each year of credited service between 2008 and 2013. The higher accrual rate is equivalent to approximately 1.50 years of credited service. Upon Mr. Monaco’s appointment to President & CEO, a cap to the annual pension payable of $1,750,000 was implemented.
|
|
4
|
Mr. Gruending’s SMPP retirement benefits earned after December 31, 2017 are not indexed for inflation.
|
|
5
|
Mr. Whelen’s annual benefits payable and accrued obligation at year end reflects his retirement in 2020.
|
|
6
|
The impact of changes to exchange rates on Mr. Yardley’s accrued obligation is reflected in the
non-compensatory
change. The accrued obligation for Mr. Yardley’s cash balance retirement benefits prior to joining the SMPP are US$1,019,509 at the start of the year and US$1,060,289 at year end.
|
|
7
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
|
8
|
In 2020, all NEOs were granted a temporary hold-harmless against a reduction to their SMPP pension resulting from the significant reductions in base salary should they retire within 5 years of the reduction. These base salary reductions were related to the impacts of
COVID-19,
reduced energy demand and reduced commodity prices, and were not intended to have a permanent impact on the SMPP lifetime pensions. As indicated under “2021 changes” on page 33, NEO base salaries are to be reinstated in 2021.
|
Defined contribution plan
The defined contribution pension plan is a
non-contributory
pension plan. The level of contribution varies, depending on age and years of service. None of the NEOs are currently participating in the defined contribution pension plan.
Mr. Monaco, Mr. Gruending, Mr. Whelen and Mr. Yu participated in the defined contribution plan for three years, four years, four years and five years, respectively, prior to joining the SMPP. The values shown below reflect market value of assets of the defined contribution plan.
|
Executive
|
Accumulated value at Jan 1,
2020 ($) |
Compensatory change
1
($)
|
Accumulated value at Dec 31,
2020 ($) |
|||||||||
|
Al Monaco
|
|
72,413
|
|
|
-
|
|
|
77,811
|
|
|||
|
Colin K. Gruending
|
|
79,400
|
|
|
-
|
|
|
82,499
|
|
|||
|
John K. Whelen
|
|
79,579
|
|
|
-
|
|
|
83,086
|
|
|||
|
Vern D. Yu
|
|
79,916
|
|
|
-
|
|
|
84,966
|
|
|||
|
1
|
The compensatory change is equal to contributions made by the company during 2020.
|
39
Other benefits
Enbridge’s savings plan and benefits plans are key elements of the total compensation package for our employees, including NEOs.
Savings Plan
Enbridge provides a savings plan for Canadian employees and a 401(k) savings plan for U.S. employees. All NEOs participate in the savings plan on the same terms as eligible employees. The savings plans assist and encourage employees to save by matching 100% of employee contributions up to plan limits (maximum 2.5% and 6% of base salary for Canadian employees and U.S. employees, respectively) and subject to applicable tax limits. In Canada, matching contributions are provided as flex credits which may be used to purchase additional benefits or taken as
after-tax
cash; in the U.S., matching contributions are invested in the savings plan.
Life and health benefits
Medical, dental, life insurance and disability insurance benefits are available to meet the specific needs of individuals and their families. The NEOs participate in the same plan as all other employees. The plans are structured to provide minimum basic coverage with the option of enhanced coverage at a level that is competitive and affordable.
The HRC Committee reviews the retirement and other benefits regularly. These benefits are a key element of a total compensation package and are designed to be competitive and reasonably meet the needs of executives in their current roles.
Compensation governance
Enbridge’s compensation governance structure consists of the Board and the HRC Committee, with Mercer (Canada) Limited (“Mercer”), and others from time to time, providing independent advisory support to the HRC Committee. The HRC Committee reviews the governance structure annually against best practices and regulatory guidance.
Board and HRC Committee
The Board is responsible for the oversight of the compensation principles and programs at Enbridge. The HRC Committee approves major compensation programs and payouts, including reviewing and recommending the compensation for the President & CEO to the Board. The HRC Committee also approves the compensation for the other NEOs.
The HRC Committee assists the Board in carrying out its responsibilities with respect to compensation matters by providing oversight and direction on human resources strategy, policies and programs for the NEOs, senior
management and the broader employee base. This includes compensation, equity incentive plans, pension and benefits as well as talent management, succession planning, workforce recruitment, retention, diversity and inclusion, and employee health and safety in response to the
COVID-19
pandemic. The HRC Committee provides oversight regarding the management of broader people-related risk and, in addition, specifically reviews the compensation programs from a risk perspective.
All members of the HRC Committee are independent under the independence standard discussed in this Amendment No. 1 on Form 10-K/A. The members of the HRC Committee are V. Maureen Kempston Darkes (chair), Pamela L. Carter, Marcel R. Coutu, Susan M. Cunningham and Gregory J. Goff.
The members of the HRC Committee have experience as members of the compensation committees of other public companies. In addition, the members of the HRC Committee have experience in top leadership roles, strong knowledge of the energy industry, experience as directors of other public companies, and a mix of other relevant skills and experience. This background provides the HRC Committee members with the collective experience, knowledge and skills to effectively carry out their responsibilities. For information on each HRC Committee member’s experience and current service on other public company boards and committees, see the director profiles, beginning on page 4. For information on each HRC Committee member’s skills and experience, see the skills and experience matrix on page 15. For information on each HRC Committee member’s participation on other Board committees, see page 14.
Independent advice
The HRC Committee is directly responsible for the appointment, compensation and oversight of the work of any compensation consultants, outside legal counsel or other advisors it retains (each, an “Advisor”). The HRC Committee may select or receive advice from an Advisor only after taking into consideration all factors relevant to the Advisor’s independence from management including:
|
•
|
the provision of other services to Enbridge by the Advisor;
|
|
•
|
the amount of fees received from Enbridge by the Advisor as a percentage of the Advisor’s total revenue;
|
|
•
|
the policies and procedures of the Advisor that are designed to prevent conflicts of interest;
|
|
•
|
any shares owned by the Advisor; and
|
|
•
|
any business or personal relationship of the Advisor with a member of the HRC Committee or with an executive officer at Enbridge.
|
Although the HRC Committee is required to consider these factors, it is free to select or receive advice from an Advisor that is not independent. The HRC Committee has determined that Mercer, as an Advisor, is independent.
40
Since 2002, Mercer, an independent Advisor, has provided guidance to the HRC Committee on compensation matters to ensure Enbridge’s programs are appropriate, market competitive and continue to meet intended goals. Advisory services include reviewing:
|
•
|
the competitiveness and appropriateness of executive compensation programs;
|
|
•
|
annual total direct compensation for the President & CEO and the executive leadership team;
|
|
•
|
executive compensation governance; and
|
|
•
|
the HRC Committee’s mandate and related Board committee processes.
|
While the HRC Committee considers the information and recommendations Mercer provides, it has full responsibility for its own decisions, which may reflect other factors and considerations.
The HRC Committee chair reviews and approves the terms of engagement with Mercer every year. The terms specify the work to be done in the year, Mercer’s responsibilities and its fees. Management can also retain Mercer on compensation matters from time to time or for prescribed compensation services. The HRC Committee chair must, however, approve all services that are not standard in nature, considering whether or not the work would compromise Mercer’s independence.
Management and the HRC Committee engaged Mercer in 2020 to provide analysis and advice on various compensation matters. The following table provides a breakdown of services provided by and fees paid to Mercer and its affiliates (a significant portion of which relate to risk brokerage service fees paid to Marsh Inc., a Mercer affiliate) by Enbridge and its affiliates in 2020 and 2019:
|
Nature of work
|
Approximate fees in 2020 ($)
|
Approximate fees in 2019 ($)
|
||||||||
|
Executive compensation related fees
1
|
|
296,735
|
|
|
296,632
|
|
||||
|
All other fees
2
|
|
5,658,518
|
|
|
6,148,371
|
|
||||
|
Total
|
|
5,955,253
|
|
|
6,445,003
|
|
||||
|
1
|
Includes all fees related to executive compensation associated with the President & CEO and the executive leadership team.
|
|
2
|
Includes fees paid for other matters that apply to Enbridge as a whole, such as pension actuarial valuations, renewal and pricing of benefit plans, evaluation of geographic market differences and regulatory proceedings support. Also includes significant risk brokerage service fees paid to Marsh for services provided to our operating affiliates.
|
Compensation services received by Enbridge from Advisors are not sole sourced from one provider; each situation and need is assessed independently, and other providers are used depending on the nature of the service required, and the qualifications of the provider. In 2020, Enbridge did not engage the services of other compensation consultants.
Compensation risk management
The HRC Committee oversees Enbridge’s compensation programs from the perspective of whether the programs encourage individuals to take inappropriate or excessive risks that are reasonably likely to have a material adverse impact on Enbridge.
Compensation risk mitigation practices
Enbridge uses the following compensation practices to mitigate risk:
|
•
|
a
pay-for-performance
|
|
•
|
a mix of pay programs benchmarked against a relevant peer group in terms of both relative proportion and prevalence;
|
|
•
|
a rigorous approach to goal setting and a process of establishing targets with multiple levels of performance, which mitigate excessive risk-taking that could harm Enbridge’s value or reward poor judgment of executives;
|
|
•
|
compensation programs that include a combination of short-, medium- and long-term elements that ensure executives are incentivized to consider both the immediate and long-term implications of their decisions;
|
|
•
|
program provisions where executives are compensated for their short-term performance using a combination of safety, system reliability, environmental, financial, and customer and employee metrics that ensure a balanced perspective and are a mix of both leading (proactive/preventative) and lagging (incident-based) indicators;
|
|
•
|
performance thresholds that include both minimum and maximum payouts;
|
|
•
|
stock award programs that vest over multiple years and are aligned with overall corporate performance that drives superior value to Enbridge shareholders;
|
|
•
|
share ownership guidelines that ensure executives have a meaningful equity stake in Enbridge to align their interests with those of Enbridge shareholders;
|
|
•
|
an anti-hedging policy to prevent activities that would weaken the intended
pay-for-performance
|
|
•
|
an incentive compensation clawback policy that allows Enbridge to recoup overpayments made to executives in the event of fraudulent or willful misconduct.
|
41
The HRC Committee has considered the concept of risk as it relates to the compensation programs and has concluded that the programs do not encourage excessive or inappropriate risk-taking and are aligned with the long-term interests of shareholders.
Anti-hedging policy
Enbridge’s insider trading and reporting guidelines, among other things, prohibit directors, officers, employees and contractors (of Enbridge and its subsidiaries) from purchasing financial instruments that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held by the NEO, as such positions delink the intended alignment of employee and shareholder interests. The following activities are specifically prohibited:
|
•
|
any form of hedging activity;
|
|
•
|
any form of transaction involving stock options (other than exercising options in accordance with the incentive plans);
|
|
•
|
any other form of derivative trading (including “puts” and “calls”); and
|
|
•
|
“short-selling” (selling securities that the individual does not own).
|
Clawback policy
The incentive compensation clawback policy allows Enbridge to recover, from current and former executives, certain incentive compensation amounts awarded or paid to individuals if the individuals engaged in fraud or willful misconduct that led to inaccurate financial results reporting, regardless of whether the misconduct resulted in a restatement of all or a part of Enbridge’s financial statements.
Annual decision-making process
The HRC Committee reviews and approves the compensation plans and pay levels for all the NEOs except the President & CEO. The HRC Committee reviews and recommends the compensation plans and pay level for the President & CEO to the Board.
The chart below shows the process by which compensation decisions are made.
42
Benchmarking to peers
Total direct compensation for the NEOs is managed within a framework that involves input from and consideration by the President & CEO and the HRC Committee, with Mercer providing independent advisory support. The competitiveness of this framework is based on peer group market data extracted from third-party compensation surveys and publicly disclosed executive compensation information for comparable benchmark roles at peer companies. The market data is considered from several perspectives including organization size and industry sector (pipeline, energy and utility criteria).
As the responsibilities of Enbridge’s NEOs are primarily North American in scope, a North American peer group is determined and used for executive compensation benchmarking.
Peer group determination
The following outlines Enbridge’s compensation benchmarking peer group determination criteria:
|
•
|
Industry (typically defined as
low-risk
regulated operations in the energy sector) remains a key criterion for identifying peers, as that will help to ensure Enbridge can pay competitively against
“best-in-class”
|
|
•
|
Size/complexity remains important but is more broadly defined to consider multiple dimensions, including
|
|
financial (e.g., market capitalization, cash flow, capital employed) and nonfinancial measures (e.g., geography and breadth of operations).
|
|
•
|
Geography is not a major factor; in particular, Enbridge believes it is less important to focus on Canadian companies if they are not sufficiently comparable to Enbridge in terms of industry and/or size/complexity.
|
Based on these criteria, Enbridge uses a single peer group of Canadian and U.S. companies to reflect Enbridge’s identity as a North American leader that happens to be based in Canada. Our peer group of energy and infrastructure companies is weighted heavily towards the U.S. as the U.S. market offers more comparable peers from an industry and/or size/complexity perspective. It is important to note that Enbridge limits the peer group to those in the energy and infrastructure space, rather than extending to other capital-intensive sectors, as these companies are subject to the same external industry pressures and macroeconomic factors as Enbridge.
Our peer group contains companies that are generally similar in size to Enbridge, primarily in terms of enterprise value, and secondarily market capitalization and assets; size constraints were relaxed in certain instances to include those similar to Enbridge in terms of operational profile.
Enbridge’s compensation benchmarking peer group is reviewed annually by the HRC Committee. The peer group used for determining compensation in 2020 was unchanged from 2019.
Setting compensation targets
Enbridge targets overall total direct compensation at the median (including the President & CEO position), considering the skills, competencies and experience of each senior executive.
