NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

AND PROXY STATEMENT OF PSEG

The Annual Meeting of Stockholders of Public Service Enterprise Group Incorporated (the “Company”) will be held on Tuesday, April 20, 2021, at 1:00 p.m. Eastern Time. Due to the public health impact of the coronavirus outbreak (COVID-19) and to support the health and well-being of our stockholders and other meeting participants, the Annual Meeting will be held in a virtual only format via live webcast on the internet. You will not be able to attend the Annual Meeting in person. However, stockholders of record as of the close of business on February 19, 2021 will be able to attend, vote, and submit questions during the virtual meeting by registering at: register.proxypush.com/peg

 

DATE   April 20, 2021 at 1:00 P.M., Eastern Time   VIRTUAL MEETING   To attend the meeting register at: register.proxypush.com/peg     Scan this QR code to access the 2021 PSEG Proxy Statement and 2020 Annual Report on your mobile device   RECORD DATE   Stockholders entitled to vote at the Annual Meeting are the holders of common stock of record on February 19, 2021						You are encouraged to vote your shares in advance of the Annual Meeting for the following items:   1.  Elect ten members of the Board of Directors (Board) to hold office until the Annual Meeting of Stockholders in 2022, or until each director’s respective successor is elected and qualified;   2.  Approve on an advisory basis, our executive compensation;   3.  Ratify the appointment of Deloitte & Touche LLP (Deloitte) as independent auditor for 2021;   4.  Approve the 2021 Equity Compensation Plan for Outside Directors;   5.  Approve the 2021 Long-Term Incentive Plan; and   6.  Transact any other business that is properly presented at the meeting.   By order of the Board of Directors,   Michael K. Hyun   Secretary   March 15, 2021   YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE SIGN, DATE AND MAIL THE ACCOMPANYING PROXY CARD OR VOTING INSTRUCTION FORM PROMPTLY. YOU MAY ALSO VOTE VIA THE INTERNET OR BY TELEPHONE. PLEASE USE THE INTERNET ADDRESS OR TOLL-FREE NUMBER SHOWN ON YOUR PROXY CARD OR VOTING INSTRUCTION FORM.   IF YOU HAVE MULTIPLE ACCOUNTS, YOU MAY RECEIVE MORE THAN ONE PROXY CARD OR VOTING INSTRUCTION FORM AND RELATED MATERIALS. PLEASE VOTE EACH PROXY CARD AND VOTING INSTRUCTION FORM THAT YOU RECEIVE. THANK YOU FOR VOTING.   Voting Methods for Stockholders
						MAIL EQ Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945
						INTERNET/MOBILE www.proxypush.com/peg		PHONE 1-866-883-3382 (toll-free)

 

Please vote on these items:

 

PROPOSAL

PROPOSAL

PROPOSAL

1

Election of Directors

2

Advisory Vote on the Approval of Executive Compensation

3

Ratification of the Appointment of Independent Auditor

PROPOSAL

PROPOSAL

4

Approval of the 2021 Equity Compensation Plan for Outside Directors

5

Approval of the 2021 Long-Term Incentive Plan

To Submit Proposals for the 2022 Annual Meeting

 

FINAL DATE   November 15, 2021 (last day for receipt by us)		CONTACT   Corporate Secretary, PSEG 80 Park Plaza, T4B, Newark, NJ 07102

For shares held by a bank or broker, including those in the various stockholder and employee plans that we offer, please follow the voting instructions from your bank, broker or plan administrator. For more information, see pages 84-88.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on April 20, 2021 (Annual Meeting).

The Proxy Statement and Annual Report to Stockholders are available at www.pseg.com/annualmeeting.

The approximate date on which this Proxy Statement and the accompanying proxy card were first sent or given to security holders and made available electronically via the Internet was March 15, 2021.

Public Service Enterprise Group Incorporated (we, us, our, PSEG or the Company) is distributing this Proxy Statement to solicit proxies in connection with our 2021 Annual Meeting of Stockholders.

 

Save Trees Go Paperless.		Future Electronic Delivery   You can help us and the environment by choosing to receive future proxy statements and related documents such as the Annual Report and Form 10-K by electronic delivery. You may sign up for future electronic delivery at the website below, depending on the nature of your ownership. Please note that these are not the same sites to use for voting. For further information about how to vote, see the Notice of Annual Meeting of Stockholders and page 87.
		•   If you are a stockholder of record, please go to www.proxyconsent.com/peg   •   For shares held in Employee Benefit Plans, please go to www.proxyconsent.com/peg   •   If your shares are held by a bank or broker, please go to https://enroll.icsdelivery.com/peg

 

PSEG 2021 Proxy Statement		i

Table of Contents

 

 

PROXY STATEMENT SUMMARY			1
Proposal 1: ELECTION OF DIRECTORS			6
OVERVIEW OF BOARD NOMINEES			6
Diversity of Skills, Qualifications and Experience			6
Gender, Racial and Ethnic Diversity			7
Director Independence			7
Board Refreshment and Tenure			8
Board Membership Selection			9
Board Selection Criteria and Qualifications			9
NOMINEES FOR DIRECTOR			9
Biographical Information			10
CORPORATE GOVERNANCE			15
Role of the Board of Directors			15
Board Leadership Structure			15
The Role of Our Lead Director			15
Our Corporate Governance Principles			15
Board and Committee Self-Assessment Process			16
Director Education and Orientation			16
Board and Committee Meetings and Attendance			17
Service on Other Boards			17
Board Committees			17
Integrated Approach to Shareholder Engagement			21
Board and Committee Oversight of Risk Management			22
Board Oversight of Cybersecurity			22
Response to COVID-19 Pandemic			23
Our Approach to Sustainability			25
Our Environmental Priorities			26
Our Social Priorities			27
Our Governance Priorities			30
Certain Relationships and Related Person Transactions			32
Conflicts of Interest			33
SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS			34
Delinquent Section 16(a) Reports			35
DIRECTOR COMPENSATION			35
How Our Directors Are Compensated			36
Proposal 2: ADVISORY VOTE ON THE APPROVAL OF EXECUTIVE COMPENSATION			38
EXECUTIVE COMPENSATION SUMMARY			39
2020 Named Executive Officers			39
2020 Company Performance Overview			40
Executive Compensation Philosophy and Pay for Performance			41
EXECUTIVE COMPENSATION			42

Say-On-Pay and Shareholder Engagement			42
Executive Compensation Best Practices			42
Peer Comparison and Benchmarking			43
How We Compensate Our Executives			45
Our Compensation Elements Explained			47
Executive Compensation Governance Features and Controls			52
Accounting and Tax Implications			54
Compensation Committee Interlocks and Insider Participation			55
COMPENSATION COMMITTEE REPORT			55
EXECUTIVE COMPENSATION TABLES			56
2020 Summary Compensation Table			56
2020 Grants of Plan-Based Awards Table			58
Material Factors Concerning Awards Shown in Summary Compensation Table, Grants of Plan-Based Awards Table and Employment Agreements			59
Outstanding Equity Awards at Year-End December  31, 2020 Table			60
Option Exercises and Stock Vested During 2020 Table			62
2020 Pension Benefits Table			63
Qualified and Non-Qualified Pension Plans			64
2020 Non-Qualified Deferred Compensation Table			66
Deferred Compensation			66
POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE-IN-CONTROL			68
Termination without Cause			68
Change-In-Control			69
PAY RATIO			70
Proposal 3: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITOR			71
OVERSIGHT OF THE INDEPENDENT AUDITOR			72
Pre-Approval of Services			72
Fees billed by Deloitte for 2020 and 2019			72
AUDIT COMMITTEE REPORT			73
Proposal 4: APPROVAL OF THE 2021 EQUITY COMPENSATION PLAN FOR OUTSIDE DIRECTORS			74
Proposal 5: APPROVAL OF THE 2021 LONG-TERM INCENTIVE PLAN			77
ANNUAL MEETING, VOTING AND PROCEDURES			84
APPENDIX A: OPERATING EARNINGS (Non-GAAP) AND ADJUSTED EBITDA (Non-GAAP) RECONCILIATIONS			A-1
APPENDIX B: 2021 EQUITY COMPENSATION PLAN FOR OUTSIDE DIRECTORS			B-1
APPENDIX C: 2021 LONG-TERM INCENTIVE PLAN			C-1