Share ownership
It is important for the NEOs to have a meaningful equity stake in Enbridge. Owning Enbridge shares is a tangible way to align the interests of executives with those of Enbridge shareholders.
Executives can acquire Enbridge shares by participating in the employee savings plan, exercising stock options or by making personal investments in Enbridge shares. Personal holdings, and Enbridge shares held in the name of a spouse, dependent child or trust, all count toward meeting the guidelines. PSUs, unvested RSUs and unexercised stock options do not count toward meeting the guidelines (resulting in a more stringent threshold than typical practice).
43
The share ownership requirement is six times base salary for the President & CEO and three times base salary for the other NEOs. The NEOs have until January 1, 2022 to comply with their increased target, with the
exception of Mr. Gruending who has four years from his appointment to Executive Vice President & CFO. All have already met or exceeded the requirement, as noted in the following graph.
Target and actual share ownership as of December 31, 2020
44
Executive compensation tables and other compensation disclosures
2020 summary compensation table
The table below shows the total amounts that Enbridge and its subsidiaries paid and granted to the NEOs for the years ended December 31, 2020, 2019 and 2018. Amounts represented below for Mr. Yardley were originally paid in U.S. dollars and have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740, US$1 = C$1.2967, and US$1 = C$1.3657 for 2020, 2019 and 2018, respectively.
|
Name and
principal position
1
|
Year
|
Salary
($) |
Stock-
based awards
2
($) |
Option-
based
awards
3
($) |
Non-
equity
incentive
plan
compen-
sation
4
|
Pension
value
5
($) |
All other
compen- sation
6
($) |
Total
($) |
||||||||||||||||||||||||||||||||
|
Al Monaco
President & Chief Executive Officer
|
|
2020
|
|
1,546,139
|
|
8,475,960
|
|
2,303,250
|
|
3,205,919
|
|
1,462,000
|
|
61,568
|
|
17,054,836
|
||||||||||||||||||||||||
|
|
2019
|
|
1,592,878
|
|
6,129,560
|
|
3,327,732
|
|
3,687,712
|
|
3,195,000
|
|
60,502
|
|
17,993,384
|
|||||||||||||||||||||||||
|
|
2018
|
|
1,479,450
|
|
4,439,868
|
|
2,777,446
|
|
3,473,453
|
|
1,141,000
|
|
68,509
|
|
13,379,726
|
|||||||||||||||||||||||||
|
Colin K. Gruending
Executive Vice President & Chief Financial Officer
|
|
2020
|
|
587,074
|
|
1,680,385
|
|
456,525
|
|
761,904
|
|
1,017,000
|
|
12,032
|
|
4,514,919
|
||||||||||||||||||||||||
|
|
2019
|
|
467,122
|
|
1,225,912
|
|
316,315
|
|
583,360
|
|
1,498,000
|
|
25,460
|
|
4,116,169
|
|||||||||||||||||||||||||
|
|
2018
|
|
361,656
|
|
496,675
|
|
172,549
|
|
338,078
|
|
421,000
|
|
231,272
|
|
2,021,230
|
|||||||||||||||||||||||||
|
John K. Whelen
Former Executive Vice President
|
|
2020
|
|
542,492
|
|
2,052,101
|
|
557,550
|
|
690,766
|
|
525,000
|
|
73,105
|
|
4,441,015
|
||||||||||||||||||||||||
|
|
2019
|
|
635,849
|
|
1,604,385
|
|
870,883
|
|
821,199
|
|
645,000
|
|
17,568
|
|
4,594,884
|
|||||||||||||||||||||||||
|
|
2018
|
|
619,500
|
|
1,244,477
|
|
758,499
|
|
886,132
|
|
126,000
|
|
33,466
|
|
3,668,074
|
|||||||||||||||||||||||||
|
William T. Yardley
Executive Vice President & President, Gas Transmission & Midstream
|
|
2020
|
|
700,018
|
|
2,320,853
|
|
598,335
|
|
849,262
|
|
396,000
|
|
32,065
|
|
4,896,533
|
||||||||||||||||||||||||
|
|
2019
|
|
732,029
|
|
3,828,546
|
|
1,069,747
|
|
767,701
|
|
351,400
|
|
32,993
|
|
6,782,416
|
|||||||||||||||||||||||||
|
|
2018
|
|
751,161
|
|
1,570,650
|
|
847,539
|
|
968,697
|
|
359,000
|
|
32,958
|
|
4,530,005
|
|||||||||||||||||||||||||
|
Vern D. Yu
Executive Vice President & President, Liquids Pipelines
|
|
2020
|
|
616,801
|
|
1,821,821
|
|
495,038
|
|
703,893
|
|
1,177,000
|
|
22,579
|
|
4,837,131
|
||||||||||||||||||||||||
|
|
2019
|
|
564,541
|
|
1,424,276
|
|
773,196
|
|
711,996
|
|
1,478,000
|
|
22,648
|
|
4,974,657
|
|||||||||||||||||||||||||
|
|
2018
|
|
450,000
|
|
723,196
|
|
440,752
|
|
900,000
|
|
122,000
|
|
29,030
|
|
2,664,978
|
|||||||||||||||||||||||||
|
Robert R. Rooney
Executive Vice President & Chief Legal Officer
|
|
2020
|
|
557,394
|
|
1,593,583
|
|
433,163
|
|
634,091
|
|
349,000
|
|
18,167
|
|
3,585,397
|
||||||||||||||||||||||||
|
|
2019
|
|
564,541
|
|
1,139,225
|
|
618,565
|
|
689,992
|
|
286,000
|
|
10,283
|
|
3,308,606
|
|||||||||||||||||||||||||
|
|
2018
|
|
550,000
|
|
883,759
|
|
538,734
|
|
729,299
|
|
236,000
|
|
20,742
|
|
2,958,534
|
|||||||||||||||||||||||||
|
1
|
Mr. Whelen retired effective November 15, 2020.
|
|
2
|
The amounts disclosed in this column include the aggregate grant date fair value of PSUs and RSUs granted in 2020, 2019 and 2018. These amounts are calculated by multiplying the number of performance and restricted stock units by the unit values in the table below:
|
|
Year granted
|
C$
|
US$
|
||||||||
|
2020
|
51.06
|
|
38.75
|
|
||||||
|
2019
|
48.81
|
|
36.97
|
|
||||||
|
2018
|
43.99
|
|
38.59
|
|
||||||
|
|
In May 2019, Mr. Yardley was granted 40,421 RSUs with grant date fair value of US$37.11.
|
|
3
|
The amounts in this column represent the grant date fair value of stock option awards granted to each of the NEOs. The grant date fair value of stock option awards is measured using the Black-Scholes option-pricing model, based on the following assumptions:
|
|
February 2020
|
February 2019
|
February 2018
|
||||||||||||||||||||||||||||
|
Assumptions
|
C$
|
US$
|
C$
|
US$
|
C$
|
US$
|
||||||||||||||||||||||||
|
Expected option term
|
6 years
|
6 years
|
6 years
|
6 years
|
6 years
|
6 years
|
||||||||||||||||||||||||
|
Expected volatility
|
17.587%
|
20.283%
|
18.318%
|
21.802%
|
21.077%
|
21.893%
|
||||||||||||||||||||||||
|
Expected dividend yield
|
5.847%
|
5.847%
|
5.961%
|
5.961%
|
6.377%
|
6.377%
|
||||||||||||||||||||||||
|
Risk free interest rate
|
1.314%
|
1.416%
|
1.615%
|
2.333%
|
2.088%
|
2.694%
|
||||||||||||||||||||||||
|
Exercise price
|
$55.54
|
$41.97
|
$48.30
|
$36.71
|
$43.02
|
$33.97
|
||||||||||||||||||||||||
|
Option value
|
$3.75
|
$3.64
|
$4.03
|
$4.07
|
$3.82
|
$3.40
|
||||||||||||||||||||||||
|
4
|
The amounts disclosed in this column represent amounts paid under the Enbridge Inc. STIP with respect to the 2020, 2019 and 2018 performance years.
|
|
5
|
The pension values are equal to the compensatory change shown in the defined benefit plan table.
|
45
|
6
|
The table below describes the elements comprising the amounts presented in this column for 2020:
|
|
Executive
|
Matching
contribution under retirement savings plan
($)
|
Excess flexible
benefit credit
a
($)
|
Unused
vacation ($) |
Personal use
of company aircraft
($)
|
Parking
($)
|
Other benefits
b
($)
|
Total
($)
|
||||||||||||||||||||||||||||
|
Al Monaco
|
-
|
40,854
|
-
|
7,865
|
6,108
|
6,741
|
61,568
|
||||||||||||||||||||||||||||
|
Colin K. Gruending
|
-
|
7,232
|
-
|
-
|
4,800
|
-
|
12,032
|
||||||||||||||||||||||||||||
|
John K. Whelen
|
-
|
4,244
|
59,817
|
-
|
4,200
|
4,844
|
73,105
|
||||||||||||||||||||||||||||
|
William T. Yardley
|
21,786
|
-
|
-
|
8,950
|
-
|
1,329
|
32,065
|
||||||||||||||||||||||||||||
|
Vern D. Yu
|
-
|
12,083
|
-
|
-
|
4,800
|
5,696
|
22,579
|
||||||||||||||||||||||||||||
|
Robert R. Rooney
|
-
|
11,872
|
-
|
-
|
4,800
|
1,495
|
18,167
|
||||||||||||||||||||||||||||
|
a)
|
For the NEOs domiciled in Canada, flexible benefit credits are provided based on their family status and base salary. These credits can be used to purchase benefits or can be paid in cash. Participants could receive up to 2.5% of base salary in matching contributions towards their flexible benefit credits if they made contributions into their Savings Plan. This amount represents the excess flexible benefit credits paid to the NEO.
|
|
b)
|
Other benefits include executive medical and other incidental compensation.
|
Executive compensation and shareholder return
The chart below shows the value of a $100 investment made January 1, 2016 in both Enbridge common shares and the S&P/TSX Composite Index and the S&P 500 index, at the end of each of the last five years (assuming reinvestment of dividends throughout the term). It also shows the growth in average total direct compensation for the NEOs reported in the 2020 summary compensation table over the same period.
Total direct compensation includes base salary, short-term incentive award paid, and the grant value of medium- and long-term incentive awards. Average total direct compensation is taken by dividing total direct compensation from the 2020 summary compensation table by the number of named executives in any given year. The total direct compensation value for NEOs is 0.72% of our adjusted earnings of $4,894 million for 2020.
The total return on Enbridge common shares has been positive from 2016 to 2020. Average compensation paid to the NEOs has also increased over the same period.
46
Outstanding option-based and share-based awards
The table below shows the option-based and share-based awards that were outstanding on December 31, 2020. The market value of unvested or unearned awards is calculated based on C$40.71 per share for awards denominated in Canadian dollars and US$31.99 for awards denominated in U.S. dollars, the closing prices of our shares on the TSX and NYSE on December 31, 2020. The grant date fair value for U.S. option grants and the market value of unvested or unearned awards denominated in U.S. dollars were each converted from U.S. dollars to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
Option-based awards
1
|
Share-based awards
|
|||||||||||||||||||||||||||||||
|
|
Number of
securities underlying unexercised options
(#)
|
Option
exercise price
2
($)
|
Option
expiry
date
|
Value of
in-the-money
unexercised options
3
|
Number
of units that have not vested
4 5
(#)
|
Market or
payout
value of
units not
vested
3
($)
|
Market or
value of vested share-based awards not paid out or distributed
3 6
($)
|
|||||||||||||||||||||||||
|
Named executive officer
|
Vested
($) |
Unvested
($)
|
||||||||||||||||||||||||||||||
|
Al Monaco
|
|
614,200
|
|
|
55.54
|
|
|
2/20/2030
|
|
|
0
|
|
|
0
|
|
|
43,966
|
|
|
1,789,860
|
|
|
|
|
||||||||
|
|
825,740
|
|
|
48.30
|
|
|
2/21/2029
|
|
|
0
|
|
|
0
|
|
|
131,898
|
|
|
5,369,580
|
|
|
|
|
|||||||||
|
|
727,080
|
|
|
43.02
|
|
|
2/27/2028
|
|
|
0
|
|
|
0
|
|
|
141,635
|
|
|
5,765,960
|
|
|
|
|
|||||||||
|
|
584,000
|
|
|
55.84
|
|
|
2/28/2027
|
|
|
0
|
|
|
0
|
|
|
-
|
|
|
-
|
|
|
9,724,864
|
|
|||||||||
|
|
365,000
|
|
|
44.06
|
|
|
3/1/2026
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
196,000
|
|
|
59.08
|
|
|
3/2/2025
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
199,000
|
|
|
48.81
|
|
|
3/13/2024
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
229,000
|
|
|
44.83
|
|
|
2/27/2023
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
147,500
|
|
|
38.34
|
|
|
3/2/2022
|
|
|
349,575
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Colin K. Gruending
|
|
121,740
|
|
|
55.54
|
|
|
2/20/2030
|
|
|
0
|
|
|
0
|
|
|
8,719
|
|
|
354,953
|
|
|
|
|
||||||||
|
|
78,490
|
|
|
48.30
|
|
|
2/21/2029
|
|
|
0
|
|
|
0
|
|
|
26,147
|
|
|
1,064,428
|
|
|
|
|
|||||||||
|
|
45,170
|
|
|
43.02
|
|
|
2/27/2028
|
|
|
0
|
|
|
0
|
|
|
28,108
|
|
|
1,144,261
|
|
|
|
|
|||||||||
|
|
48,670
|
|
|
55.84
|
|
|
2/28/2027
|
|
|
0
|
|
|
0
|
|
|
-
|
|
|
-
|
|
|
604,577
|
|
|||||||||
|
|
64,600
|
|
|
44.06
|
|
|
3/1/2026
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
64,780
|
|
|
59.08
|
|
|
3/2/2025
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
66,500
|
|
|
48.81
|
|
|
3/13/2024
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
72,000
|
|
|
44.83
|
|
|
2/27/2023
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
69,750
|
|
|
38.34
|
|
|
3/2/2022
|
|
|
165,308
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
John K. Whelen
|
|
148,680
|
|
|
55.54
|
|
|
11/15/2025
|
|
|
0
|
|
|
0
|
|
|
2,772
|
|
|
112,848
|
|
|
|
|
||||||||
|
|
216,100
|
|
|
48.30
|
|
|
11/15/2023
|
|
|
0
|
|
|
0
|
|
|
9,749
|
|
|
396,900
|
|
|
|
|
|||||||||
|
|
198,560
|
|
|
43.02
|
|
|
11/15/2023
|
|
|
0
|
|
|
0
|
|
|
23,432
|
|
|
953,936
|
|
|
|
|
|||||||||
|
|
152,910
|
|
|
55.84
|
|
|
11/15/2023
|
|
|
0
|
|
|
0
|
|
|
-
|
|
|
-
|
|
|
2,546,456
|
|
|||||||||
|
|
82,430
|
|
|
44.06
|
|
|
11/15/2023
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
109,670
|
|
|
59.08
|
|
|
11/15/2023
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
92,700
|
|
|
48.81
|
|
|
11/15/2023
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
78,550
|
|
|
44.83
|
|
|
2/27/2023
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
77,050
|
|
|
38.34
|
|
|
3/2/2022
|
|
|
182,609
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
84,000
|
|
|
28.78
|
|
|
2/14/2021
|
|
|
1,002,540
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
William T. Yardley
|
|
129,020
|
|
|
US41.97
|
|
|
2/20/2030
|
|
|
0
|
|
|
0
|
|
|
12,448
|
|
|
507,343
|
|
|
|
|
||||||||
|
|
202,700
|
|
|
US36.71
|
|
|
2/21/2029
|
|
|
0
|
|
|
0
|
|
|
37,355
|
|
|
1,522,460
|
|
|
|
|
|||||||||
|
|
182,520
|
|
|
US33.97
|
|
|
2/27/2028
|
|
|
0
|
|
|
0
|
|
|
44,312
|
|
|
1,806,034
|
|
|
|
|
|||||||||
|
|
56,580
|
|
|
US41.64
|
|
|
2/28/2027
|
|
|
0
|
|
|
0
|
|
|
36,471
|
7
|
|
1,486,427
|
|
|
|
|
|||||||||
|
|
|
58,941
|
|
|
US28.87
|
|
|
2/16/2026
|
|
|
234,292
|
|
|
0
|
|
|
-
|
|
|
-
|
|
|
2,984,853
|
|
||||||||
|
Vern D. Yu
|
|
132,010
|
|
|
55.54
|
|
|
2/20/2030
|
|
|
0
|
|
|
0
|
|
|
9,450
|
|
|
384,712
|
|
|
|
|
||||||||
|
|
191,860
|
|
|
48.30
|
|
|
2/21/2029
|
|
|
0
|
|
|
0
|
|
|
28,350
|
|
|
1,154,136
|
|
|
|
|
|||||||||
|
|
115,380
|
|
|
43.02
|
|
|
2/27/2028
|
|
|
0
|
|
|
0
|
|
|
32,911
|
|
|
1,339,789
|
|
|
|
|
|||||||||
|
|
93,300
|
|
|
55.84
|
|
|
2/28/2027
|
|
|
0
|
|
|
0
|
|
|
-
|
|
|
-
|
|
|
1,543,361
|
|
|||||||||
|
|
96,750
|
|
|
44.06
|
|
|
3/1/2026
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
82,340
|
|
|
59.08
|
|
|
3/2/2025
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
83,350
|
|
|
48.81
|
|
|
3/13/2024
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
83,250
|
|
|
44.83
|
|
|
2/27/2023
|
|
|
0
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
64,350
|
|
|
38.34
|
|
|
3/2/2022
|
|
|
152,510
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Robert R. Rooney
|
|
115,510
|
|
|
55.54
|
|
|
2/20/2030
|
|
|
0
|
|
|
0
|
|
|
8,264
|
|
|
336,407
|
|
|
|
|
||||||||
|
|
153,490
|
|
|
48.30
|
|
|
2/21/2029
|
|
|
0
|
|
|
0
|
|
|
24,801
|
|
|
1,009,654
|
|
|
|
|
|||||||||
|
|
141,030
|
|
|
43.02
|
|
|
2/27/2028
|
|
|
0
|
|
|
0
|
|
|
26,324
|
|
|
1,071,648
|
|
|
|
|
|||||||||
|
|
|
167,200
|
|
|
55.84
|
|
|
2/28/2027
|
|
|
0
|
|
|
0
|
|
|
-
|
|
|
-
|
|
|
1,886,017
|
|
||||||||
47
|
1
|
Each ISO award has a
10-year
term and vests
pro-rata
as to one fourth of the option award beginning on the first anniversary of the grant date.
|
|
2
|
Option exercise prices are reflected in the currency granted.
|
|
3
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London year-end exchange rate of US$1 = C$1.2740.
|
|
4
|
The number of PSUs and RSUs outstanding includes dividend equivalents as of December 31, 2020.
|
|
5
|
A performance multiplier of 1.0x has been used (PSUs only), based on achieving the target performance level as defined in the plan.
|
|
6
|
Reflects the payout value of the 2018 PSU grant, which vested on December 31, 2020 but will not be paid until March 2021. A performance multiplier of 1.82x is used.
|
|
7
|
Reflects RSUs granted on May 8, 2019 that remain outstanding, 20% of which vested on the first anniversary of the grant date, 20% and 60% of which vest on the second and third anniversaries of the grant date, respectively.
|
Value vested or earned in 2020
|
Executive
|
Value vested during the year
|
Value earned during the year
|
||||||||||
|
Option-based awards
1 2
($)
|
Share-based awards
1 3
($)
|
Non-equity incentive plan
1 4
($)
|
||||||||||
|
Al Monaco
|
|
3,406,926
|
|
|
9,724,864
|
|
|
3,205,919
|
|
|||
|
Colin K. Gruending
|
|
321,146
|
|
|
832,454
|
5
|
|
761,904
|
|
|||
|
John K. Whelen
|
|
888,481
|
|
|
2,546,456
|
|
|
690,766
|
|
|||
|
William T. Yardley
|
|
333,142
|
|
|
4,271,348
|
6
|
|
849,262
|
|
|||
|
Vern D. Yu
|
|
704,506
|
|
|
1,543,361
|
|
|
703,893
|
|
|||
|
Robert R. Rooney
|
|
544,704
|
|
|
1,886,017
|
|
|
634,091
|
|
|||
|
1
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
|
2
|
The values of the option-based awards listed above are based on the following:
|
|
Grant date
|
Grant price
|
2020 vesting date
|
Closing price on 2020 vesting date
|
|||||||||
|
2/29/2016
|
|
$44.06
|
|
|
2/28/2020
|
|
|
$49.96
|
|
|||
|
2/28/2017
|
|
$55.84
|
|
|
2/28/2020
|
|
|
$49.96
|
|
|||
|
2/28/2017
|
|
US$41.64
|
|
|
2/28/2020
|
|
|
US$37.43
|
|
|||
|
2/27/2018
|
|
$43.02
|
|
|
2/27/2020
|
|
|
$50.84
|
|
|||
|
2/27/2018
|
|
US$33.97
|
|
|
2/27/2020
|
|
|
US$37.66
|
|
|||
|
2/21/2019
|
|
$48.30
|
|
|
2/21/2020
|
|
|
$55.31
|
|
|||
|
2/21/2019
|
|
US$36.71
|
|
|
2/21/2020
|
|
|
US$41.87
|
|
|||
|
3
|
Includes the 2018 PSUs, including dividend equivalents, that matured on December 31, 2020. A performance multiplier of 1.82x has been used.
|
|
4
|
Based on corporate, business unit and individual performance for the 2020 performance year.
|
|
5
|
Includes the 2018 RSUs, including dividend equivalents, that matured on December 1, 2020.
|
|
6
|
Includes the 2019 RSUs, including dividend equivalents, that matured on May 8, 2020.
|
Termination of employment and
arrangements
change-in-control
Employment agreements
Enbridge has entered into employment agreements with each of the NEOs. The terms in the employment agreements are competitive and part of a comprehensive compensation package that assists in recruiting and retaining top executive talent.
The agreements generally provide payments for executives in the case of involuntary termination for any reason (other than for cause) or voluntary termination within 150 days after constructive dismissal, as defined in each agreement, and do not provide for any “single-trigger” severance payments upon a change in control of the company. As a condition to receiving payments under the employment agreements upon a qualifying termination of employment, the executive must execute a general release of claims in favor of Enbridge and comply with the following restrictive covenants:
|
Confidentiality provision
|
Non-competition/solicitation
|
No recruitment
|
||
|
2 years after departure
|
1 year after departure
|
2 years after departure
|
||
48
Termination of employment scenarios
Compensation that would be paid to the NEOs pursuant to the terms of their existing employment agreements under various termination scenarios is described below.
|
Type of termination
|
Base salary
|
Short-term incentive
|
Medium- and long-term incentives
|
Pension
|
Benefits
|
|||||||
|
Resignation
|
None
|
Payable in full if executive has worked the entire calendar year and remains actively employed on the payment date. Otherwise, none.
|
• PSUs and RSUs forfeited.
• Vested stock options must be exercised within 30 days of resignation or by the end of the original term (if sooner).
• Unvested stock options are cancelled.
|
No longer earns service credits.
|
None
|
||||||
|
Retirement
|
Current year’s incentive prorated to retirement date
|
• PSUs and RSUs are prorated to retirement date and value is assessed and paid at the end of the usual term.
• Stock options granted prior to 2020 continue to vest and can be exercised for three years after retirement (or option expiry, if sooner)
• Stock options granted in 2020 continue to vest and can be exercised for five years after retirement (or option expiry, if sooner)
|
Post-retirement benefits begin.
|
|||||||||
|
Termination not for cause or constructive dismissal
|
Current salary is paid in a lump sum (3x for CEO and 2x for other NEOs)
|
The average short-term incentive award over the past two years is paid out in a lump sum (3x for CEO and 2x for other NEOs)
plus
the current year’s short-term incentive, prorated based on active service during the year of termination based on target performance
|
• PSUs and RSUs are prorated to date of termination (plus any applicable notice period) and value is assessed and paid at the end of the usual term.
• Vested stock options must be exercised according to stock option terms.
• The
in-the-money
|
Additional years of pension credit are added to the final pension calculation (three years for CEO and two years for other NEOs).
|
Value of future benefits paid out in a lump sum (3x for CEO and 2x for other NEOs).
|
||||||
|
Termination following a change of control (CIC)
|
• PSUs vest and value is assessed and paid on performance measures deemed to have been achieved as of the change of control. RSUs vest and are paid out.
• All stock options vest and remain exercisable for 30 days following termination (or option expiry, if sooner).
|
|||||||||||
49
The amounts shown in the table below include the estimated potential payments and benefits that would be payable to each of our NEOs as a result of the specified triggering event, assumed to occur as of December 31, 2020. The actual amounts that would be payable in these circumstances can be determined only at the time of the executive’s separation, would include payments or benefits already earned or vested and may differ from the amounts set forth in the table below. Amounts in U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
Named
executive
officer
1
|
Triggering event
2
|
Base
salary
3
($)
|
Short-
term incentive
4
($) |
Medium-
term incentive
5
($) |
Long-
term incentive
6
($) |
Pension
7
($)
|
Benefits
8
($)
|
Total
payout
($)
|
||||||||||||||||||||||
|
Al Monaco
|
CIC
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0
|
|
||||||||
|
Death
|
|
-
|
|
|
-
|
|
|
12,925,401
|
|
|
-
|
|
|
-
|
|
|
55,969
|
|
|
12,981,370
|
|
|||||||||
|
Retirement
|
|
-
|
|
|
-
|
|
|
5,883,086
|
|
|
-
|
|
|
-
|
|
|
55,969
|
|
|
5,939,056
|
|
|||||||||
|
Voluntary or for cause termination
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
55,969
|
|
|
55,969
|
|
|||||||||
|
Involuntary termination without cause
|
|
4,365,600
|
|
|
10,741,747
|
|
|
12,925,401
|
|
|
-
|
|
|
3,771,000
|
|
|
252,009
|
|
|
32,055,757
|
|
|||||||||
|
Involuntary or good reason termination after a CIC
|
|
4,365,600
|
|
|
10,741,747
|
|
|
12,925,401
|
|
|
-
|
|
|
3,771,000
|
|
|
252,009
|
|
|
32,055,757
|
|
|||||||||
|
Colin K.
Gruending
|
CIC
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0
|
|
||||||||
|
Death
|
|
-
|
|
|
-
|
|
|
3,707,902
|
|
|
-
|
|
|
-
|
|
|
22,718
|
|
|
3,730,620
|
|
|||||||||
|
Voluntary or for cause termination
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
22,718
|
|
|
22,718
|
|
|||||||||
|
Involuntary termination without cause
|
|
1,181,340
|
|
|
921,438
|
|
|
3,691,385
|
|
|
-
|
|
|
1,551,000
|
|
|
88,954
|
|
|
7,434,117
|
|
|||||||||
|
Involuntary or good reason termination after a CIC
|
|
1,181,340
|
|
|
921,438
|
|
|
3,691,385
|
|
|
-
|
|
|
1,551,000
|
|
|
88,954
|
|
|
7,434,117
|
|
|||||||||
|
John K.