 

Forward-Looking Statements

The statements contained in this Proxy Statement that are not purely historical are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission (SEC) and available on our website: https://investor.pseg.com/financial-information/sec-filings. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this Proxy Statement apply only as of the date hereof. We specifically disclaim any obligation to update these forward-looking statements unless required by applicable securities laws. Information on our website should not be deemed incorporated into, or as a part of, this report.

 

	ii			PSEG 2021 Proxy Statement

Corporate Governance – Role of the Board of Directors

 

 

CORPORATE GOVERNANCE

Role of the Board of Directors

PSEG is governed by our Board and its committees that meet throughout the year. The Board is elected by our stockholders and is the ultimate decision-making body of the Company except for the items reserved to stockholders.

The Board provides direction and oversight by:

 

•

Actively engaging in developing corporate strategy and approving major initiatives and significant investments;

 

•

Monitoring financial and business integrity and performance, including risk management;

 

•

Monitoring sound corporate citizenship grounded in the principles of diversity, equity and inclusion;

 

•

Evaluating the performance of the CEO and approving succession plans for the CEO and other senior executives;

 

•

Selecting a diverse group of nominees for election to the Board; and

 

•

Evaluating Board and committee performance.

The Board holds an annual strategy session in addition to its regular meetings, receives regular updates and actively engages in dialogue with our senior management. The Board has full and free access to all members of management and may hire its own consultants and advisors as it deems necessary.

Board Leadership Structure

The Board has determined that, at the present time, it is in the best interests of the Company and stockholders for all three positions of Chairman of the Board, President and CEO to be combined under the leadership of Ralph Izzo and that independent board member Shirley Ann Jackson serve as Lead Director. The Board believes that Mr. Izzo possesses the attributes of experience, judgment, vision, managerial skill and overall leadership ability essential for our continued success.

The Role of Our Lead Director

Shirley Ann Jackson has served as our Lead Director since April 2019. Our Lead Director is an independent director designated annually by the independent directors and typically serves in that capacity for four years. The Lead Director’s duties include:

 

		•  Presiding over executive sessions of the independent directors;   •  Providing the independent directors with a key means for collaboration and communication;   •  Coordinating with the Chairs of our various Board committees to set agendas for committee meetings;   •  Reviewing quality and timeliness of information provided to the directors; and   •  Ensuring a robust Board self-evaluation.		As communities face adversity climate change, diversity, equity and inclusion challenges, the COVID-19 pandemic I am confident that citizenship and innovation will prevail. Strong Board oversight and good governance at PSEG will help steer the company towards powering a clean energy future and benefiting its stakeholders. Shirley Ann Jackson

Our Lead Director complements the talents and contributions of Mr. Izzo and promotes confidence in our governance structure by providing an additional perspective to that of management.

Our Corporate Governance Principles

The Board has adopted and operates under our By-Laws and Governance Principles. The Governance Principles provide guidelines for directors and management to effectively pursue and support our business objectives. The Governance Principles govern our board structure, requirements of our directors, board operations and functioning of our Board committees and are reviewed periodically by the Corporate Governance Committee, which recommends any changes to the Board. Our By-Laws and Governance Principles can be found on our website at https://investor.pseg.com/governance/governance-overview.

 

PSEG 2021 Proxy Statement		15

Corporate Governance – Board and Committee Self-Assessment Process

 

 

Board and Committee Self-Assessment Process

Our Board and committees each have a robust annual process for self-assessment, as shown below.

 

The Corporate Governance Committee leads the committee evaluation process. Directors provide written assessments of board and committee performance, identifying areas for improvement. The lead Director, Chair and committee members analyze the responses and report on the results to the full board. The board and each committee discuss the responses, decide on action items and execute plans to address them.The Corporate Governance Committee leads the committee evaluation process. Directors provide written assessments of board and committee performance, identifying areas for improvement. The Lead Director, Chairs and committee members analyze the responses and report on the results to the full board. The board and each committee discuss the responses, decide on action items and execute plans to address them.

Governance Enhancements from the 2020 Self-Assessment Process:

 

We continued enhancements with respect to Board meeting effectiveness, executive sessions of independent directors and director selection process.

Director Education and Orientation

To assist the Board in understanding the Company and to maintain the necessary knowledge to perform their responsibilities, members of our Board are offered and participate in a variety of learning opportunities throughout the year.

 

Internal Educational Presentations		The Board is regularly offered internal presentations that comprise “deep dives” on specific topics presented by management as well as detailed assets data books where appropriate.
External Programs		Directors are encouraged to attend third-party programs; management regularly updates a list of recommended offerings.
Outside Speakers		The Board regularly hears from outside experts on such topics as investor perspectives, strategy, cybersecurity, environmental, social and governance (ESG) issues, climate change, regulatory matters and business leadership.
Orientations		New directors and new committee members receive comprehensive materials and in-house orientation sessions featuring presentations by key members of management and the independent auditor. These sessions cover such topics as strategic plans; operations; human capital management; ESG and climate change; significant financial, accounting and risk management issues; regulatory and governance practices and compliance programs and trends.		Highlights In 2020, we continued to provide lunch and learn series of educational presentations on topics of interest to our Board. These sessions provide the Board with the opportunity to interact with subject matter experts below the officer level.

 

	16			PSEG 2021 Proxy Statement

Corporate Governance – Board and Committee Meetings and Attendance

 

 

Board and Committee Meetings and Attendance

In 2020, the Board met seven times, including five regular meetings, one strategy session and one special meeting. The PSE&G Board met six times, including five regular meetings and one strategy session. During 2020, each director attended at least 75% of the aggregate number of meetings of the Board and the committees on which the director served. All of the directors who were elected in 2020 attended the 2020 Annual Meeting of Stockholders.

Our Governance Principles provide that each director is expected to attend all Board meetings, all meetings of committees of which the director is a member and the Annual Meeting of Stockholders.

Service on Other Boards

The experience gained through other directorships provides our Board with a breadth of valuable knowledge and insight. Advance approval by the Corporate Governance Committee is required for service on any public company board. All of our nominees have successfully balanced other demands on their time and attention in meeting their obligations to PSEG.

Board Committees

Our Board has six standing Committees: Audit, Corporate Governance, Executive, Finance, Industrial Operations, and Organization and Compensation (O&CC). A description of each Committee follows.

Committee assignments and Chairs are regularly reviewed and periodically changed to optimize the talents of our directors and meet the Company’s evolving needs.

Each Committee has open and free access to all Company information, may require any of our officers or employees to furnish it with information, documents or reports, may investigate any matter involving us and has discretion to hire outside resources. Each Committee, other than the Executive Committee, has a charter that defines its roles and responsibilities and annually conducts a performance evaluation of its activities and a review of its charter.