Whelen
9
|
Retirement
|
|
-
|
|
|
-
|
|
|
709,308
|
|
|
-
|
|
|
-
|
|
|
59,817
|
|
|
769,125
|
|
||||||||
|
William T.
Yardley
|
CIC
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0
|
|
||||||||
|
Death
|
|
-
|
|
|
-
|
|
|
5,322,264
|
|
|
-
|
|
|
-
|
|
|
25,860
|
|
|
5,348,124
|
|
|||||||||
|
Retirement
|
|
-
|
|
|
-
|
|
|
2,597,159
|
|
|
-
|
|
|
-
|
|
|
25,860
|
|
|
2,623,019
|
|
|||||||||
|
Voluntary or for cause termination
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
25,860
|
|
|
25,860
|
|
|||||||||
|
Involuntary termination without cause
|
|
1,344,735
|
|
|
2,212,254
|
|
|
5,298,656
|
|
|
-
|
|
|
837,000
|
|
|
94,914
|
|
|
9,787,559
|
|
|||||||||
|
Involuntary or good reason termination after a CIC
|
|
1,344,735
|
|
|
2,212,254
|
|
|
5,298,656
|
|
|
-
|
|
|
837,000
|
|
|
94,914
|
|
|
9,787,559
|
|
|||||||||
|
Vern D. Yu
|
CIC
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0
|
|
||||||||
|
Death
|
|
-
|
|
|
-
|
|
|
2,878,638
|
|
|
-
|
|
|
-
|
|
|
23,649
|
|
|
2,902,287
|
|
|||||||||
|
Voluntary or for cause termination
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
23,649
|
|
|
23,649
|
|
|||||||||
|
Involuntary termination without cause
|
|
1,229,760
|
|
|
1,611,996
|
|
|
2,860,736
|
|
|
-
|
|
|
2,159,000
|
|
|
100,581
|
|
|
7,962,073
|
|
|||||||||
|
Involuntary or good reason termination after a CIC
|
|
1,229,760
|
|
|
1,611,996
|
|
|
2,860,736
|
|
|
-
|
|
|
2,159,000
|
|
|
100,581
|
|
|
7,962,073
|
|
|||||||||
|
Robert R.
Rooney
|
CIC
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0
|
|
||||||||
|
Death
|
|
-
|
|
|
-
|
|
|
2,417,709
|
|
|
-
|
|
|
-
|
|
|
20,693
|
|
|
2,438,402
|
|
|||||||||
|
Retirement
|
|
-
|
|
|
-
|
|
|
1,098,013
|
|
|
-
|
|
|
-
|
|
|
20,693
|
|
|
1,118,706
|
|
|||||||||
|
Voluntary or for cause termination
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
20,693
|
|
|
20,693
|
|
|||||||||
|
Involuntary termination without cause
|
|
1,076,040
|
|
|
1,419,291
|
|
|
2,402,055
|
|
|
-
|
|
|
971,000
|
|
|
87,933
|
|
|
5,956,319
|
|
|||||||||
|
Involuntary or good reason termination after a CIC
|
|
1,076,040
|
|
|
1,419,291
|
|
|
2,402,055
|
|
|
-
|
|
|
971,000
|
|
|
87,933
|
|
|
5,956,319
|
|
|||||||||
50
|
1
|
Mr. Whelen retired on November 15, 2020.
|
|
2
|
Messrs. Monaco, Yardley and Rooney are the only NEOs who are retirement eligible as of December 31, 2020. Retirement eligibility under Enbridge programs means age 55 or older.
|
|
3
|
Reflects a lump sum payment equal to three times (for Mr. Monaco) and two times (for Messrs. Gruending, Yardley, Yu and Rooney) the NEO’s base salary in effect as at December 31, 2020.
|
|
4
|
Reflects a lump sum payment equal to three times (for Mr. Monaco) and two times (for Messrs. Gruending, Yardley, Yu and Rooney) the average of the short-term incentive award paid to the NEO in the two years preceding the year in which the termination occurs. In addition, the amount the NEO would receive as short-term incentive payment for the current year is reflected in the 2020 summary compensation table.
|
|
5
|
Represents the value of RSUs and PSUs that would vest and be settled in cash upon the triggering event, based on C$40.71 for awards granted in Canadian dollars and US$31.99 for awards granted in U.S. dollars, the closing price of an Enbridge share on the TSX and NYSE, respectively, on December 31, 2020 and assuming, in the case of PSUs, target performance. For PSUs and RSUs, severance period, as outlined in the executive employment agreement, counts towards active service when prorating for termination without cause.
|
|
6
|
Represents the
“in-the-money
In-the-money
|
|
7
|
Reflects the value of three additional years of pension credit for Mr. Monaco and two additional years of pension credit for each of Messrs. Gruending, Yardley, Yu and Rooney.
|
|
8
|
Reflects a lump sum cash payment in respect of the flex credit allowance, vacation carryover and savings plan matching contributions that would have been paid by Enbridge in respect of the NEO over a period of three years (for Mr. Monaco) or two years (for each of Messrs. Gruending, Yardley, Yu and Rooney) following the executive’s termination, plus an allowance for financial and career counselling.
|
|
9
|
Amounts shown for Mr. Whelen represent the value on his departure date, with payout value of the unvested medium- and long-term incentives based on the closing price of an Enbridge share on the TSX on November 13, 2020 of $37.38.
|
Additional equity compensation information
Enbridge shares used for purposes of equity compensation
Enbridge has two “prior stock option plans” which were approved by Enbridge shareholders in 2007, as follows:
|
•
|
Enbridge Inc. Incentive Stock Option Plan (2007), as revised (“Incentive stock option plan”); and
|
|
•
|
Enbridge Inc. Performance Stock Option Plan (2007), as amended and restated (2011) and further amended (2012 and 2014) (“Performance stock option plan”).
|
The Performance stock option plan was historically used to grant options, but no options have been granted under it since 2014.
Enbridge adopted the 2019 LTIP effective February 13, 2019, under which stock options were granted beginning in 2019. Beginning in 2020, share-settled RSUs were granted under the 2019 LTIP. The 2019 LTIP was approved by our shareholders at our 2019 annual meeting of shareholders. No further awards have been or will be granted under the Incentive stock option plan or Performance stock option plan after February 13, 2019, and all shares still available to be issued and not subject to awards under these prior stock option plans became available under the 2019 LTIP.
Shares reserved for equity compensation as of December 31, 2020
|
A
|
B
|
C
|
||||||||||
|
Plans approved by
security holders
|
Number of securities to
be issued upon exercise of outstanding options, warrants and rights (#) |
Weighted-average exercise price
of outstanding options, warrants and rights ($) |
Number of securities remaining
available for future issue under equity compensation plans (excluding securities reflected in column A)
(#)
|
|||||||||
|
2019 LTIP
|
|
11,683,418
|
|
|
50.91
|
3 4
|
|
38,016,582
|
|
|||
|
Prior stock option plans
1
|
|
24,146,312
|
|
|
48.82
|
3
|
|
—
|
|
|||
|
Spectra 2007 LTIP
2
|
|
775,806
|
|
|
36.78
|
3
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
1.8770% of total issued and
outstanding Enbridge shares |
|
|||
|
1
|
Includes 24,146,312 options outstanding under the Incentive stock option plan and no options outstanding under the Performance stock option plan.
|
|
2
|
Awards granted under the Spectra 2007 LTIP were assumed by Enbridge at the closing of the Merger Transaction, as described in the “Assumed equity-based compensation awards from Spectra Energy” section. No further awards have been or will be granted under the Spectra 2007 LTIP following the closing of the Merger Transaction.
|
|
3
|
U.S. dollars have been converted to Canadian dollars using the published WM/Reuters 4 pm London
year-end
exchange rate of US$1 = C$1.2740.
|
|
4
|
This weighted-average exercise price relates only to options granted under the 2019 LTIP. All other awards granted under the 2019 LTIP are deliverable without the payment of any consideration, and therefore these awards have not been considered in calculating the weighted average exercise price.
|
51
Awards granted and outstanding as of December 31, 2020
|
Awards outstanding
|
# outstanding
|
% of total issued and
outstanding Enbridge shares
|
||||||
|
2019 LTIP
|
|
11,683,418
|
|
|
0.5768
|
|
||
|
Incentive stock option plan
|
|
24,146,312
|
|
|
1.1922
|
|
||
|
Performance stock option plan
|
|
0
|
|
|
0.0000
|
|
||
|
Spectra 2007 LTIP – stock options
1
|
|
775,806
|
|
|
0.0383
|
|
||
|
1
|
Awards granted under the Spectra 2007 LTIP as described in the “Assumed equity-based compensation awards from Spectra Energy” section.
|
Plan restrictions – 2019 LTIP
|
Enbridge shares reserved for issue under the 2019 LTIP
|
49,700,000 in total, or 2.45% of Enbridge’s total issued and outstanding Enbridge shares as of December 31, 2020.
The total number of Enbridge shares reserved for issuance to Insiders pursuant to all security based compensation arrangements of the company shall not exceed 10% of the number of Enbridge shares outstanding at the time of reservation.
|
|
|
Enbridge shares that can be issued in a
one-year
period
|
The total number of Enbridge shares issued to Insiders pursuant to all security based compensation arrangements of the company shall not exceed 10% of the number of Enbridge shares outstanding at the time of issuance (excluding any other Enbridge shares issued under all security based compensation arrangements of the company during such
one-year
period)
|
|
|
The number of Enbridge shares that can be issued as incentive stock options (within the meaning of the U.S. Internal Revenue Code)
|
Up to 2,000,000 Enbridge shares can be issued under the 2019 LTIP as incentive stock options.
|
|
|
Stock options delivered to a greater than 10% shareholder
|
If an Incentive Stock Option is granted to a greater than 10% shareholder, the grant price will not be less than 110% of the fair market value on the grant date of the Incentive Stock Option, and in no event will such Incentive Stock Option be exercisable after the expiration of five years from the date on which the Incentive Stock Option is granted.
|
|
|
Minimum vesting
|
All awards shall be subject to a minimum vesting schedule of at least twelve months following the date of grant of the award, provided that vesting may accelerate in connection with death, retirement, a change in control or other termination of service.
Notwithstanding the foregoing, up to 5% of the Enbridge shares available for grant under the 2019 LTIP may be granted with a minimum vesting schedule that is shorter than twelve months.
|
|
Annual burn rate
|
Awards outstanding
|
2020
|
2019
|
2018
|
|||
|
2019 LTIP
|
0.2529%
|
0.3348%
|
—
|
|||
|
Incentive stock option plan
1
|
—
|
—
|
0.3350%
|
|||
|
Performance stock option plan
2
|
—
|
—
|
—
|
|||
|
Spectra 2007 LTIP – stock options
3
|
—
|
—
|
—
|
|||
|
1
|
No grants have been made under this plan since 2018.
|
|
2
|
No grants have been made under this plan since 2014.
|
|
3
|
All grants under the Spectra 2007 LTIP were made by Spectra Energy prior to the Merger Transaction. No further awards have been or will be granted under the Spectra 2007 LTIP following the closing of the Merger Transaction.
|
52
Making changes to the 2019 LTIP
To the extent permitted by applicable laws, the Board may amend, suspend or terminate the 2019 LTIP at any time without shareholder approval, provided that no amendment, other than an increase to the overall share limit, may materially and adversely affect any award outstanding at the time of the amendment without the affected participant’s consent.
Enbridge shareholder approval is required to implement any of the following changes:
|
•
|
increasing the overall share limit;
|
|
•
|
reducing the grant, exercise or purchase price for any awards;
|
|
•
|
the cancellation of any awards and the reissue of or replacement of such awards with awards having a lower grant, exercise or purchase price;
|
|
•
|
removing or exceeding the limits of the 2019 LTIP on participation by insiders;
|
|
•
|
the extension of the term of any award;
|
|
•
|
allowing other than employees or
non-employee
directors of the company or a subsidiary to become participants in the 2019 LTIP;
|
|
•
|
allowing awards to become transferable or assignable other than by will or according to the laws of descent and distribution; and
|
|
•
|
changing the amendment provisions of the 2019 LTIP.
|
Termination provisions of equity compensation plans
The termination provisions for equity compensation awards granted under the 2019 LTIP (as governed by the incentive stock option grant agreements and the RSU grant agreements), the incentive stock option plan (2007), as revised, and the performance stock option plan, are summarized below.
|
Reason for termination
|
Incentive stock option provisions
1
|
Restricted stock unit provisions
|
||||
|
Resignation
|
|
Can exercise vested options up to 30 days from the date of termination or until the option term expires (if sooner).
|
All outstanding RSUs are forfeited.
|
|||
|
Retirement
|
|
For incentive stock options granted prior to 2020, options continue to vest and can be exercised up to three years from retirement or until the stock option term expires (if sooner).
For incentive stock options granted in 2020 and thereafter, options continue to vest and can be exercised up to five years from retirement or until the stock option term expires (if sooner).
Conditions for performance stock options are mentioned below.
|
RSUs are prorated to retirement date and value is assessed and settled at the end of the usual term.
|
|||
|
Death
|
|
All options vest and can be exercised up to 12 months from the date of death or until the option term expires (if sooner).
|
All outstanding RSUs become vested and are settled no later than 30 days following the date of death.
|
|||
|
Disability
|
|
Options continue to vest based on the regular provisions of the plan.
|
All outstanding RSUs become vested and are settled no later than 30 days following the date of disability.
|
|||
|
Involuntary
termination
|
not for cause
|
Unvested options continue to vest during the notice period, and options that are vested or become vested can be exercised up to 30 days after the notice period expires or until the option term expires (if sooner).
|
RSUs are prorated to termination date (plus any applicable notice period) and value is assessed and settled at the end of the usual term.
|
|||
|
for cause
|
All options are cancelled on the date of termination.
|
All outstanding RSUs are forfeited.
|
||||
53
|
Reason for termination
|
Incentive stock option provisions
1
|
Restricted stock unit provisions
|
||||
|
Change of control or
reorganization
|
Beginning with the 2017 grants, if the employment of a participant is terminated without cause (including constructive dismissal) by the company or a subsidiary within two years after a change of control, then all unvested options of the participant vest on that double-trigger date.
For 2016 and prior grants, for a change of control, options vest on a date determined by the HRC Committee before the change of control. For any other kind of reorganization, options are to be assumed by the successor company. If they are not assumed, they will vest and the value will be paid in cash.
Performance stock option plan
|
If the employment of a participant is terminated without cause, (including constructive dismissal) by the company or a subsidiary within two years after a change of control, then all outstanding RSUs become vested and are settled no later than 30 days following the date of termination.
|
||||
|
Other transfer or assignment of awards
|
The holder of an option may not transfer or assign it other than by will, or as allowed by the laws of descent and distribution.
|
The award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution.
|
||||
|
1
|
Differences in termination provisions apply for US$ options where the executive has elected treatment as incentive stock options within the meaning of U.S. Internal Revenue Code Section 422.
|
Options granted under the Performance stock option plan have the same termination provisions as options granted under the Incentive stock option plan, except for the following differences:
|
•
|
for retirement, performance stock options are prorated for the period of active employment in the five-year period starting January 1 of the year of grant. These options can be exercised until the later of three years after retirement, or 30 days after the date by which the share price targets must be met (or the date the option expires, if earlier), as long as the share price targets are met;
|
|
•
|
for death, unvested performance stock options are prorated and the plan assumes performance requirements have been met;
|
|
•
|
for involuntary termination
not-for-cause,
|
|
•
|
for change of control, the plan assumes the performance requirements have been met and the plan was not amended in 2018 to implement a double trigger change of control as there are currently no plans to grant further awards under the plan.
|
Assumed equity-based compensation awards from Spectra Energy
Pursuant to the terms of the merger agreement, Enbridge assumed all awards outstanding under the Spectra Energy Corp 2007 Long Term Incentive Plan, as amended and restated (the “Spectra 2007 LTIP”) at the closing of the Merger Transaction (“Assumed Spectra LTIP Awards”). The Assumed Spectra LTIP Awards, including the shares of Enbridge issuable thereunder, were approved by Enbridge shareholders as part of the Merger Transaction on December 15, 2016. No further awards have been or will be granted under the Spectra 2007 LTIP following the closing of the Merger Transaction.
Spectra 2007 LTIP
The Assumed Spectra LTIP Awards remain subject to and will continue to be administered by Enbridge pursuant to the terms of Spectra 2007 LTIP. The following summarizes the material provisions of the Spectra 2007 LTIP to the extent applicable to the Assumed Spectra LTIP Awards. The summary is qualified in its entirety by the full text of the amended and restated Spectra 2007 LTIP, which is available on Enbridge’s profile on the SEC’s website at www.sec.gov.
General provisions
|
•
|
Number of shares. The aggregate number of Enbridge shares that may be issued pursuant to the Assumed Spectra LTIP Awards is 5,000,000 shares of Enbridge representing 0.25% of Enbridge’s outstanding and issued shares as at December 31, 2019.
|
|
•
|
Reservation of shares. When Spectra Energy first adopted the Spectra 2007 LTIP in 2007, it reserved 30,000,000 shares of common stock for issuance under the Spectra 2007 LTIP, with an additional 10,000,000 shares and 12,500,000 shares reserved following shareholder approval on April 19, 2011 and April 26, 2016, respectively. Immediately prior to closing of the Merger Transaction, there were 19,756,580 shares of Spectra Energy common stock available for future issuance under the Spectra 2007 LTIP. However, Enbridge determined that it would not grant any additional awards under the Spectra 2007 LTIP following the closing of the Merger Transaction and as a result, assumed only those shares issuable under the Assumed Spectra LTIP Awards. All future equity-based awards granted by Enbridge (including those made to legacy Spectra Energy employees) will be awarded pursuant to Enbridge’s existing plans and not the Spectra 2007 LTIP.
|
54
|
•
|
Administration. Prior to the closing of the Merger Transaction, the Spectra 2007 LTIP was administered by the Compensation Committee of Spectra Energy, which had the authority to determine the persons to whom awards were granted, the types of awards granted, the time at which awards were to be granted, the number of shares, units or other rights subject to an award, and the terms and conditions of each award. Following the completion of the Merger Transaction, the Spectra 2007 LTIP will, solely to the extent applicable to the Assumed Spectra LTIP Awards, be administered by the HRC Committee consistent with the administration of Enbridge’s existing compensation programs.
|
|
•
|
Eligibility. All key employees of Spectra Energy and its subsidiaries and all
non-employee
directors were eligible for awards granted under the Spectra 2007 LTIP, as selected from time to time by the Compensation Committee of Spectra Energy in its sole discretion. As noted above, only those shares issuable under the Assumed Spectra LTIP Awards were assumed by Enbridge in connection with the Merger Transaction and as a result, no additional awards will be granted by Enbridge to any individual under the Spectra 2007 LTIP.
|
|
•
|
Awards. As described in more detail below, the Assumed Spectra LTIP Awards include:
|
|
—
|
Spectra Energy options;
|
|
—
|
Spectra Energy phantom units;
|
|
—
|
Spectra Energy PSUs; and
|
|
—
|
Dividend equivalent awards.
|
|
•
|
Adjustments to awards. The HRC Committee may determine and implement appropriate adjustments to the Assumed Spectra LTIP Awards in the event of any merger, consolidation, recapitalization, reclassification, stock dividend, stock split or other similar change of control transactions.
|
|
•
|
Term and amendment. The Spectra 2007 LTIP has a term of ten years from the date of approval by the shareholders of Spectra Energy, which was last granted on April 26, 2016, subject to earlier termination or amendment in accordance with the terms of the Spectra 2007 LTIP. Any amendment to the Assumed Spectra LTIP Awards or the Spectra 2007 LTIP that is implemented by the HRC Committee may not materially adversely affect the Assumed Spectra LTIP Awards without consent of the holder of such award.
|
|
•
|
Assignability. A stock option granted under the Spectra 2007 LTIP may, solely to the extent permitted by the HRC Committee, be transferred to members of the participants’ immediate family or to trusts, partnerships or corporations whose beneficiaries, members or owners are members of the participant’s immediate family or such other person as may be approved by the HRC Committee in advance and set forth in the award agreement. All other Assumed Spectra LTIP Awards are not assignable or transferable except by will or the laws of descent and distribution.
|
Stock options
|
•
|
Nonqualified stock options and incentive stock options. Spectra Energy granted options under the Spectra 2007 LTIP to purchase shares of Spectra Energy common stock (“Spectra Energy options”) to certain of its employees. As
|
|
of immediately prior to the closing of the Merger Transaction, there were 4,000 Spectra Energy options outstanding under the Spectra 2007 LTIP at a weighted average exercise price of US$26.33 per share of Spectra Energy common stock and 892,163 Spectra Energy options outstanding under the Spectra 2007 LTIP at a weighted average exercise price of US$28.40 per share of Spectra Energy common stock.
|
|
•
|
Exercise price. The exercise price of each Spectra Energy option was determined by the Compensation Committee of Spectra Energy at the date of grant, provided however, that the exercise price per option could not be less than 100% of the fair market value per share of the common stock of Spectra Energy as of the date of grant. As the exercise price of the Spectra Energy options was determined at the date of grant, the exercise price may be below the then current market price of the Enbridge shares at the time the options are exercised.
|
|
•
|
Vesting and term of stock options. The Compensation Committee of Spectra Energy prescribed in the award agreement applicable to each Spectra Energy option the time or times at which, or the conditions upon which, such option vests or becomes exercisable. Spectra Energy options generally have a term of ten years from date of grant and during such term, once vested, the option could be exercised, unless a shorter exercise period was specified by the Compensation Committee of Spectra Energy in an award agreement, and subject to such limitations as may apply under an award agreement relating to the termination of a participant’s employment or other service with Spectra Energy or any of its subsidiaries.
|
|
•
|
Treatment upon closing of the Merger Transaction. At the closing of the Merger Transaction, each outstanding Spectra Energy option, whether vested or unvested, was automatically converted into an option to purchase, on the same terms and conditions as were applicable immediately prior to the closing, the number of Enbridge shares equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Spectra Energy common stock subject to such option immediately prior to the closing and (ii) 0.984 (“Exchange Ratio”), at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Spectra Energy common stock of such Spectra Energy option immediately prior to the closing divided by (B) the Exchange Ratio. The Spectra Energy options assumed by Enbridge in connection with the Merger Transaction are exercisable for 881,819 Enbridge shares at a weighted average exercise price of US$28.86 per share of Enbridge shares, vest at various dates until February 2019 and have various terms expiring on or before February 2026.
|
Phantom stock units
|
•
|
Grant, price and vesting. Spectra Energy granted awards of phantom units under the Spectra 2007 LTIP (“Spectra Energy phantom units”) which entitle the holder thereof the right to receive at the end of a fixed vesting period, payment based on the value of a share of common stock at the time of vesting. On the applicable vesting dates, Spectra Energy phantom units are settled in Enbridge shares or cash with an equivalent fair market value as required by the terms of such award.
|
55
|
•
|
Treatment upon closing of the Merger Transaction. At the closing of the Merger Transaction, each Spectra Energy phantom unit, whether vested or unvested, was automatically converted into a phantom unit, on the same terms and conditions as were applicable immediately prior to the closing, denominated in a number of Enbridge shares equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Spectra Energy common stock subject to such Spectra Energy phantom unit immediately prior to the closing and (ii) the Exchange Ratio. Enbridge assumed 1,566,726 Spectra Energy phantom units which were converted into 1,541,094 phantom units denominated in Enbridge shares in connection with the Merger Transaction. Approximately 42% of these assumed Spectra phantom units will be settled in Enbridge shares and approximately 58% will be settled in cash at various dates until February 2020.
|
Performance awards
|
•
|
Grant. Spectra Energy granted certain performance awards denominated in shares of Spectra Energy common stock under the Spectra 2007 LTIP (“Spectra Energy PSUs”) which become payable at the completion of a three-year performance period based upon the achievement of certain performance criteria established by the Compensation Committee of Spectra Energy. Performance award payments made in the form of Enbridge shares are valued at their fair market value at the time of payment.
|
|
•
|
Treatment upon closing of the Merger Transaction – 2015 Spectra Energy PSUs. At the closing of the Merger Transaction, each outstanding Spectra Energy PSU granted in the 2015 calendar year (“2015 Spectra Energy PSU”), was automatically cancelled and converted into the right to receive a number of Enbridge shares equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Spectra Energy common stock subject to such 2015 Spectra Energy PSU immediately prior to the closing multiplied by (ii) the Exchange Ratio, together with a cash payment equal to the amount of any dividend equivalents accrued with respect to such 2015 Spectra Energy PSU. The number of shares of Spectra Energy common stock subject to such 2015 Spectra Energy PSU was determined assuming a vesting percentage determined as set forth in the applicable award agreement (which was based upon Spectra Energy’s total stockholder return relative to the total stockholder return of the peer group for the period beginning on January 1, 2015, and ending on the date on which the closing of the Merger Transaction occurred). Approximately 820,671 Enbridge shares and US$2,637,494 in respect of accrued dividend equivalents (in each case, before tax withholding) were payable to holders of 2015 Spectra Energy PSUs in connection with the closing of the Merger Transaction.
|
|
•
|
Treatment upon closing of the Merger Transaction – 2016 Spectra Energy PSUs. At the closing of the Merger Transaction, each outstanding Spectra Energy PSU granted in the 2016 calendar year (“2016 Spectra Energy PSU”), was automatically converted into a
|
|
service-based stock unit denominated in Enbridge shares and subject to the same terms and conditions (including service vesting terms, but excluding any performance vesting terms) as were applicable to the underlying 2016 Spectra Energy PSU prior to the closing. The number of Enbridge shares subject to each such stock unit is equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Spectra Energy common stock subject to such 2016 Spectra Energy PSU immediately prior to the closing (with any performance-based vesting conditions deemed satisfied based on actual performance through the closing) multiplied by (ii) the Exchange Ratio. In connection with the Merger Transaction, Enbridge assumed 560,656 2016 Spectra Energy PSUs which, after application of the performance multiplier, were converted into 1,103,132 stock units denominated in Enbridge shares. As assumed, these stock units will be settled in Enbridge shares generally after the December 31, 2018 vesting date.
|
Other stock-based awards
|
•
|
Other stock-based awards. In addition to the Assumed Spectra LTIP Awards, Spectra Energy had other equity-based or equity-related awards representing a right to acquire or receive shares of Spectra Energy common stock or payments or benefits measured by the value thereof (“Spectra Energy other awards”) outstanding under the Spectra Energy Executive Savings Plan and the Spectra Energy Directors’ Savings Plan (“Spectra Savings Plans”).
|
|
•
|
Treatment upon closing of the Merger Transaction. At the closing of the Merger Transaction, each outstanding Spectra Energy other award was automatically converted into a right to acquire or receive benefits measured by the value of Enbridge shares, on the same terms and conditions as were applicable to the Spectra Energy other award immediately prior to the closing. As converted, the number of Enbridge shares subject to such other award is equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Spectra Energy common stock subject to such award immediately prior to the closing and (ii) the Exchange Ratio. The Spectra Savings Plans have trust funding vehicles (commonly referred to as rabbi trusts) (“Spectra Savings Plan Trusts”). Obligations to fund the Spectra Savings Plan Trusts were triggered in connection with the Merger Transaction. For any share-settled Spectra Energy other awards, the Enbridge shares used to settle such awards will be obtained on the market by the trustee of the Spectra Savings Plan Trusts.
|
Dividend equivalent awards
|
•
|
Dividend equivalent awards. Dividend equivalent awards granted under the Spectra 2007 LTIP entitled the holder to a right to receive cash payments determined by reference to dividends declared on Spectra Energy common stock during the term of the award.
|
56
Quantification of equity-based compensation
As of December 31, 2020, there is an aggregate of 775,806 Enbridge shares issuable in connection with the outstanding Assumed Spectra LTIP Awards, representing approximately 0.0383% of Enbridge’s issued and outstanding shares. Set forth below are the number of Enbridge shares issuable under the Spectra 2007 LTIP in connection with the exercise or settlement of the Assumed Spectra Energy Awards outstanding as of December 31, 2020.
|
Spectra Energy options
|
Spectra Energy
phantom units
|
Total Enbridge shares
issuable under
Spectra 2007 LTIP
|
Percentage of issued and
outstanding Enbridge shares |
|||
|
775,806
|
0
|
775,806
|
0.0383%
|
|||
Termination provisions of Spectra Energy options, Spectra Energy phantom units, and Spectra Energy PSUs
The termination provisions for the Spectra Energy options, Spectra Energy phantom units, and Spectra Energy PSUs are described below.
|
Reason for termination
|
Provisions
|
|
|
Voluntary termination
(not retirement eligible) |
The unvested portion of such an award terminates immediately.