The Executive Committee consists of the Chairman of the Board, the Lead Director and at least one additional independent director. In 2020, the members of the Executive Committee were Ralph Izzo, Shirley Ann Jackson, David Lilley and Susan Tomasky. The authority of the Executive Committee is set forth in our By-Laws. The Committee charters and our By-Laws are posted on our website, https://corporate.pseg.com/aboutpseg/leadershipandgovernance/boardofdirectors/committeedescriptions.

 

PSEG 2021 Proxy Statement		17

Corporate Governance – Board Committees

 

 

 

	18			PSEG 2021 Proxy Statement

Corporate Governance – Board Committees

 

 

Finance Committee				Corporate Governance Committee
Chair: Alfred W. Zollar             Members: David Lilley, Barry H. Ostrowsky,                              Scott G. Stephenson             Meetings held in 2020: 5				Chair: Willie A. Deese              Members: Shirley Ann Jackson, John P. Surma,                               Susan Tomasky              Meetings held in 2020: 4
Key Responsibilities				Key Responsibilities
Ø   Oversees corporate financial policies and processes and significant financial decisions;   Ø   Reviews annually our financial plan, dividend policy, capital structure and cash management policies and practices;   Ø   Discusses with management our risk assessment and risk management policies;   Ø   Oversees the investment guidelines for, and investment performance of, the Company’s pension plan trust funds and nuclear decommissioning trust funds; and   Ø   Reviews with management credit agency ratings and analyses.				Ø   Oversees the Company’s corporate governance practices;   Ø   Evaluates the composition and qualifications of the Board, its committees and prospective nominees, assesses the independence of each nominee and makes recommendations to the Board;   Ø   Oversees the self-evaluation process of the Board and its committees and reviews the Governance Principles and committee charters and makes recommendations to the Board in order to improve effectiveness of the Board and its committees;   Ø   Oversees sustainability efforts and initiatives, activities and disclosures related to climate change and our political participation activities and expenses;   Ø   Oversees risk management guidelines, policies, processes and mapping and identifies risks to the Board and its committees;   Ø   Reviews and approves transactions with related persons;   Ø   Reviews and makes recommendations to the Board regarding compensation of directors; and   Ø   Provides input to the O&CC regarding the performance of the CEO as Chairman of the Board.
				The nomination process and criteria used are described under Board Membership selection beginning on page 6.

 

PSEG 2021 Proxy Statement		19

Corporate Governance – Board Committees

 

 

Industrial Operations Committee

Chair: Laura A. Sugg             Members: Shirley Ann Jackson, Scott G.                              Stephenson, John P. Surma, Alfred W. Zollar             Meetings held in 2020: 5

Key Responsibilities

Ø   Oversees the operations of the Company including electric and natural gas transmission and distribution, nuclear, fossil and other generation and energy trading, as well as related matters;   Ø   Oversees all matters relating to cyber and physical security across the Company;   Ø   Provides oversight of crisis management related to operations of the Company;   Ø   Oversees environmental, health and safety and legal and compliance issues relating to operations;   Ø   Reviews the results of major inspections and evaluations by external oversight groups such as the NRC and the Institute of Nuclear Power Operations;   Ø   Reviews the results of significant reports of the PSEG Nuclear Safety Review Board (NSRB), and receives independent reports from the NSRB Committee Representative;   Ø   Receives and reviews periodic reports from officers and employees who have responsibility for operation of nuclear generating facilities, including regular reports from the Chief Nuclear Officer;   Ø   Reviews the results of significant reports of the PSEG Cybersecurity Excellence Oversight Board (CEOB), and receives independent reports from the CEOB Committee Representative; and   Ø   Reviews periodic reports from officers and employees who have responsibility for the Company’s cybersecurity program including regular reports from the Chief Information Security Officer.

 

 

	20			PSEG 2021 Proxy Statement

Corporate Governance – Integrated Approach to Shareholder Engagement

 

 

Integrated Approach to Shareholder Engagement

The Board and management believe in ongoing shareholder engagement and conduct engagement efforts throughout the year in an integrated approach, including through investor conferences, analyst meetings, and one-on-one discussions. Understanding the issues that are important to our shareholders is critical for our accountability. We have robust conversations on topics such as corporate governance, executive compensation, business strategy, risk management, human capital management and ESG matters. Our Board routinely reviews and improves our practices and disclosures in a manner that best supports our business and our culture taking into account feedback from shareholder engagement.

Shareholder Outreach and Engagement

 

 

Engaged Through:Annual Shareholder Outreach Investor Conferences Quarterly Earnings Calls Annual Meeting Invitation to Speak to BoardAnnual Shareholder Outreach:We extended engagement invitations to over 30 of our largest shareholders representing >50% of our outstanding shares. Approximately onefourth of them accepted and engaged in one-on-one discussions with us.Information Shared Through:SEC Fillings, Press Releases & Company Website ESG Performance Report Annual Sustainability/Climate Change Report Annual Investor Fact Book & IR Fact Sheets Investor Conference MaterialsDiscussion Topics - Annual Shareholder Outreach:Board Diversity, Refreshment & Tenure ESG-related Business Strategy COVID-19 Response Sustainability & Climate ChangeHuman Capital Management, including Diversity, Equity & Inclusion

 

 

PSEG 2021 Proxy Statement		21

Corporate Governance – Board and Committee Oversight of Risk Management

 

 

Board and Committee Oversight of Risk Management

The objective of PSEG’s risk management program is to support the achievement of growth and business objectives within acceptable risk levels. An important aspect of the program is promoting a risk-aware culture where all employees have a responsibility for identifying and communicating risks, and where there is clear accountability for risk mitigation.

The Board has ultimate responsibility for the oversight of risk management at PSEG, overseeing the Company’s risk management program and reviewing the most significant risks facing the Company.

The Board interacts with senior management regarding assessment and mitigation of the most significant risks facing the Company, across a range of categories that includes strategic, financial, operational, environmental, human capital management, health and safety, legal and compliance and reputational risks.

The Corporate Governance Committee reviews key enterprise risks and recommends to the Board the mapping of each risk to an appropriate committee or the full Board, in accordance with the allocation of risk categories reflected in the charter of each committee.

 

Board of Directors Strategic risks Risks not mapped to specific CommitteesCorporate Governance Committee Risk policies and practices Mapping of risks to Board and Committees Reputation and political activity risks ESG and climate change risksAudit Committee Risk-related processes and assessments Financial and other reporting risks Compliance and legal risksFinance Committee Finance and investment risk Commodity, credit, liquidity, tax event, pension fund and trust riskIndustrial Operations CommitteeOperating risks (including Health & Safety) Project risks Cybersecurity risksOrganization and Compensation Committee Executive compensation, succession planning and other talent risks Senior officer interaction Reporting on risks by Chief Risk Officer, Chief InformationERM Programs annual risk assessment, deep & Digital Officer, Chief Compliance Officer and Vice dive reviews and regular risk updates President of Internal Auditing Services, among othersSenior Management / Risk Management CommitteeLines of Business / Functional Areas

The Board’s oversight of risk management is supported by the Risk Management Committee, which consists of senior executives, and by the Enterprise Risk Management (ERM) team, led by PSEG’s Chief Risk Officer in collaboration with other assurance functions and management committees and councils, such as the Cybersecurity Council, and the CEOB. (For more information on cybersecurity risk management, see the next section.) At least annually, the Chief Risk Officer briefs the Corporate Governance Committee and the Audit Committee on enterprise-level risks and emerging risks. Throughout the year, the Board and each committee provide ongoing oversight of key enterprise risks through deep-dive risk reviews and updates presented by representatives of the relevant line of business and functional areas. The risk reviews include analyses of underlying risk causes, as well as reviews of current risk mitigation and response activities. The committees report out to the Board regarding their risk reviews and elevate risk issues to the Board as appropriate. Management integrates risk evaluation into business decisions and escalates to the committees and Board as appropriate.