Vested Spectra Energy options can be exercised through the earlier of 3 months following termination of employment or the 10th anniversary of the grant date.
|
|
|
Voluntary termination
(retirement eligible) |
The award is
pro-rated
based on full and partial months of service during the vesting period, and the
pro-rated
award becomes payable on the original vesting date.
Vested Spectra Energy options can be exercised through the 10th anniversary of the grant date.
|
|
|
Involuntary termination, for cause
|
The unvested portion of such an award terminates immediately.
Vested Spectra Energy options can be exercised through the earlier of 3 months following termination of employment or the 10th anniversary of the grant date.
|
|
|
Involuntary termination, without cause or for good reason before 2 year anniversary of change in control (the
2-Year
CIC Period)
|
The unvested portion of such an award vests upon such termination from employment.
Vested Spectra Energy options can be exercised through the 10th anniversary of the grant date.
|
|
|
Involuntary termination, without cause after
2-Year
CIC Period
|
The award is
pro-rated
based on full and partial months of service during the vesting period.
Spectra Energy PSUs – The
pro-rated
award becomes payable on the original vesting date.
Spectra Energy phantom units – The
pro-rated
award becomes payable upon such termination from employment.
Vested Spectra Energy options can be exercised through the earlier of 3 months following termination of employment or the 10th anniversary of the grant date.
|
|
|
Employment termination as a result of death or disability
|
The unvested portion of such an award vests.
Vested Spectra Energy options can be exercised through the earlier of 36 months following such termination of employment or the 10th anniversary of the grant date.
|
|
|
Other transfer or assignment of stock options
|
The holder of an option may not transfer or assign it other than by will, or as allowed by the laws of descent and distribution. The Spectra Energy phantom units and Spectra Energy PSUs are not assignable or transferable by the holder of the award.
|
|
57
Treatment of Assumed Spectra LTIP Awards post-Merger Transaction
Pursuant to the terms of the Spectra 2007 LTIP, the Assumed Spectra LTIP Awards will vest in the event that, the holder of such award experiences a qualifying termination within 24 months following the completion of the Merger Transaction. Under the Spectra 2007 LTIP, a qualifying termination generally includes an involuntary termination of the holder of such award by Enbridge without cause or by the holder with good reason.
Report of the Human Resources & Compensation Committee
The Human Resources & Compensation Committee has reviewed and discussed the preceding Compensation Discussion and Analysis with management. Based on the review and discussion, the Human Resources & Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Circular. This report is provided by the following independent directors who comprise the Human Resources & Compensation Committee:
V. Maureen Kempston Darkes (Chair)
Pamela L. Carter
Marcel R. Coutu
Susan M. Cunningham
Gregory J. Goff
58
Director compensation
Philosophy and approach
The Board is responsible for developing and implementing the Directors’ Compensation Plan and has delegated the
responsibility for director compensation to the Governance Committee.
day-to-day
Our Directors’ Compensation Plan is designed with four key objectives in mind:
|
•
|
to attract and retain the most qualified individuals to serve as directors;
|
|
•
|
to compensate our directors to reflect the risks, responsibilities and time commitment they assume when serving on our Board and Board committees;
|
|
•
|
to offer directors compensation that is competitive with other public companies that are comparable to Enbridge and to deliver such compensation in a tax effective manner; and
|
|
•
|
to align the interests of directors with those of our shareholders.
|
While our executive compensation program is designed around pay for performance, director compensation is based on annual retainers. This is to meet the compensation objectives and to help ensure our directors are unbiased when making decisions and carrying out their duties while serving on our Board.
The Governance Committee uses a peer group of companies to set the annual retainers for our Board and targets director compensation at or about the 50th percentile. See “Benchmarking to peers” beginning on page 43 for more information about our peer group and how we benchmark executive compensation.
The Governance Committee reviews the Directors’ Compensation Plan every year, with assistance from management. Every second year a formal review by an external consultant is undertaken. Each year, as part of this review, the Governance Committee considers the time commitment and experience required of members of our Board and the director compensation paid by a group of comparable public companies when it sets the compensation. The Governance Committee also reviews the Directors’ Compensation Plan to make sure the overall program is still appropriate and reports its findings to the Board.
In 2020, the Governance Committee engaged Mercer (Canada) Limited for a formal review of directors’ compensation, including peer analysis and benchmarking to the peer group. Following this review, effective January 1,
2020, the Directors’ Compensation Plan was amended to increase: the Board retainer from US$260,000 to US$285,000, the Chair of the Board retainer (including the Board annual retainer) from US$520,000 to US$550,000, the Governance Committee chair retainer from US$10,000 to US$15,000 and the Corporate Social Responsibility Committee chair retainer from US$10,000 to US$15,000. All retainers are payable in U.S. dollars regardless of director residency.
Throughout the
COVID-19
pandemic, our priority has been to protect our employees, their families and our communities, while continuing to safely operate the critical infrastructure that delivers the energy people rely on every day. In the context of the
COVID-19
pandemic, reduced global energy demand and reduced commodity prices, the company initiated actions to bolster our resiliency. After a comprehensive review of operating expenditures, we initiated actions to reduce costs by approximately $300 million in 2020. These actions included company-wide compensation reductions, including a 15% reduction in Board compensation. Effective June 1, 2020, the Directors’ Compensation Plan was amended to reduce: the Board retainer from US$285,000 to US$242,250 and the Chair of the Board retainer (including the Board annual retainer) from US$550,000 to US$467,500. Board committee chair retainers were not amended.
To align with our director compensation philosophy of targeting director compensation at or about the 50th percentile in our peer group, the Directors’ Compensation Plan was amended effective April 1, 2021 to reinstate the Board and Chair of the Board retainers in effect immediately before the June 2020 reductions.
All
non-employee
director compensation in 2020 was paid under the Directors’ Compensation Plan. We do not compensate
non-employee
directors under our 2019 Long Term Incentive Plan.
2020 director share ownership requirements
|
|
About DSUs
A deferred share unit (“DSU”) is a notional share that has the same value as one Enbridge common share. Its value fluctuates with variations in the market price of Enbridge shares.
DSUs do not have voting rights but they accrue dividends as additional DSUs, at the same rate as dividends paid on our common shares.
|
|
||
59
We expect directors to own Enbridge shares so they have an ongoing stake in the company and are aligned with the interests of shareholders. Directors must, within five years of becoming a director, hold at least three times their annual Board retainer in DSUs or Enbridge shares. The annual Board retainer since June 1, 2020 was US$242,250 and the director share ownership requirement since June 1, 2020 was US$726,750. Effective April 1, 2021, the director share ownership requirement will increase to US$855,000.
If a decrease in the market value of Enbridge shares results in a director no longer meeting the share ownership requirements, we expect him or her to buy additional Enbridge shares in order to satisfy the minimum threshold.
DSUs are paid out when a director retires from the Board. They are settled in cash, based on the weighted average of the trading price of common shares on the TSX for the last five trading days before the date that is three trading days before the payment date, multiplied by the number of DSUs the director holds. Directors may not engage in equity monetization transactions or hedges involving securities of Enbridge (see “Anti-hedging policy” on page 42).
2020 compensation components
Our Directors’ Compensation Plan has four components:
|
•
|
an annual retainer;
|
|
•
|
an annual retainer if he or she serves as the Chair of the Board or chair of a Board committee;
|
|
•
|
a travel fee for attending Board and Board committee meetings; and
|
|
•
|
reimbursement for reasonable travel and other
out-of-pocket
|
We do not have meeting attendance fees.
Our Directors’ Compensation Plan has been in effect since 2004 and was revised in 2010, 2013, 2015, 2016, 2018, 2019, 2020 and 2021. The table below shows the fee schedule for directors in 2020. Directors are paid quarterly. Mr. Monaco does not receive any director compensation because he is our President & CEO and is compensated in that role.
We have not granted stock options to directors since 2002. Mr. Ebel held certain Spectra Energy equity awards at the closing of the Merger Transaction that were generally treated in the same manner as those held by other employees of Spectra Energy.
Directors can receive their retainer in a combination of cash, Enbridge shares and DSUs, but they must receive a minimum amount in DSUs, described below. Travel fees are always paid in cash.
|
1
|
Effective April 1, 2021, the Directors’ Compensation Plan was amended to reinstate the Board and Chair of the Board retainers in effect immediately before the June 2020 reductions.
|
60
For purposes of the explanation that follows in this paragraph, all references to “retainer” shall include the “Board retainer” and “additional retainers” described in the table above. Before a director reaches the minimum share ownership level, at least one half of their retainer will be paid in the form of DSUs, with the balance paid in cash, Enbridge shares or DSUs, according to a percentage mix they choose. Once a director reaches the minimum share ownership level, they can choose to receive between 35% and their entire retainer in DSUs, with the balance in cash, Enbridge shares or a combination of both, according to a percentage mix they choose. Directors are allocated the DSUs and Enbridge shares based on the weighted average of the trading price of the Enbridge shares on the TSX for the five trading days immediately preceding the date that is two weeks prior to the date of payment.
Directors who do not make a timely election as to the form in which they wish to receive their retainer will receive the applicable minimum amount in DSUs (in 2020, 35% if they have met the share ownership requirement and 50% if they have not) and the balance in cash.
The table below shows the compensation components in which each director’s annual retainer for the year ended December 31, 2020 was delivered.
|
Director
|
Cash (%)
|
Enbridge shares (%)
|
DSUs (%)
|
|||
|
Pamela L. Carter
|
40
|
25
|
35
|
|||
|
Marcel R. Coutu
|
-
|
-
|
100
|
|||
|
Susan M. Cunningham
|
30
|
20
|
50
|
|||
|
Gregory L. Ebel
|
50
|
-
|
50
|
|||
|
J. Herb England
|
-
|
65
|
35
|
|||
|
Gregory J. Goff
|
50
|
-
|
50
|
|||
|
V. Maureen Kempston Darkes
|
-
|
-
|
100
|
|||
|
Teresa S. Madden
|
50
|
-
|
50
|
|||
|
Al Monaco
1
|
-
|
-
|
-
|
|||
|
Stephen S. Poloz
|
30
|
-
|
70
|
|||
|
Dan C. Tutcher
|
-
|
-
|
100
|
|||
|
Former Directors
|
|
|
|
|||
|
Charles W. Fischer
2
|
50
|
-
|
50
|
|||
|
Catherine L. Williams
3
|
20
|
40
|
40
|
|||
|
1
|
Mr. Monaco does not receive any compensation as a director of Enbridge because he is our President & CEO.
|
|
2
|
Mr. Fischer passed away on June 17, 2020.
|
|
3
|
Ms. Williams retired from the Board effective May 5, 2020.
|
61
Director compensation table
The table below provides information concerning the compensation of each
non-employee
director who served at any time in 2020. Mr. Monaco does not receive any compensation as a director of Enbridge because he is our President & CEO. For information on Mr. Monaco’s compensation, see page 45.