Board Oversight of Cybersecurity

Cybersecurity is a critical component of our risk management program. The Board, the Audit Committee, Industrial Operations Committee and senior management receive frequent reports on such topics as personnel and resources to monitor and address cybersecurity threats, technological advances in cybersecurity protection, rapidly evolving cybersecurity threats that may affect our Company and industry, cybersecurity incident response and applicable cybersecurity laws, regulations and standards as well as collaboration mechanisms with intelligence and enforcement agencies and industry groups to assure timely threat awareness and response coordination.

 

	22			PSEG 2021 Proxy Statement

Corporate Governance – Board Oversight of Cybersecurity

 

 

Our cybersecurity program is focused on the following areas:

Governance:

 

•

Cybersecurity Council – which is comprised of members of senior management, meets regularly to discuss emerging cybersecurity issues and maintenance of a corporate cybersecurity scorecard to measure performance of key risk indicators (KRIs). The Cybersecurity Council ensures that senior management and ultimately, the Board, is informed of information required to exercise proper oversight over cybersecurity risks and that escalation procedures are followed.

 

•

CEOB – provides the COO with periodic cybersecurity assessments of the Company. The CEOB is comprised of employee and non-employee members who have expertise in technology security, compliance and controls, or in management practices.

Cybersecurity Awareness: Identifying and assessing cyber risks through partnerships with public and private entities and industry groups and disseminating electronic notices to, and conducting presentations for, company personnel.

Training: Providing annual cybersecurity training for all personnel with network access, as well as additional education for personnel with access to industrial control systems or customer information systems; and conducting phishing exercises. Regular cybersecurity education is also provided to our Board through management reports and presentations by external subject matter experts.

Technical Safeguards: Deploying measures to protect our network perimeter and internal Information Technology platforms, such as internal and external firewalls, network intrusion detection and prevention, penetration testing, vulnerability assessments, threat intelligence, anti-malware and access controls.

Vendor Management: Maintaining a risk-based vendor management program, including the development of robust security contractual provisions. Notably, in 2020, the Company implemented additional measures to ensure compliance with new requirements promulgated by the North American Electric Reliability Corporation applicable to cyber systems involved in the operation of the Bulk Electric System (BES). These new or enhanced measures require PSEG to identify and assess cybersecurity risks to the BES from vendor products or services.

Incident Response Plans: Maintaining and updating incident response plans that address the life cycle of a cyber incident from a technical perspective (i.e., detection, response and recovery), as well as data breach response (with a focus on external communication and legal compliance); and testing those plans (both internally and through external exercises).

Mobile Security: Deploying controls to prevent loss of data through mobile device channels.

Response to COVID-19 Pandemic

A pandemic has the potential to influence risks across the enterprise with the capacity to impact operations, health & safety, and financial results. Throughout the COVID-19 pandemic, PSEG has relied on a well-established crisis management structure to quickly coordinate responses across the organization and ensure the continued delivery of our essential services to our customers in a safe manner. The Executive Crisis Management Team, led by the COO and with representation from all operating companies and functional areas, met as often as seven days a week in the early months of the crisis and continues to meet regularly to monitor evolving conditions and adapt the Company’s response. Frequent updates and testimonials on pandemic safety are provided to employees, including on personal mobile devices.

PSEG’s ERM program provided the framework by which the potential impacts of the pandemic on the enterprise were proactively assessed and planned for, beyond the immediate response horizon. These assessments were discussed with the Risk Management Committee and the Executive Crisis Management Team at multiple times throughout the year and presented to the Board. PSEG is documenting lessons learned to strengthen business continuity plans and improve resilience to the uncertainty of the ongoing pandemic or a future event.

 

PSEG 2021 Proxy Statement		23

Corporate Governance – Response to COVID-19 Pandemic

 

 

COVID-19 Response (Community, Customers and Employees)

By providing essential electric and natural gas service to over 3.5 million customers in New Jersey and Long Island, New York – two states that saw the highest early positivity and morbidity rates – PSEG delivered more than just heating and lighting to homes, businesses, and essential emergency services. These essential services have proven to be more critical than ever in powering the communication infrastructure, enabling the work-from-home economy, keeping us connected to our loved ones and maintaining the critical energy infrastructure that supports economic activity in our service territories. Furthermore, our response efforts have contributed to employee and customer safety protocols, and expanded community outreach as follows:

Community:

 

Ø

PSEG Foundation pledged $4 million in support to communities for pandemic response and relief efforts and to combat food insecurity;

 

Ø

PSEG donated 50,000 N95 masks and 200,000 pairs of gloves to New Jersey health care workers; and

 

Ø

PSEG sponsored the COVID-19 testing site in Salem County, and continues to support local food and community organizations and events to ease the financial hardship in the Salem community.

 

Customers:   Ø    Voluntarily suspended shutoffs of service due to non-payment; worked cooperatively with customers needing payment flexibility;   Ø   Maintained full customer service staffing and hours of availability via phone;   Ø   WorryFree® Tech-Talk Appliance Repair introduced to remotely assist appliance repair customers; and   Ø    Provided assistance with electricity provisioning for emergency medical facilities construction.   Employees:   Ø    Maintained workforce levels and employee benefits. Implemented remote work practice for all employees where job could be performed remotely;		PSEG COVID-19 ResponsePledged $4M since the start of the COVID-19 pandemic to support communitiesDonated 50K N95 masks & 200K pairs ofgloves to New Jersey health care workersVoluntarily suspended shutoffs of service dueto non-payment WorryFree Tech-Talk Appliance Repair introduced to remotely assist appliance repair customers Continuation of hiring for talent pipelineincluding internships and no layoffs due to thepandemic Pandemic hotline exclusively for employees

 

Ø

Pandemic response hotline exclusive for PSEG employees to guide them through questions on their health and safety, identification and notification of close contact exposure, clinical assessments to determine quarantine needs and appropriate return to work procedures;

 

Ø

Enhanced bereavement leave allotments to accommodate any employee suffering a loss of a family member;

 

Ø

Expanded COVID-19 related paid time off for employees to take care of themselves and their family members, get vaccinated and navigate school and daycare closures;

 

Ø

Expanded childcare resources, including discounted home and remote placement services, expanded referrals and tutoring support;

 

Ø

Implemented changes to medical and retirement savings plan made available through federal relief packages;

 

Ø

Introduced a mobile assessment tool that enables employees to answer questions, regarding their health and exposure status which provides a daily passport for entry into the workplace;

 

Ø

Provided frequent education to front line managers and the workforce by PSEG’s medical director and Health and Safety teams;

 

Ø

Increased leadership communication platforms, including “The Link” employee social media channel and ongoing pulse surveys during the critical period of the pandemic to ensure employee well-being and engagement; and

 

Ø

Designed Responsible Reentry approach and playbook for future business practices.

 

	24			PSEG 2021 Proxy Statement

Corporate Governance – Our Approach to Sustainability

 

 

Our Approach to Sustainability

We continue to implement sound ESG practices throughout our business. PSEG’s agile approach for continuous integration of ESG practices reflects our goal of being a leader in building an economically strong, environmentally responsible energy future. Our Board takes an active role in overseeing ESG and corporate citizenship issues including our climate strategy. As specified in its charter, the Corporate Governance Committee holds the primary responsibility for overseeing sustainability matters for our Company and will oversee our transition to a future of net-zero carbon emissions.

 

ENVIRONMENTAL CEF: EE, EC/Smart Meters, EV Charging Infrastructure Coal Free by Mid-2021 Orsteds Ocean Wind Farm Strategic Alternatives for Fossil Fleet Net-Zero Vision PROGRESS TOWARD OUR ESG GOALS IN 2020-2021 GOVERNANCE Board/Committee Oversight Board Diversity/Refreshment Sustainability/Climate reports (follows SASB and TCFD), ESG Performance report Executive Compensation linked to ESG goals Member of CEO Climate Dialogue Political Contributions/ Engagement Oversight SOCIAL Company/Foundation giving of $13M in 2020 Committed $1M to Social Justice Initiative Committed to Just Transition principles Expanded D&I commitment to include Equity Continuous Employee Engagement & Development Sustainability yearbook member 2021 s&p global Ceres Dow jones sustainability indices In collaboration with sam CECPENVIRONMENTAL CEF: EE, EC/Smart Meters, EV Charging Infrastructure Coal Free by Mid-2021 Orsteds Ocean Wind Farm Strategic Alternatives for Fossil Fleet Net-Zero Vision PROGRESS TOWARD OUR ESG GOALS IN 2020-2021 GOVERNANCE Board/Committee Oversight Board Diversity/Refreshment Sustainability/Climate reports (follows SASB and TCFD), ESG Performance report Executive Compensation linked to ESG goals Member of CEO Climate Dialogue Political Contributions/ Engagement Oversight SOCIAL Committed $4M to Pandemic Relief Efforts Committed $1M to Social Justice Initiative Committed to Just Transition principles Expanded D&I commitment to include Equity Continuous Employee Engagement & Development Sustainability yearbook member 2021 s&p global Ceres Dow jones sustainability indices In collaboration with sam CECP

 

 

PSEG 2021 Proxy Statement		25

Corporate Governance – Our Environmental Priorities

 

 

Our Environmental Priorities

PSEG’s Powering Progress vision is a future in which we help all customers use less energy, ensure the energy they use is cleaner, and deliver that energy more reliably than ever before.

In 2020, we continued to successfully execute on our Powering Progress vision through our Clean Energy Future programs, renewable energy investment strategy, and enhanced ESG disclosures that follow the Task Force on Climate-related Financial Disclosures framework (TCFD).

Clean Energy Future Programs: In 2020, New Jersey Board of Public Utilities (NJBPU) approved $1 billion of investments through our Energy Efficiency (EE) program. This is the largest commitment to energy efficiency ever in NJ.

In 2021, NJBPU also approved AMI (Smart Meters)/Energy Cloud program, which provides investments of approximately $700 million for smart meter programs over the next four years, and a proposal for PSE&G to provide investments of approximately $166 million for electric vehicle (EV) charging infrastructure programs.

Furthermore, PSEG has filed for NJBPU review of its electric storage (ES) proposal for utility-scale investments to supplement solar generation and enhance grid resiliency.

Progress in Offshore Wind Renewable Energy: In 2020, PSEG entered into an agreement to acquire a 25% ownership interest in Ørsted’s 1,100-megawatt Ocean Wind project, NJ’s first offshore wind farm (subject to regulatory approval).

Strategic Review of Non-Nuclear Generation Assets: In 2020, PSEG announced a strategic review of PSEG Power’s non-nuclear generation assets to accelerate transformation into a primarily regulated electric and gas utility and contracted business which will, among other benefits, enhance its ESG position.

PSEG’s Emissions Goals and Net-Zero Vision: As part of our Powering Progress Initiative, PSEG is working towards reducing greenhouse gas emissions from PSEG Power’s fleet by 80% from 2005 levels by 2046.

PSEG’s vision of net-zero emissions by 2050 assumes necessary advances in technology, public policy and consumer behavior, including preservation of existing nuclear fleet, continued investment in renewable energy sources, retirement or sale of coal assets and no plans to acquire or build new fossil units.

Sustainability/Climate Reports: PSEG is committed to reporting annually on sustainability and climate using the TCFD framework. PSEG’s Sustainability/Climate reports are compliant with the Sustainability Accounting Standards Board and incorporates a comprehensive analysis of contributions to the United Nations Sustainable Development Goals. PSEG’s Sustainability/Climate reports are featured on our website.

 

2021 ESG Performance Report: In 2021, PSEG launched its first ESG Performance report as part of its ongoing efforts to increase disclosures and transparency. The report includes additional ESG metrics and disclosures, as well as the Company’s progress toward existing goals. The report is featured on our website.   PSEG’s Gas System Modernization Program: In addition, PSEG’s Gas System Modernization Program (GSMP) focuses on modernizing and replacing cast iron and unprotected steel main, resulting in a reduction in methane leaks, safety enhancements and supports customer usage of high efficiency appliances.		PSEG Sustainability Net-Zero By 2050 Generates >90% of New Jerseys carbon emissions-free energy $2 billion in Clean Energy Future programs 25% interest in NJs first offshore wind farm 13th year in a row Dow Jones Sustainability North America Index and 2021 selection in S&P Sustainability Yearbook invested $2.7 billion in electric and gas transmission and distribution system

 

	26			PSEG 2021 Proxy Statement

Corporate Governance – Our Social Priorities

 

 

Our Social Priorities

Our focus on citizenship is grounded in the belief that we can do well as a company by doing good for the diverse people and communities we serve. The Board, through its Corporate Governance Committee, oversees our corporate citizenship that is grounded in the principles of diversity, equity and social priorities.

PSEG Foundation & Corporate Citizenship: Through the PSEG Foundation, the Company makes approximately $8 million annually in corporate contributions to support our communities.

Employee Volunteerism: We also support our communities through employee volunteerism that includes paid time off and grants to nonprofits.

NJ CEO Council: Our CEO is a member of the New Jersey CEO Council, a coalition of CEOs that has pledged to hire or train more than 30,000 residents by 2030 and spend an additional $250 million on procurement with state-based, diverse companies by 2025. Both efforts focus on underrepresented and underserved communities.

Environmental Stewardship: Community investment in environmental stewardship is another strategic pillar of PSEG’s Foundation and we aim to increase support to 20% of annual giving by 2023.

Clean Energy Workforce: PSEG is developing New Jersey’s clean energy workforce through innovative training and pipeline development programs, emphasizing low- to moderate-income and underserved communities. PSE&G’s $1 billion energy efficiency program is expected to create more than 4,000 direct and indirect clean energy jobs.

Powering Progress / Social Justice: In a joined effort, PSEG and the PSEG Foundation launched the Powering Equity and Social Justice Initiative with a $1 million commitment to fight racial injustice and inequity.

COVID-19 Community Efforts: Our community efforts through the PSEG Foundation expanded this year and include additional support for pandemic response and relief efforts and to combat food insecurity, for which we pledged $4 million. To further assist customers and communities during the pandemic, PSEG also voluntarily suspended shutoffs of service due to non-payment and worked cooperatively with customers needing payment flexibility. For more information see pages 23-24.

Supplier Diversity: PSEG is also committed to diversity that spans across the value chain, including supplier diversity with a goal of achieving 30% of applicable supplier spend allocated to diverse suppliers by 2023.

Customer focus: PSEG provides essential electric service to over 2.3 million customers and gas to over 1.9 million customers. Through disciplined cost management, sound investment practices and reliable energy delivery, PSEG strives to keep customer cost as low as possible. NJ customers benefit from access to low cost natural gas which has also resulted in lower electricity prices.