|
Share based awards
2
|
All other
compensation |
Total
|
||||||||||||||||||||||||||||||||||
|
Fees
earned
1
(cash) |
Enbridge
Shares
3
|
DSUs
3
|
Other
fees
4
|
Dividends
on DSUs
5
|
||||||||||||||||||||||||||||||||
|
Director
|
($)
|
(#)
|
($)
|
(#)
|
($)
|
($)
|
(#)
|
($)
|
($)
|
|||||||||||||||||||||||||||
|
Pamela L. Carter
|
|
147,200
|
|
|
2,080
|
|
|
92,000
|
|
|
2,915
|
|
|
128,800
|
|
|
2,073
|
|
|
78
|
|
|
3,279
|
|
|
373,353
|
|
|||||||||
|
Marcel R. Coutu
|
|
-
|
|
|
-
|
|
|
-
|
|
|
7,872
|
|
|
347,987
|
|
|
-
|
|
|
211
|
|
|
8,881
|
|
|
356,868
|
|
|||||||||
|
Susan M. Cunningham
|
|
108,261
|
|
|
1,634
|
|
|
72,174
|
|
|
4,090
|
|
|
180,435
|
|
|
2,073
|
|
|
108
|
|
|
4,536
|
|
|
367,479
|
|
|||||||||
|
Gregory L. Ebel
|
|
335,777
|
|
|
-
|
|
|
-
|
|
|
7,596
|
|
|
335,777
|
|
|
20,793
|
|
|
204
|
|
|
8,569
|
|
|
700,916
|
|
|||||||||
|
J. Herb England
|
|
-
|
|
|
5,274
|
|
|
233,916
|
|
|
2,841
|
|
|
125,955
|
|
|
2,073
|
|
|
78
|
|
|
3,281
|
|
|
365,226
|
|
|||||||||
|
Gregory J. Goff
|
|
151,270
|
|
|
-
|
|
|
-
|
|
|
3,486
|
|
|
151,270
|
|
|
2,073
|
|
|
82
|
|
|
3,428
|
|
|
308,041
|
|
|||||||||
|
V. Maureen Kempston Darkes
|
|
-
|
|
|
-
|
|
|
-
|
|
|
8,430
|
|
|
372,295
|
|
|
2,073
|
|
|
225
|
|
|
9,433
|
|
|
383,801
|
|
|||||||||
|
Teresa S. Madden
|
|
184,729
|
|
|
-
|
|
|
-
|
|
|
4,193
|
|
|
184,729
|
|
|
2,073
|
|
|
110
|
|
|
4,600
|
|
|
376,131
|
|
|||||||||
|
Al Monaco
6
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|||||||||
|
Stephen S. Poloz
|
|
75,521
|
|
|
-
|
|
|
-
|
|
|
2,602
|
|
|
106,723
|
|
|
-
|
|
|
22
|
|
|
911
|
|
|
183,155
|
|
|||||||||
|
Dan C. Tutcher
|
|
-
|
|
|
-
|
|
|
-
|
|
|
8,083
|
|
|
356,614
|
|
|
-
|
|
|
213
|
|
|
8,947
|
|
|
365,561
|
|
|||||||||
|
Former Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Charles W. Fischer
7
|
|
100,259
|
|
|
-
|
|
|
-
|
|
|
2,124
|
|
|
100,259
|
|
|
-
|
|
|
17
|
|
|
757
|
|
|
201,275
|
|
|||||||||
|
Catherine L. Williams
8
|
|
38,605
|
|
|
1,181
|
|
|
57,155
|
|
|
1,182
|
|
|
57,155
|
|
|
-
|
|
|
13
|
|
|
575
|
|
|
153,491
|
|
|||||||||
|
1
|
The cash portion of the retainers paid to the directors. Directors are paid quarterly in US$. The values presented in this table are in C$ and reflect U.S./Canadian exchange rates from the Bank of Canada of 1.3820 as at March 12, 2020, 1.3508 as at June 4, 2020, 1.3162 as at September 10, 2020, and 1.2880 as at December 3, 2020.
|
|
2
|
The portion of the retainer received as DSUs and Enbridge shares.
|
|
3
|
We pay directors quarterly. The value of the Enbridge shares and DSUs is based on the weighted average of the trading price of Enbridge shares on the TSX for the five trading days prior to the date that is two weeks prior to the applicable payment date. The weighted average Enbridge share prices were $50.52, $44.11, $42.21 and $39.93 for the first, second, third and fourth quarters, respectively, of 2020.
|
|
4
|
For all of our
non-employee
directors, includes a per meeting US$1,500 travel fee. For Mr. Ebel, these amounts also include expenses incurred for tax return preparation services.
|
|
5
|
Includes dividend equivalents granted in 2020 on DSUs granted in 2020 based on the 2020 quarterly dividend rate of $0.81. Dividend equivalents vest at the time of grant.
|
|
6
|
Mr. Monaco does not receive any compensation as a director of Enbridge because he is our President & CEO.
|
|
7
|
Mr. Fischer passed away on June 17, 2020.
|
|
8
|
Ms. Williams retired from the Board on May 5, 2020.
|
62
Change in director equity ownership
The table below shows the change in each director nominee’s equity ownership from March 2, 2020 to March 2, 2021, the dates of the management information circular for the 2020 annual meeting of shareholders and of the Circular, respectively, and his or her status in meeting the share ownership requirements.
|
Director
|
Enbridge
shares (#) |
Enbridge
stock options (#) |
DSUs(#)
|
Total
Enbridge shares +
DSUs (#) |
Market (at risk) value
of equity holdings (C$)
1,2
|
|||||||||||||||
|
Pamela L. Carter
|
||||||||||||||||||||
|
2021
|
|
44,639
|
|
|
-
|
|
|
11,744
|
|
|
56,383
|
|
|
2,494,943
|
|
|||||
|
2020
|
|
42,559
|
|
|
-
|
|
|
8,056
|
|
|
50,615
|
|
|
2,576,810
|
|
|||||
|
Change
|
|
2,080
|
|
|
-
|
|
|
3,688
|
|
|
5,768
|
|
|
(81,867
|
)
|
|||||
|
Marcel R. Coutu
|
||||||||||||||||||||
|
2021
|
|
46,900
|
|
|
-
|
|
|
39,090
|
|
|
85,990
|
|
|
3,805,069
|
|
|||||
|
2020
|
|
29,400
|
|
|
-
|
|
|
28,595
|
|
|
57,995
|
|
|
2,952,525
|
|
|||||
|
Change
|
|
17,500
|
|
|
-
|
|
|
10,495
|
|
|
27,995
|
|
|
852,544
|
|
|||||
|
Susan M. Cunningham
|
||||||||||||||||||||
|
2021
|
|
2,581
|
|
|
-
|
|
|
7,827
|
|
|
10,408
|
|
|
460,564
|
|
|||||
|
2020
|
|
947
|
|
|
-
|
|
|
3,281
|
|
|
4,228
|
|
|
215,247
|
|
|||||
|
Change
|
|
1,634
|
|
|
-
|
|
|
4,546
|
|
|
6,180
|
|
|
245,317
|
|
|||||
|
Gregory L. Ebel
3
|
||||||||||||||||||||
|
2021
|
|
651,845
|
|
|
405,408
|
|
|
32,217
|
|
|
684,062
|
|
|
30,269,732
|
|
|||||
|
2020
|
|
651,845
|
|
|
405,408
|
|
|
22,489
|
|
|
674,334
|
|
|
34,330,344
|
|
|||||
|
Change
|
|
-
|
|
|
-
|
|
|
9,728
|
|
|
9,728
|
|
|
(4,060,612
|
)
|
|||||
|
J. Herb England
|
||||||||||||||||||||
|
2021
|
|
37,306
|
|
|
-
|
|
|
86,576
|
|
|
123,882
|
|
|
5,481,792
|
|
|||||
|
2020
|
|
32,032
|
|
|
-
|
|
|
77,530
|
|
|
109,562
|
|
|
5,577,801
|
|
|||||
|
Change
|
|
5,274
|
|
|
-
|
|
|
9,046
|
|
|
14,320
|
|
|
(96,010
|
)
|
|||||
|
Gregory J. Goff
|
||||||||||||||||||||
|
2021
|
|
-
|
|
|
-
|
|
|
3,644
|
|
|
3,644
|
|
|
161,230
|
|
|||||
|
2020
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|||||
|
Change
|
|
-
|
|
|
-
|
|
|
3,644
|
|
|
3,644
|
|
|
161,230
|
|
|||||
|
V. Maureen Kempston Darkes
|
||||||||||||||||||||
|
2021
|
|
21,735
|
|
|
-
|
|
|
57,789
|
|
|
79,524
|
|
|
3,518,945
|
|
|||||
|
2020
|
|
21,735
|
|
|
-
|
|
|
45,396
|
|
|
67,131
|
|
|
3,417,639
|
|
|||||
|
Change
|
|
-
|
|
|
-
|
|
|
12,393
|
|
|
12,393
|
|
|
101,306
|
|
|||||
|
Teresa S. Madden
|
||||||||||||||||||||
|
2021
|
|
1,000
|
|
|
-
|
|
|
7,934
|
|
|
8,934
|
|
|
395,338
|
|
|||||
|
2020
|
|
-
|
|
|
-
|
|
|
3,281
|
|
|
3,281
|
|
|
167,036
|
|
|||||
|
Change
|
|
1,000
|
|
|
-
|
|
|
4,653
|
|
|
5,653
|
|
|
228,303
|
|
|||||
|
Al Monaco
4
|
||||||||||||||||||||
|
2021
|
|
920,699
|
|
|
4,465,600
|
|
|
-
|
|
|
920,699
|
|
|
40,740,931
|
|
|||||
|
2020
|
|
876,512
|
|
|
3,987,520
|
|
|
-
|
|
|
876,512
|
|
|
44,623,226
|
|
|||||
|
Change
|
|
44,187
|
|
|
478,080
|
|
|
-
|
|
|
44,187
|
|
|
(3,882,295
|
)
|
|||||
|
Stephen S. Poloz
|
||||||||||||||||||||
|
2021
|
|
-
|
|
|
-
|
|
|
2,676
|
|
|
2,676
|
|
|
118,398
|
|
|||||
|
2020
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|||||
|
Change
|
|
-
|
|
|
-
|
|
|
2,676
|
|
|
2,676
|
|
|
118,398
|
|
|||||
|
Dan C. Tutcher
|
||||||||||||||||||||
|
2021
|
|
637,523
|
|
|
-
|
|
|
138,662
|
|
|
776,185
|
|
|
34,346,186
|
|
|||||
|
2020
|
|
637,523
|
|
|
-
|
|
|
120,743
|
|
|
758,266
|
|
|
38,603,322
|
|
|||||
|
Change
|
|
-
|
|
|
-
|
|
|
17,919
|
|
|
17,919
|
|
|
(4,257,136
|
)
|
|||||
|
Total
|
||||||||||||||||||||
|
2021
|
|
2,364,228
|
|
|
4,871,008
|
|
|
388,159
|
|
|
2,752,387
|
|
|
121,793,128
|
|
|||||
|
2020
|
|
2,292,553
|
|
|
4,392,928
|
|
|
309,371
|
|
|
2,601,924
|
|
|
132,463,951
|
|
|||||
|
Change
|
|
71,675
|
|
|
478,080
|
|
|
78,788
|
|
|
150,463
|
|
|
(10,670,823
|
)
|
|||||
63
|
1
|
Based on the total market value of the Enbridge shares and/or DSUs owned by the director, based on the closing prices of $44.25 on the TSX on March 2, 2021 and $50.91 on March 2, 2020. These amounts have been rounded to the nearest dollar in Canadian dollars. Excludes stock options.
|
|
2
|
Directors must hold at least three times the annual Board retainer in DSUs or Enbridge shares within five years of becoming a director on our Board. All director nominees currently meet or exceed this requirement other than Mses. Madden and Cunningham, who have until February 12, 2024 and February 13, 2024, respectively, Mr. Goff, who has until February 11, 2025, and Mr. Poloz, who has until June 4, 2025.
|
|
3
|
Mr. Ebel’s stock options were Spectra Energy options that converted into options to purchase Enbridge shares upon the closing of the Merger Transaction. No new Enbridge stock options were granted to Mr. Ebel in his capacity as a Director of Enbridge or Chair of the Enbridge Board.
|
|
4
|
Mr. Monaco does not receive any compensation as a director of Enbridge. He is only compensated for his role as President & CEO. As President & CEO, he is subject to a share ownership requirement of six times base salary. Please see page 44 of this Amendment No. 1 on Form 10-K/A for information on his Enbridge share ownership as a multiple of his base salary.
|
64
Non-GAAP
reconciliation
This Amendment No. 1 on Form 10-K/A contains references to DCF and DCF per common share, which are measures used for purposes of Enbridge’s executive compensation programs. Management believes the presentation of DCF gives useful information to investors and shareholders as they provide increased transparency and insight into the performance of the company. Our
non-GAAP
measures described above are not measures that have standardized meaning prescribed by generally accepted accounting principles in the United States of America (U.S. GAAP) and are not U.S. GAAP measures. Therefore, these measures may not be comparable with similar measures presented by other issuers. The table below provides a reconciliation of the
non-GAAP
measures to comparable GAAP measures.