Human Capital Management: Our People

At PSEG, we know that our people are our most valuable resource. Therefore, our Human Capital Management strategy is designed to ensure we have the best talent and culture to sustain our business both today and in the future as we lead transformation in our industry.

Board Oversight of Human Capital Management

Our Board has a key role in the oversight of our talent management programs and culture initiatives with particular focus on diversity, equity and inclusion, organization and succession planning, talent and workforce development, total rewards, and culture. At least semi-annually the Board is engaged in a review of our human capital management focusing on our organizational and leadership priorities, executive leadership succession and development plans, and executive performance and potential. In addition, the Board reviews workforce and talent diversity metrics, employee engagement and culture survey data and findings, and talent and culture plans and programmatic developments. The Board actively engages not only with our executive leadership teams but also our rising senior leaders through formal presentations and talent engagement meetings.

As specified in its charter, the O&CC holds the primary responsibility for overseeing our organizational, talent and total rewards strategy. The Organizational and Compensation Committee oversees our annual incentive plan, which includes specific metrics holding our leaders accountable to meet human capital related goals to drive key talent, culture, diversity, equity and inclusion priorities. Specifically, annual employee incentive awards are tied to a People Strong Goal, which measures employee growth and development, engagement, and inclusion, and a Diversity, Equity and Inclusion (DEI) index, which measures DEI progress, among other business performance goals. PSEG’s pay-for-performance philosophy aligns employee compensation with individual performance as well as business unit and Enterprise performance results, driving employee accountability and ownership of overall results and progress on key strategic objectives.

 

PSEG 2021 Proxy Statement		27

Corporate Governance – Our Social Priorities

 

 

Our Culture   PSEG continuously strives for a culture inclusive and supportive of its employees, customers and the communities we serve. Through our Core Commitments, we attract, develop, and retain a high-performing diverse workforce that drives organizational performance and fosters a culture of collaboration, learning and comfort speaking up, where new ideas are welcome and all of our approximately 13,000 employees feel valued and enhance each other’s performance.   Diversity, Equity and Inclusion   With intention and action, in 2020, PSEG added “Equity” to its Diversity & Inclusion commitment, signaling a renewed focus on ensuring our systems and processes are fair and equitable.		OUR CORE COMMITMENTS   SAFETY We put safety first.   INTEGRITY We do what’s right.   CONTINUOUS IMPROVEMENT We aspire to achieve excellence.   DIVERSITY, EQUITY & INCLUSION We treat all individuals fairly, equitably, and with dignity and respect.   CUSTOMER SERVICE We keep customers at the heart of everything we do.

Pay Equity Reviews: We set compensation levels for new and existing employee candidates based on role qualification and market data. We calibrate our performance ratings and perform semi-annual equity reviews across the Enterprise to ensure our pay is fair and equitable for all employees.

Policy, Practice and Equity Reviews: We performed a comprehensive equity review of our policies and practices, resulting in specific updates to our programs to better support equity (e.g., expanded access to our parental leave program). We enhanced our year-end performance management process for all non-represented employees to control for bias. We continue to review and modify job requirements to focus on Day 1 job requirements to maximize opportunity and allow for on-the-job training.

 

Inclusion: In January 2020, we launched a new program, Inclusion for All, to foster a more inclusive workplace culture. We trained Diversity Champions and our leadership teams on inclusive leadership skills and created Local Inclusion Teams throughout the businesses. The Local Inclusion Teams, along with our strong, active network of Employee Business Resource Groups (EBRGs) drive inclusion at the local and grassroots levels of the Enterprise. In the third quarter, we launched a disability inclusion campaign to better understand our employee population self-identifying as having a disability.   Diversity: Our approach has become more transparent so that we can assess progress in our diversity representation. We track our Equal Employment Opportunity data to inform our workforce development strategy. To bolster diversity pipeline hiring, this year we created a women-in-skilled-trades initiative, and are piloting an in-depth partnership model with historically Black colleges and universities (HBCUs).		Employee Business Resource Groups (EBRGs) Over 25 employee groups in 12 focus areas networked with over 500 local organizations and schools.   Black Professionals, Asian & Pacific Islanders, Hispanic & LatinX, LGBTQ+, People with Disabilities, New Hires, Women, Working Parents & Caregivers, Veterans, Young Generations in Nuclear, Environmental and Safety professionals.

 

	28			PSEG 2021 Proxy Statement

Corporate Governance – Our Social Priorities

 

 

Talent Attraction and Retention

PSEG has maintained an unwavering focus on attracting, developing and retaining a robust talent pipeline for the future, from our frontline to our leadership levels. To remain competitive and continue to provide our customers with the best service, we must ensure our employees are engaged and have the right skills and environment to drive innovation, productivity, safety and excellence.

To PSEG, developing the talent of the future is about:

 

•

Deployment of the right people in the right roles;

 

•

Continuous skill building to meet current operational needs and stay ahead of market and industry trends;

 

•

Leveraging people, technology, and processes to create high quality, timely and effective outcomes for our customers; and

 

•

Evaluation of both internal and contracted talent options to optimize efficiency.

Diversity, Equity & Inclusion Highlights

 

 

Forbes 2020 list of Americas Best Employers for Diversity 3rd year in a row Military Friendly Employer 2021 Bronze medallion Forbes 2020 list of best employers for veterans $1 Million Commitment to fight racial injustice and inequity CEO is part of NJ CEO Council supporting the training and placement of 30,000 NJ residents by 2030 Our CEO is a signatory to CEO Action for Diversity & Inclusion commitment

 

Talent Development   Our learning and development programs reach all of our employees from entry to executive level and include digital on-demand learning resources and live, instructor-led workshops.   •  In 2020 we trained our Top 200+ Leaders on developing Inclusive Leadership skills.   •  We pioneered a leadership development program for Black professionals designed to increase representation in leadership ranks.   •  We doubled our participation in women’s leadership development programs through virtual platform offerings.   •  We delivered a six-month “Accelerate” program to support newly hired college graduates in their introduction to our workplace.

Employee Engagement                                                    We solicit continuous feedback so that we improve our culture in a way that is responsive to the voices of our employees.   2020 Your Voice Matters survey highlights:

86% Overall engagement score

88% of employees are proud to work at PSEG

Annual Employee net promoter score improved 6.9 points

Our Total Rewards Program   In addition to our competitive pay, incentives and benefits programs, our Total Rewards offerings take into account the safety, health and overall well-being of our employees. We offer an array of programs designed to support physical, emotional, social, and financial wellness, the foundation of employee engagement and productivity.   We support our employees through everyday challenges, critical life events, as well as new and changing life experiences. Our benefits program includes access to mental health, childcare and elder care resources, voluntary benefits for discounted services, tuition reimbursement and adoption assistance.

 

PSEG 2021 Proxy Statement		29

Corporate Governance – Our Social Priorities

 

 

Labor Relations

We are proud of the partnership we have with union leadership and the 7,786 employees represented by unions in our workforce.

 

•

Our strong relationship with our unions allowed for swift and effective implementation of COVID-19 protocols, with over 45 negotiated agreements on terms such as sequestration, flexible work hours and paid time off, telecommuting, use of personal vehicles, and training.

 

•

In 2020, we extended several of our labor contracts through 2023, providing labor stability during the pendency of key business initiatives.

Just Transition: As we accelerate our business to a primarily regulated utility and contracted energy business with zero-carbon nuclear assets, PSEG is committed to a fair, equitable and transparent approach to human capital management, one that is grounded in treating people with dignity and respect. With evolving technologies in energy and digital advancements we look for training, upskilling and redeployment opportunities for our existing workforce.

PSEG Workforce at a Glance

 

 

Total Headcount 12,788 Voluntary Turnover (excluding retirement 1.4% Avg. employee tenure 15 years 61% Represented Employees PSEG Benchmark Results (Utilities) Racially/Ethnically Diverse Women 26% 21% 18% 24% Race/ Ethnicity White or Caucasian (73%) Black or African American (12%) Hispanic or Latino (9%) Asian (5%) Others* (1%) *includes Native Hawaiian or Other Pacific Islander or Two or More Races 14% Racially/Ethnically Diverse Executives 28% Women in Executive positionsTotal Headcount 12,788 Voluntary Turnover (excluding retirement) 1.4% Avg. employee tenure 15 years 61% Represented Employees PSEG Benchmark Results (Utilities) Racially/Ethnically Diverse Women 26% 21% 18% 24% Race/ Ethnicity White or Caucasian (73%) Black or African American (12%) Hispanic or Latino (9%) Asian (5%) Others* (1%) *includes Native Hawaiian or Other Pacific Islander or Two or More Races 14% Racially/Ethnically Diverse Executives 28% Women in Executive positions

Our Governance Priorities

Sound corporate governance is integral to the results and progress we achieve. We are guided by a code of conduct and integrity that emphasizes high ethical standards, accountability and transparency. Governance is a top priority and includes a focus on enterprise risk management (see p. 22), cybersecurity (see p. 22), political contributions (see p. 31) and executive compensation (see p. 39). Our Board exercises oversight, supported by each committee, as reflected in their charters.

 

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Corporate Governance Committee – sustainability/ESG practices (and climate change), and enterprise risk management

 

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Audit Committee – ethics and compliance (Standards of Conduct), financial reporting, internal controls and related risks

 

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Industrial Operations Committee – cybersecurity and safety

 

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Finance Committee – finance and investment risk, commodity/credit/liquidity, tax and pension risks

 

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Organization and Compensation Committee – human capital management

Sound corporate governance starts from the top where we strive to balance the right mix of Board diversity characteristics (including skills, backgrounds, gender, racial and ethnic diversity) that will enable us to achieve our strategic goals. Our Board is continuously refreshed and we had seven new directors in the last ten years (including four new directors since 2018) and four of the seven directors were women or racially/ethnically diverse. For more information, see pages 6-8.

Our ESG goals are also linked to executive compensation. Compensation scorecards reflect key ESG goals including diversity, equity and inclusion, climate and sustainability. For more information, see pages 47-48.

 

	30			PSEG 2021 Proxy Statement

Corporate Governance – Our Governance Priorities

 

 

Oversight of Political Contributions and Engagement Activities

The Company is committed to maintaining orderly, stable and productive relationships with its stakeholders in government. The nature of our business requires that we are a trusted corporate citizen with an unwavering commitment to integrity. The Corporate Governance Committee oversees our political engagement activities in accordance with our Corporate Political Participation Practice, which may be found here: https://investor.pseg.com/governance/governance-overview/default.aspx

In 2020, we revised our Corporate Political Participation Practice to implement additional controls on the Company’s political engagement activities. These controls expand internal requirements applicable to the Company’s interactions with prominent political figures and its contributions to political organizations and social welfare organizations (i.e., 501(c)(4) organizations). For example, any contribution to a social welfare organization will undergo a robust review to confirm the contribution will not result in unreasonably adverse reputational or business risk and must be approved by the Senior Vice President—Corporate Citizenship and EVP and General Counsel. These additional controls also expand the review and approval process applicable to interactions with prominent political figures and others close to them. Also, vendors or suppliers who perform lobbying activities or political consulting may not subcontract work without our prior review and approval.

 

Consistent with our commitment to integrity in our political activities, we are transparent about our political contributions. Annually, we publish a report that includes our corporate contributions to candidates, trade associations and other political and social welfare organizations. With regard to trade associations, we request that trade associations to which we paid total annual payments of $50,000 or more identify the portion of dues or payments received from PSEG that were used for expenditures or contributions that, if made directly by PSEG, would not have been deductible under Section 162(e)(1)(B) of the Internal Revenue Code (IRC). The report is available here: https://investor.pseg.com/governance/governance-overview/default.aspx				Political Spending Transparency & Governance
				Received First Tier Score on the CPA-Zicklin Index for Corporate Political Disclosure and Accountability
				Annually publish Political Contributions Report on corporate political contributions, including to 501(c)(4), organizations				Corporate Governance Committee oversight of political expenditures and disclosures
				Enhanced Corporate Political Participation Practice to implement additional controls, including over politically connected vendors and 501(c)(4) contributions

What We Expect of Our Employees, Officers and Directors

We have a long-established corporate culture of emphasizing integrity, honesty and the highest ethical standards and require all to remain in compliance with our Standards of Conduct. Our Chief Compliance Officer has overall responsibility for administering the Standards of Conduct under the oversight of the Audit Committee.

The Standards of Conduct are posted on our website at:

https://corporate.pseg.com/aboutpseg/leadershipandgovernance/standardsofconduct

Our Standards of Conduct:

 

•

Form an integral part of our business conduct compliance program and apply to all of our directors, employees and contractors, who are each responsible for understanding and complying with the Standards of Conduct;

 

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Establish a set of written common expectations for dealings with investors, customers, fellow employees, competitors, vendors, government officials and the media; and

 

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Provide procedures for seeking ethical guidance and reporting concerns, including a hotline.

We require every employee to complete annual training on the Standards of Conduct.

We commit to post on our website:

 

•

Any amendment to the Standards of Conduct; and

 

•

Any waiver from the Standards of Conduct that applies to any director, executive officer or person performing similar functions and that relates to any applicable SEC requirement. Waivers may be granted in exceptional circumstances only and must be made by the Board.

 

PSEG 2021 Proxy Statement		31

Corporate Governance – Our Governance Priorities

 

 

In 2020, we did not grant any waivers to the Standards of Conduct.

Our Standards of Conduct, Compliance Program, Related Person Transactions Practice and Conflicts of Interest Practice described below, establish clear policies and procedures regarding personal and business conduct. Our written management practices provide that any capital investment with a non-PSEG entity or its affiliate, for which one of our directors or officers serves as a director or executive officer, must be approved by our Board. These are our only written policies and procedures regarding the review, approval or ratification of transactions with related persons.

Certain Relationships and Related Person Transactions

Under our Related Person Transactions Practice, which is administered by the Corporate Governance Committee, directors and executive officers must report any potential related person transactions.

For purposes of our Related Person Transactions Practice, a related person transaction includes transactions in which PSEG is a participant, the amount involved exceeds $120,000 and a “related person” has or will have a direct or indirect interest. Related persons of PSEG consist of directors (including director nominees), executive officers, stockholders beneficially owning more than 5% of PSEG’s voting securities and the immediate family members of these individuals.

The Corporate Governance Committee reviews the facts and circumstances of each transaction and approves or ratifies related person transactions that it determines are in the best interests of PSEG and its stockholders. The Corporate Governance Committee’s consideration include:

 

•

Whether the transaction was in the ordinary course of business and at arm’s length, in accordance with the Company’s internal policies and procedures

 

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Whether the transaction involved any special treatment of the related person

 

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The purpose of the transaction and its potential benefits to PSEG

•

The approximate dollar value of the transaction

 

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The related person’s interest in the transaction

 

•

Any other information regarding the transaction or the related person that the Committee deems relevant

 

 

PSEG Director Barry H. Ostrowsky is the President and CEO of RWJBarnabas Health (RWJBarnabas), a non-profit corporation incorporated in New Jersey.