Distributable cash flow
The following table presents the reconciliation of cash provided by operating activities to DCF. DCF is defined as cash flow provided by operating activities before changes in operating assets and liabilities (including changes in environmental liabilities) less distributions to noncontrolling interests and redeemable noncontrolling interests, preference share dividends and maintenance capital expenditures, and further adjusted for unusual,
non-recurring
or
non-operating
factors. Management also uses DCF to assess the performance of the company and to set its dividend payout target. DCF for the year ended December 31, 2020 has been converted to DCF per share by taking DCF of C$9,440 million and dividing by 2,020 million, the weighted average number of Enbridge shares outstanding as of December 31, 2020. For purposes of the 2020 STIP award determinations as described on page 26, DCF was converted to DCF per share by taking DCF of C$9,473 million and dividing by 2,020 million, the weighted average number of Enbridge shares outstanding as of December 31, 2020. For purposes of 2018 PSU payout determinations as described on page 31, DCF was converted to DCF per share by taking DCF of C$9,848 million and dividing by 2,020 million, the weighted average number of Enbridge shares outstanding as of December 31, 2020.
|
Year ended December 31, 2020
|
||||
|
(unaudited, millions of Canadian dollars)
|
||||
|
Cash provided by operating activities
|
|
9,781
|
|
|
|
Adjusted for changes in operating assets and liabilities
1
|
|
(93
|
)
|
|
|
|
|
9,688
|
|
|
|
Distributions to noncontrolling interests and redeemable noncontrolling interests
2
|
|
(300
|
)
|
|
|
Preference share dividends
|
|
(380
|
)
|
|
|
Maintenance capital expenditures
3
|
|
(915
|
)
|
|
|
Significant adjustment items:
|
|
|
|
|
|
Other receipts of cash not recognized in revenue
4
|
|
292
|
|
|
|
Employee severance, transition and transformation costs
|
|
335
|
|
|
|
Distributions from equity investments in excess of cumulative earnings
2
|
|
675
|
|
|
|
Other items
|
|
45
|
|
|
|
DCF
|
|
9,440
|
|
|
|
Adjusting items in respect of:
|
|
|
|
|
|
For STIP calculation purposes, normalizations including (but not limited to) the net accretive impact of financing and strategic actions not contemplated at the time of target setting expressed in DCF
|
|
33
|
|
|
|
Total DCF adjusted for 2020 STIP award determinations
|
|
9,473
|
|
|
|
DCF
|
|
9,440
|
|
|
|
Adjusting items in respect of:
|
|
|
|
|
|
For 2018 PSU calculation purposes, normalizations including (but not limited to) the net accretive impact of financing and strategic actions not contemplated at the time of the grant expressed in DCF
|
|
408
|
|
|
|
Total DCF adjusted for 2018 PSU payout determinations
|
|
9,848
|
|
|
|
1
|
Changes in operating assets and liabilities, net of recoveries.
|
|
2
|
Presented net of adjusting items.
|
|
3
|
Maintenance capital expenditures are expenditures that are required for the ongoing support and maintenance of the existing pipeline system or that are necessary to maintain the service capability of the existing assets (including the replacement of components that are worn, obsolete or completing their useful lives). For the purpose of DCF, maintenance capital excludes expenditures that extend asset useful lives, increase capacities from existing levels or reduce costs to enhance revenues or provide enhancements to the service capability of the existing assets.
|
|
4
|
Consists of cash received net of revenue recognized for contracts under
make-up
rights and similar deferred revenue arrangements.
|
65
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Equity Compensation Plan Information
See Item 11 – “Shares reserved for equity compensation as of December 31, 2020” for information regarding our equity plan compensation on page 51.
Security ownership of certain beneficial owners and management
Beneficial ownership table
The table below sets forth the number and percentage of outstanding Enbridge shares beneficially owned by each of our Directors, each of our NEOs and all Directors and executive officers as a group, as of March 2, 2021. The number of Enbridge shares beneficially owned by each person is determined under applicable SEC rules. Under these rules, a person is deemed to have “beneficial ownership” of any shares over which that person, directly or indirectly, has or shares voting or investment power, plus any shares that the person has the right to acquire within 60 days, including through the exercise of stock options. Unless otherwise indicated, for each person named in the table, the number in the “Number of Enbridge shares acquirable within 60 days” column includes shares covered by stock options that may be exercised and that vest within 60 days after March 2, 2021. Unless otherwise indicated in the table, the address of each of the individuals below is c/o Enbridge Inc., 200, 425 - 1st Street SW, Calgary, Alberta, T2P 3L8.
|
Name of beneficial owner
|
Number of
Enbridge shares held |
Number of
Enbridge shares acquirable within 60 days |
Total
Enbridge shares beneficially owned |
Percent of
common shares outstanding |
||||||||||||
|
Pamela L. Carter
|
|
44,639
|
|
|
-
1
|
|
|
44,639
|
|
|
*
|
|
||||
|
Marcel R. Coutu
|
|
46,900
|
|
|
-
|
|
|
46,900
|
|
|
*
|
|
||||
|
Susan M. Cunningham
|
|
2,581
|
|
|
-
|
|
|
2,581
|
|
|
*
|
|
||||
|
Gregory L. Ebel
|
|
651,845
|
|
|
405,408
|
|
|
1,057,253
|
|
|
*
|
|
||||
|
J. Herb England
|
|
37,306
|
|
|
-
1
|
|
|
37,306
|
|
|
*
|
|
||||
|
Gregory J. Goff
|
|
-
|
|
|
-
|
|
|
-
|
|
|
*
|
|
||||
|
V. Maureen Kempston Darkes
|
|
21,735
|
|
|
-
|
|
|
21,735
|
|
|
*
|
|
||||
|
Teresa S. Madden
|
|
1,000
|
|
|
-
|
|
|
1,000
|
|
|
*
|
|
||||
|
Al Monaco
|
|
920,699
|
|
|
2,832,230
|
|
|
3,752,929
|
|
|
*
|
|
||||
|
Stephen S. Poloz
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
||||
|
Dan C. Tutcher
|
|
637,523
|
|
|
-
|
|
|
637,523
|
|
|
*
|
|
||||
|
Colin K. Gruending
|
|
59,432
|
|
|
489,859
|
|
|
549,291
|
|
|
*
|
|
||||
|
Robert R. Rooney
|
|
48,656
|
|
|
378,596
|
|
|
427,252
|
|
|
*
|
|
||||
|
William T. Yardley
|
|
122,012
|
|
|
386,016
|
|
|
508,028
|
|
|
*
|
|
||||
|
Vern D. Yu
|
|
164,753
|
|
|
718,808
|
|
|
883,561
|
|
|
*
|
|
||||
|
John K. Whelen
|
|
204,203
|
|
|
887,450
|
|
|
1,091,653
|
|
|
*
|
|
||||
|
All current executive officers and directors as a group
2
|
|
3,083,199
|
|
|
6,824,589
|
|
|
9,907,788
|
|
|
*
|
|
||||
|
1
|
Ms. Carter and Mr. England will be paid a portion of their directors’ compensation in Enbridge shares on March 19, 2021. Under our Directors’ Compensation Plan, the number of Enbridge shares will be calculated by dividing the applicable amount of compensation in Canadian dollars payable in Enbridge shares on the payment date by the weighted average the closing price per Enbridge share on the TSX for the five trading days prior to the date that is two weeks prior to the payment date.
|
|
2
|
Mr. Whelen’s security ownership is not included in this total as he retired effective November 15, 2020.
|
|
*
|
Represents less than 1% of the outstanding Enbridge shares.
|
Principal shareholders
As of March 2, 2021, there are no persons known to Enbridge who beneficially own more than five percent of issued and outstanding Enbridge shares.
66
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Handling conflicts of interest and related person transactions
If a director or officer has a material interest in a transaction or agreement involving Enbridge, or otherwise identifies a potential personal conflict, he or she must:
|
•
|
declare the conflict or potential conflict; and
|
|
•
|
abstain from voting on the matter at any Board meeting where it is being discussed or considered.
|
This approach is consistent with the requirements of the CBCA. In addition, the Board would review related person transactions in conjunction with making director independence determinations. Completion of annual questionnaires by directors and officers of the company assists in identifying possible related person transactions. Further, as stated above, pursuant to our Statement on Business Conduct, all officers and directors are required to avoid conflicts of interest and to disclose any actual or potential conflicts of interest. They must also annually certify their compliance with the Statement on Business Conduct. Disclosures of an actual or potential conflict of interest are reviewed by the company’s Ethics & Compliance Department to ensure appropriate
follow-up
and reporting. Any waiver from any part of the Statement on Business Conduct requires the approval of the CEO. For executive officers, senior financial officers and members of the Board, a waiver requires the express approval of Enbridge’s Board. Since the beginning of 2020, neither the CEO nor the Board has waived any aspect of the Statement on Business Conduct.
For purposes of the foregoing, a “related person transaction” is a transaction in which the company was or is to be a participant and the amount involved exceeds US$120,000, and in which any related person had or will have a direct or indirect material interest, and a “related person” means (i) a director, nominee director or executive officer of the company; (ii) an immediate family member of a director, nominee director or executive officer, or (iii) a beneficial holder of greater than five per cent of the company’s shares or an immediate family member of such holder.
Interest of informed person in material transaction
On February 27, 2017, Enbridge and Spectra Energy combined through a
merger transaction (the “Merger Transaction”). Upon the closing of the Merger Transaction, Gregory L. Ebel (Spectra Energy’s former Chairman, President and CEO) became the
stock-for-stock
non-executive
Chair of the Enbridge Board. Enbridge was required, until the first meeting of the Board following the 2020 annual meeting of shareholders of Enbridge:
|
•
|
to provide, without charge, to Mr. Ebel as
non-executive
Chair: (i) use of Enbridge’s aircraft for business flights to Board meetings and for other business conducted on behalf of Enbridge, (ii) information technology support and (iii) administrative support; and
|
|
•
|
to secure office space in the Houston area on behalf of Mr. Ebel and to reimburse the
non-executive
Chair for expenses incurred for tax return preparation services (in an aggregate amount not to exceed US$100,000 per year for such office and tax return preparation services).
|
Pursuant to the merger agreement relating to the Merger Transaction, the foregoing requirements ended in July 2020.
Independence
The majority of our directors must be independent, as defined by Canadian securities regulators in NI
52-110,
NYSE rules and the rules and regulations of the SEC. Our Governance Guidelines, available on our website (www.enbridge.com), provide that the Board shall consist of a substantial majority of independent directors. The Board uses a detailed annual questionnaire to assist in determining if a director is independent and makes this determination annually or more often, if required.
The Board has determined that 10 of our 11 directors, including the Chair of the Board, are independent. Mr. Monaco is not independent because he is our President & CEO. With respect to former directors who served as directors during any part of 2020, Charles W. Fischer and Catherine L. Williams were also independent.
The Governance Committee is responsible for ensuring the Board functions independently of management. The Governance Committee has developed guidelines to ensure each director is aware of the expectations placed on them as a director. Key expectations include meeting attendance, financial literacy and ethical conduct.
67
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
External auditor services – fees
The following table sets forth all services rendered by the company’s auditors, PwC, by category, together with the corresponding fees billed by the auditors for each category of service for the financial years ended December 31, 2020 and 2019.
|
2020
(C$)
|
2019
(C$)
|
Description of fee category
|
||||
|
Audit fees
|
14,764,000
|
16,928,000
|
Represents the aggregate fees for audit services.
|
|||
|
Audit-related fees
|
816,000
|
431,000
|
Represents the aggregate fees for assurance and related services by the company’s auditors that are reasonably related to the performance of the audit or review of the company’s financial statements and are not included under “Audit fees”. During fiscal years 2020 and 2019, the services provided in this category include services related to prospectus offerings.
|
|||
|
Tax fees
|
1,417,000
|
1,993,000
|
Represents the aggregate fees for professional services rendered by the company’s auditors for tax compliance, tax advice and tax planning.
|
|||
|
All other fees
|
366,000
|
320,000
|
Represents the aggregate fees for products and services provided by the company’s auditors other than those services reported under “Audit fees”, “Audit-related fees” and “Tax fees”. During fiscal years 2020 and 2019, these fees include those related to French translation work.
|
|||
|
Total fees
|
17,363,000
|
19,672,000
|
|
|||
Pre-approval
policies and procedures
The Audit, Finance & Risk Committee has adopted a policy that requires
pre-approval
by the Audit, Finance & Risk Committee of any services to be provided by the company’s external auditors, PwC, whether audit or
non-audit
services. The policy prohibits the company from engaging the auditors to provide the following
non-audit
services:
|
•
|
bookkeeping or other services related to accounting records and financial statements;
|
|
•
|
financial information systems design and implementation;
|
|
•
|
appraisal or valuation services, fairness opinions or contribution in kind reports;
|
|
•
|
actuarial services;
|
|
•
|
internal audit outsourcing services;
|
|
•
|
management functions or human resources;
|
|
•
|
broker or dealer, investment adviser or investment banking services;
|
|
•
|
legal services; and
|
|
•
|
expert services unrelated to the audit.
|
The Audit, Finance & Risk Committee believes that the policy will protect the company from the potential loss of independence of the external auditors. The Audit, Finance & Risk Committee has also adopted a policy which prohibits the company from hiring (as a full time employee, contractor or otherwise) into a financial reporting oversight role any current or former employee or partner of its external auditor who provided audit, review or attest service in respect of the company’s financial statements (including financial statements of its reporting issuer subsidiaries and significant investees) during the 12 month period preceding the date of the initiation of the current annual audit. The policy further prohibits the hiring of a former partner of the company’s external auditor who receives pension benefits from the firm, unless such pension benefits are of a fixed amount, not dependent upon firm earnings and fully funded. In all cases, the hiring of any partner or employee or former partner or employee of the independent auditor is subject to joint approval by the lead engagement partner and the company’s Senior Vice President and Chief Accounting Officer.
68
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Part IV (Item 15) of the Original Filing is hereby amended solely to add the following exhibits required to be filed in connection with this Amendment No. 1.
(b) Exhibits:
Reference is made to the “Index of Exhibits” following Item 16.
, which is hereby incorporated into this Item.
Form
10-K
Summary
ITEM 16. FORM
10-K
SUMMARY
Not applicable.
69
INDEX OF EXHIBITS
Each exhibit identified below is included as a part of this Amendment No. 1. Exhibits included in this filing are designated by an asterisk (“*”).
|
Exhibit
No. |
Name of Exhibit
|
|
| 31.1* | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
70
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
ENBRIDGE INC.
|
||||||
| (Registrant) | ||||||
| Date: March 8, 2021 | By: |
/s/ Colin K. Gruending
|
||||
| Colin K. Gruending | ||||||
|
Executive Vice President and Chief Financial Officer
|
||||||
|
Enbridge Inc.
|
||||||
71