 

•

In 2020, as part of the Company’s philanthropic activities and commitment to invest in the communities in which we do business, the Company, directly or through a subsidiary, donated approximately $43,800 to facilities affiliated with RWJBarnabas and the PSEG Foundation, a separate, 501(c)(3) organization that is funded by the Company but whose donations are not determined or influenced by the PSEG Board, donated approximately $135,000. It is expected that PSEG and the PSEG Foundation each will make future contributions to facilities affiliated with RWJBarnabas.

 

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Since 2013, the Company’s subsidiary, PSEG Services Corporation (Services), has had a contractual arrangement with an RWJBarnabas affiliate, Robert Wood Johnson University Hospital Hamilton (RWJ Hamilton), pursuant to which RWJ Hamilton provides medical care, medical testing and related services to the Company and its subsidiaries. In 2020, the Company paid a total of approximately $376,000 for services provided pursuant to this arrangement. The Company expects to pay a similar amount in 2021.

 

•

Since 2008, the Company’s subsidiary, PSE&G, has engaged in an ongoing Hospital Energy Efficiency Program (HEE Program), through which PSE&G provides funds for energy efficiency upgrades to hospitals throughout the PSE&G service territory. The HEE Program was approved, and is overseen, by the NJBPU. PSE&G has committed to invest approximately $271.8 million through the HEE Program to a variety of hospitals over the course of several years. PSEG had made commitments of approximately $64.7 million to RWJBarnabas facilities. These projects are in various stages of completion, with several fully completed and others in progress or in the planning stage. The aggregate portion that RWJBarnabas facilities have committed to repay to PSE&G through utility bills in accordance with the NJBPU-approved terms of the program is equal to approximately $24.1 million. Because the HEE Program is ongoing, the investment and repayment figures are subject to change in the coming years.

Christopher LaRossa, brother of Ralph A. LaRossa, COO of PSEG and one of the Company’s NEOs, is an employee of, and receives compensation from, PSE&G. During 2020, Christopher LaRossa served and currently serves as District Manager – Regulatory Policy and Procedure. The approximate total compensation paid to Christopher LaRossa during 2020 was within the range set for employees with comparable qualifications and responsibilities who held similar positions at the Company (salary of $114,000-$228,000 plus incentive compensation targeted at 20% of salary). He also received health insurance and other benefits

 

	32			PSEG 2021 Proxy Statement

Corporate Governance – Certain Relationships and Related Person Transactions

 

 

available to all other employees in a similar position. His compensation was determined in accordance with our compensation practices applicable to employees who hold similar positions. Ralph A. LaRossa did not and does not have any direct responsibility for directing or reviewing his brother’s work or any influence over his brother’s compensation or the other terms of his employment.

The Corporate Governance Committee reviewed all of the transactions referenced above and determined that they are in the best interests of PSEG and its stockholders. We do not have any other related person transactions that meet the requirements for disclosure in this Proxy Statement.

Conflicts of Interest

The Governance Principles provide that a director must notify the Chair of the Corporate Governance Committee if the director encounters a conflict of interest or proposes to accept a position with a new entity so that potential conflicts of interest may be reviewed. Our Conflicts of Interest Practice applies to all employees, contractors, suppliers and any third party working on behalf of PSEG and covers situations where individual interests are or could be at odds or in conflict with PSEG’s interests. These situations are required to be reported to our Office of Ethics and Compliance, which may conduct an investigation or take actions it deems appropriate.

 

PSEG 2021 Proxy Statement		33

Security Ownership Table

 

 

SECURITY OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS

The following table shows, as of February 19, 2021, beneficial ownership of our common stock by the directors and nominees and the currently serving executive officers named in the 2020 Summary Compensation Table. None of these amounts exceeds one percent of our common stock outstanding. The table also shows as of February 19, 2021, beneficial ownership in shares by any person or group known to us to be the beneficial owner of more than five percent of our common stock. According to the Schedule 13G filed by each owner with the SEC, these securities were acquired and are held in the ordinary course of business and not for the purpose of changing or influencing the control of the Company.

 

Name		Owned Shares (#)(1)				Restricted Stock (#)(2)				Stock Units/ RSUs (#)(3)				Phantom Shares (#)(4)				Deferred Equity Shares (#)(5)				Amount of Beneficial Ownership of Common Stock (#)				Percent of Class (%)
Directors:
Willie A. Deese			-				-				15,096				-				-				15,096				<1
Shirley Ann Jackson			5,604				9,600				53,082				4,338				-				72,624				<1
David Lilley			-				-				45,465				32,659				-				78,124				<1
Barry H. Ostrowsky(6)			-				-				8,114				-				-				8,114				<1
Scott G. Stephenson(6)			-				-				2,808				-				-				2,808				<1
Laura A. Sugg(6)			210				-				5,251				-				-				5,461				<1
John P. Surma(6)			1,736				-				2,808				-				-				4,544				<1
Susan Tomasky			-				-				31,261				-				-				31,261				<1
Alfred W. Zollar			-				-				31,042				-								31,042				<1
NEOs:
Ralph Izzo(7)			50,817				-				137,464				-				1,676,483				1,864,764				<1
Daniel J. Cregg(7)			62,780				-				25,623				-				8,781				97,184				<1
Ralph A. LaRossa(7)			26,324				-				33,107				-				149,288				208,719				<1
Tamara L. Linde(7)			51,249				-				21,032				-				-				72,281				<1
David M. Daly(7)			35,580				-				20,515				-				-				56,095				<1
All Directors, NEOs and Executive Officers of the Company as a Group (16 Persons):
			316,412				9,600				443,615				36,997				1,834,552				2,641,176				<1
Certain Beneficial Owners:
Blackrock, Inc.(8)																							51,015,043				10.10
State Street Corporation(9)																							26,360,568				5.21
T. Rowe Price Associates, Inc.(10)																							26,136,648				5.10
Vanguard Group, Inc.(11)																							42,222,685				8.35

 

(1)	Includes all shares, if any, held directly, in brokerage accounts, under the Thrift and Tax-Deferred Savings Plan (401(k) Plan), Enterprise Direct, Employee Stock Purchase Plan, shares owned jointly by or with a spouse and shares held in a trust or a custodial account.

(2)	Includes restricted stock granted to directors under the former Stock Plan for Outside Directors.

(3)	Includes vested and unvested RSUs granted to executive officers under the LTIP and stock units granted to directors under the Equity Compensation Plan for Outside Directors (Directors Equity Plan), with no voting rights.

(4)	Includes phantom shares accrued under the Directors’ Deferred Compensation Plan for those individuals who have elected to have the earnings on their deferred payments calculated based upon the performance of our common stock, with no voting rights and all payouts in cash.

(5)	Includes shares deferred under the Equity Deferral Plan, with no voting rights.

(6)	Board member has not yet met their ownership requirement.

(7)	Address: 80 Park Plaza, Newark, NJ 07102

(8)	As reported on Schedule 13G filed on January 8, 2021. Address: 55 East 52nd Street, New York, NY 10055.

(9)	As reported on Schedule 13G filed on February 10, 2021. Address: One Lincoln Street, Boston, MA 02111.

(10)	As reported on Schedule 13G filed on February 16, 2021. Address: 100 E. Pratt Street, Baltimore, MD 21202.

(11)	As reported on Schedule 13G filed on February 8, 2021. Address: 100 Vanguard Blvd., Malvern, PA 19355.

 

	34			PSEG 2021 Proxy Statement